Northern Graphite Announces Third Quarter 2025 Results and Provides Corporate Update

Executive Summary

• Northern Graphite reported a net loss of $9.4 million ($0.07 per share) for the third quarter ended September 30, 2025, driven by increased mine operating losses, foreign exchange losses, and non-cash accretion charges.
• The company is advancing its "Mine-to-Market" strategy, securing a $6.225 million federal loan for the Lac des Îles (LDI) pit extension and closing a C$1.44 million private placement to fund the Baie-Comeau Battery Anode Material (BAM) feasibility study.
• LDI mine operations faced disruptions due to unplanned SAG mill repairs and ore supply issues, resulting in concentrate production of 2,325 tonnes; however, the company aims to reach a steady-state production of 20,000 tpy (up to 25,000 tpy nameplate) by H1 2026 following plant upgrades.

Key Details

• Financial Performance (Q3 2025):
  • Net loss: $9.4 million ($0.07/share) vs. $4.8 million ($0.04/share) in Q3 2024.
  • Revenue: $6.5 million (down 4% YoY), driven by a 27% drop in sales volumes (2,325 tonnes) partially offset by 32% higher average prices.
  • Cash costs: $1,817/tonne (up 29% YoY) due to lower production and higher cost inventory.
  • Mine operations loss: $1.5 million (including $2.6M non-cash depreciation) vs. $0.6 million loss in prior year.
  • General & Administrative expenses: $2.4 million.
  • Finance costs: $3.8 million (up from $2.9M), largely non-cash due to capitalized interest and deferred royalty payments.
  • Foreign exchange loss: $1.7 million on financing instruments.
• Liquidity and Debt Covenants:
  • Cash and equivalents: $0.6 million as of Sept 30, 2025.
  • Senior secured loan ($27.7M) and royalty financing ($17.0M) classified as current liabilities due to covenant breaches (interest payments, working capital, cash balance, and royalty payments).
  • Lender and royalty holder waived all defaults as of Dec 1, 2025; discussions ongoing to amend terms.
  • Negative working capital balance: $48.3 million.
• Operational Updates (Lac des Îles):
  • Production declined to 2,325 tonnes due to fluctuating plant availability, unplanned SAG mill repairs, and ore supply issues.
  • LDI placed on temporary care and maintenance post-quarter end to address equipment issues and accelerate plant upgrades.
  • Goal: Reach steady-state production of 20,000 tpy (nameplate 25,000 tpy) by H1 2026.
  • Pit Extension: Secured $6.225 million interest-free federal loan covering 75% of costs; pre-stripping of overburden completed. First production from new zones expected in ~6 months.
  • Restoration Plan: Approved Nov 28, 2025. Total financial guarantee required is $10.1 million. Company must pay $0.9M cash deposit by Feb 26, 2026, with further payments due in Nov 2026 and Nov 2027.
• Financing and Corporate Actions:
  • Closed C$1,442,600 non-brokered private placement subsequent to quarter-end to fund Baie-Comeau BAM feasibility study and working capital.
  • Management changes: Niall Moore appointed permanent CFO; Dr. Moritz Hantel promoted to Chief Product Officer.
• Strategic Partnerships and Market Context:
  • Partnership with Italy’s Alkeemia S.p.A. for advanced graphite purification technology.
  • Research funding of up to C$860,000 awarded to consortium including RAIN Carbon Canada and Northern’s German group to recycle graphite fines into BAM.
  • Baie-Comeau BAM facility: Collaborating with The BMI Group on a brownfield site; first tranche of private placement closed in Oct 2025.
  • France BAM facility: Awarded "Strategic Project" status under EU Critical Raw Materials Act.
  • US Market: Preliminary anti-dumping tariffs on Chinese AAM set at ~160% effective duty rate.

Notable Quotes

• "The Company's financial and operating performance continues to be negatively affected by a number of intermittent and temporary shutdowns of the LDI mine and processing plant due to planned and unplanned maintenance requirements and technical challenges... The Company expects its operating and financial performance to improve as plant upgrades are completed, and mining of the new pit extension commences in the first half of 2026." — Hugues Jacquemin, CEO
• "Since acquiring LDI and the Okanjande Project in 2022, we have been laying the groundwork for a resilient, integrated and globally relevant graphite business and that work is starting to bear fruit... Northern is well positioned to meet this challenge." — Hugues Jacquemin, CEO