NextSource Materials completes feasibility study for Molo expansion to 150k tpa
TORONTO, ON / ACCESS Newswire / July 27, 2026 / NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) ("NextSource" or "the Company") is pleased to announce the positive results of an updated Technical Feasibility Study ("FS") for a Phase 2 mine expansion of its Molo Graphite Mine Project in southern Madagascar (the "Molo Mine").
The FS considered a staged expansion beyond the existing Phase 1 mining and processing operation to reach a total capacity of 150,000 tonnes per annum ("tpa") of flake graphite concentrate over a 37-year life of mine ("LOM"). The FS estimates Phase 2 expansion capital costs of US$290.8 million, and financed in stages, with a pre-tax Net Present Value ("NPV") (8% discount rate) of US$402.5 million and a nominal pre-tax Internal Rate of Return ("IRR") of 21.0% (real pre-tax IRR of 18.5%).
The FS builds on the findings from previous technical reports and prior studies and assumes the construction of three new 50,000 tpa processing modules in two stages, adjacent to the current Phase 1 processing plant, and using the same fully modular construction approach. The fully modular approach is expected to greatly reduce build time, associated costs and development risks in relation to conventional mine construction.
The FS includes the procurement of all mining equipment, and the full costs of off-site modular fabrication and assembly, factory acceptance testing, module disassembly, shipping, plant infrastructure construction, on-site module re-assembly, commissioning, project contingencies, and working capital. The capital and operating costs estimates are prepared in line with a Class 3 estimate as per the American Association of Cost Engineers ("AACE") classification and a target accuracy of -15 to +25% at an 80% confidence level.
Hanré Rossouw, President and CEO of NextSource, commented,
"The updated and optimized FS announced today confirms the Molo Mine's ability to be expanded in stages to a larger-scale operation of global significance to meet the robust market demand for flake graphite, particularly for use in electric vehicle batteries. This is especially timely given the recent announcement of the progress on our Battery Anode Facility in the UAE. A staged expansion of this magnitude will position NextSource as a major global supplier and underpins our vertical integration strategy to offer an ample and secure supply of graphite flake and battery anode material, enabling direct supply to the electric vehicle battery market. In addition, the staged approach set out in the updated Feasibility Study reduces operating risk, lowers financing costs and accelerates revenue while providing flexibility to respond to market demand."
The FS's phased approach to 150,000 tpa was developed based on its offtake agreement with Mitsubishi Chemical Group for purified graphite and spheronized and purified graphite ("SPG") from NextSource's planned Battery Anode Facility ("BAF") in the United Arab Emirates ("UAE"), and ongoing discussions with automotive manufacturers ("OEMs") and battery anode offtake partners on the expected demand for flake graphite.
The Company has not yet made a production decision in respect of the first phase of the expansion to 150,000 tpa and discussions with offtakers and other potential strategic partners to determine the timing of a mine expansion are ongoing.
The FS was prepared by Stantec Consulting International Ltd. ("Stantec"), an independent engineering and consulting firm specializing in the mining and processing of commodities and battery materials.
Stantec has been supported by the following consultants and qualified persons: Keith Wilson, Martin Maloney, Damian Pianta, Jeremy Tape, Dion Deetlefs, Greg Gold (Stantec), Philip John Hancox and Desmond Subramani (Caracle Creek International Consulting (Pty.) Ltd.),
Oliver Peters (Metpro Management Inc.), Clive Brown (Bara Consulting Ltd.), Andreas Savvas (Epoch Resources (Pty) Ltd.), and Alkie Marais (Geostratum (Pty) Ltd.).
RESULTS SUMMARY
The following summary highlights the financial metrics provided in the FS:
Description | Feasibility Study |
Economic Highlights | |
Pre-tax NPV (8% discount rate)(1) | US$402.5 million |
Post-tax NPV (8% discount rate)(1) | US$348.4 million |
Pre-tax Nominal IRR(1) | 21.0% |
Post-tax Nominal IRR(1) | 20.0% |
Payback Period(2) | 7.2 years |
Project Capital Expenditure (including a contingency of $32.3 million)(3) (9) | US$290.8 million |
Sustaining Capital Expenditure and Closure Costs(9) | US$72.2 million |
Minesite Operating Cost EXW (per tonne of concentrate) (9) | US$419 |
Total Cash Cost FOB (per tonne of concentrate)(4) (9) | US$650 |
All-in Sustaining Cost FOB (per tonne of concentrate)(4) | US$665 |
LOM Weighted Average Basket Price of SuperFlake® graphite concentrate (US$/tonne)(5) | US$1,138 |
Life of Mine ("LOM")(6) | 37 years |
Operational Highlights | |
Waste Mined: Total (Mt) | 56.3 |
Ore Mined: Total (Mt)(7) | 82.6 |
Ore Mined: Steady-State (Mtpa)(7) | 2.5 |
Average ROM Grade: Cg (%) | 6.27% |
Notes:
(1) Assumes Project is financed with 100% equity. Unless otherwise noted, all monetary figures presented throughout this press release are expressed in real (unless otherwise stated) US dollars (USD) as of 1 April 2026. No above-inflationary cost escalations have been applied.
