Nouveau Monde Graphite Inc.

Table 13-2 - Mineralized material units definition

In the years that followed, several testwork programs were undertaken including both comminution and concentration tests on a variety of different samples.

The Lac Guéret ore samples used for testwork was categorized into three units (U1, U2 and U3) according to the average graphitic carbon grade throughout the ore body. The range in grades of each unit is presented in Table 13-2.

Table 13-2 - Ore units definition

Sample Locations

The samples used for comminution and pilot-scale concentration testwork were from two bulk samples resulting from surface blasts in July 2014. Variability samples were also collected from four drillholes for additional comminution testing. Bench-scale concentration tests were performed on two-channel samples from Uatnan Mining Project Report batch materials as well as on three variability samples collected from nine drillholes. A detailed description of sample location, sample preparation and ore unit definition are presented in the 2018 Feasibility Study Technical Report.

Comminution

Comminution tests on the Lac Guéret material included JK Drop Weight tests ("DWT"), SAG Mill Comminution “SMC” tests, SAG design tests, Rod and Ball mill grindability tests, as well as abrasion tests.

The conclusion from the comminution testwork was that the Lac Guéret ore is soft in macro (impact) grinding, and generally soft in micro (attrition) grinding, with the exception of samples in ore unit U3 which were classified medium to very hard. All samples were characterized as mildly abrasive.

Concentration

Concentration testwork was performed on the PEA channel samples to test the repeatability of the PEA flowsheet and variability between mineralized units. Results revealed that previous performances were not exactly reproduced. The variability was attributed to the weathering of the samples over time. Additionally, it was determined that there is no interaction between mineralised units when treated together, meaning the results obtained were a weighted average of the individual sample results.

Several flotation technologies were tested during the FS concentration testwork, and the conclusion reached was that regular flotation (cell and column) yielded the best graphite grade and recovery. High concentrate grades were achieved, ranging from 92 to 98% carbon in individual size fractions with over 92% overall carbon recovery.

Material Aging

The impact of aging or weathering was tested by comparing samples that were exposed to air and sprayed for varying periods of time prior to being processed. After approximately eight weeks of aging, carbon recovery was reduced at the scavenger phase of processing.

Pilot Scale Testwork

Pilot scale testwork results confirmed that the use of three or four stages of polishing and cleaning are sufficient to maximize both graphite grade and recovery when maximizing the final concentrate flake size is required. Prolonged aging or weathering of the ore before processing has been proven to have an impact on the graphite recovery.

PEA Mass Balance

While no new testwork was undertaken for the current study, the majority of the process design criteria was based on the available data and any changes to the flowsheet were considered to be a reasonable extrapolation of the previously observed metallurgical response. The metallurgical balance used for the Uatnan Mining Project Report is presented in Table 1-1.

Table 1-1 – Metallurgical balance used for PEA

PEA Metallurgical Balance

While no new testwork was undertaken for the current study, the majority of the process design criteria was based on the available data and any changes to the flowsheet were considered to be a reasonable extrapolation of the previously observed metallurgical response. The metallurgical balance used for the Uatnan Mining Project Report is presented in Table 1-1.

Table 1-1 – Metallurgical balance used for PEA

For more details regarding the mineral processing and metallurgical testing of the Uatnan Mining Property, refer to chapter 13 of the Uatnan Mining Project Report.

Mineral Resource and Mineral Reserve Estimates

Mineral Resource Estimate

The graphite mineralization at Uatnan Mining Property is extensive in terms of size and grade. There is a significant amount of resources and the graphite mineralization extends to the northeast as well as to the southeast around the iron formation anticlinorium core and at depth.

Mineral Resource Estimates for the Uatnan Mining Project Report are based on the Mason drilling campaigns (2012, 2013/2014) and Quinto exploration data (2003 and 2006 drilling campaigns) using a cut-off grade ("COG") of 5.75% Cg. The pit optimization was designed using the same block model used for the Mineral Resource Update issued on November 9, 2015, and updated with more recent parameters (See Table 1-3).

The interpretation of the mineralized zones is mainly based on the percentage of carbon graphite and follows structural tendencies of the deposit. The current Measured and Indicated Mineral Pit-constrained Resources are 65.6 million tonnes at 17.2% Cg (See Table 1-2 below).

Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.

Table 1-2 - Current Mineral Resources Estimate for Uatnan Project

Notes :

interpolated from equal length composites (3 m) calculated from the mineralized intervals.

There has not been additional exploration on the mineralized zone since the last Mineral Resources Estimate. A pit optimization with new parameters (Table 1-3) using the same block model as previously used has been done by GMG.

Table 1-3 - The parameters used for the Mineral Resource pit optimization

There is a very small difference between the use of a cut-off grade of 5% Cg and 5.75% Cg. The table below shows the difference in terms of the pit constrained mineral resources.

**Table 1-4 -**Comparison of 2014, 2018 and 2022 Mineral Resources Estimates

The graphite mineralization at Uatnan Mining Property is extensive in terms of size and grade. There is a significant amount of resources and the graphite mineralization extends to the northeast as well as to the southeast around the iron formation anticlinorium core and at depth.

