NextSource Materials Inc 6-K, filed Nov 16, 2021

NextSource Materials Inc. (NSRCF)

6-K 2021-11-16 For: 2021-11-15

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Added on April 12, 2026

About this 6-K

NextSource Materials Inc filed this 6-K on November 16, 2021.

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	As at	As at
	September 30,	June 30,
	2021	2021

Assets
Current Assets:
Cash and cash equivalents	$18,951,655	$22,437,086
Amounts receivable (note 17)	31,880	92,370
Prepaid expenses (note 17)	39,500	52,974
Total Current Assets	19,023,035	22,582,430
Property, plant and equipment (note 7)	8,039,082	4,337,161
Total Assets	$27,062,117	$26,919,591

Liabilities
Current Liabilities:
Accounts payable (note 17)	575,242	383,428
Accrued liabilities (note 17)	158,455	221,692
Short term debt (note 8)	-	-
Current portion of lease obligations (note 9)	5,947	5,845
Fair value of warrant derivate financial liabilities (note 11)	46,702,455	45,380,933
Provisions (note 12)	742,855	738,022
Total Current Liabilities	48,184,954	46,729,920
Royalty obligation (note 10)	6,583,271	6,330,721
Lease obligations (note 9)	5,348	5,254
Total Liabilities	54,773,573	53,065,895

Shareholders’ Equity (Deficit)
Share capital (note 13)	121,038,550	120,491,932
Accumulated deficit	(149,240,505)	(146,893,550)
Accumulated other comprehensive income	490,499	255,314
Total Shareholders’ Equity (Deficit)	(27,711,456)	(26,146,304)

Total Liabilities and Shareholders’ Equity (Deficit)	$27,062,117	$26,919,591

Nature of operations (note 1)
Basis of presentation (note 2)
Mineral development property (note 5)
Mineral exploration properties (note 6)

	Three months ended	Three months ended
	September 30,	September 30,
	2021	2020
Revenues	$-	$-

Expenses and other income
Mine development expenses (notes 5 and 16)	(121,916)	9,835
Exploration and evaluation expenses (notes 6 and 16)	52,858	6,467
General and administrative expenses (note 16 and 17)	418,769	283,263
Share-based compensation (note 17)	152,570	-
Amortization of plant and equipment (note 7)	4,869	1,522
Lease finance costs (note 9)	272	-
Foreign currency translation (gain) loss	239,639	(16,251)
Interest (income)	(44)	-
Interest expense	32	771
Sub-total before other items	747,049	285,607
Change in value of royalty obligation (note 10)	34,923	-
Change in value of warrant liability (note 11)	1,564,983	(4,892)
Net loss for the period	(2,346,955)	(280,715)

Other comprehensive income
Items that will be reclassified subsequently to net loss
Translation adjustment for foreign operations	235,185	545
Net loss and comprehensive loss for the period	$(2,111,770)	$(280,170)

Weighted-average common shares (basic and diluted)	98,200,680	59,670,518
Net loss per common shares (basic and diluted)	$(0.02)	$(0.00)

	Common Shares	Share	Accumulated	Accumulated Other	Total (Deficit)
	Outstanding	Capital	Deficit	Comprehensive Income	Equity
	#	$	$	$	$
Balance as at June 30, 2020	53,649,481	103,901,775	(104,933,066)	120,675	(910,616)

Private placement of common shares	6,157,879	1,476,571	-	-	1,476,571
Cost of issue of private placement of common shares	-	(9,292)	-	-	(9,292)
Reclassification as warrant liability	-	(539,536)	-	-	(539,536)
Net loss for the period	-	-	(280,715)	-	(280,715)
Cumulative translation adjustment	-	-	-	545	545
Balance as at September 30, 2020	59,807,360	104,829,518	(105,213,781)	121,220	(263,043)

Private placement of common shares	35,214,286	18,500,000	-	-	18,500,000
Cost of issue of common shares	-	(104,154)	-	-	(104,154)
Reclassification of equity to warrant liability	-	(12,382,325)	-	-	(12,382,325)
Reclassification of warrant liability to equity on exercise of warrants	-	4,236,116	-	-	4,236,116
Shares issued on exercise of warrants	1,842,997	1,108,200	-	-	1,108,200
Shares issued on exercise of stock options	802,174	560,406	-	-	560,406
Stock options granted under long-term incentive plan	-	2,777,403	-	-	2,777,403
Shares issued on conversion of restricted share units	517,443	-	-	-	-
Restricted share units granted under long-term incentive plan	-	966,768	-	-	966,768
Net loss for the period	-	-	(41,679,769)	-	(41,679,769)
Cumulative translation adjustment	-	-	-	134,094	134,094
Balance as at June 30, 2021	98,184,260	120,491,932	(146,893,550)	255,314	(26,146,304)

