NextSource Materials Inc 6-K, filed May 16, 2023

NextSource Materials Inc. (NSRCF)

6-K 2023-05-16 For: 2023-03-31

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Added on April 12, 2026

About this 6-K

NextSource Materials Inc filed this 6-K on May 16, 2023.

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99.1	NextSource Materials Inc. Unaudited Condensed Interim Consolidated Financial Statements for the Nine and Three Months Ended December 31, 2022 as filed on SEDAR on May 12, 2023.

99.2	NextSource Materials Inc. Management’s Discussion and Analysis for the Nine and Three Months Ended December 31, 2022 as filed on SEDAR on May 12, 2023.

99.3	NextSource Materials Inc. Form 52-109F2 Certification of Interim Filings (CEO) for the Nine and Three Months Ended December 31, 2022 as filed on SEDAR on May 12, 2023.

99.4	NextSource Materials Inc. Form 52-109F2 Certification of Interim Filings (CFO) for the Nine and Three Months Ended December 31, 2022 as filed on SEDAR on May 12, 2023.

Dated: May 15, 2023	NEXTSOURCE MATERIALS INC.

	/s/ Marc Johnson
	Marc Johnson Chief Financial Officer

	As at			As at
	March 31,			June 30,
	2023			2022

Assets
Current Assets:
Cash and cash equivalents	$	11,055,086		$	9,793,253
Amounts receivable (note 15)		228,771			574,260
Inventories		290,188			-
Prepaid expenses		1,011,277			96,792
Total Current Assets		12,585,322			10,464,305
Deposits		161,645			181,161
Property, plant, and development (note 5)		45,238,788			18,652,394
Total Assets	$	57,985,755		$	29,297,860

Liabilities
Current Liabilities:
Accounts payable		1,811,757			817,265
Accrued liabilities (note 15)		784,432			1,047,400
Current portion of lease obligations (note 6)		1,291,373			51,725
Current portion of royalty obligations (note 7)		1,897,500			-
Fair value of warrant derivative financial liabilities (note 8)		-			21,689,490
Commercial production obligation (note 9)		715,708			727,051
Total Current Liabilities		6,500,770			24,332,931
Lease obligations (note 6)		12,942,544			298,093
Asset retirement obligations (note 5)		233,665			-
Royalty obligations (note 7)		9,829,778			7,731,196
Total Liabilities		29,506,757			32,362,220

Shareholders’ Equity (Deficit)
Share capital (note 10)		169,282,228			127,377,519
Accumulated deficit		(141,993,962	)		(130,773,347	)
Accumulated other comprehensive income		1,190,732			331,468
Total Shareholders’ Equity (Deficit)		28,478,998			(3,064,360	)

Total Liabilities and Shareholders’ Equity (Deficit)	$	57,985,755		$	29,297,860

	Nine months ended			Nine months ended			Three months ended			Three months ended
	March 31,			March 31,			March 31,			March 31,
	2023			2022			2023			2022
Revenues	$	-		$	-		$	-		$	-

Expenses and other income
Mine development expenses (note 14)		963,365			(73,830	)		452,514			25,779
Exploration and evaluation expenses		2,408			107,966			2,408			14,558
General and administrative expenses (note 14)		2,357,393			1,478,526			1,048,154			602,987
Share-based compensation (note 13)		429,633			156,658			83,487			(141,519	)
Amortization of plant and equipment (note 5)		150,357			20,810			115,438			12,268
Lease finance expense (note 6)		159,226			766			136,669			222
Foreign currency translation (gain) loss		1,039,992			(331	)		(671,542	)		63,042
Interest (income)		(283	)		(134	)		(163	)		(43	)
Interest expense		2			32			1			-
Foreign taxes		-			-			(262	)		-
Sub-total before other items		5,102,093			1,690,463			1,166,704			577,294
Change in value of royalty obligation (note 7)		8,201			400,299			-			269,972
Change in value of warrant liability (note 8)		2,783,360			11,546,205			-			3,915,292
Change in value of commercial production obligation (note 9)		(49,255	)		(48,472	)		-			(48,472	)
Impairment of sales tax receivable (note 14)		3,376,216			-			502,515			-
Total Expenses		11,220,615			13,588,495			1,669,219			4,714,086
(Loss) income before income taxes		(11,220,615	)		(13,588,495	)		(1,669,219	)		(4,714,086	)
Income tax expense		-			-			-			-
Net (loss) income for the period		(11,220,615	)		(13,588,495	)		(1,669,219	)		(4,714,086	)