(2) Based on cumulative undiscounted free cash flows associated with the Expansion Project as measured from the date of first concentrate production.
(3) Project capital costs includes process equipment, civil & infrastructure, mining, buildings, electrical infrastructure, project & construction services. Includes capitalized operating costs. Excludes sustaining capital and closure costs.
(4) Assumes all concentrate will be sold on a FOB basis at the Port of Tulear, Madagascar.
(5) Based on the weighted average prices of the various size fractions of SuperFlake® concentrate, as informed by Benchmark Mineral Intelligence and includes a premium associated with an above 94%-95% concentrate grade. Also assumes any product that is required to be sold into Madagascar will be at the same price.
(6) Life of mine is measured in terms of actual operating years, where the mined production increases over the first 5 years as modules are commissioned, and then runs at a nominal rate of 2.5M tpa of ROM for a further ~32 years, with a 3 year tail at the end of the mine life.
(7) Assumes a Reserve cut-off grade of 3% Cg has been applied, with all material below this cut-off grade treated as waste. Over the life of the mine, 2,520 kt (4.5% of the total ore tonnes in the ROM production schedule) of inferred material above this cut-off has been included in the life of mine production schedule. The sensitivity analysis section of the FS considers the impact of excluding the inferred resource from the LOM production schedule.
(8) LOM average capacity consists of 150,000 tpa to cover the variability of feed grade and product distribution.
(9) Non-GAAP measure. See "Non-GAAP Measures" below.
CAPITAL COST SUMMARY
Metric |
| Total (US $'000) |
|---|---|---|
Direct Capital Costs |
| 183,270 |
Operating Equipment & Consumables |
| 70,630 |
Infrastructure |
| 68,447 |
Services |
| 44,193 |
Indirect Capital Costs |
| 107,518 |
Indirect |
| 42,753 |
Capitalized Operating Costs |
| 32,487 |
Contingency |
| 32,278 |
Total: Project CAPEX(1) |
| 290,788 |
Notes:
(1) Excludes sustaining capital and closure costs.
OPERATING COST SUMMARY
Based on discussions with offtakers, their preference is to purchase Molo graphite concentrate at the local Madagascar port at free on board ("FOB") East Africa prices. As such, operating costs ("OPEX") include the all-in FOB cost to deliver the graphite concentrate to the local port of Tulear.
Sub-Activity | LOM Total (US$ '000) | Unit Cost (US$ / t ROM) | Unit Cost (US$ / t concentrate) |
|---|---|---|---|
Phase 1 OPEX | 15,880 | 0.19 | 3.24 |
Mining | 464,990 | 5.63 | 94.75 |
Tailings | 116,260 | 1.41 | 23.69 |
Processing | 636,220 | 7.70 | 129.63 |
Infrastructure | 521,250 | 6.31 | 106.20 |
Site G&A | 300,600 | 3.64 | 61.24 |
Sub-Total: SiteOPEX Cost | 2,055,180 | 24.89 | 418.76 |
Selling Costs | 652,930 | 7.91 | 133.04 |
Royalties | 483.09 | 5.85 | 98.43 |
Sub-Total: SiteCash Cost(1) | 3,191,210 | 38.64 | 650.23 |
Notes:.
(1) Non-GAAP measure. See "Non-GAAP Measures" below
MINERAL RESOURCE AND RESERVE ESTIMATES
The Molo Mine hosts the following Mineral Resources and remains open along strike and to depth:
Measured Mineral Resources of 23.51 Mt at 6.31% Cg.
Indicated Mineral Resources of 76.75 Mt at 6.25% Cg.
Inferred Mineral Resources of 40.91 Mt at 5.78% Cg.