Reclassification of warrant liability to equity on exercise of warrants	-	243,461	-	-	243,461
Shares issued on exercise of warrants	211,112	150,587	-	-	150,587
Restricted share units granted under long-term incentive plan	-	152,570	-	-	152,570
Net loss for the period	-	-	(2,346,955)	-	(2,346,955)
Cumulative translation adjustment	-	-	-	235,185	235,185
Balance as at September 30, 2021	98,395,372	121,038,550	(149,240,505)	490,499	(27,711,456)

	Three months ended	Three months ended
	September 30,	September 30,
	2021	2020

Operating activities
Net loss for the period	$(2,346,955)	$(280,715)
Add (deduct) items not affecting cash:
Amortization of plant and equipment	4,869	1,522
Change in value of lease obligations	272	22
Change in value of royalty obligation	34,923	-
Change in value of warrant derivative liability	1,564,983	(4,892)
Share-based compensation	152,570	-
Government assistance	-	-
Change in non-cash working capital balances:
(Increase) decrease in amounts receivable and prepaid expenses	73,964	2,674
Increase (decrease) in accounts payable and accrued liabilities	128,577	(279,663)
Increase (decrease) in provision	4,833	3,596
Increase (decrease) in royalty obligation	217,627	-
Increase (decrease) in lease obligation	(76)	-
Increase (decrease) in share subscriptions received in advance	-	(68,411)
Net cash used in operating activities	(164,413)	(625,867)

Investing activities
Additions to property, plant and equipment	(3,706,790)	-
Net cash used in investing activities	(3,706,790)	-

Financing activities
Proceeds from issuance of common shares	-	1,476,571
Exercise of stock options	-	-
Exercise of warrants	150,587	-
Common share issue costs	-	(9,292)
Lease liability principal payments	-	(1,255)
Short term debt	-	(22,115)
Proceeds from royalty financing	-	-
Net cash provided by financing activities	150,587	1,443,909

Effect of exchange rate changes on cash and cash equivalents	235,185	545
Net increase (decrease) in cash and cash equivalents during the period	(3,485,431)	818,587

Cash and cash equivalents, beginning of period	22,437,086	222,305
Cash and cash equivalents, end of period	$18,951,655	$1,040,892

	Mining Property	Assets Under Construction	Right of Use Assets	Vehicles and Equipment	Total
	$	$	$	$	$
As at June 30, 2020	-	-	18,111	-	18,111
Additions	708,514	3,611,890	-	5,238	4,325,642
Disposals	-	-	-	-	-
Amortization	-	-	(6,037)	(555)	(6,592)
As at June 30, 2021	708,514	3,611,890	12,074	4,683	4,337,161
Additions	215,191	3,428,951	-	62,648	3,706,790
Disposals	-	-	-	-	-
Amortization	-	-	(1,521)	(3,348)	(4,869)
As at September 30, 2021	923,705	7,040,841	10,553	63,983	8,039,082


As at June 30, 2021
Cost	708,514	3,611,890	24,165	5,238	4,349,807
Accumulated amortization	-	-	(12,091)	(555)	(12,646)
Total	708,514	3,611,890	12,074	4,683	4,337,161

As at September 30, 2021
Cost	923,705	7,040,841	24,165	67,886	8,056,597
Accumulated amortization	-	-	(13,612)	(3,903)	(17,515)
Total	923,705	7,040,841	10,553	63,983	8,039,082

	Lease Obligations
	$
As at June 30, 2020	16,018
Additions	-
Lease payments	(6,367)
Finance costs	1,317
Foreign exchange adjustments	131
As at June 30, 2021	11,099
Additions	-
Lease payments	-
Finance costs	272
Foreign exchange adjustments	(76)
As at September 30, 2021	11,295

	Lease Obligations
	$
Current portion of lease obligations	5,947
Long-term lease obligations	5,348
Balance as at September 30, 2021	11,295

	Lease Obligations
	$
Within 12 months	6,019
Between 13 and 24 months	6,019
Total undiscounted lease obligations	12,038

	Obligation
	$
Within 12 months	-
Between 13 and 24 months	948,750
Between 25 and 36 months	1,897,500
Between 37 and 48 months	1,897,500
Between 49 and 60 months	1,897,500
Thereafter	12,333,750
Total undiscounted minimum payments and interest	18,975,000

	Warrant Liability
	$
As at June 30, 2020	208,768
Recognition of derivative liability	56,216,388
Reclassification to equity on exercise of warrants	(4,236,117)
Change in fair value through profit and loss	(6,808,106)
As at June 30, 2021	45,380,933
Reclassification to equity on exercise of warrants	(243,461)
Change in fair value through profit and loss	1,564,983
As at September 30, 2021	46,702,455

