Lithium Equity Financing TSX Quebec OTC FSE

Nemaska Lithium announces $360M equity financing

News Release

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN THE UNITED STATES

NEMASKA LITHIUM ANNOUNCES C$280,000,000 BOUGHT DEAL PUBLIC OFFERING OF COMMON SHARES AND C$80,000,000 CONTEMPORANEOUS PRIVATE PLACEMENT OF COMMON SHARES

QUÉBEC CITY, QUÉBEC – May 22, 2018 – Nemaska Lithium Inc. (TSX:NMX) (OTCQX:NMKEF) (FRANCFORT:N0T) (“Nemaska Lithium” or the “Corporation”) is pleased to announce that it has entered into an agreement with National Bank Financial Inc., BMO Capital Markets and Cantor Fitzgerald Canada Corporation, as co-lead underwriters and joint bookrunners, on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis 280,000,000 common shares of the Corporation (the “Shares”) at a price of C$1.00 per Share (the “Offering Price”) for gross proceeds of C$280,000,000 (the “Offering”). The Shares will be offered in all provinces and territories of Canada pursuant to a prospectus supplement to be filed by Nemaska Lithium (the “Prospectus Supplement”), as well as on a private placement basis in the United States, made by the Underwriters or their U.S. affiliates, and other such jurisdictions as the Corporation and Underwriters agree, under available prospectus and registration statement exemptions. Clarksons Platou Securities SA will be engaged as a selling agent in the Offering.

The Corporation has also granted the Underwriters an over-allotment option to purchase up to an additional 15% of the Shares purchased pursuant to the Offering, exercisable in whole or in part for a period of 30 days after and including the closing date of the Offering to cover over-allotments, if any, and for market stabilization purposes. If the option is exercise in full, an additional C$42,000,000 will be raised pursuant to the Offering.

Contemporaneous Private Placement of Common Shares

Contemporaneously with the Offering, Nemaska Lithium will enter into an agreement, subject to certain conditions, pursuant to which it will complete a private placement (the “Contemporaneous Private Placement”) with an institutional investor who will acquire, on a private placement basis, 80,000,000 shares (the “Private Placement Shares”) at the Offering Price, for aggregate gross proceeds of C$80,000,000. The Private Placement Shares will be subject to a four month hold from the closing date of the Contemporaneous Private Placement, which is expected to occur on or about May 25, 2018.

Guy Bourassa, President and CEO of Nemaska Lithium, commented on these recent announcements: “Today marks a big day in the life of Nemaska Lithium, as we are announcing the last piece of financing required to start the commercial development of the Whabouchi lithium mine project. This project financing package, which covers capital expenditures of both the Whabouchi mine and Shawinigan electrochemical plant, project contingencies, working capital requirements and financing costs will ensure the future of Nemaska Lithium. This will also allow the Corporation to stay on target to initiate the commissioning of the Whabouchi mine by second half of calendar year 2019 and start commissioning the Shawinigan electrochemical plant during the first half of calendar year 2020”.

The Offering is expected to close on or about May 30, 2018. The Offering and the Contemporaneous Private Placement are subject to the receipt of all necessary regulatory approvals, including, but not limited to, the final approval of the Toronto Stock Exchange (“TSX”) and subject to certain other conditions.

The closing of the Offering and the Contemporaneous Private Placement are also conditional on (i) the satisfaction or waiver of all conditions precedent (other than the pre-funding of an escrow/trust account), and the waiver of all termination rights by the Corporation and the managers, to the closing of the Bond Offering (as herein defined) as announced on April 20, 2018 and May 10, 2018; and (ii) the satisfaction or waiver of all escrow release conditions (other than the closing of the Offering and the Contemporaneous Private Placement) under the SoftBank Private Placement (as herein defined) as announced on April 6, 2018 and April 25, 2018.

For more information regarding the Offering, the Contemporaneous Private Placement and associated closing conditions, investors are encouraged to refer to the Prospectus Supplement to be filed in relation to the Offering and the term sheet with respect to the Bond Offering that has been filed on the Corporation’s corporate profile on SEDAR at www.sedar.com.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The securities offered pursuant to the Offering and the Contemporaneous Private Placement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined under the U.S. Securities Act) absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Project Financing Update

