Big picture - Why invest in NextSource Materials Inc
NextSource Materials Inc Snapshot
NextSource Materials is focused on bringing its 100% owned Molo Graphite Project in southern Madagascar into production, with 2018 targeted for Phase 1 output to begin.
The Molo is a feasibility-stage project and ranks as one of the largest-known and highest quality flake graphite deposits in the world. The Molo hosts a National Instrument 43-101 compliant total combined graphite resource of 141.28 million tonnes (Mt) at 6.13% total graphitic carbon (C), with a contained ore reserve of 22.44 Mt at 7.02%C.
A Feasibility Study completed February 2015 confirmed that the Molo Project is expected to be a lowest-quartile producer due to its low-cost, open pit operation that has a negligible stripping ratio. In February 2017, an updated Feasibility Study was undertaken to reflect NextSource Materials’ phased approach to production, using a “mining first” full-modular mine build philosophy.
Phase 1 will consist of a processing plant with a feed rate of 240,000 tonnes per annum and a production rate of approximately 15,000 tonnes of finished flake graphite concentrate at purities between 97%C to 98%C per annum. This production level will rank the Molo Project among one of the top five largest producers of graphite globally.
Phase 2 of the Molo mine will be the expansion of SuperFlake™ production to 50,000 tonnes per annum, as envisioned in the Company’s 2015 Feasibility Study. Molo SuperFlake™ has been verified by end-users for use in all the top demand applications - refractory (steel), lithium-ion battery applications and expanded graphite (foil) applications.
By utilizing a phased approach, it ideally positions the Molo Project with first-mover advantage while simultaneously creating a competitive barrier to entry.
NextSource Materials is now focused on advancing the Molo Project to production, with marketing initiatives also being increased to coincide with the Comany’s aggressive development plan. Commissioning and production are expected in 2018.
The Molo Graphite Project
The Molo is a Full Feasibility-stage project and ranks as one of the largest-known and highest quality flake graphite deposits in the world. The Molo Project hosts a National Instrument 43-101 compliant total combined graphite resource of 141.28 million tonnes (Mt) at 6.13% total graphitic carbon (C), with a contained ore reserve of 22.44 Mt at 7.02%C.
The Molo is situated in the Tulear region of south-western Madagascar and is located 11.5km east of the town of Fotadrevo, covering an area of 62.5 hectares within the Company’s overall property claim position of 425km2 .
The Molo is centrally located between two coastal port cities. On the west coast of the island and located 160km north-west of Molo is the regional capital and port city of Toliara. On the east coast and 220km by road from the Molo is the port city of Fort Dauphin, which was the first French settlement in Madagascar.
At Fort Dauphin is the Port of Ehoala, a modern deep-water port built by the World Bank and Rio Tinto in 2009. Fort Dauphin will be the port of choice for the Molo Project.
The Molo deposit itself occurs in a serendipitously flat, sparsely populated and dry savannah grassland region that has easy access via a network of seasonal secondary roads. These roads radiate outward from the village of Fotadrevo to a serviceable regional road system connecting Toliara to Fort Dauphin, via the RN10 (“Route Nationale”) or RN13. Fotadrevo, the current location of NextSource’s permanent camp, hosts an all-weather, all-season airstrip.
Madagascar is renowned worldwide for its high-quality flake graphite and has been a traditional producer for over a century but has never exceeded 12,000 tonnes of production annually. Currently, annual production of flake graphite averages about 5,000 tonnes. NextSource Materials’ Molo deposit represents the first new and substantial graphite discovery in the country in over 50 years.
The Molo is one of seven surficial graphite trends discovered and drill tested by NextSource in late 2011 and announced to the market in early January 2012. Resource delineation, drilling and trenching on the Molo took place between May and November of 2012, and allowed for a maiden Indicated and Inferred Resource to be stated in early December of the same year. This maiden mineral resource estimate formed the basis for the Company’s Preliminary Economic Assessment (the “PEA”), which was undertaken by DRA Mineral Projects and released to the market in 2013.
