NextSource Materials Inc.

A copy of this preliminary short form prospectus has been filed with the securities regulatory authorities in each of the provinces of Canada , except the province of Québec, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form prospectus is obtained from the securities regulatory authorities.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold within the United States (as such term is defined in Regulation S under the U.S. Securities Act (the “United States”)) or to, or for the account or benefit of, a U.S. person (as such term is defined in Rule 902 of Regulation S under the U.S. Securities Act (a “U.S. Person”)), except as permitted by the Underwriting Agreement (as defined herein) and in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby within the United States or to, or for the account or benefit of, U.S. Persons. See “Plan of Distribution”.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar regulatory authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of NextSource Materials Inc. at 130 King Street West, Exchange Tower, Suite 1940, Toronto, Ontario M5X 2A2, telephone (416) 364-4911, and are also available electronically at www.sedar.com.

PRELIMINARY SHORT FORM PROSPECTUS

New Issue

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July 12, 2023

$[  ] [  ] Common Shares

This short form prospectus is being filed by NextSource Materials Inc. (the “ Corporation ”) to qualify the distribution (the “ Offering ”) of [  ] common shares (the “ Offered Shares ”) of the Corporation at a price of $[  ] per Offered Share (the “ Offering Price ”). The Offering is being made pursuant to an underwriting agreement (the “ Underwriting Agreement ”) dated as of July [  ], 2023 among the Corporation and Cormark Securities Inc. and BMO Nesbitt Burns Inc., as co-lead underwriters (together, the “ Co-Lead Underwriters ”), and [  ], [  ] and [  ] (collectively with the Co-Lead Underwriters, the “ Underwriters ”). The Offering Price was determined by arm’s length negotiation between the Corporation and the Co-Lead Underwriters with reference to the prevailing market price of the common shares of the Corporation (the “ Common Shares ”). See “ Plan of Distribution ”.

The outstanding Common Shares are listed and posted for trading on the Toronto Stock Exchange (“ TSX ”) under the symbol “NEXT” and on the OTCQB Market (“ OTCQB ”) under the symbol “NSRCF”. On July 11, 2023, the last trading day prior to the date of this short form prospectus, the closing price of the Common Shares on the TSX was $1.92 and on the OTCQB was US$1.47. The Corporation has applied to list the Offered Shares and the Additional Shares (as defined herein) on the TSX. The TSX has not conditionally approved the Corporation’s listing application and there is no assurance that the TSX will approve the listing application. Listing will be subject to the Corporation fulfilling all the requirements of the TSX.

Price: $[  ] per Offered Share

Per Offered Share.……… Total(3)………………….	Price to the Public $[] $[]	Underwriters’ Fee(1) $[] $[]	Net Proceeds to the Corporation(2)
			$[] $[]

(1) In consideration for the services rendered by the Underwriters in connection with the Offering, the Corporation has agreed to pay the Underwriters a cash fee (the “ Underwriters’ Fee ”) of 5.0 % of the gross proceeds of the Offering (which shall be reduced to 1.0% for gross proceeds raised from Offered Shares sold to certain purchasers on the president’s list agreed to between the Corporation and the Co-Lead Underwriters (the “ President’s List ”)), including any Additional Shares sold pursuant to the exercise of the Over-Allotment Option (as defined herein). See “ Plan of Distribution ”.

(2) After deducting the Underwriters’ Fee, but before deducting the expenses relating to the Offering, including the preparation and filing of this short form prospectus, which expenses are estimated to be approximately $[  ] and which will be paid from the proceeds of the Offering.

(3) The Corporation has granted the Underwriters an over-allotment option (the “ Over-Allotment Option ”), exercisable in whole or in part, in the sole discretion of the Co-Lead Underwriters, on behalf of the Underwriters, for a period of 30 days from and including the Closing Date (as defined herein), to purchase up to an additional [  ] Common Shares (the “ Additional Shares ”), at the Offering Price, to cover over-allotments, if any, made by the Underwriters in connection with the Offering and for market stabilization purposes. The grant of the Over-Allotment Option and the Additional Shares issuable upon exercise of the Over-Allotment Option are hereby qualified for distribution under this short form prospectus. A purchaser who acquires Additional Shares forming part of the Underwriters’ overallocation position acquires such Additional Shares under this short form prospectus regardless of whether the over-allocation position is ultimately filled through

the exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment Option is exercised in full, the total price to the public, Underwriters’ Fee and net proceeds to the Corporation (before deducting the expenses relating to the Offering (see note 2 above)) will be $[  ], $[  ] and $[  ], respectively. See “ Plan of Distribution ” and the table below.

	Number of Common Shares
Underwriters’ Position	Available	Exercise Period	Exercise Price
Over-Allotment Option	Up to [] Additional Shares	Up to 30 days from and	$[] per Additional Share
		including the Closing Date

Unless the context otherwise requires, all references to the “Offering” in this short form prospectus includes the exercise of the Over-Allotment Option, and all references to the “Offered Shares” in this short form prospectus includes all Additional Shares issuable assuming the exercise of the Over-Allotment Option.

The Underwriters, as principals, conditionally offer the Offered Shares, subject to prior sale, if, as and when issued by the Corporation and accepted by the Underwriters in accordance with the terms and conditions contained in the Underwriting Agreement referred to under “ Plan of Distribution ”, and subject to the approval of certain legal matters on behalf of the Corporation by Cassels Brock & Blackwell LLP and on behalf of the Underwriters by Bennett Jones LLP.

The Offering is being made in each of the provinces of Canada, except the province of Québec. The Offered Shares will be offered in each of such provinces through those Underwriters or their affiliates who are registered to offer Offered Shares for sale in such provinces and such other registered dealers as may be designated by the Underwriters. Subject to applicable law, the Underwriters may offer the Offered Shares in such other jurisdictions outside of Canada as agreed between the Corporation and the Underwriters. See “ Plan of Distribution ”.

Subject to applicable laws, the Underwriters may, in connection with the Offering, over-allot or effect transactions that are intended to stabilize or maintain the market price of the Common Shares at levels other than those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. The Underwriters may offer the Offered Shares at a lower price than stated above. See “ Plan of Distribution ”.

It is anticipated that the Offered Shares will be delivered under the book-based system through CDS Clearing and Depository Services Inc. (“ CDS ”) or its nominee and deposited in electronic form. A purchaser of Offered Shares, including a purchaser of Offered Shares in the United States that is a “qualified institutional buyer” as defined in Rule 144A of the U.S. Securities Act (a “ Qualified Institutional Buyer ”), will receive only a customer confirmation from the registered dealer from or through which the Offered Shares are purchased and who is a CDS depository service participant. CDS will record the CDS participants who hold Offered Shares on behalf of owners who have purchased Offered Shares in accordance with the book-based system. Except with respect to a purchaser of Offered Shares in the United States that is a U.S. Accredited Investor (as defined herein), no definitive certificates will be issued unless specifically requested or required. See “ Plan of Distribution ”.

An investment in the Offered Shares is highly speculative and involves significant risks that should be carefully considered by prospective investors before purchasing such securities. Such investment should only be made by those persons who can afford the risk of loss of their entire investment. The risks outlined in this short form prospectus and in the documents incorporated by reference herein should be carefully reviewed and considered by prospective investors in connection with an investment in such securities. See “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” in this short form prospectus, “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” in the AIF (as defined herein) and the risk factors set forth in the Interim MD&A and the Annual MD&A (each as defined herein) which are available under the Corporation’s profile on SEDAR at www.sedar.com, before purchasing the Offered Shares.

Prospective purchasers are advised to consult their own tax advisors regarding the application of Canadian federal income tax laws to their particular circumstances, as well as any other provincial, foreign and other tax consequences of acquiring, holding or disposing of the Common Shares, including the Canadian federal income tax consequences applicable to a foreign controlled Canadian corporation that acquires the Common Shares.

Each of Craig Scherba (President, Chief Executive Officer and Director), Sir Mick Davis (Chair of the Board of Directors) and Robin Borley (Director and Chief Operating Officer) reside outside of Canada. Each of the individuals named above have appointed Cassels Brock & Blackwell LLP, Suite 3200, 40 Temperance St., Toronto, Ontario, M5H 0B4, as their agent for service of process in

Canada. Johann de Bruin, Sivanesan (Desmond) Subramani, Philip John Hancox, Pono Mogoera, Schalk Pienaar, Hercules Albertus Smith, and Albertus Wynand Christoffel (Alkie) Marais, being certain of the authors of the PEA (as defined herein), reside outside of Canada. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that resides outside of Canada or is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction outside of Canada, even if the party has appointed an agent for service of process.

The Corporation’s head and registered office is located at 130 King Street West, Exchange Tower, Suite 1940, Toronto, Ontario M5X 2A2.

