NOVONIX Limited and Lithium Energy Limited to Combine Natural Graphite Interests with Intention to Take Combined Business Public

• NOVONIX Limited (“NOVONIX”) and Lithium Energy Limited (“LEL”) to contribute their natural graphite exploration interests into a new company, Axon Graphite Limited (“Axon”)
• Shares of Axon to be offered through an initial public offering (“IPO”) and listed on the Australian Securities Exchange (“ASX”)
• NOVONIX and LEL each will retain up to 28.57% ownership of Axon following the planned IPO
• Creates world class, large-scale natural flake graphite project
• Realises value for the shareholders of both NOVONIX and LEL
• Eligible NOVONIX and LEL shareholders to be given priority in the IPO

BRISBANE, Australia, April 03, 2024 (GLOBE NEWSWIRE) -- NOVONIX Limited (NASDAQ: NVX, ASX: NVX) (“NOVONIX” or “the Company”), a leading battery materials and technology company, today announced that it has signed a definitive agreement under which its wholly owned subsidiary, MD South Tenements Pty Ltd, which holds the Mount Dromedary natural graphite exploration interests, will be divested to Axon Graphite Limited (“Axon”), a subsidiary of Lithium Energy Limited (ASX: LEL). LEL will contribute its interest in its Burke and Corella graphite projects to Axon pursuant to the agreement. As consideration for the transaction, NOVONIX will receive shares in Axon, which the parties intend to list on the Australian Securities Exchange (“ASX”). The transaction is subject to the completion of the parties' due diligence enquiries, completion of the proposed initial public offering (“IPO”) of Axon, and receipt of approval for the admission of Axon to the ASX.

NOVONIX’s Mt. Dromedary project is a high-grade natural flake graphite deposit (refer Annexure A) and is adjacent to LEL’s Burke interests located 125km north of Cloncurry in northwest Queensland in a well-established mining region with access to an export hub. LEL’s Corella interests are located 40km west of Cloncurry.

Axon’s principal activities will include:

• Advancing the development of the Burke/Mt. Dromedary graphite projects;
• Advancing the exploration, evaluation and development of the Corella graphite project;
• Progressing the development of a vertically integrated Spherical Purified Graphite Battery Anode Material manufacturing facility in Queensland; and
• Investigating and potentially pursuing other prospective projects in the battery minerals sector both in Australia and abroad.

Axon proposes to undertake its IPO to raise a minimum of $15 million and up to $25 million at an issue price of $0.20 per share. The proposed IPO will include a priority offer to both eligible NOVONIX and eligible LEL shareholders, as well as a public offer to other new investors (see table 1 below). The Axon prospectus for the proposed IPO is expected to be issued in approximately 6 to 8 weeks.

Upon completion of the proposed IPO, NOVONIX and LEL will each retain up to 28.57% of the shares in Axon with the remaining shares to be held by investors in the IPO. The shares held by each of NVX and LEL will likely be held in escrow for a period of 24 months.

Table 1 – Pro-Forma Axon Graphite Capital Structure

Dr. Chris Burns, CEO of NOVONIX said: “The growth opportunity in the electric vehicle and energy storage systems battery markets for anode materials and high-grade graphite products is significant over the next decade. We believe the combination of the Mt. Dromedary and Burke assets will enhance the scale and economics of these resources and provide the focus for the development of a substantial natural graphite mine and business. We believe the newly formed company of Axon to focus on the development of these assets provides the opportunity to attract new capital to enable the development of the resource and advance the production of highly refined grade natural graphite for EVs and ESS. It will also highlight the value of these assets for NOVONIX shareholders.”

William Johnson, Executive Chairman of LEL, commented, “This transaction involving the Mt Dromedary and the Burke Graphite Projects will allow the consolidation of two adjacent high quality natural graphite deposits, creating a world-class inventory of high-grade natural graphite to support plans to develop an Australian-based, vertically integrated battery anode material (BAM) business. We expect significant operational synergies and economies of scale will be gained from the consolidation of these adjacent graphite deposits. We are delighted also to have NOVONIX as a partner in Axon Graphite. NOVONIX has established an enviable position within the global battery industry and their experience and industry contacts will be of great value for Axon Graphite moving forward.”