Warrants Expiring October 25, 2021		Warrant Liability
		$
As of June 30, 2020		201,687
Reclassification to equity on exercise of warrants		(1,373,246)
Change in fair value through profit and loss		2,278,285
As of June 30, 2021		1,106,726
Reclassification to equity on exercise of warrants		(243,461)
Change in fair value through profit and loss		14,926
Share price on measurement date	(CAD $2.83) USD $2.23
Exercise price	(CAD $0.90) USD $0.71
Risk free rate	0.20%
Expected volatility	111%
Expected dividend yield	Nil
Expected life (in years)	0.07
As of September 30, 2021		878,191

Warrants Expiring July 2, 2022		Warrant Liability
		$
As of June 30, 2020		-
Recognition on July 2, 2020 (issue date)		421,861
Reclassification to equity on exercise of warrants		(2,862,871)
Change in fair value through profit and loss		5,773,919
As of June 30, 2021		3,332,909
Reclassification to equity on exercise of warrants		-
Change in fair value through profit and loss		107,258
Share price on measurement date	(CAD $2.83) USD $2.23
Exercise price	(CAD $0.65) USD $0.51
Risk free rate	0.23%
Expected volatility	156%
Expected dividend yield	Nil
Expected life (in years)	0.75
As of September 30, 2021		3,440,167

Warrants Expiring May 19, 2023		Warrant Liability
		$
As of June 30, 2020		-
Recognition on May 19, 2021 (issue date)		55,794,527
Reclassification to equity on exercise of warrants		-
Change in fair value through profit and loss		(14,853,229)
As of June 30, 2021		40,941,298
Reclassification to equity on exercise of warrants		-
Change in fair value through profit and loss		1,442,799
Share price on measurement date	(CAD $2.83) USD $2.23
Exercise price	(CAD $1.00) USD $0.79
Risk free rate	0.41%
Expected volatility	152%
Expected dividend yield	Nil
Expected life (in years)	1.63
As of September 30, 2021		42,384,097

			As at				As at
Issued	Expiration	Exercise	June 30,				September 30,
Date	Date	Price	2021	Issued	Cancelled	Exercised	2021
October 25, 2019	October 25, 2021	CAD $0.90	787,780	-	-	(211,112)	576,668
July 2, 2020	July 2, 2022	CAD $0.65	1,902,056	-	-	-	1,902,056
May 19, 2021	May 19, 2023	CAD $1.00	23,214,286	-	-	-	23,214,286
Totals			25,904,122	-	-	(211,112)	25,693,010

Award and			As at				As at
Vesting	Expiration	Exercise	June 30,				September 30,
Date	Date	Price	2021	Awarded	Cancelled	Exercised	2021
June 9, 2017	June 9, 2022	USD $0.66	900,000	-	-	-	900,000
March 26, 2019	March 26, 2024	CAD $1.00	580,000	-	-	-	580,000
March 19, 2021	March 19, 2024	CAD $3.60	1,300,000	-	-	-	1,300,000
Totals			2,780,000	-	-	-	2,780,000

	/s/ Marc Johnson Marc JohnsonChief Financial Officer

	As of	As of
	September 30,	June 30,
	2021	2021
Amounts receivable from key management	$13,668	$17,007
Prepaid expenses to companies controlled by key management	$3,147	$6,949
Accounts payable due to companies controlled by key management	$-	$-
Accrued liabilities due to key management	$62,941	$64,503

			As at				As at
Award	Vesting	Vesting	June 30,				September 30,
Date	Condition	Date	2021	Awarded	Cancelled	Converted	2021
March 19, 2021	Employment	December 31, 2022	200,000	-	-	-	200,000
March 19, 2021	Plant commissioning	June 30, 2022	100,000	-	-	-	100,000
March 19, 2021	Offtake agreement	June 30, 2022	25,000	-	-	-	25,000
March 19, 2021	Financing milestone	May 17, 2021	150,000	-	-	-	150,000
Totals			475,000	-	-	-	475,000

As at September 30, 2021	Canada	Mauritius	Madagascar	Total
	$	$	$	$
Cash and cash equivalents	18,792,027	1,130	158,498	18,951,655
Amounts receivable	31,855	-	25	31,880
Prepaid expenses	34,884	-	4,616	39,500
Property, plant and equipment	956,954	-	7,082,128	8,039,082
Total assets	19,815,720	1,130	7,245,267	27,062,117

	Buildings
	$

Within 12 months	6,019
Between 13 and 24 months	6,019
Total undiscounted lease obligations	12,038