Other comprehensive income
Items that will be reclassified subsequently to net income (loss)
Translation adjustment for foreign operations		859,264			(7,216	)		(463,467	)		62,587
Net (loss) income and comprehensive (loss) income for the period	$	(10,361,351	)	$	(13,595,711	)	$	(2,132,686	)	$	(4,651,499	)

Weighted-average common shares (basic and diluted)		111,476,332			98,865,631			125,086,900			99,398,892
Net income (loss) per common share (basic and diluted)	$	(0.10	)	$	(0.14	)	$	(0.01	)	$	(0.05	)

	Common Shares		Share			Accumulated			Accumulated Other			Total (Deficit)
	Outstanding		Capital			Deficit			Comprehensive Income			Equity
	#		$			$			$			$
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		-		2,897,523			-			-			2,897,523
Shares issued on exercise of warrants		1,434,735		1,202,859			-			-			1,202,859
Shares issued on conversion of restricted share units		123,518		(70,190	)		-			-			(70,190	)
Restricted share units expensed over vesting period		-		156,658			-			-			156,658
Net loss for the period		-		-			(13,588,495	)		-			(13,588,495	)
Cumulative translation adjustment		-		-			-			(7,216	)		(7,216	)
Balance as at March 31, 2022		99,742,513		124,678,782			(160,482,045	)		248,098			(35,555,165	)
Reclassification of warrant liability to equity on exercise of warrants		-		1,564,633			-			-			1,564,633
Shares issued on exercise of warrants		1,255,101		327,333			-			-			327,333
Shares issued on exercise of stock options		875,000		577,500			-			-			577,500
Stock options granted under long-term incentive plan		-		43,050			-			-			43,050
Restricted share units expensed over vesting period		-		186,221			-			-			186,221
Net income for the period		-		-			29,708,698			-			29,708,698
Cumulative translation adjustment		-		-			-			83,370			83,370
Balance as at June 30, 2022		101,872,614		127,377,519			(130,773,347	)		331,468			(3,064,360	)
Reclassification of warrant liability to equity on exercise of warrants		-		24,472,850			-			-			24,472,850
Shares issued on exercise of warrants		23,214,286		17,002,227			-			-			17,002,227
Restricted share units expensed over vesting period		-		429,632			-			-			429,632
Net loss for the period		-		-			(11,220,615	)		-			(11,220,615	)
Cumulative translation adjustment		-		-			-			859,264			859,264
Balance as at March 31, 2023		125,086,900		169,282,228			(141,993,962	)		1,190,732			28,478,998

·	On March 23, 2023, the Company announced the initiation of commissioning of Phase 1 of the Molo Graphite Mine in Madagascar, which has a production capacity of 17,000 tonnes per annum (“tpa”) of SuperFlake® graphite concentrate. Commissioning is expected to be completed in May 2023 with a ramp up period of up to three months prior to declaring commercial production.

·	The Company is progressing with a Feasibility Study and front-end engineering design (“FEED”) study for a proposed Phase 2 Expansion. Prior to making a Phase 2 construction decision, the Company will consider the Feasibility and FEED study results as well as Phase 1 operational results.

