NextSource Materials (TSX: NEXT) announced on Thursday that it has entered into a mandate letter with the International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, to lead a senior debt facility amounting to $91 million. Approximately half of these funds are earmarked for expanding its Molo graphite mine located in southern Madagascar. The mine, which commenced production a year ago, currently produces NextSource’s proprietary SuperFlake graphite concentrate at a capacity of 17,000 tonnes per annum (tpa). The planned expansion aims to boost production nearly ninefold to 150,000 tpa.

According to a feasibility study conducted in December 2023, the expansion is estimated to cost $161.7 million (including contingency) plus $25.2 million for working capital. It is projected to yield a post-tax net present value (NPV) of $370 million, assuming an 8% discount rate, and an internal rate of return (IRR) of 29%. IFC’s commitment to provide financing is contingent upon completing technical, social, legal, and environmental due diligence, which NextSource reports is already underway and expected to conclude in Q1 2025.

With IFC’s backing, NextSource CEO Craig Scherba expressed confidence that the company is now positioned to fully tap into the extensive potential of the Molo project and contribute significantly to sustainable development in Madagascar. The project boasts one of the world’s largest graphite deposits, with measured resources totaling 23.6 million tonnes grading 6.32% carbon and indicated resources of 76.8 million tonnes grading 6.25%. NextSource’s strategic goal is to leverage these resources to become a vertically integrated global supplier of graphite for electric vehicle (EV) batteries. This involves establishing battery anode facilities capable of large-scale production of coated, spheronized, and purified graphite.

The company has already initiated plans for its first graphite plant in Mauritius, having submitted an application and secured a lease agreement for the site. Following the announcement of the partnership with IFC, NextSource Materials’ stock surged by 10.3% to C$0.86. As of now, the company's market capitalization stands at C$134 million ($94.5 million).

NextSource Materials Inc., headquartered in Toronto, Canada, specializes in developing battery materials and aims to establish itself as a vertically integrated global supplier through mining and value-added processing of graphite and other minerals. The company's flagship asset is the Molo Graphite Mine in Madagascar, recognized as one of the largest and highest-quality graphite resources worldwide, distinguished by its SuperFlake® graphite. The Molo Graphite Mine has commenced production, and its Phase 1 operations are currently scaling up to achieve a targeted production capacity of 17,000 tonnes per annum (tpa) of graphite concentrate.