Mr. Brent Nykoliation reports

NEXTSOURCE MATERIALS EXECUTES BINDING OFFTAKE AGREEMENT WITH MITSUBISHI CHEMICAL CORPORATION TO SUPPLY SUPERFLAKE GRAPHITE ANODE MATERIAL FOR THE NORTH AMERICAN EV MARKET

NextSource Materials Inc. and Mitsubishi Chemical Corp., Japan's largest chemical company and a leading supplier of anode active material to original automotive equipment manufacturers, have entered into a binding, multiyear offtake agreement. Under the terms of the offtake agreement, NextSource and Mitsubishi have partnered to supply AAM to a major OEM for the North American electric vehicle market. NextSource will produce and supply intermediate AAM to Mitsubishi's Japanese plant where Mitsubishi will produce final AAM for the OEM's EV battery cell manufacturing facilities in North America.

This offtake agreement represents a major milestone for NextSource in its strategy to become one of very few vertically integrated graphite producers outside of China. The company is prioritizing the development of a large-scale battery anode facility in the Middle East to meet the volume capacities required for Mitsubishi and has identified several prospective sites in the United Arab Emirates. These locations offer streamlined permitting processes, robust infrastructure and strategic proximity to other OEMs, enabling the company to accelerate its timeline and meet growing demand for high-value graphite anode active material.

Hanre Rossouw, president and chief executive officer of NextSource, stated: "We are excited to have entered into a partnership with Mitsubishi Chemical Corp. through a binding offtake agreement for the production of active anode material in the Middle East, leveraging high-quality graphite feedstock from our Molo mine in Madagascar. This partnership underscores our commitment to delivering sustainable, high performance anode materials to meet the growing demand from OEM and battery manufacturers. By integrating world-class resource supply with advanced processing capabilities, we are building a resilient and scalable solution that supports global electrification efforts."

Through the phased development of its BAFs, NextSource is establishing a significant downstream value-added business capable of large-scale production of coated, spheronized and purified graphite. These facilities will serve as a secure, transparent and fully traceable source of supply for battery and OEM customers, entirely decoupled from existing Asian supply chains, and a critical alternative for U.S.-government-compliant supply chains.

In July, 2025, the United States imposed a substantial 160-per-cent total tariff on anode-grade graphite imports from China, combining a 93.5-per-cent anti-dumping duty with additional countervailing measures.

More than 95 per cent of the anode (negative) side of EV batteries is made from graphite, making it the most critical raw material of all battery metals (Benchmark Mineral Intelligence, July, 2025). In parallel, NextSource has begun preparations to expand its Molo mine operations to ensure sufficient and secure graphite feedstock supply to support the offtake agreement with Mitsubishi.

Today's announcement also underpins NextSource's engagement with strategic financing partners where it is in advanced discussions regarding assistance in financing construction of both the large-scale BAF and Molo mine expansion.

Offtake agreement terms

The offtake agreement designates NextSource as the sole supplier of about 9,000 tonnes per year of intermediate AAM to Mitsubishi for a multiyear term from the commencement of production of the company's BAF.

This agreement is further underpinned by a rigorous qualification process. Through close technical collaboration between NextSource and Mitsubishi to supply AAM from high-quality SuperFlake graphite concentrate, the qualification process will be finalized in 2026 through the installation of BAF processing equipment, of which approximately half has already been purchased and awaiting installation. SuperFlake anode active material will be processed by Mitsubishi in Japan and supplied to its OEM customer's cell manufacturing facility in North America, with full-scale ramp-up from 2027.

The pricing formula negotiated with Mitsubishi is based on an agreed-upon price formula that comprise both a fixed and variable price component which underpins the economics of the project and secures capacity for the offtaker.

The offtake agreement is subject to conditions precedent and contains standard termination rights, which are customary for an offtake agreement of this nature.

Offtake capacity requirements underpin NextSource's growth strategy

Through close technical collaboration, qualification of AAM from NextSource, using SuperFlake graphite from Molo phase 1 as feedstock, has been provided to and evaluated by Mitsubishi for the OEM's battery manufacturer, confirming compliance with its specific anode quality and performance requirements.

The company has begun preparations for an industry-scale Molo phase 2 expansion, which is expected to benefit from larger economies of scale, while continuing to qualifying its graphite products and servicing existing key customers through phase 1 campaign production.

The completion of the technical and economic studies for both the mine and a United Arab Emirates-based BAF will inform the final investment decisions, including capital requirements and detailed financing plans. The significant potential of an expanded Molo phase 2 and large-scale BAF in the Middle East offer a strong foundation for growth by securing further offtake agreements for SuperFlake AAM.

About NextSource Materials Inc.

NextSource is a battery material development company based in Toronto, Canada, that is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.

The company's Molo graphite project in Madagascar is one of the largest known and highest-quality graphite resources globally, and the only one with SuperFlake graphite. The Molo mine has begun production, with phase 1 mine operations currently being optimized.

The company is also developing a significant downstream graphite value-add business through the staged rollout of battery anode facilities capable of large-scale production of coated, spheronized and purified graphite for direct delivery to battery and automotive customers, outside of existing Asian supply chains, in a fully transparent and traceable manner.

NextSource Materials is listed on the Toronto Stock Exchange under the symbol NEXT and on the OTCQB under the symbol NSRCF.

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