·	On February 28, 2023, the Company announced a global Battery Anode Facility (“BAF”) expansion strategy and the results of a technical study for a Mauritius BAF (“BAF1”) capable of producing coated spheronized purified graphite (“CSPG”). The Company also announced the signing of an industrial lease at a site located in a freeport-classified industrial park. Mauritius was selected due to its proximity to the Molo Graphite Mine and strategic position on shipping routes to key markets. Front-end engineering and environmental and social impact assessment (“ESIA”) permitting for BAF1 is currently in progress.

·	The Company also owns the Green Giant Vanadium Project, located in Madagascar, and the Sagar Project, located in Quebec, both of which are at the exploration and evaluation stage.

	Mining		Assets Under		Equipment &			Right of Use
	Property		Construction		Vehicles			Assets			Total
	$		$		$			$			$
As at June 30, 2021		708,514		3,611,890		4,683			12,074			4,337,161
Additions		398,836		13,181,333		239,542			530,562			14,350,273
Amortization		-		-		(29,053	)		(5,987	)		(35,040	)
As at June 30, 2022		1,107,350		16,793,223		215,172			536,649			18,652,394
Additions		155,312		9,195,523		2,244,824			15,141,092			26,736,751
Amortization		-		-		(94,463	)		(55,894	)		(150,357	)
As at March 31, 2023		1,262,662		25,988,746		2,365,533			15,621,847			45,238,788

Cost		1,107,350		16,793,223		244,780			554,727			18,700,080
Accumulated amortization		-		-		(29,608	)		(18,078	)		(47,686	)
As at June 30, 2022		1,107,350		16,793,223		215,172			536,649			18,652,394

Cost		1,262,662		25,988,746		2,489,604			15,695,819			45,436,831
Accumulated amortization		-		-		(124,071	)		(73,972	)		(198,043	)
As at March 31, 2023		1,262,662		25,988,746		2,365,533			15,621,847			45,238,788

·	On July 1, 2019, the Company recognized a ROU asset and lease obligation of $24,164 using an incremental borrowing rate of 10.43% for the exploration camp located in Fotadrevo, Madagascar. The lease is payable monthly in Ariary and as of March 31, 2023, had a remaining term of 3 months. The lease is not expected to be renewed due to completion of the Molo mining camp.

·	On March 31, 2022, the Company recognized a ROU asset and lease obligation of $389,049 using an incremental borrowing rate of 13.8% for the emphyteutic property lease of the Molo mine, which has an initial term of 50 years. The lease is payable annually in Ariary to the Government of Madagascar and as of March 31, 2023, had a remaining term of 49.0 years.

·	On February 28, 2023, the Company recognized a ROU asset and lease obligation of $15,141,092 using an incremental borrowing rate of 11.5% for the Mauritius BAF industrial lease, which has an initial term of 20 years plus a renewal of 5 years. The lease is payable annually in USD and as of March 31,2023, had a remaining term of 24.9 years.

	Exploration Camp $			BAF Property $			Molo Property $			Total Obligations $
As at June 30, 2021		11,099			-			-			11,099
Additions		-			-			389,049			389,049
Finance costs		900			-			11,080			11,980
Foreign exchange adjustments		(318	)		-			(8,713	)		(9,031	)
Lease payments		(6,027	)		-			(47,252	)		(53,279	)
As at June 30, 2022		5,654			-			344,164			349,818
Additions		-			15,141,092			-			15,141,092
Finance costs		252			125,774			33,200			159,226
Foreign exchange adjustments		(190	)		-			(31,042	)		(31,232	)
Lease payments		(4,275	)		(1,338,637	)		(42,075	)		(1,384,987	)
As at March 31, 2023		1,441			13,928,229			304,247			14,233,917

	(a)	The Company received the initial royalty funding of $8.0 million (less a $1.5 million royalty financing fee) on June 28, 2021 and received the remaining $3.0 million on August 17, 2022.
	(b)	Beginning on the biannual period ending June 30, 2022, the Company must pay the greater of: (i) $825,000 (the “Minimum Repayment”) or (ii) 3% of the gross sales revenues from graphite concentrate sales (the “GSR”). Once Vision Blue has received cumulative royalty payments of $16.5 million, the Minimum Repayment will cease, and the royalty will only be based on the GSR. NextSource has the option at any time to reduce the GSR to 2.25% by paying $20 million to Vision Blue. Each of the biannual Minimum Repayments can be deferred by 12 months, subject to accrued interest of 15% per annum.
	(c)	Vision Blue received a royalty of 1.0% of the gross revenues from sales of vanadium pentoxide (“V2O5”) from the Green Giant Vanadium Project for a period of 15 years following commencement of production of V2O5.