Mineral Reserve Estimate

Since the Uatnan Mining Project Report summarizes the results of a “preliminary economic assessment”, no Mineral Reserves have been estimated for the Uatnan Mining Project as per NI 43-101 guidelines.

For more details regarding the mineral resource and mineral reserve estimates of the Uatnan Mining Property, refer to chapters 14 and 15 of the Uatnan Mining Project Report.

Mining Operations

The mining method selected for the Uatnan Mining Project is a conventional open pit, truck and shovel, drill, and blast operation. Vegetation, topsoil, and overburden will be stripped and stockpiled for future reclamation use. The Mineral Resources and waste rock will be mined with 9 m high benches, drilled, blasted, and loaded into rigid frame haul trucks with backhoe excavators. The mine will be operated by an owner fleet, seven days per week, 24 hours per day and be comprised of a four-crew system working on a 2-week in, 2-week out rotation.

Since the Uatnan Mining Project is at a PEA level, a simplified ultimate pit surface was generated following the selected optimized pit shell as a guide and considering an overall pit slope of 50 degrees, which is presented in Figure 16-2. The pit is approximately 1,500 m long and 750 m wide at surface, with a total surface area of the pit is roughly 65 ha. The deepest part of the pit is at the 214 m elevation which is 290 m below surface.

Figure 16-2 – Pit design

To minimize the environmental footprint of the Uatnan Mining Project and select a waste rock and tailings management strategy to enhance closure performance, waste rock will be hauled to a mine rock stockpiles ("MRS"). Waste rock will be hauled to the tailings storage facility ("TSF"), located to the northwest of the open pit and will be disposed with the tailings. Also, when possible, waste rock will be backfilled into the mined out open pit.

The subset of Mineral Resource contained with the open pit design considers a cut-off grade of 5.75% Cg and include 62.2 Mt of Measured and Indicated Resources at an average diluted grade of 17.3% Cg, and 14.2 Mt of Inferred Resources at an average diluted grade of 18.0% Cg. A total of 102.6 Mt of overburden and waste rock are included in the pit resulting in a strip ratio of 1.3.

The Uatnan Mining Project has a 24-year mine life plus a six-month period of pre-production development. The purpose of the pre-production period is for the mine to provide waste rock for construction material and to prepare the pit for mining operations. A total of 500 kt of material is planned to be mined during preproduction.

During the mining operation, the total material mined from the open pit peaks at 10.8 Mt during Years 15 to 17 and averages 7.6 Mtpy. The average diluted Cg grade ranges from 14.2% to 24.9%, and averages

22.4% during the first five years. The average concentrate production over the life of mine averages 503,000 tpy.

The fleet of mining equipment includes twelve articulated haul trucks with 60-tonne payloads, two hydraulic excavator, and four production drill.

To manage water that collects in the open pit, sumps will be developed on the pit floor as mining progresses, and a series of pumps will be used to pump the water to settling ponds located at surface. BBA has assumed that in general, a total five pumps should be adequate to serve the needs of the open pit.

The mine workforce requirements have been calculated to reach 193 during peak production. The mine operations team will work on a 4-crew system, to provide 24 hours per day year-round coverage. The mine management and technical team will work on a 2-week in, 2-week out rotation.

For more details regarding the mining operations of the Uatnan Mining Property, refer to chapter 16 of the Uatnan Mining Project Report.

Processing and Recovery Operations

Given that the target market for the Uatnan Mining Project concentrate is the battery market, the main focus of the flowsheet has shifted from preserving flake size to overall graphite recovery and grade. No additional testwork was performed since the 2018 NI 43-101 Technical Report Feasibility Study Update. However, the extensive historical metallurgical testwork was used to select the updated process flowsheet. Both mining and processing will take place at the Uatnan Mining Project site. The run of mine (“ROM”) will be trucked from the mine to the crushing area where it will undergo a first-size reduction using a mineral sizer. The crushed material is stockpiled before being conveyed to the concentrator where the size is further reduced via primary grinding in a semi- autogenous ("SAG") mill and secondary grinding in a ball mill. Following comminution, the mineralised material is concentrated through rougher and scavenger flotation. The concentrates generated from rougher and scavenger flotation are polished and cleaned in two stages before reporting to the concentrate thickener. The thickened concentrate is pressure filtered and dried to produce a final graphite concentrate that is stored in a bulk silo and transported offsite. Any sulphur dioxide generated from the drying of the graphite concentrate will be captured in a wet scrubber where it will be neutralized with caustic soda. The flotation tailings are thickened in a tailings thickener before being pressure-filtered and subsequently trucked to the TSF for management with the MRS. Overflow water from the concentrate, tailings and process water thickeners reports to a process water tank.

A summary of the initial capital and sustaining capital costs ("CAPEX") for the Project are presented in Table 25-2 below.

