NextSource Materials Inc. (TSX: NEXT, OTCQB: NSRCF) released a positive updated Technical Feasibility Study on July 27, 2026 for a Phase 2 expansion of its Molo Graphite Mine in southern Madagascar — a study that puts a US$402.5 million pre-tax NPV (at an 8% discount rate) against a US$290.8 million expansion capital cost.
The study targets a total processing capacity of 150,000 tonnes per annum of flake graphite concentrate, reached by constructing three new 50,000 tpa processing modules in two stages adjacent to the existing Phase 1 plant. The pre-tax IRR comes in at 21.0% nominal (18.5% real), with a projected payback period of 7.2 years and life-of-mine average operating costs of US$419 per tonne. The life of mine is estimated at 37 years, per the July 27 company announcement on Access Newswire.
NextSource has not yet made a production decision for Phase 1 of the expansion, and discussions with offtakers and potential strategic partners on timing remain ongoing, per the July 27 Junior Mining Network release.
Phase 1 mine operations at Molo are already underway. The project is 100% owned through ERG Madagascar SARLU, an indirect wholly owned subsidiary of NextSource. One material caveat flagged in the study: the financial assessment does not incorporate any free-carried State interest, because the Malagasy government's potential participation percentage in the Molo Mine has not yet been determined, per the July 27 Junior Mining Network release. That unresolved variable sits alongside the capex raise as two near-term uncertainties noted in the filing.
The Molo project carries a distinctive product claim — it is described in the July 27 Access Newswire release as the only graphite resource globally with SuperFlake® graphite, and among the largest known high-quality graphite deposits worldwide.
Downstream, NextSource is building Battery Anode Facilities (BAF) capable of producing coated, spheronized, and purified graphite. The first BAF is in development in the UAE. The company has executed a multi-year offtake agreement for anode active material supply with Mitsubishi Chemical, per the Access Newswire release.
President and CEO Hanré Rossouw framed the expansion in terms of vertical integration strategy: "A staged expansion of this magnitude will position NextSource as a major global supplier and underpins our vertical integration strategy to offer an ample and secure supply of graphite flake and battery anode material, enabling direct supply to the electric vehicle battery market."
No current cash position, share count, or July 27 trading data for NEXT was available for this report.
What comes next, per the Junior Mining Network release of July 27, is continued engagement with offtakers and potential strategic partners to determine expansion timing. The State participation question will also need resolution before the financial model can be considered complete. Those two variables — financing structure and government ownership stake — are the practical gating items between a positive feasibility study and a construction decision.