	Total
	$
As at June 30, 2021		6,330,721
Accretion of royalty obligation		904,771
Remeasurement of royalty obligation		495,704
As at June 30, 2022		7,731,196
Accretion of royalty obligation		987,881
Royalty proceeds		3,000,000
Remeasurement of royalty obligation		8,201
As at March 31, 2023		11,727,278

	Total
	$
Within 12 months		1,897,500
Between 13 and 24 months		1,897,500
Between 25 and 36 months		1,897,500
Between 37 and 48 months		1,897,500
Between 49 and 60 months		1,897,500
Over 60 months		9,487,500
Total undiscounted minimum payments and interest		18,975,000

Warrants Expiring May 19, 2023		Warrant Liability
		$
As of June 30, 2021		40,941,298
Change in fair value through consolidated statement of operations and comprehensive income (loss)		(19,251,808)
Share price on measurement date	(CAD $2.12) USD $1.65
Exercise price	(CAD $1.00) USD $0.78
Risk free rate	3.10%
Expected volatility	71%
Expected dividend yield	Nil
Expected life (in years)	0.88
As of June 30, 2022		21,689,490
Change in fair value through consolidated statement of operations and comprehensive income (loss)		2,783,360
Share price on measurement date	(CAD $2.40) USD $1.76
Exercise price	(CAD $1.00) USD $0.73
Risk free rate	4.05%
Expected volatility	73%
Expected dividend yield	Nil
Expected life (in years)	0.55
Reclassification to equity on exercise of warrants		(24,472,850)
As of March 31, 2023		-

	Warrant Liability
	$
As at June 30, 2021		45,380,933
Reclassification to equity on exercise of warrants		(4,462,156	)
Change in fair value through profit and loss		(19,229,287	)
As at June 30, 2022		21,689,490
Reclassification to equity on exercise of warrants		(24,472,850	)
Change in fair value through profit and loss		2,783,360
As at March 31, 2023		-

			As at									As at
Grant	Expiration	Exercise	June 30,									March 31,
Date	Date	Price	2022		Awarded		Cancelled			Exercised		2023
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		-		(200,000	)		-		1,100,000
May 11, 2022	May 11, 2025	CAD $2.50		30,000		-		-			-		30,000
Totals				1,910,000		-		(200,000	)		-		1,710,000

	Vesting		As at								As at
Grant	Measurement	Expiration	June 30,								March 31,
Date	Date	Date	2022		Awarded		Cancelled		Converted		2023
*Unvested RSUs – Vesting condition of employment on vesting date*
July 28, 2022	June 30, 2023	June 30, 2024		-		160,000		-		-		160,000
*Vested RSUs*
March 19, 2021	December 31, 2022	June 30, 2023		200,000		-		-		-		200,000
May 11, 2022	July 14, 2022	June 30, 2023		40,000		-		-		-		40,000
May 11, 2022	July 14, 2022	June 30, 2023		30,000		-		-		-		30,000
Totals				270,000		160,000		-		-		430,000

	(a)	On July 14, 2022, the 30,000 and 40,000 RSUs granted on May 11, 2022 satisfied their respective vesting conditions.

	(b)	On July 28, 2022, the Company granted 160,000 RSUs with a vesting measurement date of June 30, 2023 whereby the respective holders will receive a total of 160,000 common shares subject to being employed on the vesting date. The grant date fair value was estimated at $322,818 based on a grant-date market price of $2.02 (CAD$2.59).