Molo Resource Estimate Statement | ||||
|---|---|---|---|---|
Effective Date: March 31, 2025 | ||||
Classification | Material Type | Resource Tonnes | Grade | Contained Carbon Graphite |
(kt) | (% Cg)(1) | (kt) | ||
Measured | "Low-Grade" | 13,025 | 4.64 | 604 |
Measured | "High-Grade" | 10,480 | 8.40 | 880 |
Total Measured | 23,505 | 6.31 | 1,484 | |
Indicated | "Low-Grade" | 39,539 | 4.73 | 1,871 |
Indicated | "High-Grade" | 37,207 | 7.86 | 2,925 |
Total Indicated | 76,746 | 6.25 | 4,796 | |
Measured + Indicated | "Low-Grade" | 52,564 | 4.71 | 2,475 |
Measured + Indicated | "High-Grade" | 47,686 | 7.98 | 3,805 |
Total Measured + Indicated | 100,250 |
Notes:
(1) % Cg = percentage Carbon Graphite.
(2) Mineral Resources are classified according to the Canadian Institute of Mining definitions.
(3) Mineral Resources are reported Inclusive of Mineral Reserves.
(4) "Low Grade" Resources are stated at a cut-off grade of 2% Cg.
(5) "High Grade" Resources are stated at a cut-off grade of 4% Cg.
(6) Eastern and western high-grade assays are capped at 15% Cg.
(7) A relative density of 2.36 tonnes per cubic meter (t/m3) was assigned to the mineralized zones for the resource tonnage estimation.
(8) Totals may not represent the sum of the parts due to rounding.
(9) Mineral Resources are defined as surface mineable only.
(10) Mineral Resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that any mineral resource will be converted into a mineral reserve.
The table below presents the Mineral Reserves which have been estimated for the Molo Mine:
Molo Reserve Estimate Statement | ||||
Effective Date: March 31, 2025 | ||||
Classification | Material Type | Ore | Grade | Contained Carbon Graphite |
(kt) | (% Cg)(1) | (kt) | ||
Proven Reserves | Total | 21,356 | 6.39 | 1,365 |
Probable Reserves | Total | 61,228 | 6.23 | 3,815 |
Total Reserves |
| 82,584 | 6.27 | 5,181 |
Notes:
(1) % Cg = percentage Carbon Graphite.
(2) Mineral Reserves are classified according to the Canadian Institute of Mining definitions.
(3) Apparent computational errors due to rounding are not considered significant.
(4) The Mineral Reserves are reported with appropriate modifying factors of dilution and recovery.
(5) The Mineral Reserves are reported at the head grade and at delivery to plant.
(6) The Mineral Reserves are stated at a basket price of US$1,085 per tonne of concentrate as at March 31, 2025.
(7) Although stated separately, the Mineral Resources are inclusive of the Mineral Reserves.
(8) Only Measured and Indicated Mineral Resources have been converted to Mineral Reserves.
(9) Quantities are reported in metric tonnes.
(10) The Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Reserves
METALLURGY
The FS is based on a full suite of metallurgical test work performed by SGS Canada Metallurgical Services Inc. in Lakefield, Ontario, Canada. These tests included lab and bench scale process development work, a bulk sample/pilot plant program, and metallurgical optimization and variability program. The overall graphitic carbon recovery into the final concentrate is 92.0% and the mass pull to concentrate is 5.9%.
Flake Size Distribution and Product Grade
Product Size | Distribution (%) | Product Grade |
+50 mesh | 13.7 | 97.1 |
-50 to +80 mesh | 28.0 | 96.9 |
-80 to +100 mesh | 10.6 | 97.4 |
-100 mesh | 47.7 | 97.8 |
PRICING
The life of mine average selling price East Africa FOB of US$1,138/t of concentrate (Real) used in the FS is the volume weighted average sales price for the various flake sizes and grades of SuperFlake® graphite concentrate that are expected to be produced from the Molo deposit. Prices used are based on current market prices provided by UK-based, commodity price reporting agency Benchmark Minerals Intelligence, who are recognized as leaders in providing independent and unbiased market research, pricing trends, and demand and supply analyses for the natural flake graphite market.
Current market prices in real US dollar terms were used through to 2040 and held constant thereafter over the rest of the life of mine. A pricing premium for increased carbon grade was applied based on recent market trends for products exceeding 94% carbon. No other premiums were applied. Furthermore, no financial or operational calculations and/or scenarios in the FS financial model with regard to downstream value-added processing of SuperFlake® graphite concentrate were included. This includes purification, spheroidization and coating for battery-grade graphite and thermal expansion for specialty graphite applications, such as foils. Pricing also assumed that any material required to be sold into Madagascar would be sold at the same price.
MADAGASCAR REGULATORY RISK
In May 2026, the Government of Madagascar enacted Decree No. 2026-831, which designates several minerals, including graphite, as "Strategic Mineral Substances" and provides, inter alia, for direct State participation in projects involving such commodities. The decree establishes an entitlement of a minimum non-dilutable State participation of 10%, exercisable through designated State entities and without any requirement for the State to contribute funding for such interest. It also provides the State with enhanced governance, information and oversight rights and introduces provisions relating to domestic supply obligations and strategic resource management.