Infrastructure, Permitting, and Compliance Activities

Project Infrastructure

The Uatnan Mining Property is located in a remote location (285 km from Baie-Comeau, the nearest city) and does not have access to public services, requiring it to be autonomous. A mining camp with a capacity for 360 workers will be built next to the Lac Des Torchons, less than 3 km from the mine site.

Access roads to the deposit already exist but will have to be improved for the final 85 km to support industrial use.

The concentrator has been located to be near the deposit to minimize transport between the mine and processing facilities. The electrical needs of the project will be sourced from the Manic-5 hydroelectric power station, located 70 km away.

A two-door garage at the mine site will be used for maintenance on the mining equipment.

The main industrial installations will comprise an ore storage area with a crusher, concentrator buildings (wet and dry areas).

An office building will house the administrative offices, the lunchroom and the changing room.

A tailings filtration plant will be built to manage the tailings. They will be thickened then filtered to finally be trucked to a TSF. The bottom of the TSF will be lined to collect seepage water. Contact water will be collected in a collection basin for recycling to the plant or to be treated before being released to the environment.

Status of Permits

The Lac Guéret Project received a ministerial decree in 2018 from the Québec Government. From 2018 to 2020, Mason received some permits and leases which are presented in Table 20-1. Permits expired are not listed in the table.

Table 20-1 - Lists of permits for Baie-Comeau and Lac Guéret

Environmental Studies

The former Lac Guéret Project was granted a decree in 2018 from the Government of Québec. Although, the Uatnan Mining Project will request a modification of the actual decree or a new one. Baseline studies (Hatch, 2015) will have to be updated based on the new study area to identify any environmental issues like protected areas, species at risk, waterbodies, fish habitats, biophysical environment etc. The results of those studies will have to be considered to identify project alternatives.

After having a decree, licenses and authorizations from various governmental authorities such as the MELCC will be needed to build and operate the mine.

Geochemical testing carried out on the Mason project tailings and mine rocks shows that the tailings and waste rock are potentially acid generating ("PAG"). Geochemical characterization results will be included in the next engineering phase to select appropriate tailings and waste rock management methods that will limit sulphide oxidation during the years of operation and at closure.

Through design and operation choices, the Corporation is planning to adopt high standards for tailings and waste rocks management, optimize mining infrastructures through progressive backfill of the proposed open pit, progressively rehabilitate the site, develop a transition to electrify the mining fleet and maintain the Corporation’s carbon neutrality status.

Social Studies

From the outset of the exploration stage, Mason developed a consultation plan and met with stakeholders on-site. The objectives of the consultation plan were to identify any concerns, expectations, and/or reactions from the affected communities, and reflect those in the Uatnan Mining Project development. Between 2012 and 2015, several meetings and public consultation activities took place with governmental, social, environmental, and local economic development actors and groups, along with the Innu First Nation of Pessamit, as the Uatnan Mining Project is located on Nitassinan Territory (Hatch, 2015).

In 2017, the Innu Council of Pessamit and Mason signed the Mushalakan agreement, an impact and benefit agreement that outlined the mutual desire to work closely together and ensure the Lac Guéret Project would result in benefits for both parties.

Through visits and series of meetings in the Baie-Comeau region and Pessamit community, the Corporation gathered feedback from local organizations and leaders who were initially involved in the Lac Guéret Project, established a dialogue as the new forecasted operator of the Uatnan Mining Project, and informed stakeholders of the next steps in the Uatnan Mining Project development.

For more details regarding the infrastructure, permitting and compliance activities of the Uatnan Mining Property, refer to chapters 18 and 20 of the Uatnan Mining Project Report.

Capital and Operating Costs

The Uatnan Mine Project is a greenfield mining and processing facility with average yearly mill feed throughput capacity of 3,400,000 t and a target production of approximately 500,000 tpy of graphite concentrate.

Capital Costs Summary

The Capex covers the development of the mine, processing facilities, and infrastructure required for the Uatnan Mine Project. It is based on the application of standard costing methods of achieving a PEA which provides a level of accuracy ranging between -30% and +50%. The operating costs covers mining, processing, concentrate haulage, tailings and water management, general and administration fees, as well as infrastructure and services.

A summary of the initial Capex for the Uatnan Mining Project is presented in Table 25-2 below.

Table 25-2 - Summary of capital cost estimate

Sustaining CAPEX is the amount required to periodically invest in the operations phase to maintain the functionality of the mining and processing operations. For this Project, the sustaining capital estimated at $147M is mainly related to the haul truck fleet replacement, the co-disposal system and water management.

Operating Costs Estimate

The operating costs ("OPEX") over the Uatnan Mining Project life are estimated at $3,236M for an average of $268/t of concentrate. Operating costs are made up from the following costs: mining and tailings, Processing, Water Management, General and Administration ("G&A").

A summary of these costs is presented in Table 25-3.

Table 25-3 - Operating costs summary

Note

Economic Analysis

The results of the study confirm that the Project is economically viable with an after-tax IRR of 25.9% and an 8% discount rate NPV of $2,173M based on current pricing projections for flake concentrate. The complete results of the economic analysis, before and after tax are presented in Table 25-4 below.