	(c)	On December 31, 2022, the 200,000 RSUs granted on March 19, 2021 satisfied their respective vesting conditions.

	Canada		Mauritius		Madagascar		Total
	$		$		$		$
Cash and cash equivalents		10,196,141		56,707		802,238		11,055,086
Amounts receivable		228,771		-		-		228,771
Inventories		-		-		290,188		290,188
Prepaid expenses		179,484		669,318		162,475		1,011,277
Deposits		121,149		-		40,496		161,645
Property, plant, and development		11,986,570		15,090,762		18,161,456		45,238,788
Total assets as at March 31, 2023		22,712,115		15,816,787		19,456,853		57,985,755

	As of		As of
	March 31,		June 30,
	2023		2022
Amounts receivable	$	197,050	$	193,471
Accrued liabilities	$	34,282	$	35,257

	·	Accounts payable and accrued liabilities, which are generally due within 30 days.
	·	Minimum Repayments under the royalty agreement due on June 30, 2023 and December 31, 2023.
	·	Commercial production obligation due upon declaration of commercial production at the Molo Mine.
	·	Annual lease payment obligations for the Mauritius BAF lease and for the Molo Mine property.

	·	Completion of commissioning and ramp-up to full Phase 1 production capacity
	·	Declaration of commercial production and first commercial shipment
	·	Completion of a Feasibility Study for a Phase 2 expansion
	·	Completion of a FEED Study for a Phase 2 expansion
	·	Decision of whether to proceed with construction of a Phase 2 expansion
	·	Decision of whether to proceed with construction of the Mauritius BAF plant
	·	Obtaining sufficient financing to initiate construction of the Mauritius BAF plant

Cash and cash equivalents	Canada		Mauritius		Madagascar		Total
	$		$		$		$
As at March 31, 2023		10,196,141		56,707		802,238		11,055,086
As at June 30, 2022		9,641,083		61,010		91,160		9,793,253

	Exploration Camp			BAF Property			Molo Property			Total Obligations
	$			$			$			$
As at June 30, 2021		11,099			-			-			11,099
Additions		-			-			389,049			389,049
Finance costs		900			-			11,080			11,980
Foreign exchange adjustments		(318	)		-			(8,713	)		(9,031	)
Lease payments		(6,027	)		-			(47,252	)		(53,279	)
As at June 30, 2022		5,654			-			344,164			349,818
Additions		-			15,141,092			-			15,141,092
Finance costs		252			125,774			33,200			159,226
Foreign exchange adjustments		(190	)		-			(31,042	)		(31,232	)
Lease payments		(4,275	)		(1,338,637	)		(42,075	)		(1,384,987	)
As at March 31, 2023		1,441			13,928,229			304,247			14,233,917

Common shares issued and outstanding			125,086,900
Warrants			-
Stock options			1,710,000
Restricted share units (RSUs)			430,000
Fully diluted common shares			127,226,900

	·	Offtake is for a period of ten (10) years, beginning at the start of commercial production at the Molo Graphite Mine, with an automatic renewal for an additional five (5) years.
	·	Exclusive right to import and sell SuperFlake® graphite concentrate in Japan.
	·	Provided that commercial production commences within 3 years, following the ramp up period, the Japanese Partner will purchase 20,000 tonnes of SuperFlake® graphite per annum.
	·	Product prices will be negotiated on a per order basis between the parties and will be based on the market prices (FOB basis) prevailing in the region.

