Key points
- The Novonix share price is currently soaring 5%, trading at $7.87
- The gain follows news of a completed supply agreement with US battery cell developer, KORE Power
- Novonix has also taken a 5% stake in KORE Power
The Novonix Ltd (ASX: NVX) share price is taking off after the company announced that its signed and sealed a supply agreement with, and investment in, battery cell developer KORE Power.
Under the agreement, Novonix will be KORE Power's only graphite anode material supplier. It has also taken a 5% stake in the company.
At the time of writing, the Novonix share price is $7.87, 4.93% higher than its previous close.
Though, that's lower than its intraday high of $8.14, which represented an 8.5% gain.
Let's take a closer look at today's news from the battery technology company.
What's boosting the Novonix share price?
Tuesday is proving to be a good day for the Novonix share price. That's despite the market reacting poorly to the company's initial announcement of its deal with KORE Power.
This time last week, the company's stock was tumbling – eventually closing 7.5% lower – after it announced its intent to undergo the agreement that was finalised today.
Novonix will initially supply KORE Power with 3,000 tonnes of graphite anode material each year for 5 years, beginning in 2024.
That supply has the potential to increase to 12,000 tonnes of anode material each year by 2027, subject to demand.
It's the first significant offtake agreement Novonix has entered as it expanded its production capacity at the new Riverside facility.
Additionally, Novonix has taken a 5% stake in KORE Power – paying US$7.50 apiece for around 3.33 million shares in the battery cell developer.
That brings its total investment to US$25 million. Half of the holding was paid for in cash while the other half was paid via script.
Speaking on the supply agreement and investment, Novonix co-founder and CEO, Dr Chris Burns commented:
More than ever, the United States and its neighbours are realising the importance of building a sustainable and energy secure future. Our partnership with KORE Power is a testament to our commitment on executing on our phased growth plan and bringing large-scale production of high-performance battery synthetic graphite to the United States.