DESCRIPTION PAGE NO.
ABOUT THIS SHORT FORM PROSPECTUS............................................................................................................ 5
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION ....................................... 5
CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION .......................................................... 7
DIFFERENCES IN REPORTING OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES ........... 7
DOCUMENTS INCORPORATED BY REFERENCE ................................................................................................ 7
MARKETING MATERIALS ....................................................................................................................................... 8
ELIGIBILITY FOR INVESTMENT............................................................................................................................. 9
THE CORPORATION .................................................................................................................................................. 9
SUMMARY DESCRIPTION OF THE BUSINESS ................................................................................................... 10
CONSOLIDATED CAPITALIZATION .................................................................................................................... 15
USE OF PROCEEDS .................................................................................................................................................. 15
PLAN OF DISTRIBUTION ........................................................................................................................................ 17
DESCRIPTION OF SECURITIES BEING DISTRIBUTED ..................................................................................... 20
PRIOR SALES ............................................................................................................................................................ 21
TRADING PRICE AND VOLUME ........................................................................................................................... 21
RISK FACTORS ......................................................................................................................................................... 21
AUDITOR, TRANSFER AGENT AND REGISTRAR .............................................................................................. 24
INTEREST OF EXPERTS .......................................................................................................................................... 24
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION .......................................................................... 26
CERTIFICATE OF THE CORPORATION .............................................................................................................. C-1
CERTIFICATE OF THE UNDERWRITERS ........................................................................................................... C-2

ABOUT THIS SHORT FORM PROSPECTUS

Prospective investors should rely only on the information contained or incorporated by reference in this short form prospectus and are not entitled to rely only on certain parts of the information contained or incorporated by reference in this short form prospectus to the exclusion of the remainder. The Corporation and the Underwriters have not authorized anyone to provide prospective investors with different information. If anyone provides you with different or additional information, you should not rely on it. The Corporation and the Underwriters are not offering the securities in any jurisdiction in which the Offering is not permitted. Prospective investors should assume that the information contained in this short form prospectus is accurate only as of the date on the front of this short form prospectus and that information contained in any document incorporated by reference is accurate only as of the date of that document, regardless of the time of delivery of this short form prospectus or of any sale of the securities pursuant thereto.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This short form prospectus and documents incorporated by reference herein contain “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of applicable United States securities laws (collectively referred to herein as “ forward-looking information ”). Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans,” “expects,” or “does not expect,” “is expected,” “budget,” “scheduled,” “goal,” “estimates,” “forecasts,” “intends,” “anticipates,” or “does not anticipate,” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,” “occur,” or “be achieved”.

Forward-looking information includes, but is not limited to, information and statements with respect to the intended use of proceeds of the Offering; the proposed Closing Date of the Offering; certain expectations, development plans, and production estimates in respect of the Molo Graphite Mine; certain expectations, development plans, and production estimates in respect of the Mauritius BAF (as defined herein) and additional BAFs (as defined herein) located in other key geographical locations, and strategies and economic results relating thereto, including in respect of the Mauritius BAF Technical Study (as defined herein); the potential impact of the Corporation’s BAF technology partnership; potential construction of an AG (as defined herein) production facility; supply, demand and pricing outlook in the graphite and EV (as defined herein) market; potential completion of a Feasibility Study (as defined herein); and the Corporation’s business objectives and targeted milestones (and timing thereof).

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information. Such factors relate to, among others, possible changes to the intended use of proceeds of the Offering; development, commissioning, and operation of the Molo Graphite Mine; construction and start-up of new mines and industrial plants; geopolitical risk and conflict; additional financings; the Corporation’s development and exploration projects are in the African country of Madagascar and are subject to country political and regulatory risks; the Corporation has a significant shareholder; economic dependence on the Molo Graphite Mine; additional permits and licenses are necessary to begin operations of Phase 1 of the Molo Graphite Mine; additional permits and licenses are necessary to complete the development of Phase 2 of the Molo Graphite Mine; uncertainty due to the Covid-19 Pandemic; fluctuations in the market price of graphite and other metals may adversely affect the value of the Corporation’s securities, revenue projections and the ability of the Corporation to develop Phase 2 of the Molo Graphite Mine and the ability to develop BAF plants; estimates of mineral resources and mineral reserves may not be realized; the Corporation has a limited operating history and expects to incur operating losses for the foreseeable future; due to the speculative nature of mineral property exploration, there is substantial risk that the Corporation’s assets will not go into commercial production and the business will fail; mining companies are increasingly required to consider and provide benefits to the communities and countries in which they operate, and are subject to extensive environmental, health and safety laws and regulations; because of the inherent dangers involved in mineral exploration, there is a risk that the Corporation may incur liability or damages as the Corporation conducts business; the Corporation has no insurance for environmental problems; should the Corporation lose the services of key executives, the Corporation’s financial condition and proposed expansion may be negatively impacted; because access to the Corporation’s properties may be restricted by inclement weather or proper infrastructure, its exploration programs

are likely to experience delays; climate change and related regulatory responses may impact the Corporation’s business; compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for management; tax risks; the Corporation may experience losses due to foreign exchange translations; the Corporation’s business is subject to anti-corruption and anti-bribery laws, a breach or violation of which could lead to civil and criminal fines and penalties, loss of licenses or permits and reputational harm; the Corporation is exposed to general economic conditions, which could have a material adverse impact on its business, operating results and financial condition; the market price for the Common Shares is particularly volatile given the Corporation’s status as a company with a small public float, limited operating history and lack of profits which could lead to wide fluctuations in the market price for the Common Shares; the Corporation does not intend to pay dividends in the foreseeable future; and the Corporation’s ability to meet other factors listed from time to time in the Corporation’s continuous disclosure documents, including but not limited to, the AIF (as defined herein); and other risks involved in the mineral exploration and development industry and risks specific to the Corporation, including the risk factors identified elsewhere in this short form prospectus and documents incorporated by reference herein, including in the AIF under “ Risk Factors ” and in the Interim MD&A and the Annual MD&A, in the PEA (as such terms are defined herein) and in other disclosure documents of the Corporation filed at www.sedar.com.

Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management and/or “qualified persons” (as such term is defined under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“ NI 43-101 ”)) made in light of their experience and their perception of trends, current conditions and expected developments, as well as other factors that management and/or qualified persons believe to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Although the Corporation believes that the assumptions and expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Corporation can give no assurance that such expectations will prove to be correct. In addition to the assumptions discussed in this short form prospectus and documents incorporated by reference herein, the material assumptions upon which such forward-looking information is based include, among others, that: the Corporation will be successful in its financing activities, including the Offering; the demand for graphite will develop as anticipated; graphite prices will remain at or attain levels that would make the Molo Graphite Mine and BAFs economic; that any proposed operating and capital plans will not be disrupted by operational issues, title issues, loss of permits, environmental concerns, power supply, labour disturbances, financing requirements or adverse weather conditions; the Corporation will continue to have the ability to attract and retain skilled staff; and there are no material unanticipated variations in the cost of energy or supplies. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained in this short form prospectus and documents incorporated by reference herein is presented for the purposes of assisting investors in understanding the Corporation’s expected financial and operating performance and the Corporation’s plans and objectives and may not be appropriate for other purposes.

The Corporation does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

This short form prospectus and documents incorporated by reference herein include market, industry and economic data and projections obtained from various publicly available sources and other sources believed by the Corporation to be true. Although the Corporation believes these to be reliable, it has not independently verified the information from third party sources, or analyzed or verified the underlying reports relied upon or referred to by the third parties, or ascertained the underlying economic and other assumptions relied upon by the third parties. The Corporation believes that the market, industry and economic data and projections are accurate and that the estimates and assumptions are reasonable, but there can be no assurance as to their accuracy or completeness. The accuracy and completeness of the market, industry and economic data and projections in this short form prospectus and documents incorporated by reference herein are not guaranteed and the Corporation does not make any representation as to the accuracy or completeness of such information.

The forward-looking information contained in this short form prospectus and documents incorporated by reference herein are expressly qualified by the foregoing cautionary statement.

CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION

References to “$” or “C$” in this short form prospectus are to Canadian dollars, unless otherwise indicated. References to “US$” in this short form prospectus are to United States dollars. On July 11, 2023, the Bank of Canada indicative average rate of exchange for Canadian dollars and United States dollars was C$1.00 = US$0.7541 or US$1.00 = C$1.3260.

DIFFERENCES IN REPORTING OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES

This short form prospectus and documents incorporated by reference herein have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. Unless otherwise indicated, all mineral reserve and mineral resource estimates included or incorporated by reference in this short form prospectus have been prepared in accordance with NI 43-101. NI 43-101 is an instrument developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements of the United States Securities and Exchange Commission that are applicable to domestic United States reporting companies pursuant to Subpart 1300 of Regulation S-K under the U.S. Securities Act (“ Subpart 1300 ”). While the determination of mineral reserves and mineral resources and related disclosure obligations under NI 43-101 and Subpart 1300 are similar, they are not identical. Accordingly, information contained in this short form prospectus and documents incorporated by reference herein containing descriptions of the Corporation’s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar regulatory authorities in Canada. Copies of the documents incorporated by reference herein may be obtained on request without charge from the Chief Financial Officer of the Corporation at 130 King Street West, Exchange Tower, Suite 1940, Toronto, Ontario M5X 2A2, telephone (416) 364-4911, and are also available electronically under the profile of the Corporation at www.sedar.com.