	·	Commercial agreement for the sale of 35,000 tpa of SuperFlake® graphite concentrate from the Molo mine
	·	10-year term with an automatic 5-year extension
	·	Products under the agreement pertain to refractory, battery anode production and expandable graphite (graphite foil) markets
	·	Geographical regions include, but are not limited to, Europe, the UK, North America, Mexico, China and South Korea
	·	Minimum 7,300 tpa during Phase 1 initial production
	·	Ramp up to 35,000 tpa in Phase 2
	·	Shipments in Phase 1 will be used to verify run-of-mill production to trigger the larger volume expansion

Classification	Material Type	Tonnes	Grade - C%	Graphite - T
Measured	"Low Grade"	13 048 373	4.64	605 082
Measured	"High Grade"	10 573 137	8.4	887 835
Total Measured		23 621 510	6.32	1 492 916
Indicated	"Low Grade"	39 539 403	4.73	1 871 075
Indicated	"High Grade"	37 206 550	7.86	2 925 266
Total Indicated		76 745 953	6.25	4 796 341
Measured + Indicated	"Low Grade"	52 587 776	4.71	2 476 157
Measured + Indicated	"High Grade"	47 779 687	7.98	3 813 101
Total Measured & Indicated		100 367 464	6.27	6 289 257
Inferred	"Low Grade"	24 233 267	4.46	1 080 677
Inferred	"High Grade"	16 681 453	7.70	1 285 039
Total Inferred		40 914 721	5.78	2 365 716

	·	Mineral Resources are classified according to the Canadian Institute of Mining definitions.
	·	Mineral Resources are reported Inclusive of Mineral Reserves.
	·	“Low Grade” Resources are stated at a cut-off grade of 2% C.
	·	“High grade” Resources are stated at a cut-off grade of 4% C.
	·	Eastern and western high-grade assays are capped at 15% C.

Category	Tonnage	C Grade (%)
Proven	14 169 741	7.00
Probable	8 266 944	7.04
Proven & Probable	22 436 685	7.02

Description	Phase 2 PEA (150K tpa production)
*Economic Highlights*
Pre-tax Net Present Value (“NPV”) (8% discount rate) ^(1)(2)(4)(8)	US$904.8 million
Post-tax NPV (8% discount rate) ^{(1)(2)(3)(4)(8)}	US$593.0 million
Pre-tax Internal Rate of Return (“IRR”) ^(1)(2)(4)(8)	40.4%
Post-tax IRR ^{(1)(2)(3)(4)(8)}	31.4%
Life of Mine (“LoM”)	26 years
Pre-tax payback ^(1)(2)(4)(8)	3.18 years
Post-tax payback^{(1)(2)(3)(4)(8)}	3.74 years
Capital costs ("CAPEX") including contingency of $31.96 million⁽²⁾	US$155.8 million
Initial working capital	US$20.9 million
Sustaining and closure CAPEX	US$24.5 million
*Operational Highlights*
Graphite concentrate sale price (US$ per tonne of concentrate)⁽⁸⁾	US$1,230.50

Description	Phase 2 PEA (150K tpa production)
Average operating costs FOB (“Opex”) (US$ per tonne of concentrate following ramp-up)⁽⁷⁾	US$495.62
Average annual production of concentrate ⁽⁵⁾⁽⁶⁾	150,000 tpa
Average ore mined per annum over LoM	2,532,345 tpa
Average head grade	6.16%
Concentrate purity (Cg) of finished product	97%
Average stripping ratio	0.53:1
Average carbon recovery	88.30%

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

	Quarter Ended
	March 31,			December 31,			September 30,			June 30,
	2023			2022			2022			2022
	$			$			$			$
Revenues		-			-			-			-
Mine development expenses		963,365			510,851			224,376			138,990
Exploration and evaluation expenses		2,408			-			-			69,989
General and administrative expenses		2,357,393			1,309,239			652,390			450,766
Net income (loss)		(11,220,615	)		(9,551,396	)		(5,918,430	)		(29,708,698	)
Net income (loss) and comprehensive income (loss)		(10,361,351	)		(8,228,665	)		(5,813,100	)		29,792,068
Net income (loss) per share (basic and diluted)		(0.10	)		(0.09	)		(0.06	)		(0.30	)
Working capital (deficit) surplus		6,084,552			13,706,665			(21,493,227	)		(13,868,626	)

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of NextSource Materials Inc. (the “issuer”) for the interim period ended March 31, 2023.

2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.	Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

	i.	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

	ii.	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and