NextSource Materials has obtained a $91m (C$125.16m) debt facility, led by the International Finance Corporation (IFC) of the World Bank, to expand the Molo Graphite Mine in southern Madagascar.

In this regard, a mandate letter has been signed with the IFC.

The expansion would increase the mine’s capacity from 17,000tpa to 150,000tpa of SuperFlake graphite concentrate.

Last year in December, NextSource publicised the findings of an FS that endorsed the economic viability of significantly enhancing the Molo mine’s output.

The FS projected capex of $161.7m, alongside a working capital requirement of $25.2m.

These investments are expected to yield a pre-tax net present value (NPV8) of $424.1m and a pre-tax internal rate of return (IRR) of 31.1%. On a post-tax basis, the NPV8 stands at $370m with an IRR of 29%.

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The IFC has proposed to lead the coordination of the debt syndicate, which will include a selection of commercial banks and development finance institutions.

The IFC debt facility is set to cover around half of the capital and working capital requirements for the mine’s expansion to 150,000tpa.

IFC’s mandate to finance NextSource is contingent upon the completion of favourable technical, social, legal and environmental due diligence, the execution of agreeable conditions and their documentation, the acquisition of final credit, and board and regulatory approvals.

The due diligence process has started and is due to be over in the first quarter of 2025.

NextSource president and CEO Craig Scherba said: “We are delighted to announce the signing of a mandate letter with IFC, marking a significant milestone in our journey to expand the Molo Graphite Mine and support the diversification of global supply chains for critical battery materials.

“This partnership underscores the confidence placed in NextSource’s Molo mine expansion by one of the world’s leading development finance institutions. With IFC’s support, we are poised to unlock Molo’s vast potential and further contribute to long-term sustainable development in Madagascar.”