The following documents filed by the Corporation with the securities commissions or similar regulatory authorities in Canada are specifically incorporated by reference into, and form an integral part of, this short form prospectus:

(a) the annual information form of the Corporation dated September 28, 2022 for the year ended June 30, 2022 (the “ AIF ”);
(b) the audited consolidated financial statements of the Corporation for the years ended June 30, 2022 and 2021, together with the notes thereto and the auditor’s report thereon (the “ Annual Financial Statements ”);
(c) the amended management’s discussion and analysis of the Corporation for the years ended June 30, 2022 and 2021 (the “ Annual MD&A ”);
(d) the amended and restated unaudited condensed interim consolidated financial statements of the Corporation for the nine and three months ended March 31, 2023 and 2022, together with the notes thereto (the “ Interim Financial Statements ”) (except for the notice of no auditor review, as the Corporation’s auditor has performed a review of the Interim Financial Statements in connection with the Offering);

(e) the amended and restated management’s discussion and analysis of the Corporation for the nine and three months ended March 31, 2023 and 2022 (the “ Interim MD&A ”);
(f) the management information circular of the Corporation dated October 12, 2022, regarding the annual meeting of shareholders of the Corporation held on December 5, 2022; and
(g) the technical report entitled “Molo Phase 2 Preliminary Economic Assessment, National Instrument 43-101 Technical Report on the Molo Graphite Project located near the village of Fotadrevo, in the Province of Toliara, Madagascar” with an effective date of April 27, 2022 (the “ PEA ”); and
(h) the template version of the term sheet dated July 12, 2023 in connection with the Offering (the “ Marketing Materials ”).

Any documents of the foregoing type, and all other documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, filed by the Corporation with the securities commissions or similar authorities in any of the provinces of Canada subsequent to the date of this short form prospectus and prior to the termination of this Offering shall be deemed to be incorporated by reference in this short form prospectus.

Any statement contained in this short form prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this short form prospectus, to the extent that a statement contained herein or in any other subsequently filed document that also is, or is deemed to be, incorporated by reference herein modifies, replaces or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this short form prospectus. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes.

The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

MARKETING MATERIALS

In connection with the Offering, the Underwriters used the Marketing Materials as “marketing materials” (as such term is defined under applicable Canadian securities laws). The Marketing Materials do not form part of this short form prospectus to the extent that the contents of the Marketing Materials have been modified or superseded by a statement contained in this short form prospectus. Any “template version” (as such term is defined under applicable Canadian securities laws) of any “marketing materials” filed on SEDAR after the date of this short form prospectus and before the termination of the distribution under the Offering (including any amendments to, or an amended version of, the Marketing Materials) is deemed to be incorporated by reference into this short form prospectus.

ELIGIBILITY FOR INVESTMENT

In the opinion of Cassels Brock & Blackwell LLP, counsel to the Corporation, and Bennett Jones LLP, counsel to the Underwriters, based on the current provisions of the Income Tax Act (Canada) (the “ Tax Act ”) and the regulations thereunder in force as of the date hereof, the Offered Shares, if issued on the date hereof and listed on a “designated stock exchange” as defined in the Tax Act (which includes the TSX), would at that time be a “qualified investment” under the Tax Act for trusts governed by a “registered retirement savings plan”, a “registered retirement income fund”, a “registered education savings plan”, a “registered disability savings plan”, a “tax-free savings account”, a “first home savings account” (collectively referred to as “ Registered Plans ”) or a “deferred profit sharing plan”, each as defined in the Tax Act.

Notwithstanding the foregoing, the holder of, or subscriber of or annuitant under, a Registered Plan (the “ Controlling Individual ”) will be subject to a penalty tax as set out in the Tax Act in respect of Offered Shares held in the Registered Plan if such securities are a “prohibited investment” (as defined in the Tax Act) for the particular Registered Plan. An Offered Share generally will not be a “prohibited investment” for a Registered Plan unless (i) the Controlling Individual does not deal at arm’s length with the Corporation for the purposes of the Tax Act, or (ii) the Controlling Individual has a “significant interest” (as defined in subsection 207.01(4) of the Tax Act) in the Corporation. In addition, the Offered Shares will generally not be a “prohibited investment” if the Offered Shares are “excluded property” (as defined in subsection 207.01(1) of the Tax Act) for the Registered Plan.

Controlling Individuals of Registered Plans should consult their own tax advisors as to whether the Offered Shares will be a prohibited investment having regard to their particular circumstances.

THE CORPORATION

General

The Corporation was continued under the Canada Business Corporations Act from the State of Minnesota to Canada on December 27, 2017 and has a fiscal year end of June 30. The outstanding Common Shares are listed and posted for trading on the TSX under the symbol “NEXT” and on the OTCQB under the symbol “NSRCF”. The Corporation’s head and registered office is located at 130 King Street West, Exchange Tower, Suite 1940, Toronto, Ontario M5X 2A2.

Corporate Structure

The following figure displays the corporate structure of the Corporation and its subsidiaries:

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SUMMARY DESCRIPTION OF THE BUSINESS

The Corporation is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals. The Corporation’s principal business is the development of the Molo Graphite Mine in Madagascar and has announced plans to build the first of several Battery Anode Facilities (“ BAFs ”) in Mauritius.

Mineral Properties

The Corporation is developing the Molo Graphite Mine located near the town of Fotadrevo in the Province of Toliara, Madagascar, which is the Corporation’s sole material mineral property.

Phase 1 of the Molo Graphite Mine was designed with a nameplate production capacity of 17,000 tonnes per annum (“ tpa ”) of SuperFlake® graphite concentrate. On March 23, 2023, the Corporation announced the initiation of commissioning. On June 22, 2023, the Corporation announced production of the first tonne of SuperFlake® graphite concentrate as part of the commissioning and optimization of the processing plant. The operations team will now shift their focus to ramping up the plant over a period of up to three months to the nameplate production capacity of 17,000 tpa of flake graphite concentrate.

The Corporation is progressing with a feasibility study (the “ Feasibility Study ”) for a proposed Phase 2 Expansion of the Molo Graphite Mine. Prior to making a Phase 2 construction decision, the Corporation will consider the Feasibility Study results as well as Phase 1 operational results. Construction of the Phase 2 expansion is subject to the Feasibility Study confirming positive project economics and subsequently obtaining sufficient funding for construction costs and working capital.

The Corporation also owns the Green Giant Vanadium Project, located in Madagascar, and the Sagar Project, located in Québec, both of which are at the exploration stage.

For additional information with respect to the Molo Graphite Mine and the other mineral properties of the Corporation, readers are referred to the Corporation’s Interim MD&A, AIF, Annual MD&A and the PEA, all of which are incorporated by reference herein. See also “ Risk Factors ” in this short form prospectus and the AIF, and the risk factors set forth in the Interim MD&A and in the Annual MD&A.

Battery Anode Facilities

The Corporation announced on February 28, 2023 its strategy for the staged buildout of Battery Anode Facilities (“ BAFs ”) in key geographic locations starting with Mauritius. The BAFs are value-added processing facilities that convert flake graphite into coated, spheronized, purified graphite (“ CSPG ”), which is the final form of anode material that is assembled along with cathode material into finished lithium-ion batteries used in electric vehicle (“ EV ”) applications.

The highlights of the BAF strategy are as follows:

Plans to construct multiple BAFs in key jurisdictions capable of producing CSPG anode material for use in lithium-ion batteries for EV applications.
The BAFs will leverage the Corporation’s exclusive partnership outside of the People's Republic of China with a leading value-added graphite processor and a CSPG sales and marketing company (the “ Partnership ”) for use of proprietary and well-established flake graphite processing technology and international CSPG sales and marketing relationships.
The first BAF will be in Mauritius (the “ Mauritius BAF ”), which was selected due to its proximity to the Molo Graphite Mine in Madagascar and its position on strategic shipping routes to Asian markets:

A long-term industrial lease has been signed to build the Mauritius BAF within a new industrial facility in proximity to the international container port of Port Louis, Mauritius (the “ Mauritius BAF Property ”).
A technical study for the Mauritius BAF with a production capacity of 3,600 tpa of CSPG (the “ Mauritius BAF Technical Study” ) estimated initial capital costs and working capital investments of US$28.4 million and annual revenues at US$33.7 million with an EBITDA of US$13.2 million. The resulting post-tax economic results over a 30-year term demonstrated an NPV of US$106.9 million using an 8% discount rate, an IRR of 42.7% and a payback of 2.2 years.
Construction of the Mauritius BAF is subject to completion of the front-end engineering and design (“ FEED ”) study and environmental and social impact assessment (“ ESIA ”) process, obtaining all necessary permits, and obtaining sufficient funding for construction costs and working capital. Once initiated, the construction process is expected to take approximately twelve (12) months.
Evaluation of the potential construction of a BAF in North America (a “ North America BAF ”) and initiation of the application process to access various financial loans and grants offered under Canadian federal and provincial programs and under the U.S. Inflation Reduction Act (the “ IRA ”).
Evaluation of the potential construction of a BAF in the United Kingdom (a “ UK BAF ”) and initiation of the application process to access various financial loans and grants offered under the UK Government Automotive Transformation Fund.
Evaluation of the potential construction of a BAF in the European Union (a “ European BAF ”).
Evaluation and potential construction of an artificial graphite (“ AG ”) production facility, which would enable the Corporation to supply AG anode material.

