By M. Marin
Novonix Cathode Supplies – important for lithium-ion batteries
Novonix (NASDAQ:NVX) is advancing each its Cathode and Anode supplies items because it continues its technique to develop a north American provide chain to help the battery business. With Novonix Cathode Supplies anticipated to play a key position as demand for batteries grows, NVX had launched a pilot manufacturing facility for cathode supplies. Reflecting NVX’s elevated funding over the previous two years in its cathode synthesis expertise, the fabric was produced utilizing Novonix’s all-dry, zero-waste synthesis expertise. NVX introduced that it lately was granted a patent for its all-dry, zero-waste cathode synthesis expertise in Japan, which is a key marketplace for the manufacturing and use of CAM.
NVX intends to make use of the pilot line to reveal the business potential and competitiveness of its cathode supplies and expertise, together with high-nickel and cobalt-free supplies and their efficiency and sturdiness in industrial lithium-ion cells. Early bodily property measurements of mid-nickel cathode powders produced on the pilot line point out comparable, if not higher, anticipated electrochemical efficiency from the scaled Novonix materials.
Furthermore, the corporate expects its expertise to provide essential reductions in each prices and waste within the cathode manufacturing course of. NVX had commissioned Hatch Ltd. to conduct a commercial-scale capital and working price comparability research and an analysis of plant emissions and impacts to pure assets. Hatch’s analysis discovered the NVX course of doubtlessly reduces energy consumption considerably in comparison with the traditional course of. Furthermore, the NVX course of is estimated to devour fewer pure assets and generate fewer waste streams. Thus, the corporate views it as a greener manufacturing course of.
NVX subsequently expects the cathode enterprise to be an essential contributor to its technique to grow to be a provider of a full vary of superior supplies and providers to the battery business. The corporate has indicated that a number of potential prospects and companions have already proven curiosity within the cathode supplies and earlier this week introduced that it has signed a joint growth settlement with CBMM. CBMM is a 60-year outdated Brazilian firm that may be a world chief within the provide of niobium merchandise and expertise. NVX expects it could actually leverage CBMM’s expertise with niobium merchandise to doubtlessly enhance the soundness and sturdiness of its supplies.
NVX will use its patented all-dry, zero-waste synthesis course of to check and analyze cathode lively supplies (CAM) incorporating CBMM’s niobium merchandise. The 2 firms purpose to develop a decrease price CAM with improved efficiency. If sure milestones are met throughout the challenge, NVX and CBMM doubtlessly may type an settlement for CBMM merchandise to be built-in into NVX’s manufacturing processes.
A number of agreements in place, with plans to proceed to safe new prospects
Novonix has shaped a number of essential affiliation agreements for the Novonix Anode unit and one of many firm’s near-term key targets is to safe extra prospects and lock in demand for its merchandise. Key relationships have secured advance demand, entry to important materials and, in some circumstances, financing, underscoring the positives of Novonix’s marketing strategy and development technique, in our view. For instance, a current settlement with PowerCo SE, which is a part of the Volkswagen Group, is for a non- unique Testing and Improvement Settlement (TDA) to develop, take a look at and analyze artificial graphite anode supplies custom-made to fulfill PowerCo’s necessities. If the outcomes are profitable, the 2 may then enter right into a provide settlement for developed merchandise.
LG Vitality Answer…
One other settlement with LG Vitality Answer is to collectively analysis and develop synthetic graphite anode materials for lithium-ion batteries. LG Vitality Answer believes that it holds the most important portfolio of battery- associated patents on the planet, with greater than 25,000 patents, in keeping with the corporate. LG Vitality Answer’s aim is to achieve carbon impartial operations by 2050. The joint NVX-LGES settlement is anticipated to check materials developed at NVX’s Riverside facility.
Panasonic…Kore
In 1Q24, NVX introduced that it has signed a binding off-take settlement to produce high-performance artificial graphite anode materials to Panasonic Vitality’s North American operations. The supplies will come from Novonix’s Riverside facility, topic to Novonix reaching sure milestones concerning remaining mass manufacturing qualification timelines. One other settlement NVX has shaped is with Kore Energy.
New CFO – transition anticipated to be clean…
Individually, in current weeks, the corporate has appointed a brand new Chief Monetary Officer (CFO), Robert Lengthy, who will grow to be CFO efficient September 1, 2024. He has greater than 25 years of expertise in finance and govt management with each private and non-private firms. His prior CFO positions embrace with Chattem/Sanofi from 2008 till 2010, the place he was additionally or Chief Accounting Officer from 2006 via 2007, and Charleston Hosiery from 2005 via 2006.
As the corporate had introduced beforehand, the present CFO, Nick Liveris, introduced his intention to retire from his govt position and transition to a non-executive position on NVX’s board in an effort to work full time with the Liveris Household Workplace. Mr. Liveris will transition to the Novonix board on September 1, 2024 when Mr. Lengthy assumes the CFO position. Furthermore, to impact a clean CFO transition, one other board member who has intensive finance expertise together with as Chief Accounting Officer at Dow Chemical, Ron Edmonds, has assumed the place of Govt Officer – Finance as an interim transfer as of August 1, 2024.
Current funding from authorities and company sources…
Furthermore, Mr. Lengthy assumes the CFO position at a time when the corporate has already secured substantial funding. The corporate is leveraging associate financing, authorities grants and incentives and different funding sources. NVX has been awarded a number of funding sources from numerous authorities entities. For instance, the U.S. DOE (Division of Vitality) advisable NVX to obtain a US$103 million 48C tax credit score underneath the Qualifying Superior Vitality Challenge Allocation program earmarked to help manufacturing of important battery supplies from its Riverside facility. The 48C program incentivizes clear vitality property manufacturing and recycling and goals to reinforce U.S. home manufacturing of important clean-energy merchandise and demanding supplies. The corporate can select to make use of the tax credit score sooner or later to offset earnings tax legal responsibility or promote it in an effort to monetize its worth.
NVX additionally obtained financing from the DOE workplace of Manufacturing and Vitality Provide Chains, with the award of a US$100 million grant in 4Q23. We consider the anticipated elevated want in North America for supplies to help sustainable vitality sources, mixed with NVX’s technique to develop an area provide chain, are key components behind these fundings. NVX additionally obtained funding from Canada’s NRC IRAP (Nationwide Analysis Council of Canada Industrial Analysis Help Program).
Individually, Novonix has additionally accomplished the due diligence for a proposed transaction to mix its pure graphite pursuits with these of Lithium Vitality Restricted (LEL). The 2 intend to contribute their respective pure graphite exploration pursuits into a brand new firm, Axon Graphite Restricted, which can subsequently be listed on the Australian Securities Trade, topic to the required approvals. The proposed transaction is a approach for NVX to monetize the land belongings of its legacy Mount Dromedary unit in Queensland, Australia on which a graphite mine is located, though it doesn’t actively interact within the mining enterprise. By way of this proposed transaction, NVX will divest its Mount Dromedary pure graphite exploration pursuits and in change, NVX will obtain Axon shares. Axon expects to finish an IPO to boost from $15 million to $25 million at a problem value of $0.20 per share. NVX will retain an as much as 28.57% stake in Axon following the deliberate IPO, giving it publicity to Axon’s potential upside. Given the corporate’s entry to associate, authorities and different funding sources, NVX had a money stability of US$47.1 million at June 30, 2024.
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