Nouveau Monde Graphite Inc. (NYSE: NMG) executed an updated binding term sheet with the Government of Canada for the supply of graphite concentrate from its Phase-2 Matawinie Mine in Quebec.

The framework establishes a seven-year commitment for Canada to purchase 30,000 tonnes per annum of flake graphite concentrate on a take-or-pay basis. Pricing is based on a North American fixed price with annual inflation adjustments aligned with the Industrial Product Price Index.

Under the marketing structure, NMG can resell Canada's committed volumes with a 50-50 upside-sharing mechanism when resale proceeds exceed the fixed price. The government also has the ability to store the product.

The binding term sheet is subject to customary conditions including governmental appropriations and NMG's positive final investment decision for the Matawinie Mine. The agreement advances work toward definitive transaction agreements.

NMG has secured a commitment letter for senior secured project debt facilities of $335 million from Export Development Canada and the Canada Infrastructure Bank to support the Phase-2 Matawinie Mine project financing.

The Canadian government agreement complements existing offtake agreements with Panasonic Energy Co., Ltd. and Traxys North America LLC, which collectively account for more than 70% of the Phase-2 Matawinie Mine's planned graphite concentrate production.

The committed volumes consist of products ranging from fine to large and jumbo flakes at a minimum 94% carbon purity level, according to the company's press release.