NextSource obtains term sheets to finance battery plant

Executive Summary

• NextSource Materials Inc. has executed non-binding term sheets with strategic investors, including local sovereign-linked entities and a Japanese strategic consortium, to finance Phase 1 of its proposed Battery Anode Facility (BAF) in Abu Dhabi, UAE.
• The proposed structure involves new strategic partners acquiring up to 50% interest in the UAE BAF project level, allowing them to finance their pro-rata share of capital costs, thereby minimizing dilution to NextSource shareholders.
• The company aims to reach a Final Investment Decision (FID) by the end of Q1 2026, supported by ongoing front-end engineering and design work with Stantec.

Key Details

• Transaction Structure: Equity investment at the project level for the UAE BAF.
• Investor Interest: Term sheets finalized with strategic investors including local sovereign-linked entities and a Japanese strategic consortium (a diversified industrial trading group with experience in global battery materials and infrastructure).
• Equity Stake: Potential acquisition of up to 50% interest in the UAE BAF by new strategic partners.
• Capital Contribution: Partners would finance their pro-rata share of Phase 1 capital costs.
• Strategic Rationale: Minimize dilution of NextSource Materials while partnering with investors providing strategic and regional value to the battery supply chain.
• Status: Term sheets are non-binding and subject to customary conditions; definitive agreements expected in the coming months.
• Timeline: Parallel workstreams advancing toward Final Investment Decision (FID) by the end of Q1 2026.
• Engineering Partner: Stantec is supporting front-end engineering and design.
• Next Steps: Following FID and funding, the company will proceed with full equipment procurement, installation, commissioning, and ramp-up.

Notable Quotes

• "The level and quality of funding interest we are seeing at the project level is a strong validation of our UAE BAF strategy. These strategic investors recognize the importance of establishing secure, scalable and geopolitically aligned anode supply chains outside of China. This process marks a significant first step toward funding our first commercial-scale BAF." — Hanre Rossouw, President and CEO