Novonix Expanded Its Stake In The PURE Graphite Joint Venture To 75%

Novonix limited

The trading halt on NOVONIX Limited’s shares got lifted immediately after the company announced that it has exercised the option to increase its stakes in the USA-based PURE graphite battery anode material business to 75%. The stock price surged up as high as 7.895% or $0.030 to last trade at A$0.410 on 4 February 2019.

In the announcement to Australian Securities Exchange, metals and mining company NOVONIX Limited (ASX: NVX) stated that it has exercised the option to increase its ownership by 25% to 75% in the PURE graphite battery anode material business, headquartered in the United States of America.

The company has conducted due diligence ahead of ownership increase and achieved majority control of Joint Venture which was inked in February 2017. Now NOVONIX not only has control of PUREgraphite but also has the increased production rights to 100% exceeding 1,000 tonnes per annum. During the December quarter, the company has installed the first lot of commercial milling equipment in Tennessee facility and completed equipment trials and order specifications.

As per the report, the extension of ownership was funded through the capital raising of A$10.9 million via three-year convertible notes. It included A$10 million placement to strategic investor, St Baker Energy Innovation Fund and A$0.9 million placement to another leading Australian institutional investor.

Out of this capital raising, A$7.1 million were reportedly utilized for increasing ownership, production rights & achieve control in PUREgraphite; A$3.6 million towards additional CAPEX & OPEX for higher ownership level; and A$0.2 million was used as the cost of raising.

Founder of the St Baker Energy Innovation Fund, Trevor St Baker, stated that the investment in battery-testing company NOVONIX is in line with Fund’s investment strategy to invest in electric vehicle energy systems. Mr. Baker added, “The investment by St Baker Energy Innovation Fund will assist NOVONIX to deliver lower costs, better performance, and longer-life PUREgraphite-branded battery anode materials.”

FY2019 Outlook

For Fiscal 2019, the company targets to commission its first commercial-scale battery anode plant by the second quarter of 2019 and execute first production & sales of battery anode material by the second half of 2019.

It also aims to secure site expansion and begin planning for scaling PUREgraphite above 1,000 tpa. Acceleration of Research and Development activities in the company’s “Silicon Infused Graphite” invention and securing strategic partners for the project underscores other essential objectives of the company in its to-do-list for FY2019.

During the December quarter, the company started battery research and development partnership with  Dalhousie University and filed first patent application. Going forward, the company eyes to develop next-generation battery materials IP in partnership with Dalhousie University. Further, the company expects 30% year-on-year growth in the sale of equipment and services of its 100% owned Battery Technology Solution.

The stock price has witnessed a negative performance change of 61.22% over the past 12 months as on 24 January 2019.


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