Northern Graphite restructures US$22m debt

Northern Graphite has restructured nearly US$22 million (about N$415 million) of debt linked to its Okanjande graphite project in Namibia after breaching loan conditions, agreeing to amend an existing graphite streaming agreement in return for the cancellation of loan principal and interest obligations.

The Canadian company said in its 2025 annual financial statements that it had entered into a binding letter of agreement with its lender on 29 April 2026 to restructure a senior secured loan and an existing minerals streaming agreement tied to Okanjande.

Under the deal, the lender will cancel the US$15.969 million face value of the senior secured loan, including capitalised interest, as well as about US$6.03 million in accrued and future interest due up to the loan’s maturity date.

Northern Graphite reported that by 31 December 2025 it had failed to pay accrued interest of US$5.116 million, had not maintained positive working capital, and had not met the minimum required consolidated cash balance of US$750 000.

The loan facility was secured against assets at the company’s Lac des Iles operation in Canada and the Okanjande project in Namibia.

Debt relief

In return for the debt relief, Northern Graphite has agreed to amend a streaming agreement dating back to April 2022, when it received an upfront US$20 million deposit from the same financier.

Under that agreement, the financier secured the right to purchase 11.25% of graphite produced from Okanjande until 350 000 tonnes of contained graphite in concentrate had been delivered.

Once that threshold was reached, the stream could have been converted into a 1% royalty over the remaining life of the mine. The amended agreement removes both the 350 000-tonne cap and the option to convert the stream into a royalty.

The company will also issue 12.5 million common shares to the lender as part of the restructuring. The lender will receive priority payments from future equity financing proceeds and intellectual property licensing revenues until outstanding royalty-related amounts of about US$4.4 million have been settled.

The debt restructuring comes as Northern Graphite advances plans to restart Okanjande as part of a broader battery materials strategy.

In January 2026, the company signed a term sheet with Saudi Arabia’s Obeikan Investment Group to jointly develop and operate a battery anode materials facility in Yanbu Industrial City.

The proposed project is valued at about US$200 million and is designed to produce 25 000 tonnes of battery anode materials a year using graphite from Okanjande.

New joint venture

The joint venture will be 51% owned by Obeikan and 49% by Northern Graphite. Detailed engineering is expected to begin in 2026, with first-phase production targeted for 2028, in line with the planned restart of mining and processing operations at Okanjande.

The project is expected to be financed at joint venture level, with Obeikan leading efforts to secure local debt financing for construction, development and commissioning. The remainder of funding is expected to come from equity contributions by the partners, in line with their ownership stakes, as well as commercial bank financing.

The joint venture also intends to enter into a long-term offtake agreement for up to 50 000 tonnes of graphite concentrate annually from Okanjande. Under the arrangements, Northern Graphite would receive royalties on net sales of battery anode materials, in addition to its equity stake in the Saudi venture.

In February 2026, Northern Graphite joined Rain Carbon Germany GmbH, H.C. Starck Tungsten GmbH and Friedrich Schiller University Jena in launching the USE-G project, a three-year research and development programme aimed at developing cleaner, less energy-intensive graphite processing technologies that are less dependent on the Chinese supply chain.

The initiative has a total budget of €1.7 million, with €1.14 million provided by the German Federal Ministry for Economic Affairs and Energy.

Northern Graphite said the programme would use natural graphite from its Canadian operations and, subject to restart, from Okanjande. The company will carry out milling, shaping and battery testing work at its German laboratory as part of the project, which runs from January 2026 to December 2028.

Further evidence of the strategic importance of Okanjande emerged in March, when Northern Graphite granted performance-based deferred share units and stock options to a senior executive.

The performance targets include restructuring the company’s debt, securing a final investment decision on the restart of Okanjande, advancing construction of the Saudi battery anode materials plant and achieving specific market capitalisation growth objectives.

The company also completed a non-brokered private placement in March 2026, raising C$2 million through the issue of flow-through shares.

Northern Graphite’s financial statements show that the carrying value of the senior secured loan rose from C$25.1 million at the end of 2024 to C$28.5 million by 31 December 2025, despite modifications to the facility during the period.