The positive outcome of this assessment lead NextSource to undertake another phase of exploratory drilling and sampling in 2014 to upgrade the deposit and its contained mineral resources to reserve (bankable) status. The process included an additional 32 diamond drill holes (totaling 2,063 metres) and 9 trenches (totaling 1,876 metres). The entire database upon which the upgraded resource estimate was based contained 80 drill holes (totaling 11,660 metres) and 35 trenches (totaling 8,492 metres). This new resource formed the basis of Molo’s positive Full (Bankable) Feasibility Study released in February 2015.
Board of Directors
John P. Sanderson
Mr. Sanderson has served as Chairman of the Board of Directors of the Company since March 2016 and prior to that, was the Vice Chairman of the Board since October 1, 2009. Mr. Sanderson is a mediator, arbitrator, consultant and lawyer called to the Bar in the Canadian Provinces of Ontario and British Columbia and brings many years of legal and mediation expertise from various industries. He has acted as mediator, facilitator and arbitrator in British Columbia, Alberta, Ontario and the Northwest Territories, in numerous commercial transactions, including insurance claims, corporate contractual disputes, construction matters and disputes, environmental disputes, inter-governmental disputes, employment matters, and in relation to aboriginal claims. He is a member of mediation and arbitration panels with the British Columbia Arbitration and Mediation Institute, the British Columbia International Commercial Arbitration Centre and Mediate BC. Mr. Sanderson also currently serves as the Chairman of the Board of MacDonald Mines Exploration Ltd., a publically listed resource exploration company headquartered in Toronto, Canada.
President and Chief Executive Officer
Mr. Scherba was appointed President and Chief Operating Officer in September 2012 and has been a director since January 2010. Previously, Mr. Scherba served as Vice President, Exploration of the Company since January 2010. Prior to joining the Company, Mr. Scherba was a managing partner for six years with Taiga Consultants Ltd. (“Taiga”), a mining exploration consulting company. Mr. Scherba has been a professional geologist (P. Geo.) since 2000, and his expertise includes supervising large Canadian and international exploration programs. Mr. Scherba was an integral member of the exploration team that developed Nevsun Resources’ high grade gold, copper and zinc Bisha project in Eritrea. Mr. Scherba served as the Company's Country and Exploration Manager in Madagascar during its initial exploration stage, discovering both the Molo Graphite and the Green Giant Vanadium deposits.
Senior Vice President, Mine Development
Mr. Robin Borley is a Graduate mining engineering professional and a certified mine manager with more than 25 years of international mining experience building and operating mining ventures. He has held senior management positions both Internationally and within the South African mining industry. He has most recently served as Mining Director for DRA Mineral Projects and was instrumental as the COO of Red Island Minerals in a developing a Madagascar coal venture.
His diverse career has spanned resource project management, evaluation, exploration and mine development. Robin has completed several mine evaluations including operational and financial evaluations of new and existing operations across a diverse range of resource sectors. He has experience in the management of underground and surface mining operations from both the contractor and owner miner environments.
From 2006 through to 2012, Robin participated in the BEE management buy-out transaction of the Optimum Colliery mining property from BHP, through its independent listing and its ultimate sale to Glencore in December 2012.
Mr. Yarie has served as a director of the Company since 2008. Mr. Yarie is an experienced geophysicist and a successful entrepreneur. He has over 20 years of experience in the mining and environmental/engineering sectors. Mr. Yarie has project management and business development experience as he has held senior positions with a number of Canadian-based geophysical service providers. Since January 2010, Mr. Yarie has been Senior Vice President Exploration for MacDonald Mines Exploration Ltd, Red Pine Exploration Inc. and Honey Badger Exploration Inc. From October 2007 to December 2009, Mr. Yarie was a business development officer with Geotech Ltd, a geo-physical airborne survey company. From September 2004 to October 2007, Mr. Yarie was head of sales and business development for Aeroquest Limited. From 1992 to 2001, he was a partner of a specialized environmental and engineering consulting group where he managed a number of large projects including the ESA of the Sydney Tar Ponds, the closure of the Canadian Forces Bases in Germany and the Maritime and Northeast Pipeline project.
