TORONTO, ON / ACCESS Newswire / July 27, 2026 / NextSource Materials Inc. (TSX:NEXT)(OTCQB:NSRCF) ("NextSource" or "the Company") is pleased to announce the positive results of an updated Technical Feasibility Study ("FS") for a Phase 2 mine expansion of its Molo Graphite Mine Project in southern Madagascar (the "Molo Mine").

The FS considered a staged expansion beyond the existing Phase 1 mining and processing operation to reach a total capacity of 150,000 tonnes per annum ("tpa") of flake graphite concentrate over a 37-year life of mine ("LOM"). The FS estimates Phase 2 expansion capital costs of US$290.8 million, and financed in stages, with a pre-tax Net Present Value ("NPV") (8% discount rate) of US$402.5 million and a nominal pre-tax Internal Rate of Return ("IRR") of 21.0% (real pre-tax IRR of 18.5%).

The FS builds on the findings from previous technical reports and prior studies and assumes the construction of three new 50,000 tpa processing modules in two stages, adjacent to the current Phase 1 processing plant, and using the same fully modular construction approach. The fully modular approach is expected to greatly reduce build time, associated costs and development risks in relation to conventional mine construction.

The FS includes the procurement of all mining equipment, and the full costs of off-site modular fabrication and assembly, factory acceptance testing, module disassembly, shipping, plant infrastructure construction, on-site module re-assembly, commissioning, project contingencies, and working capital. The capital and operating costs estimates are prepared in line with a Class 3 estimate as per the American Association of Cost Engineers ("AACE") classification and a target accuracy of -15 to +25% at an 80% confidence level.

Hanré Rossouw, President and CEO of NextSource, commented,

"The updated and optimized FS announced today confirms the Molo Mine's ability to be expanded in stages to a larger-scale operation of global significance to meet the robust market demand for flake graphite, particularly for use in electric vehicle batteries. This is especially timely given the recent announcement of the progress on our Battery Anode Facility in the UAE. 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. In addition, the staged approach set out in the updated Feasibility Study reduces operating risk, lowers financing costs and accelerates revenue while providing flexibility to respond to market demand."

The FS's phased approach to 150,000 tpa was developed based on its offtake agreement with Mitsubishi Chemical Group for purified graphite and spheronized and purified graphite ("SPG") from NextSource's planned Battery Anode Facility ("BAF") in the United Arab Emirates ("UAE"), and ongoing discussions with automotive manufacturers ("OEMs") and battery anode offtake partners on the expected demand for flake graphite.

The Company has not yet made a production decision in respect of the first phase of the expansion to 150,000 tpa and discussions with offtakers and other potential strategic partners to determine the timing of a mine expansion are ongoing.

The FS was prepared by Stantec Consulting International Ltd. ("Stantec"), an independent engineering and consulting firm specializing in the mining and processing of commodities and battery materials.

Stantec has been supported by the following consultants and qualified persons: Keith Wilson, Martin Maloney, Damian Pianta, Jeremy Tape, Dion Deetlefs, Greg Gold (Stantec), Philip John Hancox and Desmond Subramani (Caracle Creek International Consulting (Pty.) Ltd.),

Oliver Peters (Metpro Management Inc.), Clive Brown (Bara Consulting Ltd.), Andreas Savvas (Epoch Resources (Pty) Ltd.), and Alkie Marais (Geostratum (Pty) Ltd.).

RESULTS SUMMARY

The following summary highlights the financial metrics provided in the FS:

Notes:

(1) Assumes Project is financed with 100% equity. Unless otherwise noted, all monetary figures presented throughout this press release are expressed in real (unless otherwise stated) US dollars (USD) as of 1 April 2026. No above-inflationary cost escalations have been applied.
(2) Based on cumulative undiscounted free cash flows associated with the Expansion Project as measured from the date of first concentrate production.
(3) Project capital costs includes process equipment, civil & infrastructure, mining, buildings, electrical infrastructure, project & construction services. Includes capitalized operating costs. Excludes sustaining capital and closure costs.
(4) Assumes all concentrate will be sold on a FOB basis at the Port of Tulear, Madagascar.
(5) Based on the weighted average prices of the various size fractions of SuperFlake® concentrate, as informed by Benchmark Mineral Intelligence and includes a premium associated with an above 94%-95% concentrate grade. Also assumes any product that is required to be sold into Madagascar will be at the same price.
(6) Life of mine is measured in terms of actual operating years, where the mined production increases over the first 5 years as modules are commissioned, and then runs at a nominal rate of 2.5M tpa of ROM for a further ~32 years, with a 3 year tail at the end of the mine life.
(7) Assumes a Reserve cut-off grade of 3% Cg has been applied, with all material below this cut-off grade treated as waste. Over the life of the mine, 2,520 kt (4.5% of the total ore tonnes in the ROM production schedule) of inferred material above this cut-off has been included in the life of mine production schedule. The sensitivity analysis section of the FS considers the impact of excluding the inferred resource from the LOM production schedule.
(8) LOM average capacity consists of 150,000 tpa to cover the variability of feed grade and product distribution.
(9) Non-GAAP measure. See "Non-GAAP Measures" below.

CAPITAL COST SUMMARY

Notes:

(1) Excludes sustaining capital and closure costs.

OPERATING COST SUMMARY

Based on discussions with offtakers, their preference is to purchase Molo graphite concentrate at the local Madagascar port at free on board ("FOB") East Africa prices. As such, operating costs ("OPEX") include the all-in FOB cost to deliver the graphite concentrate to the local port of Tulear.

Notes:.

(1) Non-GAAP measure. See "Non-GAAP Measures" below

MINERAL RESOURCE AND RESERVE ESTIMATES

The Molo Mine hosts the following Mineral Resources and remains open along strike and to depth:

• Measured Mineral Resources of 23.51 Mt at 6.31% Cg.

• Indicated Mineral Resources of 76.75 Mt at 6.25% Cg.

• Inferred Mineral Resources of 40.91 Mt at 5.78% Cg.

Notes:

(1) % Cg = percentage Carbon Graphite.
(2) Mineral Resources are classified according to the Canadian Institute of Mining definitions.
(3) Mineral Resources are reported Inclusive of Mineral Reserves.
(4) "Low Grade" Resources are stated at a cut-off grade of 2% Cg.
(5) "High Grade" Resources are stated at a cut-off grade of 4% Cg.
(6) Eastern and western high-grade assays are capped at 15% Cg.
(7) A relative density of 2.36 tonnes per cubic meter (t/m3) was assigned to the mineralized zones for the resource tonnage estimation.
(8) Totals may not represent the sum of the parts due to rounding.
(9) Mineral Resources are defined as surface mineable only.
(10) Mineral Resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that any mineral resource will be converted into a mineral reserve.

The table below presents the Mineral Reserves which have been estimated for the Molo Mine:

Notes:

(1) % Cg = percentage Carbon Graphite.
(2) Mineral Reserves are classified according to the Canadian Institute of Mining definitions.
(3) Apparent computational errors due to rounding are not considered significant.
(4) The Mineral Reserves are reported with appropriate modifying factors of dilution and recovery.
(5) The Mineral Reserves are reported at the head grade and at delivery to plant.
(6) The Mineral Reserves are stated at a basket price of US$1,085 per tonne of concentrate as at March 31, 2025.
(7) Although stated separately, the Mineral Resources are inclusive of the Mineral Reserves.
(8) Only Measured and Indicated Mineral Resources have been converted to Mineral Reserves.
(9) Quantities are reported in metric tonnes.
(10) The Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Reserves

METALLURGY

The FS is based on a full suite of metallurgical test work performed by SGS Canada Metallurgical Services Inc. in Lakefield, Ontario, Canada. These tests included lab and bench scale process development work, a bulk sample/pilot plant program, and metallurgical optimization and variability program. The overall graphitic carbon recovery into the final concentrate is 92.0% and the mass pull to concentrate is 5.9%.

Flake Size Distribution and Product Grade