Common shares issued and outstanding	98,395,372
Warrants	25,693,010
Stock options	2,780,000
Restricted Share Units (RSUs)	475,000
Fully Diluted Common Shares	127,343,382

Common shares issued and outstanding	99,026,656
Warrants	25,061,726
Stock options	2,780,000
Restricted Share Units (RSUs)	475,000
Fully Diluted Common Shares	127,343,382

Classification	Tonnage (Mt)	Grade (C%)	Graphite (C Mt)
Measured	23.62	6.32%	1.49
Indicated	76.75	6.25%	4.80
Measured & Indicated	100.37	6.30%	6.29
Inferred	40.91	5.78%	2.36

Description	Phase 1 and 2
	Pre-Tax	Post-Tax
NPV (8% Discount Cash Flow)(1)(2)	$237.1 million	$184.3 million
IRR (1)(2)	43.1%	36.2%
Payback (2)	3.4 years	3.8 years
Capital cost ("CAPEX")	$60,082,340
Owners Contingency	$6,670,430
On-site Mining Costs ("OPEX") per tonne of concentrate, (year 3 onward)	$82.69
On-site Processing Costs ("OPEX") per tonne of concentrate, (year 3 onward)	$270.27
Transportation per tonne of concentrate (mine site to Madagascar Port year 3 onward)	$133.01
Average annual production of concentrate	45,136 tonne
Life of Mine ("LOM")	30 years
Graphite concentrate sale price (US$/tonne at Start Up - 2017)	$1,208
Average Head Grade	7.1%
Average ore mined per annum over Life of Mine	720,000 tonne
Average stripping ratio	0.53:1
Average carbon recovery	88.30%

CAPEX and Working Capital	Phase 1 (240ktpa)	Phase 1 and 2 (720ktpa)
Process Equipment	$8,438,609	$25,315,827
Civil & Infrastructure	$2,103,672	$6,661,016
Tailings	$0.00	$0.00
Mining	$2,574,143	$4,913,341
Buildings	$1,154,609	$2,886,523
Electrical Infrastructure	$128,804	$386,412
Project Services/EPCM	$931,481	$2,794,445
Construction Services	$1,474,775	$3,686,937
Indirect Costs	$372,750	$1,118,250
Environmental & Permitting costs	$729,827	$1,459,655
Owner's Costs	$1,197,000	$4,189,500
Sub-total	$19,105,673	$53,411,909
Contingency (10%/12.5%)	$1,910,567	$6,676,488
3 Months Working Capital	$3,100,000	$7,300,000
CAPEX AND WORKING CAPITAL TOTAL	$24,116,241	$67,388,398
Sustaining CAPEX over Life of Mine		$3,300,000

Operating Costs	Phase 1	Phase 2
	Operating cost
Mining (US$/T)	102.81	65.34
Processing (US$/T)	265.82	265.82
Trucking to local port / Ft. Dauphin (US$/T)	133.01	133.01
General and Administration (US$/T)	64.29	50.00
TOTAL	$565.93	$514.17

Classification	Tonnage (Mt)	Grade (V2O5%)	V2O5 (million pounds)
Indicated	49.5	0.693%	756.3
Inferred	9.7	0.632%	134.5

	Quarter Ended
	September 30,	June 30,	June 30,	March 31,
	2021	2021	2020	2021
	$	$	$	$
Revenues	-	-	-	-
Mine development expenses	(121,916)	198,886	17,586	97,361
Exploration and evaluation expenses	52,858	(5,550)	5,162	40,736
General and administrative expenses	418,769	472,883	357,069	283,586
Net loss	(2,346,955)	(27,419,558)	(12,710,273)	(1,549,938)
Net loss and comprehensive loss	(2,111,770)	(27,284,712)	(12,708,656)	(1,552,307)
Net loss per share (basic and diluted)	(0.02)	(0.32)	(0.20)	(0.03)
Working capital (deficit) surplus	(29,161,919)	(24,500,482)	(3,952,895)	(1,761,218)

	Quarter Ended
	March 31,	December 31,	December 31,	September 30,
	2020	2020	2019	2020
	$	$	$	$
Revenues	-	-	-	-
Mine development expenses	9,835	68,954	25,000	39,088
Exploration and evaluation expenses	6,467	26,055	7,152	24,582
General and administrative expenses	283,263	229,663	271,156	255,087
Net loss	(280,715)	(429,557)	(34,656)	(343,980)
Net loss and comprehensive loss	(280,170)	(426,243)	(34,999)	(340,010)
Net loss per share (basic and diluted)	(0.00)	(0.01)	(0.00)	(0.01)
Working capital (deficit) surplus	(269,775)	(918,048)	(484,374)	(449,374)