The financial assessment presented in the Feasibility Study has been prepared based on the current project ownership structure (being 100% owned by ERG Madagascar SARLU, an indirect wholly owned subsidiary of NextSource) and does not include the impact on NextSource of any free-carried State interest in ERG Madagascar SARLU. The State's potential participation percentage in the Molo Mine has not yet been determined. A material reduction in cash flows and other economic parameters (including NPV, IRR and payback) attributable to NextSource because of a free-carried interest in ERG Madagascar SARLU may have a material adverse effect on the economics and overall viability of the Molo Mine for NextSource.
The regulatory changes, together with any future amendments or additional decrees that may come into effect, may affect the timing, economics and implementation of the Molo expansion by introducing additional requirements that remain uncertain in scope and application, including the negotiation of a mining convention and a potential obligation to sell up to, but no more than, 30% of production to the national market or national industries. These aspects will form part of ongoing engagement with the Government of Madagascar to clarify implementation requirements and to negotiate a potential stability agreement and broader regulatory framework to support the progression of the Molo Mine.
TECHNICAL REPORT FILING
This technical report summarizing the FS will be filed under the Company's profile on SEDAR+ at sedarplus.ca and will be posted on NextSource's website at nextsourcematerials.com within 45 days of this news release.
DATA VERIFICATION
Data verification programs were undertaken by the Qualified Persons authoring the FS and have included review of QA/QC data, re-sampling and sample analysis programs, and database verification. Validation checks were performed on data, and comprise checks on surveys, collar coordinates and assay data. Sufficient verification checks were undertaken on the database to provide confidence that the database is appropriate to support the technical information contained herein.
QUALIFIED PERSONS
Scientific and technical information presented in this press release was reviewed and approved by the following Qualified Persons as defined under NI 43-101: Keith Wilson, Damian Pianta, Jeremy Tape, Greg Gold (Stantec), Philip John Hancox and Desmond Subramani (Caracle Creek International Consulting (Pty.) Ltd.), Oliver Peters (Metpro Management Inc.), Clive Brown (Bara Consulting Ltd.), Andreas Savvas (Epoch Resources (Pty) Ltd.), and Alkie Marais (Geostratum (Pty) Ltd.).
ABOUT NEXTSOURCE MATERIALS INC.
NextSource Materials Inc. is a battery materials company based in Toronto, Canada that is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.
The Company's Molo graphite project in Madagascar is one of the largest known and highest-quality graphite resources globally, and the only one with SuperFlake® graphite. The Molo Mine has begun production through Phase 1 mine operations.
The Company is also developing a significant downstream graphite value-add business through the staged rollout of Battery Anode Facilities (BAF) capable of large-scale production of coated, spheronized and purified graphite for direct delivery to battery and automotive customers, in a fully transparent and traceable manner.
The Company is now in the process of developing its first BAF in the UAE and has executed a multi-year offtake agreement for the supply of anode active material with Mitsubishi Chemical Corp of Japan into North America.
NextSource Materials is listed on the Toronto Stock Exchange under the symbol "NEXT" and on the OTCQB under the symbol "NSRCF".
For further information about NextSource Materials, please visit our website at www.nextsourcematerials.com or contact us at +1.416.364.4911 or email Brent Nykoliation, Executive Vice President at brent@nextsourcematerials.com.
Cautionary Note
Safe Harbour: This press release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation. Readers are cautioned not to place undue reliance on forward-looking information or statements. Forward looking statements and information are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "potential", "possible" and other similar words, or statements that certain events or conditions "may", "will", "could", "expected" or "should" occur. Forward-looking statements include any statements regarding, among others, relating to the development plan of the BAF, reserve and resource estimates, results of the FS and any future-oriented financial information contained within, the development plan of the Molo Mine expansion to 150k tpa and any current delays in funding, shipping, the extent of, and impact of, potential direct State participation in projects involving certain strategic commodities including the Moro Project , or otherwise due to the current Middle East conflict, as well as the Company's intent on becoming a fully integrated global supplier of critical battery and technology materials. These statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release. These risks include the risk factors set forth in the Company's latest Annual Information Form (which includes the disclosed risk related specifically to the development commissioning and operation of the BAF), and those disclosed in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive there from. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether because of new information, future events or otherwise, except as may be required by applicable securities laws. Although the forward-looking statements contained in this news release are based on what management believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with them. These forward-looking statements are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company does not assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring after the date of this news release.
SOURCE: NextSource Materials Inc.
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