BAF Technology Partnership

The BAFs will leverage the Corporation’s exclusive Partnership outside of the People's Republic of China with a leading value-added graphite processor (the “ Technology Partner ”) and a CSPG sales and marketing company (the “ Sales Partner ”) for use of the Technology Partner’s proprietary and well-established flake graphite processing technology and the Sales Partner’s international CSPG sales and marketing relationships.

The Technology Partner operates flake graphite processing facilities that produce CSPG for leading Japanese lithium-ion battery manufacturers that are part of the supply chains of major OEMs, such as Tesla and Toyota. The Technology Partner, in return for a 2% technology licensing royalty and milestone payments, will share their proprietary intellectual property by designing and developing the BAF plant process flowsheets, sourcing all spheronizing, purification and coating process equipment, and providing all necessary training and operational knowhow. The Technology Partner received a $0.5 million milestone payment in November 2021 and will receive a further $0.25 million within 10 days of the Corporation announcing the commencement of construction of the first BAF plant and $0.25 million within 10 days of the declaration of commercial production.

The Sales Partner is the Technology Partner’s sales and marketing partner, and in return for a 3% sales commission, will leverage these relationships as the exclusive agent for sales, marketing, and trading of all CSPG produced in the BAF plants.

The spherodization, purification and coating of flake graphite to produce CSPG are highly technical processes that rely on proprietary intellectual property that have been developed and optimized over many years. The Partnership provides a significant first-mover advantage over other competitors that are developing their own graphite conversion intellectual property and need to qualify their material for use in the supply chains of major EV companies (“ OEMs ”).

Mauritius BAF

Mauritius was selected as the optimal site to develop the first BAF plant due to its proximity to the Molo Graphite Mine in Madagascar and its strategic position as a major hub along shipping routes to Asian markets. As such, the Mauritius BAF will seek to leverage low transport costs into Asian markets by targeting Japanese and South Korean OEM customers, as well as produce qualification material for global OEM customers.

Mauritius was also selected as it features modern infrastructure, an educated workforce, and a highly supportive business environment. The government of Mauritius also offers favourable tax incentives for import/export-focused industries such as freeport zones and attractive corporate income tax rates.

On February 28, 2023, a long-term industrial lease was signed to build the Mauritius BAF in a new industrial facility within a freeport-classified industrial park that is in proximity to the international container port of Port Louis, Mauritius. The initial lease term is 20-years plus a renewal of 5-years unless either party provides written notice to the other of its intention not to renew at least 12 months prior to the end of the initial term and/or of any subsequent renewal.

The first production line of the Mauritius BAF will be constructed within an existing building and is expected to have a production capacity of 3,600 tpa of CSPG. The Mauritius BAF Property has sufficient space for additional buildings that could support an expansion of up to three (3) additional production lines of 3,600 tpa each, resulting in a potential total production capacity of 14,400 tpa of CSPG. The FEED and ESIA permitting for the first production line are currently in progress.

The Corporation is in active discussions with strategic offtake partners and debt and equity financiers that have expressed interest in funding the construction of the Mauritius BAF. Construction of the Mauritius BAF is subject to completion of the FEED study and ESIA process, obtaining all necessary permits, and obtaining sufficient funding for construction costs and working capital. Once initiated, the construction process is expected to take approximately twelve (12) months.

While the Corporation believes that synergies exist by developing an integrated business model, the BAF plants will be capable of processing flake graphite obtained from third parties and will not be reliant on flake graphite produced from the Molo Graphite Mine. As such, the Molo Graphite Mine and the BAF plants should be considered independent from each other with regards to their economic viability. Notwithstanding, as justified by market and operational conditions, the Corporation will prioritize the purchase of small flake graphite from the Molo Graphite Mine as feedstock for the Mauritius BAF.

Economic Results for Mauritius BAF

The Mauritius BAF Technical Study (dated February 28, 2023) estimated that a production line with a capacity of 3,600 tpa of CSPG, constructed within the existing building on the Mauritius BAF Property (“ Line 1 ”), would require initial capital expenditures of US$23.5 million and working capital investments of US$4.9 million, and that at full capacity could generate annual revenues at US$33.7 million with an EBITDA of US$13.2 million and net income of $12.2 million. The resulting post-tax economic results estimated an NPV of US$106.9 million using an 8% discount rate, an IRR of 42.7% and a payback period of 2.2 years.

The Mauritius BAF Technical Study assumes product pricing of US$8,750 per tonne of CSPG and US$550 per tonne of by-product fines and estimated operating costs of US$5,535 per tonne of CSPG (based on a full cost allocation to CSPG) excluding any deductions for by-product revenues, and excluding royalties, taxes, depreciation, and amortization.

The following presents the economic results for Line 1 as included in the Mauritius BAF Technical Study:


*Economic Highlights of Line 1 of the Mauritius BAF*	Post-Tax Results (US$)

Net Present Value (“NPV”) (8% discount rate)(1)(2)(3)(4)	106.9 million
Initial Capital Expenditures(2)	23.5 million

Initial WorkingCapital Investments(3)	4.9 million
Sustainingand Rehabilitation Capital Expenditures	15.4 million
Life of Operation(“LoO”)	30years
Internal Rate of Return(“IRR”)(1)(4)	42.7%
Payback Period(1)(4)	2.2years
Annual Revenues(5)	33.7 million
Annual EBITDA(5)	13.2 million
Annual Net Income(6)	12.2 million

Economic Operational Highlights

*Economic Operational Highlights*	*Economic Operational Highlights*
Average Annual Production
Anode material(CSPG)	3,600 tpa
By-products(fines)	4,000 tpa
Average Sales Price Assumption(US$per tonne)
Anode material(CSPG)	US$8,750per tonne
By-products(fines)	US$550per tonne
Average Operating Costs(CSPG)(4)(7)	US$5,535per tonne

(1) Assumes Line 1 is financed with 100% equity.

(2) CAPEX includes process equipment, civil & infrastructure, electrical and utilities, project and construction services, and contingency of US$2.9 million.

(3) Working capital for first 3 months of operation and raw materials inventory. See “Use of Proceeds” herein for further discussion in respect to working capital for Line 1.

(4) As measured from start of operation of Line 1 and assumes no inflationary adjustments in sales price or operating costs.

(5) Estimate is for first full year of operation at full capacity and excludes royalties, taxes, depreciation, and amortization . For

a reconciliation of non-IFRS measures, see the Interim MD&A under the heading “Supplementary Disclosure – Non-IFRS Measures”. (6) Estimate is for first full year of operation at full capacity and assumes the first year of operation is subject to a tax holiday resulting in $nil taxes.

(7) Assumes all OPEX is allocated to CSPG production without deduction for by-product revenues, and excludes royalties, taxes, depreciation, and amortization.

The Mauritius BAF Technical Study also estimated that construction of a total of four production lines of 3,600 tpa each, with each line being constructed in sequence, for a total production capacity of 14,400 tpa of CSPG, (“ Lines 1-4 ”) would require initial capital expenditures of US$23.5 million and working capital investments of US$4.9 million for the first line plus incremental capital expenditures of US$74.0 million over the next three years (approximately US$16.0 million could be funded from Line 1 cash flows) and at full capacity could generate annual revenues at US$134.8 million with an EBITDA of US$57.7 million and net income of US$53.6 million. The resulting post-tax economic results demonstrated an NPV of US$439.7 million using an 8% discount rate, an IRR of 45.8% and a payback period of 3.2 years.

The capital cost estimates were prepared by the Corporation’s EPCM Erudite Strategies (“ Erudite ”) to a confidence level of +/- 15% to 20% and are preliminary in nature. These results should not be relied upon for investment decisions. The Mauritius BAF Technical Study is not a technical report for the purposes of National Instrument 43-101 but rather is a preliminary economic and technical study relating to the design, construction and operation of the Mauritius BAF.

For additional information with respect to the BAFs, readers are referred to the Corporation’s Interim MD&A, AIF, Annual MD&A, all of which are incorporated by reference herein. See also “ Risk Factors ” in this short form prospectus and the AIF, and the risk factors set forth in the Interim MD&A and in the Annual MD&A.