Mr. Comand is a former executive of Sherritt International, where he held the position of Vice President of Operations for Sherritt’s Madagascar Ambatovy Project, which is one of the largest lateritic nickel mines in the world. Ambatovy is a joint venture between Sherritt International, Japan’s Sumitomo Corp, Korea’s Resources Corp (KORES) and Canada’s SNC Lavalin Inc.. Mr Comand is a Professional Engineer (P.Eng) and Certified Engineering Technologist (CET) who earned his Maintenance Manager Professional Designation (MMP) license in 2006 and his Charter Director designation (C.Dir) in 2012. He is currently consulting for numerous clients around the world in the mining and energy sectors. Mr. Comand spent the past 3.5 years in Madagascar and successfully led the organization through construction, commissioning and operations of the project to commercial production. Throughout his career he has consistently held senior positions in complex operations, business development, environmental management, maintenance, and project construction.
Mr. Comand, P. Eng, CET MMP CDir, is a Mechanical Engineer with extensive Madagascar mining operations experience and holds his P. Eng designation in the province of Ontario as well as designation as a Certified Engineering Technologist.
Mr. Larson is a Canadian attorney with more than 35 years as a member of the Law Society of British Columbia and has significant experience in the capital markets, specifically the equity and debt sectors.
Mr. Larson is a former partner of a major Vancouver Law firm, now McMillan LLP and currently maintains a private practice along with a successful investment business. As an expert in alternate dispute resolution, Dalton has extensive experience as a professional arbitrator and mediator. He holds a Masters Degree in law from the University of London, England and has served more than 25 years as a director of several investment funds managed by the CW Funds group of companies, affiliated with Ventures West Management Inc., which was one of the largest venture capital firms in Canada. He has served as Chairman of the Board of Directors of a Philippine ethanol company and was a founding shareholder and first Chairman of the Board of Directors of the First Coal Corporation, which started operations in 2004 and raised in excess of $65 million in equity to finance its development activities. This company was sold to Xstrata in 2011 for in excess of $150 million.
Senior Vice President, Corporate Development
Mr. Nykoliation joined the senior management team at NextSource Materials as Vice President, Corporate Development in 2007 and oversees the fundraising and investor relations for the Company. He brings over 16 years of management experience, having held senior marketing and strategic development positions with several Fortune 500 corporations in Canada, notably Nestlé, Home Depot and Whirlpool.
Mr. Nykoliation holds a Bachelor of Commerce (Marketing) with Honours degree from Queen's University and also serves as a director of Red Pine Exploration Inc., (TSX.V:RPX) a publically listed gold resource exploration company headquartered in Toronto, Canada.
Chief Financial Officer
Mr. Johnson is a bilingual senior executive with over 20 years of business experience, including 10 years at public corporations as CFO, VP Corporate Development and other financial management positions, and 10 years in capital markets in investment banking and equity research. Mr. Johnson is a Chartered Financial Analyst (CFA) and a Chartered Professional Accountant (CPA) and joined as CFO in October 2015. He also holds a Bachelor of Commerce (Finance) from the John Molson School of Business at Concordia University in Montreal.
Roland Fok Seung
Madagascar Country Manager
Mr. Fok Seung is a Chartered Accountant of the Institute of England and Wales and the Association of Chartered Certified Accountants. Employed as Energizer’s Madagascar Country Manager for the past 7 years, Mr. Fok Seung is based full time in Madagascar and will continue to act in this capacity with a focus on financial related business activity.
Johann de Bruin
Senior Consultant, Operational Readiness
Mr. de Bruin has an impressive track record as a seasoned mining industry engineer and executive with substantial knowledge of mining operations on the African continent, Australia and Canada.
Mr. de Bruin retired as Managing Director from DRA in November 2016 after successfully navigating DRA through the diversification of its business into Central, East & West Africa. Mr. de Bruin was responsible for leading a globalization agenda that included two significant acquisitions and a horizontal integration into energy, water and agriculture to create sustainability. During his tenure at DRA, Mr. de Bruin was instrumental in growing the mining project portfolio to include design and construction of 35 platinum concentrators, 42 coal processing plants and 12 metallurgical plants across multiple commodities, collectively valued at over $5 billion.
Strong institutional shareholders
As of April 24, 2017
- Shares Issued: 460,995,711
- Outstanding Options: 25,960,000
- Outstanding Warrants: 30,521,256
- Market Capitalization: C$36.9 Million
- Share Price: C$0.08
145 Wellington Street West,
Toronto, Ontario, Canada M5J 1H8
+1 (416) 364-4911
Pres Lot 001 A Bis Andranomena
Senior Vice President,
E-mail: [email protected]