On March 28, 2018, the Corporation announced the different elements of a proposed US$775 million to US$825 million comprehensive project financing package for its Whabouchi Project and has in connection therewith, (a) announced the pricing and closing of books of the Bond Offering (the “Bond Offering”) for US$350 million, (b) entered into the Orion Stream Agreement (the “Stream Agreement”) for US$150 million, and (c) closed the private placement of 88,460,446 subscription receipts to SoftBank Group Corp. (the “SoftBank Private Placement”) in escrow for C$99.075 million. The SoftBank Private Placement is expected to result in the conversion of 83,729,011 subscription receipts into Nemaska Lithium common shares and the release from escrow of C$93,776,493 to Nemaska Lithium, assuming completion of the Offering and the Contemporaneous Private Placement and without giving effect to the exercise of the over-allotment options related to the Offering. SoftBank is expected to own 9.9% of the basic shares outstanding of the Corporation following completion of the SoftBank Private Placement. The aforementioned financing transactions together with the Offering and Contemporaneous Private Placement are referred to herein as the “Project Financing Package”.

References are made to the press releases of the Corporation dated March 28, 2018, April 6, 2018, April 12, 2018, April 20, 2018, April 25, 2018 and May 10, 2018 in relation to the foregoing. The completion and disbursement of funds under the individual component financings comprising the Projecting Financing Package are subject to several conditions precedent or escrow release conditions, and the receipt of regulatory approvals (including approval of the Toronto Stock Exchange).

Use of Proceeds

The proceeds of the Offering along with the fund received from the Project Financing Package will be used by the Corporation to fund the construction, commissioning, working capital and reserves of the Whabouchi Project and for general corporate working capital. The sources and uses of funds in order to fund the Whabouchi Project through to its completion, which is expected to occur on or about the third quarter of calendar year 2020, subject to the funds related to the Project Financing Package being in place by the beginning of June 2018, are set out below:

Notes:
1. Based on exchange rate of US$1.00:C$1.30.
2. Offering proceeds are calculated assuming no exercise of the Over-Allotment Option.
3. A total of C$99.075 million was placed into escrow. Assuming the completion of the Offering and the Contemporaneous Private Placement, it is expected that approximately 4,731,435 subscription receipts pursuant to the SoftBank Private Placement will be cancelled and approximately C$5.298 million of the escrowed funds from the original C$99.075 million will be returned to SoftBank at the time of the SoftBank escrow release, resulting in an aggregate of 83,729,011 Nemaska Lithium common shares being issued to SoftBank and an aggregate gross proceeds of C$93,776,493 released to the Corporation (assuming no exercise of the Over-Allotment Option).
4. Remaining capital expenditures as at December 1, 2017.
5. Based on a 11.25% coupon covering the first 30 months of interest payments starting at the closing date of the Bond Offering.
6. Required under the Bond Offering. This amount will be placed into an escrow account and can only be used to fund permitted capex increases made to the Whabouchi Project master control budget or until the completion of the Whabouchi Project.
7. Transaction costs include the aggregated estimated fees and legal fees associated with the Project Financing Package.
8. Capital expenditures from December 1, 2017 to March 31, 2018 have been deducted from the working capital. The amount also covers for corporate general working capital needs of the Whabouchi Project and for other corporate general working capital needs.
9. Excludes any expected revenues and related production costs in relation to the sale of spodumene concentrate not required by the Shawinigan Electrochemical Plant during its construction and ramp-up period that the Whabouchi Mine would be in a position to sell.

About Nemaska Lithium

Nemaska Lithium is a developing chemical company whose activities will be vertically integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide and lithium carbonate. These lithium salts are mainly destined for the fast-growing lithium-ion battery market, which is driven by the increasing demand for electric vehicles and energy storage worldwide. With its products and processes, Nemaska Lithium intends to facilitate access to green energy.

The Corporation will be operating the Whabouchi mine in Québec, Canada, one of the richest lithium spodumene deposits in the world, both in volume and grade. The spodumene concentrate produced at the Whabouchi mine will be processed at the Shawinigan plant using a unique membrane electrolysis process for which the Corporation holds several patents.

Nemaska Lithium is a member of the S&P/TSX SmallCap Index, S&P/TSX Global Mining Index, S&P/TSX Global Base Metals Index, S&P/TSX Equal Weight Global Base Metals Index, and the MSCI Canada Small Cap Index. For more information, visit www.nemaskalithium.com or www.twitter.com/Nemaska_Lithium
Cautionary Statement on Forward-Looking Information

Further information regarding Nemaska Lithium is available in the SEDAR database (www.sedar.com) and on the Corporation’s website at: www.nemaskalithium.com

FOR FURTHER INFORMATION, PLEASE CONTACT:
Mr. Victor Cantore
Investor Relations
514 831-3809
victor.cantore@nemaskalithium.com
Ms. Wanda Cutler
Investor Relations
416 303-6460
wanda.cutler@nemaskalithium.com

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