Mr. Dan Blondal reports

NANO ONE COMMENCES FEASIBILITY STUDY FOR FIRST COMMERCIAL LFP PLANT AND "DESIGN-ONCE-BUILD-MANY" GROWTH STRATEGY

Nano One Materials Corp. has provided an update for its valued shareholders, potential financial partners and customers on the company's feasibility study, as it moves toward its first commercial LFP (lithium iron phosphate) production facility.

"Nano One is pleased to announce it has commenced a feasibility study for its first commercial plant," commented Alex Holmes, chief operating officer. "This plant design will also form the basis for our turnkey design-once-build-many strategy to address the broader LFP market. The study will provide us with an optimal production line layout and maximum utility of key equipment. Furthermore, this study will examine a ready-to-duplicate design, to address our mid-to-longer-term objective of deploying multiline facilities under licence or joint venture (JV) with partners in Asian, Indo-Pacific, North American and European jurisdictions."

Progress at Nano One's Candiac pilot plant, as reported on Dec. 19, 2023, and Feb. 5, 2024, has helped the company derisk, improve and optimize its one-pot process for LFP in commercial-scale equipment, while informing its engineering plans and providing confidence to its collaborators on the long-term competitive viability of its one-pot LFP technology.

Update on first commercial plant

Through a competitive bidding process, Nano One chose BBA to conduct an FEL 3, which will optimize plant layout, further refine capital and operating costs, and project timelines, for the construction of a 25,000-tonne-per-annum (tpa) LFP production facility.

Denis Geoffroy, chief commercialization officer, stated: "Our confidence in working with the BBA team is built on a strong foundation based on the involvement of key members of the team in the engineering, design and construction of the Candiac plant over a decade ago, when I was the general manager. More recently, BBA was also involved in the design and engineering of our 200 tpa LFP pilot line, which was successfully built and commissioned in Q3 2023. BBA brings a deep expertise in mining, metals, energy, chemicals, power and renewables. We are pleased to building on their experience while adding nearly 20 years of our own, in technology scaling, commercialization and production."

As an integral part of its feasibility study, the company has been in active dialogue with governments and their agencies on key factors that impact its ability to scale up rapidly and meet market demands. To that end, Nano One has determined that it is in its best interests to consider a broader set of site options that may be more suitable for future growth expansion beyond the first 25,000 tpa capacity plant. Key considerations include government incentives in the form of grants and forgivable loans, access to sufficient utilities (power, water and natural gas), and location preferences from collaborating stakeholders in the first commercial plant. Nano One, with the support of provincial and municipal governments, has identified potential site options in Quebec and Ontario. The company remains in active discussions with governments at all levels, as well as other strategic partners in 2024 to narrow down its site selection. Nano One is also closely monitoring government incentive programs in America and with its free trade partners, and has been engaged in conversations with several state and local governments to ensure that the company can align its business plans and scale up to meet emerging market needs in America.

With an emerging market for LFP projected to be tens of billions of dollars by 2035, the company is addressing this opportunity by aligning its first facility and partnerships to showcase the advantages of the one-pot process and the speed-to-market benefits of its design-once-build-many growth strategy.

Two thousand twenty-four path to commercialization

The company remains well capitalized and is looking to maximize opportunities to secure support from governments. The first commercial plant will require completion of the FEL 3, product validation, and customer offtake and feedstock supply agreements. These three items are fundamental for project financing and are a top priority for Nano One in 2024.

The company is in active dialogue with government agencies, project finance lenders and strategic partners to secure financing for both its growth activities, first commercial LFP plant and continuing innovations. A final investment decision will only be made following the securing of plant-specific financing. Nano One is evaluating creative structures, together with government incentives, to bring one-pot LFP to market sooner, while being cognizant of shareholders' interests.

In support of its strategic objectives, Nano One will be filing a preliminary base shelf prospectus that will help provide the most flexible and efficient access to capital markets, if and when it is needed. While the company has no immediate plans to issue securities at this time, the shelf prospectus, when made final or effective, would permit the company to make offerings of various financial securities, up to an aggregate total of $175-million, at its discretion, for an effective period of 25 months. The company considers this as a prudent step in the normal course of business.

During the 25-month period that the shelf prospectus would remain effective, the nature, size and timing of any financings would be dependent on the company's assessment of its requirements for financing and general market conditions. At the time any securities covered by the shelf prospectus are offered for sale, a prospectus supplement containing specific information regarding the terms of the securities being offered would be provided. A copy of the base shelf prospectus will available on the company's issuer profile on SEDAR+.

Candiac facility update

Nano One has confirmed orders from its Candiac facility for approximately 1.3 tonnes of LFP samples for the purposes of commercial evaluation and collaboration. Sample evaluation by potential offtakers has been positive with a collaborative approach to optimizing Nano One's commercial LFP offerings. Building on initial samples sold in Q4 2023, there is significant interest in validating Nano One's LFP product at scale for future offtake. The decisions to offtake LFP are being driven by advancements at Nano One's innovation hub in Burnaby, commercialization hub in Candiac and electric vehicle adoption policies such as the Inflation Reduction Act (IRA), as well as the equally important energy storage solutions (ESS), for industrial and military sectors.

Further and full automation of the Candiac pilot plant could help it reach up to 2,000 tpa capacity and is contingent on initial sales commitments, customer technology validation needs, capital support from government and financial returns. The company remains positive about potential opportunities in this growing market and believes that a portfolio of customers, both large and small, will help provide the right-sized offtakes to leverage the capacity of its pilot plant, to fill the capacity of a much larger first commercial plant and to secure the necessary project finance.

Dan Blondal, chief executive officer and founder, stated: "Our design-once-build-many growth strategy capitalizes on both near-term and midterm market opportunities, and enables rapid growth via licensing and joint venture. Our one-pot process reduces cost, complexity and GHG [greenhouse gas] emissions in the supply chain, while eliminating waste water, large volumes of challenging sulphate byproducts and the need for intermediate processing in foreign jurisdictions of concern. Through this combination of compelling enviro-economic value and turnkey deployment, we believe we can prudently address LFP's rapid growth opportunity, capture market share, and deliver value to shareholders, partners and government stakeholders."

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 manufacturer and strategic industry supply chain companies like Sumitomo Metal Mining, 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. The company 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 (Sustainable Development Technology Canada) and the governments of Canada and British Columbia.

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