Mr. Dan Blondal reports

NANO ONE ANNOUNCES COLLABORATION AGREEMENT WITH SUMITOMO METAL MINING AND A C$16.9 MILLION STRATEGIC INVESTMENT

Nano One Materials Corp. and Sumitomo Metal Mining Co. Ltd. have agreed to a strategic equity investment in Nano One by SMM of $16,879,949.85 and to enter into a collaboration agreement, under which the parties will work together to accelerate the commercial production of lithium iron phosphate (LFP), cathode active materials and nickel-rich CAM chemistries, such as lithium-nickel-manganese-cobalt oxide (NMC).

"This announcement builds on years of technology development and CAM production by both Sumitomo Metal Mining and Nano One Materials," said Nano One chief executive officer, Dan Blondal, "and it expresses our joint ambitions to develop and lead world-class battery ecosystems and long-term partnerships in the production of LFP and NMC cathode materials. Sumitomo Metal Mining is a world-class leader, having pioneered nickel-rich cathode active materials for long-range electric vehicle battery applications. We are proud to be partnered with such a reputable and deeply experienced organization and to be jointly addressing emerging market demand in Japan, North America and other global regions."

For over 400 years, SMM has been mining, smelting, refining and processing metals with a large and diverse customer base that includes nickel-rich cathode materials for lithium-ion battery and electric vehicle producers in recent years. In 2022, SMM expanded its CAM product portfolio to include LFP and has chosen to collaborate and partner with Nano One to accelerate its efforts.

Nano One has plans to build its first commercial LFP plant adjacent to its existing production-scale pilot facility in Candiac, Que., and is nearing completion of a front-end-loading prefeasibility study that will help determine key factors including costs, production line size, total capacity and timing. The companies believe that LFP is an important battery material that will capture a significant portion of the market in the years ahead, and that it can be produced responsibly and cost-effectively in North America, Japan and other jurisdictions using technology and know-how from both organizations.

Katsuya Tanaka, managing executive officer and general manager of battery material division of SMM, stated: "Nano One has proven LFP production experience and has demonstrated that their latest technology works at scale, their materials perform and their costs are competitive. Nano One is also aligned with our belief that less waste and energy-intensive CAM production technology is one of the most important keys to contribute to developing [electric vehicle] markets. This is particularly important in Japan, North America and other emerging markets, where the race to meet net-zero goals and establish battery supply chains is just beginning. We are excited to be working with Nano One."

Strategic equity investment

SMM will make a strategic equity investment into Nano One for gross proceeds of $16,879,949.85. On closing, Nano One will issue a total of 5,498,355 common shares, representing approximately 5 per cent of the current issued and outstanding shares of Nano One, at $3.07 per share, in a non-brokered private placement. Nano One intends to use the proceeds principally toward the conversion of its existing Candiac LFP manufacturing facility to a one-pot production-scale pilot plant, nickel- and manganese-rich engineering, and piloting activities, and for working capital purposes.

In connection with the closing of the investment, Nano One and SMM will enter into an investor rights agreement, providing SMM with participation rights in any future equity financings to maintain pro rata ownership interest for a period of up to three years from the date of closing. Under the agreement, SMM will agree to a standstill provision that, among other things, restricts SMM's ability to purchase additional shares without Nano One consent for a period of 24 months and restricts SMM's ability to sell the shares for 12 months, subject to certain exemptions.

The shares will be subject to a hold period of four months and a day under applicable Canadian securities law. Closing is subject to certain customary closing conditions, including the approval of the Toronto Stock Exchange. Nano One expects closing to occur within 30 days.

Strategic collaboration agreement

SMM and Nano One will enter into a collaboration agreement on closing of the investment that will encompass various aspects primarily centred on supporting the development of battery ecosystems, with a particular focus on LFP and NMC production using the one-pot process. The collaboration will support technical product optimization for both LFP and NMC, as well as efforts to mitigate supply chain risks. These joint efforts are intended to strengthen and progress the development, design, construction and operation of Nano One's proposed LFP production-scale pilot plant, the piloting of nickel- and manganese-rich CAMs, and Nano One's first LFP commercial plant.

Further, the companies will jointly explore business development opportunities, including future sales and technology licensing, forging long-term partnerships, and identifying potential investment and financing opportunities to expand operations. In the pursuit of these shared business objectives, the companies intend to exchange relevant market information and technical expertise to improve the quality and cost of CAM produced by the one-pot process at the Candiac facilities to meet the SMM customer requirement.

Being the first CAM producing investor in Nano One, SMM has taken a leadership position in seeking to transform the battery material supply chain for electric vehicle, industrial and renewable energy storage applications. SMM's investment builds on past investments in Nano One from mining companies and governments and could accelerate LFP adoption, demand and business opportunities for the companies. In the future, the companies intend to evaluate and negotiate a longer-term partnership in the form of a joint venture and/or a licensing agreement for large-scale production of LFP, NMC and other CAM formulations using Nano One's one-pot process in Asia (excluding China) and other global jurisdictions such as Europe, North America and the Indo-Pacific region.

About Nano One Materials Corp.

Nano One is a clean technology company with a patented, scalable and low-carbon-intensity industrial process for the low-cost production of high performance lithium-ion-battery cathode materials. With strategic collaborations and partnerships, including automotive original equipment manufacturers and strategic industry supply chain companies like BASF, Umicore and Rio Tinto. Nano One's technology is applicable to electric vehicles, energy storage and consumer electronics, reducing costs and carbon intensity while improving environmental impact. Nano One aims to pilot and demonstrate its technology as turnkey production solutions for licence, joint venture and independent production opportunities, leveraging Canadian talent and critical minerals for emerging markets in North America, Europe and the Indo-Pacific region. Nano One has received funding from SDTC and the governments of Canada and British Columbia.

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