North America BAF Project

The Corporation is evaluating the potential construction of a North America BAF and has initiated the application process to access various financial loans and grants offered under Canadian federal and provincial programs and under the IRA.

The IRA provides for US$370 billion in climate and clean energy incentives and tax credits for EVs assembled in North America that meet strict critical material requirements. Critical minerals used in EV batteries must meet a gradually increasing percentage of components that have been extracted, processed, or recycled in North America (or in countries that have free trade agreements with the U.S.), starting at 40% in 2023 and increasing by 10% each year, up to 80% in 2026. Starting in 2025, EVs will not qualify for the tax credit if the critical minerals were extracted, processed, or recycled by a “foreign entity of concern” (i.e. China).

The Corporation is completing an initial economic and site selection evaluation process that identifies prospective jurisdictions, which includes locations in the USA and Canada, that offer strategic positions along coastal and internal transport corridors, low power costs, skilled labour pools, and attractive regional infrastructure and tax incentives.

Advancement of a North American BAF will require project development expenditures consisting of economic evaluations of constructing a North American-adapted BAF at several prospective sites, final site selection, grant application process, environmental permitting and engineering specific to the selected site prior to making a final investment decision.

UK BAF Project

The Corporation is evaluating the potential construction of a UK BAF and has initiated the application process to access various financial loans and grants offered under the UK Government Automotive Transformation Fund.

The Corporation has completed an initial economic and site selection evaluation process that identified several prospective jurisdictions that offers a strategic position along coastal and internal transport corridors, skilled labour pool, and attractive regional infrastructure and tax incentives.

Advancement of a UK BAF will require project development expenditures consisting of economic evaluations of constructing a UK-adapted BAF at prospective sites, final site selection, grant application process, environmental permitting and engineering specific to the selected site prior to making a final investment decision.

European BAF Project

The Corporation is evaluating the potential construction of a European BAF for the supply of CSPG into the European Union (“ EU ”) market.

Advancement of a European BAF project will require project development expenditures consisting of an initial economic evaluation for the construction of a European-adapted BAF at several prospective sites. If the economic evaluation supports further development of a European BAF, the Corporation will require additional funding beyond the Offering to complete final site selection, grant application process, environmental permitting and engineering specific to the selected site prior to making a final investment decision.

Artificial Graphite Production Facility

The Corporation is prioritizing the evaluation and potential construction of an AG production facility, which would enable the Corporation to supply AG anode material.

Ongoing discussions with OEMs have identified significant demand for non-Chinese AG that will be required for existing battery chemistries following the implementation of IRA critical mineral restrictions. Consequently, the Corporation is pursuing collaboration agreements for the potential construction of an AG production facility in a suitable North American jurisdiction.

Advancement of the AG production facility will now require project development expenditures consisting of an initial economic evaluation for the construction of an AG production facility adapted to prospective jurisdictions in North America. If the economic evaluation supports further development, the Corporation will require additional funding beyond the Offering to complete final site selection, grant application process, environmental permitting and engineering specific to the selected site prior to making a final investment decision.

CONSOLIDATED CAPITALIZATION

There have not been any material changes in the share and loan capital of the Corporation since March 31, 2023. The following table represents the share capital of the Corporation both before and after giving effect to the Offering:

Number of Common Shares Authorized Unlimited	Outstanding as at the date hereof(1) 125,271,007	Outstanding on the date hereof, after giving effect to the Offering (without exercise of the Over- Allotment Option) (2) []	Outstanding on the date hereof, after giving effect to the Offering (including full exercise of the Over- Allotment Option) (3) []

Notes:

(1) As at the date hereof, there are: (i) 1,710,000 Common Shares issuable upon the exercise of outstanding stock options of the Corporation (“ Stock Options ”); and (ii) 160,000 Common Shares issuable upon the vesting of outstanding restricted share units of the Corporation (“ RSUs ”). See also “ Prior Sales ”.

(2) Reflects the issuance of [  ] Offered Shares pursuant to the Offering.

(3) Reflects the issuance of [  ] Offered Shares pursuant to the Offering, including the issuance of [  ] Additional Shares pursuant to the full exercise of the Over-Allotment Option.

USE OF PROCEEDS

The net proceeds to the Corporation from the Offering are estimated to be $[  ], after deducting the payment of the Underwriters’ Fee of $[  ], and after deducting the estimated expenses of the Offering (estimated to be approximately $[  ]). If the Over-Allotment Option is exercised in full, the net proceeds to the Corporation from the Offering are estimated to be $[  ], after deducting the payment of the Underwriters’ Fee of $[  ], and after deducting the estimated expenses of the Offering (estimated to be approximately $[  ]).

Use of Net Proceeds

The Corporation intends to use the net proceeds of the Offering: (1) to advance and complete construction of the Mauritius BAF; (2) for project development and technical studies for additional BAFs in key geographic locations; and (3) for general corporate and working capital purposes as set forth below:

Purpose of Funds	Estimated Amount (C$million)
Mauritius BAF
Initial capital costs (1)(2)
Civil, earthworks, and infrastructure	$4.7
Processing equipment	$10.8
Electrical, control, and instrumentation	$3.7
Plant lease and insurance	$1.9
Shipping and ground transport	$2.3

Purpose of Funds	Estimated Amount (C$million)
Engineering services	$2.8
Project services	$0.9
Contingency	$3.9
Initial operating expenses and working capital(3)
Working capital for 3 months of operation and raw materials	$6.6
Working capital for additional raw materials inventory	$3.8
Corporate overhead	$1.2
Subtotal for Mauritius BAF	$42.6

Project Development and Technical Studies for Additional BAFs
Project Development and Technical Studies(4)	$[]
Subtotal for Additional BAFs	$[]

General Corporate and Working Capital Purposes
Corporate expenses(5)	$[]
Working capital(6)	$[]
Subtotal for General Corporate and Working Capital Purposes	$[]
TOTAL USE OF NET PROCEEDS	$[]

Notes:

(1) The Corporation will incur the expenditures in US$. The above amounts were converted using an exchange rate of US$0.74/C$1.00.
(2) The cost estimates related to the Mauritius BAF assumes it will be built in Mauritius at the industrial site leased by the Corporation and are based on the Mauritius BAF Technical Study prepared for the Corporation by Erudite.
(3) The Mauritius BAF Technical Study assumed a working capital estimate of US$4.9 million for the first three months of operation and raw material inventory. The Corporation currently anticipates an increase of US$2.8M to build an additional inventory of graphite feedstock and raw materials for use during the ramp-up phase and the first few months of production, which are expected to reduce operating costs during the first year of operation, resulting in no material impact on the economic results included in the Mauritius BAF Technical Study as disclosed under the heading “Summary Description of the Business – Economic Results of Mauritius BAF’ .
(4) Anticipated to be used for the initiatives under the heading “Summary Description of the Business – Battery Anode Facilities ”, other than in respect of the Mauritius BAF.
(5) Anticipated to be used for general corporate purposes, including but not limited to an expansion of the Mauritius corporate team to ensure the Mauritius BAF objectives can be achieved.

(6) Anticipated to be used to for general working capital expenditures (including accounting, legal, and other service-related and administrative expenses).

The above noted allocation represents the Corporation’s current intentions with respect to its use of the net proceeds from the Offering based on current knowledge, planning and expectations of management of the Corporation.

The net proceeds from the exercise of the Over-Allotment Option, if any, are expected to be used for contingencies in respect of the BAFs and for general corporate and working capital purposes.

The Corporation’s actual use of the net proceeds of the Offering may vary depending on the Corporation’s operating and capital needs from time to time. There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary. See “ Risk Factors – Discretion in the Use of Proceeds ”.

Pending the use of the net proceeds described above, the Corporation may hold all or a portion of the net proceeds of the Offering as cash balances in the Corporation’s bank account or may invest all or a portion of the net proceeds of the Offering in short-term, high quality, interest bearing corporate, government-issued or governmentguaranteed securities.

During the year ended June 30, 2022 and the nine and three months ended March 31, 2023, the Corporation had negative cash flow from operating activities. The Corporation anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved at the Molo Graphite Mine and profitable commercial production is achieved at the Mauritius BAF. As a result, certain of the net proceeds from the Offering may be used to fund such negative cash flow from operating activities in future periods. See “ Risk Factors – Negative Operating Cash Flow and Additional Funding ”.

Business Objectives and Milestones

The Corporation is intent on becoming a vertically integrated global supplier of battery materials through the mining and value-added processing of graphite and other minerals.

The Corporation is planning a staged buildout of a series of BAFs in key geographic locations, each designed with modular production capacities that can expand in lockstep OEMs demand from key markets in Asia, North America, Europe and the UK. In relation to the BAFs, the Corporation intends to achieve the following milestones over approximately the next eighteen months:

Completion of construction and commissioning of the Mauritius BAF (approximately $42.6 million).
Project development and completion of technical studies for additional BAFs in key geographic locations (approximately $ [  ] million).

