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Nemaska Lithium signs nonbinding US$150M streaming deal

Nemaska Lithium Inc. said it signed a nonbinding term sheet for US$150 million related to a streaming agreement as it seeks to raise between US$775 million and US$825 million to build the Whabouchi lithium project in Canada.

Nemaska did not name the other party to the potential deal, only describing it as "an international financial institution of good standing" and said it was in the process of negotiating a definitive agreement. It also did not outline possible terms of the streaming deal, such as how much lithium product it may have to deliver and at what price.

Nemaska said it was in advanced discussions for a debt package between US$300 to US$350 million and it aimed to raise the balance of its funding needs through equity. The company said it filed a base shelf prospectus to raise up to C$500 million in debt or equity.

The company could not immediately be reached for comment, but in a prepared statement, Nemaska President and CEO Guy Bourassa said the company was in the middle of "a number of formal discussions with serious parties" and expressed confidence that the negotiations would secure the junior enough funding to get it to commercial production.

A 2018 feasibility study on the Whabouchi mine, concentrator and the Hydromet plant in Quebec estimated after-tax net present value of C$2.4 billion, using an 8% discount rate, and an internal rate of return of 30.5%.