High-quality and expansive flake graphite deposit targeting production in 2018

NEXTSOURCE MATERIALS INC. (TSX:NEXT, OTCQB:NSRC) is a minedevelopmentcompanybasedinToronto,Canada,thatisrapidlydevelopingits 100%-owned, feasibility-stageMolo FlakeGraphite Project in southernMadagascartoproducDonin2018.

2015 Feasibility Study (FS) confirmed posiDve project economics withplanned producDon of 53,017 tonnes per annum (tpa) of SuperFlake®graphiteconcentrateovera26-yearminelifeandananDcipatedpaybackofunder5years.Post-taxNPVof US$389,797,000and31%internalrateofreturn(IRR).

Updated 2017 FS was completed for Phase 1 of the Molo mine using aunique, full modular construcDon methodology. Phase 1 will consist of afully sustainable mine producing 17,000 tpa of high-quality SuperFlake®graphite concentrateover amine lifeof 30 years anda25.2%pre-tax IRRand21.6%post-taxIRR.

www.nextsourcematerials.com �1

Loca9on:SouthCentralMadagascar

FlagshipProject:MoloDeposit

Ownership:100%

Commodity:High-qualitySuperFlake®graphite

Status:Feasibility stage, shovel-readyprojectwithcompletedDetailedEngineering

TargetedProduc9on:2018;17,000tpa(Phase1)

RESOURCES:

23.62Mtat6.32%carbon(C)(measured)

76.75Mtat6.25%C(indicated)

40.91Mtat5.78%C(inferred)

Themineralresourcesaboveareinclusiveofthemineralreservesbelow.

RESERVES:

14.17Mtat7.00%C(proven)

8.37Mtat7.04%C(probable)

22.44Mtat7.02%C(provenandprobable)

•$Billionminingprojectsalreadyestablishedin-country,withcodifiedmininglaws

•Sherria’sAmbatovyprojectcontributes32%ofcountry’sannualrevenues

• “Perfectlysituated”inaridregion,awayfromecologicallysensiDveareaswithverylialeflora,faunaandpopulaDondensity

• MiningisviewedveryposiDvelybythegovernmentandakeyeconomicdriverforthecountry

MOLO GRAPHITE PROJECT Madagascar

Developing the world’s next source of high quality flake graphite

TSX:NEXT OTCQB:NSRC

QUICK FACTS

• Phase1willuDlizeaunique,fully-modularbuildplahorm,resulDnginaCAPEXofonlyUS$18.4millionandabuildDmeofjust9months

• TheMolo Project will have the lowest capitalmine cost of anynew and compeDng graphite project and one of the lowestoperaDng costs in the industry to ship SuperFlake® graphiteconcentratetoEuropeanportsonafull-cost,CIFbasis

• Using current-day flake graphite prices and realisDc producDonvolumes,Phase1oftheMolominerealizesapre-taxinternalrateofreturn(IRR)of25.2%andapost-taxIRRof21.6%1

•EventualPhase2expansionto50,000tpaofSuperFlake®graphiteconcentratewillalsoincorporatetheCompany’suniquemodularbuild approach and can be efficiently implemented as marketdemandrequires

www.nextsourcematerials.com �2

Easy access to state-of-the-art shipping port in Fort Dauphin that is currently under-utilized by Rio Tinto

The Only Project in the World with SuperFlake® graphite • Canachievenearbaaery-gradepurity

of98%CwithsimpleflotaDonalone

• High-qualityflakewithexcellentflake-sizedistribuDon

• VeryhighproporDon(46.4%)ofdepositispremium-pricedlargeandjumbosizedflake

GradeMesh Size % Distribution % Carbon (t)

+48 (jumbo flake) 23.6 96.9

+65 (coarse flake) 14.6 97.1

+80 (large flake) 8.2 97.0

+100 (medium-large flake) 6.9 97.2

+150 (medium flake) 15.5 97.3

+200 (medium-small flake) 10.1 98.1

-200 (small / fine flake) 21.1 97.5

2017 UPDATED FEASIBILITY STUDY HIGHLIGHTS 2-PHASE DEVELOPMENT PLAN USING MODULAR CONSTRUCTION

MOLO PROJECT HIGHLIGHTS & ADVANTAGES • TheonlyprojectwithSuperFlake®graphite

• Very large and easily expandable deposit with excellent flake-sizedistribuDon;abletomeetmarketdemandasrequired

• SuperFlake® graphite has been verified by end-buyers for use in alltopdemandmarkets forgraphite: refractories, lithium-ionbaaeries,specialtygraphitefoilsandgrapheneinks

• LowestCAPEXofanyemerginggraphiteproject

• OPEX in the lowest-quarDle on a full-cost, CIF basis; Molo cancompetedirectlywithoperaDngcostsofChineseflakegraphitemines

• Deposit immediately at surfacewith negligible strip raDo results inlow-costopenpitmining

• Fully de-risked metallurgy with simple/standard processing flowsheet

• Projectcloselylocatedtotoppurchasingmarketsforgraphite:China,Japan,S.Korea,India

(1) Assumes project is financed with 100% debt. Please refer to the updated 2017 Feasibility Study titled, “Molo Feasibility Study National Instrument 43-101 Technical Report” is available to view on NextSource's website at www.nextsourcematerials.com or under the Company’s profile at www.sedar.com for a discussion in respect of certain key assumptions, parameters and methods in respect to the mineral resource disclosure. Craig Scherba, P.Geo., President and CEO of NextSource Materials is the qualified person who approved the technical information contained in this factsheet.

Phase1ofMoloMine