Phase 1 of the Molo Graphite Mine was designed with a nameplate production capacity of 17,000 tpa of SuperFlake® graphite concentrate. On March 23, 2023, the Corporation announced the initiation of commissioning. On June 22, 2023, the Corporation announced production of the first tonne of SuperFlake® graphite concentrate as part of the commissioning and optimization of the processing plant. In relation to the Molo Graphite Mine, the Corporation intends to achieve the following milestones over approximately the next eighteen months:

The operations team will now shift their focus to ramping up the plant over a period of up to three months to the nameplate production capacity (working capital expenses of approximately $ [  ] million and general and administrative costs of approximately $ [  ] million).
Completion of a Feasibility Study for a Phase 2 expansion of the Molo Graphite Mine (approximately $ [  million).
Decision of whether to proceed with construction of a Phase 2 expansion of the Molo Graphite Mine.

Additional financing will be needed to advance Phase 2 of the Molo Graphite Mine into commercial production, which may require the issuance of additional securities.

There can be no assurance the Corporation’s milestones will be achieved or the business objectives will be completed in this timeline (or at all). The exploration, development and construction of mineral projects and BAFs are subject to a number of risks and uncertainties. See “ Risk Factors ”.

PLAN OF DISTRIBUTION

Pursuant to the Underwriting Agreement, the Corporation has agreed to issue and sell, and the Underwriters have severally (and not jointly, nor jointly and severally) agreed to purchase, as principals, on the Closing Date, an

aggregate of [  ] Offered Shares at the Offering Price for aggregate gross proceeds of $[  ], payable in cash to the Corporation against delivery of the Offered Shares, subject to compliance with the terms and conditions contained in the Underwriting Agreement. The obligations of the Underwriters under the Underwriting Agreement are several (and not joint, nor joint and several), and may be terminated at their discretion on the basis of “material change out”, “disaster out”, “litigation/regulatory out”, and “breach out” provisions in the Underwriting Agreement, and may also be terminated upon the occurrence of certain stated events. The Underwriters are, however, obligated to take up and pay for all of the Offered Shares if any of the Offered Shares are purchased under the Underwriting Agreement.

The Corporation has granted the Underwriters the Over-Allotment Option, exercisable in whole or in part, in the sole discretion of the Co-Lead Underwriters, on behalf of the Underwriters, for a period of 30 days from and including the Closing Date, to purchase up to [  ] Additional Shares, at the Offering Price, to cover over-allotments, if any, made by the Underwriters in connection with the Offering and for market stabilization purposes. The grant of the Over-Allotment Option and the Additional Shares issuable upon exercise of the Over-Allotment Option are qualified for distribution under this short form prospectus. A purchaser who acquires Additional Shares forming part of the Underwriters’ over-allocation position acquires such Additional Shares under this short form prospectus regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.

In consideration for the services rendered by the Underwriters in connection with the Offering, the Corporation has agreed to pay the Underwriters the Underwriters’ Fee of 5.0% of the gross proceeds of the Offering (which shall be reduced to 1.0% for gross proceeds raised from Offered Shares sold to certain purchasers on the President’s List), including any Additional Shares sold pursuant to the exercise of the Over-Allotment Option. The Offering Price and other terms of the Offering were determined by arm’s length negotiation between the Corporation and the Co-Lead Underwriters with reference to the prevailing market price of the Common Shares.

The Corporation has applied to list the Offered Shares and the Additional Shares on the TSX . The TSX has not conditionally approved the Corporation’s listing application and there is no assurance that the TSX will approve the listing application. Listing will be subject to the Corporation fulfilling all the requirements of the TSX.

The Underwriters propose to offer the Offered Shares initially at the Offering Price. After the Underwriters have made reasonable efforts to sell all of the Offered Shares at such price, the Offering Price may be decreased, and further changed from time to time, to an amount not greater than the Offering Price. However, in no event will the Corporation receive less than net proceeds of $[  ] per Offered Share. If the selling price is reduced, the compensation realized by the Underwriters will be reduced by the amount that the aggregate price paid by the purchasers for the Offered Shares is less than the gross proceeds paid by the Underwriters to the Corporation for the Offered Shares. In addition, the Underwriters may offer selling group participation to other registered dealers that are satisfactory to the Corporation, acting reasonably, with compensation to be negotiated between the Underwriters and such selling group participants, but at no additional cost to the Corporation.

Pursuant to policy statements of certain securities regulators, the Underwriters may not, throughout the period of distribution under this short form prospectus, bid for or purchase Common Shares. The foregoing restriction is subject to certain exceptions including: (a) a bid or purchase permitted under the Universal Market Integrity Rules for Canadian Marketplaces administered by the Investment Industry Regulatory Organization of Canada relating to market stabilization and passive market making activities, (b) a bid or purchase made for and on behalf of a customer where the order was not solicited during the period of the distribution, provided that the bid or purchase was for the purpose of maintaining a fair and orderly market and not engaged in for the purpose of creating actual or apparent active trading in, or raising the price of, such securities, or (c) a bid or purchase to cover a short position entered into

prior to the commencement of the prescribed restricted period. Consistent with these requirements, and in connection with this distribution, the Underwriters may over-allot or effect transactions that are intended to stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on the open market. If these activities are commenced, they may be discontinued by the Underwriters at any time. The Underwriters may carry out these transactions on the TSX, in the over-the-counter market or otherwise.

Pursuant to the Underwriting Agreement, the Corporation has agreed that it shall not, without the prior written consent of the Co-Lead Underwriters, on behalf of the Underwriters, which consent shall not be unreasonably withheld, directly or indirectly offer, issue, pledge, sell, contract to sell, announce an intention to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise lend, transfer or dispose of, directly or indirectly, any common shares or securities convertible into or exchangeable for Common Shares, other than: (i) the issuance of Common Shares in connection with the exercise or vesting of any currently outstanding awards pursuant to the Corporation’s incentive plans, (ii) the issuance of new awards pursuant to the Corporation’s incentive plans, and the issuance of Common Shares in connection with the exercise or vesting of any such new awards; (iii) in connection with the bona fide acquisition by the Corporation of the shares or assets of other corporations or entities, and (iv) to satisfy any other currently outstanding instruments or other contractual commitments of the Corporation, for a period ending 60 days after the Closing Date.

Pursuant to the Underwriting Agreement, the Corporation has agreed that it will cause each of the senior management, directors, and certain principal securityholders of the Corporation to agree, in a lock-up agreement to be executed concurrently with the closing of the Offering that, for a period of 60 days following the Closing Date, each will not, directly or indirectly, offer, sell, dispose of or otherwise monetize the economic value of any securities in the Corporation beneficially owned by such person, or announce any intention to do so, whether now owned, directly on indirectly, or under their control or direction, or with respect to which each has beneficial ownership, without the prior written consent of the Co-Lead Underwriters, on behalf of the Underwriters, which consent shall not be unreasonably withheld or delayed, and subject to other certain exceptions to be contained in such lock-up agreements. The definitive terms of such lock-up agreements shall be negotiated between the Corporation and the Co-Lead Underwriters in good faith and contain customary provisions.

The Offered Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons, except in accordance with an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Underwriters have agreed that, except as permitted by the Underwriting Agreement pursuant to transactions exempt from the registration requirements of the U.S. Securities Act and any applicable state securities laws, they will not offer or sell the Offered Shares at any time within the United States or to, or for the account or benefit of, U.S. Persons. Accordingly, the Underwriters, pursuant to the terms and conditions set forth in the Underwriting Agreement acting through their registered United States broker-dealer affiliates, may: (i) offer and resell the Offered Shares they have acquired pursuant to the Underwriting Agreement to Qualified Institutional Buyers in the United States in accordance with Rule 144A under the U.S. Securities Act and pursuant to similar exemptions under applicable state securities laws; and (ii) offer the Offered Shares for sale by the Corporation in the United States to a limited number of substituted purchasers who are U.S. Accredited Investors (as defined herein) in transactions in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by Rule 506(b) of Regulation D and/or in reliance upon Section 4(a)(2) of the U.S. Securities Act thereunder and similar exemptions from registration under applicable state securities laws. Moreover, the Underwriting Agreement provides that each Underwriter will otherwise offer and sell the Offered Shares outside the United States to non-U.S. Persons only in accordance with the exclusion from the registration requirements of the U.S. Securities Act provided by Rule 903 of Regulation S under the U.S. Securities Act. The Offered Shares issued to, or for the account or benefit of, U.S. Persons or persons in the United States, will be “restricted securities” within the meaning of Rule 144(a)(3) of the U.S. Securities Act and will be subject to restrictions to the effect that such securities have not been registered under the U.S. Securities Act and may only be offered, sold or otherwise transferred pursuant to certain exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.

This short form prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Offered Shares in the United States or to, or for the account or benefit of, a U.S. Person. In addition, until 40 days

after the commencement of the Offering, an offer or sale of Offered Shares within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with an exemption from registration under the U.S. Securities Act and similar exemptions under applicable state securities laws.