This announcement has been authorized for release by NOVONIX Chairman, Admiral Robert J. Natter, USN Ret.

About NOVONIX 

NOVONIX is a leading battery technology company revolutionizing the global lithium-ion battery industry with innovative, sustainable technologies, high-performance materials, and more efficient production methods. The Company manufactures industry-leading battery cell testing equipment, is growing its high-performance synthetic graphite anode material manufacturing operations, and has developed an all-dry, zero-waste cathode synthesis process. Through advanced R&D capabilities, proprietary technology, and strategic partnerships, NOVONIX has gained a prominent position in the electric vehicle and energy storage systems battery industry and is powering a cleaner energy future.

To learn more, visit us at www.novonixgroup.com or on LinkedIn and X.

For NOVONIX Limited 
Scott Espenshade, ir@novonixgroup.com (investors)
Valerie Malone, media@novonixgroup.com (media)

Cautionary Note Regarding Forward-Looking Statements

This communication contains forward-looking statements about the Company and the industry in which we operate. Forward-looking statements can generally be identified by use of words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or other similar expressions. Examples of forward-looking statements in this communication include statements we make regarding the proposed transaction with Lithium Energy Limited and the proposed Axon Graphite Limited IPO and ASX listing, Axon’s development of the Mt. Dromedary, Burke and Corella natural graphite resources for the production of anode materials for EV batteries, and Axon’s ability to scale-up production of its battery anode materials.

We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Such forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could affect our business and results are included in our filings with the U.S. Securities and Exchange Commission (“SEC”), including the Company's Form 20-F. Copies of these filings may be obtained by visiting our Investor Relations website at www.novonixgroup.com or the SEC's website at www.sec.gov. 

Forward-looking statements are not guarantees of future performance or outcomes, and actual performance and outcomes may differ materially from those made in or suggested by the forward-looking statements contained in this communication. Accordingly, you should not place undue reliance on forward-looking statements. Any forward-looking statement in this communication is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time, whether as a result of new information, future developments or otherwise, except as required by law. 

In particular, we caution that the proposed Axon IPO and ASX listing may be subject to final board and regulatory approvals and is dependent on market conditions. We caution that the admission of Axon to the official list of the ASX is conditional on and subject to the ASX’s satisfaction that Axon has a structure and operations suitable for a listed entity at the ASX’s absolute discretion.

In accordance with section 734(5)(b) of the Corporations Act 2001 (Cth) (Corporations Act), it is noted that:

• Axon will be the offeror of fully paid ordinary shares under the IPO;
• a prospectus will be issued by Axon in accordance with Part 6.2 of the Corporations Act when the IPO shares are offered;
  
• a person should consider the prospectus in deciding whether to apply for IPO shares; and
• anyone who wants to apply for the IPO will need to complete an application form that will be in or will accompany the prospectus.
  

Annexure A

About Mt. Dromedary Graphite Project

JORC Mineral Resources

The Mt Dromedary Graphite Project has a current Total Mineral Resource of 14.3Mt at 13.3% Total Graphitic Carbon (TGC) for 1.908Mt of contained graphite (at a 4% TGC cut-off grade) comprising:

• Total Measured Mineral Resource of 1.0Mt at 12.9% TGC for 131kt of contained graphite;
• Total Indicated Mineral Resource of 8.5Mt at 13.9% TGC for 1,185kt of contained graphite; and
• Total Inferred Mineral Resource of 4.8Mt at 12.4% TGC for 596kt of contained graphite.
  

NOTES:

Tenement Details

NOTES:

Competent Person’s Statement

The information in this document that relates to Mineral Resources in relation to the Mt Dromedary Graphite Project is extracted from the following ASX market announcement made by Novonix Limited (ASX:NVX) (formerly Graphitecorp Limited (former ASX:GRA) dated 20 October 2016 entitled “Upgraded Independent JORC Mineral Resource Estimate”. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement (referred to above).