Subscriptions for the Offered Shares will be received subject to rejection or allotment, in whole or in part, and the right is reserved to close the subscription books at any time without notice. Closing of the Offering is expected to take place on or about August 1, 2023, or such other date as may be agreed upon by the Corporation and the Underwriters, but in any event not later than 42 days after the date of the receipt of the (final) short form prospectus. It is anticipated that the Offered Shares will be delivered under the book-based system through CDS or its nominee and deposited in electronic form. A purchaser of Offered Shares, including a purchaser of Offered Shares in the United States that is a Qualified Institutional Buyer, will receive only a customer confirmation from the registered dealer from or through which the Offered Shares are purchased and who is a CDS depository service participant. CDS will record the CDS participants who hold Offered Shares on behalf of owners who have purchased Offered Shares in accordance with the book-based system. Offered Shares, if any, acquired by such Qualified Institutional Buyers may not be deposited into the facilities of the Depositary Trust Company, or a successor depository within the United States, or be registered or arranged to be registered, with Cede & Co. or any successor thereto and are subject to contractual restrictions on transfer agreed to by or on behalf of such Qualified Institutional Buyers in the United States. Physical certificates or statements evidencing the Offered Shares will be distributed to purchasers in the United States who meet the definition of “accredited investors” as defined in Rule 501(a) (each, a “ U.S. Accredited Investor ”) of Regulation D under the U.S. Securities Act. No other definitive certificates will be issued unless specifically requested or required.

Pursuant to the terms of the Underwriting Agreement, the Corporation has agreed to reimburse the Underwriters for certain expenses incurred in connection with the Offering and to indemnify the Underwriters and each of their subsidiaries and affiliates and each of their directors, officers, employees, unitholders and agents against certain liabilities and expenses and to contribute to payments the Underwriters may be required to make in respect thereof.

Participation Rights

On February 8, 2021, the Corporation entered into an investment agreement with Vision Blue Resources Limited (“ Vision Blue ”) pursuant to which, among other things, the Corporation granted Vision Blue a contractual right to participate in future equity financings on the same terms as such financing to maintain its ownership percentage in the Corporation for so long as Vision Blue holds Common Shares representing at least 10% of the issued and outstanding Common Shares.

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

The Corporation is authorized to issue an unlimited number of Common Shares, of which 125,271,007 Common Shares are outstanding as at the date hereof. Holders of Common Shares are entitled to receive notice of any meetings of the holders of Common Shares of the Corporation and to attend and to cast one vote per Common Share held at all such meetings.

Holders of Common Shares do not have cumulative voting rights with respect to the election of directors and, accordingly, holders of a majority of the Common Shares entitled to vote in any election of directors may elect all directors. Holders of Common Shares are entitled to receive on a pro rata basis such dividends, if any, as and when declared by the Board of Directors at its discretion from funds legally available therefore and upon the liquidation, dissolution or winding up of the Corporation are entitled to receive on a pro rata basis the net assets of the Corporation after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro rata basis with the holders of Common Shares with respect to dividends or liquidation. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase fund provisions.

PRIOR SALES

The following table summarizes the issuances by the Corporation of Common Shares, and securities convertible into or exchangeable for Common Shares, for the 12 months prior to the date of this short form prospectus.

Date	Type of Security Issued	Issuance / Exercise Price Per Security	Number of Securities Issued
July 28, 2022	Restricted Share Units(1)	N/A	160,000
October 31, 2022	Common Shares(2)	$1.00	23,214,286
June 30, 2023	Common Shares(3)	N/A	184,107

Notes:

(1) Each Restricted Share Unit entitles the holder thereof to one Common Share, subject to adjustments, vests on June 30, 2023 and expires on June 30, 2024. (2) Issued in connection with the exercise of Warrants.

(3) Issued in connection with the conversion of Restricted Share Units.

TRADING PRICE AND VOLUME

The outstanding Common Shares are listed and posted for trading on the TSX under the symbol “NEXT”. The following table sets forth the reported intraday high and low prices and trading volumes of the Common Shares for the 12 month period prior to the date of this short form prospectus (Source: TMX Datalinx).

Period	High Trading	Low Trading	Volume
	Price ($)	Price ($)
July 2022	2.88	1.73	1,675,483
August 2022	3.40	2.48	1,438,449
September 2022	3.20	2.15	1,163,419
October 2022	2.66	1.63	2,506,996
November 2022	3.19	2.34	1,806,615
December 2022	3.24	2.30	1,165,739
January 2023	3.17	2.65	1,170,547
February 2023	3.05	2.48	1,090,397
March 2023	2.88	2.10	1,432,762
April 2023	2.40	1.97	915,025
May 2023	2.07	1.90	706,028
June 2023	2.17	1.86	672,409
July 1 - 11, 2023	2.10	1.92	133,834

On July 11, 2023, the last trading day prior to the date of this short form prospectus, the closing price of the Common Shares on the TSX was $1.92.

RISK FACTORS

An investment in the Offered Shares being distributed under this short form prospectus is speculative and involves a high degree of risk. Any prospective investor should carefully consider the risk factors set forth in the Interim MD&A, the AIF and the Annual MD&A, which are incorporated by reference in this short form prospectus, and all of the other information contained in this short form prospectus (including, without limitation, the documents incorporated by reference herein) before acquiring any of the Offered Shares distributed under this short form

prospectus. The risks described herein and therein are not the only risks facing the Corporation. Additional risks and uncertainties not currently known to the Corporation, or that the Corporation currently deems to be immaterial, may also materially and adversely affect its business.

In addition, the following risk factors should be carefully considered by investors:

Development, Commissioning, and Operation of the Molo Graphite Mine

The development, commissioning, and operation of Phase 1 is based on management’s expectations, and may be delayed by several factors, some of which are beyond the Corporation’s control. There is a risk that development, commissioning, and achievement of commercial production will not be completed on time or on budget, or at all. Successful development and operation of Phase 1 may be affected by the design and construction of an efficient processing facility, the cost and availability of suitable machinery, supplies, equipment and skilled labor, the existence of competent operational management, prudent financial administration, the availability and reliability of appropriately skilled and experienced employees and is dependant on the receipt of various operating permits and the import of equipment into Madagascar (none of which can be assured). Further, the revenues, costs, timing, and complexities of developing and operating the Molo Graphite Mine may be significantly higher than anticipated, which could add to the cost of development, production, and operation and/or impair production and activities, thereby affecting the Corporation’s profitability.

It is common for new mines and processing facilities to experience unexpected problems and delays during construction, development, start-up, and commissioning activities due to late delivery of components, the inadequate availability of skilled labor and mining equipment, energy at an economic cost, adverse weather or equipment failures, the rate at which expenditures are incurred, delays in construction schedules, or delays in obtaining the required permits or consents, or to obtain the required financing. In addition, delays in the early stages of mineral production often occur. During this time, the economic feasibility of production may change. Capital costs are estimates based on the interpretation of geological data, feasibility studies and other conditions, and there can be no assurance that they will prove to be accurate.

Development, Commissioning, and Operation of the BAFs

The development, commissioning, and operation of BAFs (including the Mauritius BAF) is based on management’s expectations, and may be delayed by several factors, some of which are beyond the Corporation’s control. There is a risk that development, commissioning, and achievement of commercial production will not be completed on time or on budget, or at all. Successful development and operation of the Mauritius BAF may be affected by the design and construction of an efficient processing facility, the cost and availability of suitable machinery, supplies, equipment and skilled labor, the existence of competent operational management, prudent financial administration, and the availability and reliability of appropriately skilled and experienced employees.

It is common for new processing facilities to experience unexpected problems and delays during construction, development, start-up, and commissioning activities due to late delivery of components, the inadequate availability of skilled labor and processing equipment, energy and chemical reagents at an economic cost, adverse weather or equipment failures, the rate at which expenditures are incurred, delays in construction schedules, or delays in obtaining the required permits or consents, or to obtain the required financing.

The revenues, costs, timing, and complexities of developing and operating the BAFs may be significantly higher than anticipated, which could add to the cost of development, production, and operation and/or impair production and activities, thereby affecting the Corporation’s profitability.

Construction and Start-Up of New Mines and Industrial Plants

The development and construction of the Molo Graphite Mine and the BAFs require the construction of significant new industrial facilities. The success of construction projects and the start-up of new mines and industrial plants by the Corporation is subject to a number of risks and challenges including the availability and performance of engineering and construction contractors, suppliers and consultants; unforeseen geological formations; the

implementation of new mining and industrial processes; the receipt of required governmental approvals and permits in connection with the construction of mining and industrial facilities and the conduct of operations, including environmental and operating permits; price escalation on all components of construction and start-up; engineering and mine design adjustments; the underlying characteristics, quality and unpredictability of the exact nature of mineralogy of a deposit and the consequent accurate understanding of ore or concentrate production; and the successful completion and operation of haulage ramp and conveyors to move ore and other operational elements. Any delay in the performance of any one or more of the contractors, suppliers, consultants or other persons on which the Corporation is dependent in connection with its construction and development activities, a delay in or failure to receive the required governmental approvals and permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation of the operational elements in connection with the mine and the industrial facilities could delay or prevent the construction and start-up as planned and may result in additional costs being incurred by the Corporation beyond those budgeted. There can be no assurance that current or future construction and start-up plans implemented by the Corporation will be successful.

Geopolitical Risk and Conflict

As the Corporation’s operations expand and reliance on global supply chains increases, the impact of significant geopolitical risk and conflict globally may have a more sizeable and unpredictable impact on the Corporation’s business, financial condition, and operations than has traditionally been the case. The recent conflict in Ukraine and the global response to this conflict as it relates to sanctions, trade embargos, and military support, has resulted in significant uncertainty as well as economic and supply chain disruptions. Should this conflict go on for an extended period of time, expand beyond Ukraine, or should other geopolitical disputes and conflicts emerge in other regions, this could result in material adverse effects on the Corporation.

Additional Financings

The Corporation will require additional financing through equity securities and/or debt to complete the development, construction and commissioning of the Molo Graphite Mine and the BAFs. The success and the pricing of any such capital raising and/or debt financing is dependent upon the prevailing market conditions at that time and upon the Corporation’s ability to attract significant amounts of debt and/or equity. There is no assurance that such financing will be obtained on terms satisfactory to the Corporation. Failure to obtain any financing necessary for the Corporation’s capital expenditure could result in the delay or indefinite postponement of further construction and development of either or both of the Molo Graphite Mine or the BAFs, which in turn would materially and adversely affect the financial and operating results of the Corporation and the market price of the Corporation’s securities. If the Corporation raises additional funding by issuing additional equity securities or convertible debt securities such financings may substantially dilute the interests of shareholders of the Corporation and reduce the value of their investment. Additional financings and share issuances may result in a substantial dilution to shareholders of the Corporation and decrease the value of the Corporation’s securities.

Volatility of Common Share Prices

The market prices for securities of mining companies, including those of the Corporation, historically have been volatile. Future developments concerning the Corporation or its industry, including downward fluctuations in the price of graphite and vanadium, may have a significant impact on the market price of the Common Shares.

Active Liquid Market for Common Shares

There may not be an active liquid market for the Common Shares. There is no guarantee that an active trading market for the Common Shares will be maintained on the TSX. Investors may not be able to sell their Common Shares quickly or at the latest market price if trading in the Common Shares is not active.

The Corporation has a Significant Shareholder

Vision Blue holds approximately 46.6% of the issued and outstanding Common Shares. Dispositions by a significant shareholder could have an adverse effect on the market price of the Common Shares, as the market price

of the Common Shares could fall. As a result of the significant holdings, there is a risk that the Corporation’s securities are less liquid and trade at a relative discount compared to circumstances where a significant shareholder does not have the ability to influence or determine matters affecting the Corporation. Additionally, there is a risk that its significant interests in the Corporation discourages transactions involving a change of control, including transactions in which an investor, as a holder of the Corporation’s securities, would otherwise receive a premium for its securities in the Corporation over the then current market price. Further, as long as Vision Blue maintains its current ownership interest in the Corporation, it may be able to exert influence over matters that are to be determined by votes of the holders of Common Shares. There is a risk that the interests of Vision Blue may differ from those of other shareholders.

Discretion in the Use of Proceeds

Management will have broad discretion concerning the use of the net proceeds of the Offering, as well as the timing of their expenditures. Depending on fluctuations in graphite prices and other factors, the intended use of proceeds may change. As a result, an investor will be relying on the judgment of management for the application of the net proceeds of the Offering. Management may use the net proceeds of the Offering in ways that an investor may not consider desirable if they believe it would be in the best interests of the Corporation to do so. The results and the effectiveness of the application of the proceeds are uncertain. If the proceeds are not applied effectively, the Corporation’s results of operations may suffer.

Negative Operating Cash Flow and Additional Funding

The Corporation has limited financial resources and has no source of operating cash flow. During the year ended June 30, 2022 and the nine and three months ended March 31, 2023, the Corporation had negative cash flow from operating activities. The Corporation anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved at the Molo Graphite Mine and/or profitable commercial production is achieved at the Mauritius BAF. There is no assurance that additional funding will be available to the Corporation for the exploration and development of its projects. Furthermore, significant additional financing, whether through the issuance of additional securities and/or debt, will be required to continue the development of the Molo Graphite Mine generally. There can be no assurance that the Corporation will be able to obtain adequate additional financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further development of the Molo Graphite Mine generally.

Enforceability of Foreign Judgments

Craig Scherba, Sir Mick Davis and Robin Borley, each an officer and/or director of the Corporation, and certain of the experts named in this Prospectus reside outside of Canada. Some or all of the assets of those persons may be located outside of Canada. It may not be possible for investors to collect from such persons or enforce judgments obtained in Canada predicated on the civil liability provisions of Canadian securities legislation against such persons and experts named in this Prospectus. It may not be possible for investors or any other person or entity to assert claims under Canadian securities laws or otherwise in original actions instituted in a foreign jurisdiction. Consequently, investors may be effectively prevented from pursuing remedies against such persons under Canadian securities laws or otherwise.

AUDITOR, TRANSFER AGENT AND REGISTRAR

MNP LLP is the independent auditor of the Corporation and is independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.

The transfer agent and registrar for the Common Shares is TSX Trust Company, with its principal office in Toronto, Ontario.

INTEREST OF EXPERTS

The following are the names of each person or company who is named as having prepared or certified a report, valuation, statement or opinion described or included herein or in a document incorporated by reference, and whose profession or business gives authority to such report, valuation, statement or opinion:

MNP LLP provided an auditor’s report dated July 5, 2023 in respect of the Annual Financial Statements. MNP LLP has advised that it is independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.
Johann de Bruin, Pr. Eng., Director at Erudite Projects (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Oliver Peters, P. Eng., Principal Metallurgist at Metpro Management Inc., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Sivanesan (Desmond) Subramani, Pr. Sci. Nat . , Principal Resource Geologist at Caracle Creek International Consulting (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Philip John Hancox, Pr. Sci. Nat., Director at Caracle Creek International Consulting (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Pono Mogoera, Pr. Eng., Process Engineer at Erudite Projects (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Schalk Pienaar, Pr. Eng., Civil and Structural Engineer at Erudite Projects (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Hercules Albertus Smith, Pr. Eng., Senior Electrical Engineer at Erudite Projects (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Albertus Wynand Christoffel (Alkie) Marais, MSc. Geohydrology, Principal Hydrogeologist at GCS Water and Environmental Consultants (Pty) Ltd., is a qualified person who authored certain portions of the PEA. To the knowledge of the Corporation, neither the author nor the firm the author works with had an interest in any securities or other properties of the Corporation, its associates or affiliates as at the date of the PEA or as at the date hereof.
Craig Scherba, P. Geo., President and Chief Executive Officer of the Corporation, is the qualified person who reviewed, approved and verified the scientific and technical information disclosed in this short form prospectus and certain scientific and technical information disclosed in the Interim MD&A, the AIF and the Annual MD&A. Mr. Scherba’s holdings of securities of the Corporation as of the date hereof do not exceed 1.0% of the issued and outstanding securities of the Corporation .

Certain legal matters in connection with this Offering will be passed upon on behalf of the Corporation by Cassels Brock & Blackwell LLP, and on behalf of the Underwriters by Bennett Jones LLP. As at the date hereof, the partners and associates of Cassels Brock & Blackwell LLP and the partners and associates of Bennett Jones LLP, each as a group, beneficially own, directly and indirectly, in the aggregate, less than 1.0% of the outstanding Common Shares.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces of Canada, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser.

CERTIFICATE OF THE CORPORATION

Dated: July 12, 2023

This short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of Canada, except the province of Québec.

(Signed) “ Craig Scherba ” Craig Scherba President and Chief Executive Officer

(Signed) “ Marc Johnson Marc Johnson Chief Financial Officer

On behalf of the Board of Directors:

(Signed) “ Christopher Kruba ”

Christopher Kruba Director

(Signed) “ Brett Whalen

Brett Whalen Director

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CERTIFICATE OF THE UNDERWRITERS

Dated: July 12, 2023

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of Canada, except the province of Québec.

CORMARK SECURITIES INC.

BMO NESBITT BURNS INC.

(Signed) “ Darren Wallace ” By: Darren Wallace Managing Director

(Signed) “ John Manning By: John Manning Managing Director

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NextSource Materials Inc. — Capital/Financing Update 2023

46104_rns_2023-07-12_3510076f-f706-4cba-b55b-e255f7634b37.pdf

PRELIMINARY SHORT FORM PROSPECTUS

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