Northern Graphite - Bissett Creek

Fact Sheet

Nov 7, 2014

Investment Highlights
• Demand growth driven by industrialization of emerging economies and new applications such as Li ion batteries, fuel cells, vanadium redox batteries and nuclear energy.
• Supply concerns as China controls 80% of world production. It has placed restrictions on new and existing graphite mines and instituted a 20% export tax and 17% VAT to promote value added manufacturing in China rather than the export of raw materials.
• Both the EU and USA have named graphite a supply critical mineral.
• The Company’s Bissett Creek deposit is large flake, high purity and scalable, it is close to infrastructure and markets, and it is low cost with simple mining and metallurgy.
• Bankable Feasibility Study completed and construction permitting received

Graphite – The New Strategic Mineral
• Graphite demand has been increasing due to strong demand from traditional steel and automotive markets and the industrialization of emerging economies.
• Substantial incremental demand will be generated by emerging applications such as Li ion batteries. It takes 30 to 40 times more graphite than lithium to make a lithium ion battery.
• Almost no substitutes and little recycling of graphite
• China produces of 80% of the world’s supply and its production and exports are expected to decline while its production costs increase. Export duties and licenses, and restrictions on new mines have been imposed.
• There is only one graphite mine in North America, located in Quebec, Canada.
• There are very few advanced stage graphite development projects worldwide.

What is Graphite?
• Graphite and diamonds are the only two natural polymers of carbon.
• Graphite is both electrically and heat conductive.
• Graphite maintains its strength and stability to temperatures of 3,600°C and is very resistant to chemical attack.
• Graphite is one of the lightest of all reinforcing agents and has high natural lubricity.
• It is used to make refractories (bricks which line furnaces in the steel industry), brake pads, gaskets and clutch parts for automobiles, heat sinks in electronics, batteries, and many other industrial applications.
• Graphene, a one atom thick layer of graphite, is touted as the new wonder material.

Capital Structure
• Shares Outstanding 49,081,281
• Options 3,500,000
• Warrants 71,480
• Fully Diluted 53,152,761
• 10% owned by management and insiders
$6M in cash, no debt

Project Highlights
• The Bissett Creek property is located between the cities of Ottawa and North Bay, Ontario, Canada, approximately 15 km from the Trans Canada pipeline and highway. It has excellent road access.
• The Feasibility Study estimated a probable reserve of 28 million tonnes grading 2.06% Cg which is sufficient for a 28 year mine life.
• Construction of the mine will take approximately 18 months and the estimated capital cost is $101.6 million including a $9.3 million contingency. The mine is expected to produce up to 20,800 tonnes of graphite concentrate per year.
• Almost all production will be high carbon, +80 mesh large flake and over 50% will be +50 and +32 mesh jumbo sized flake, resulting in premium pricing.
• Operating costs are very competitive due to a low, 0.79 waste to ore ratio and simple metallurgy. Operating costs over the first five years are $795/tonne of concentrate based on contract mining.
• Based on a weighted average price of $1,800 per tonne for the sizes and grades of graphite that will be produced, the pre tax IRR is estimated at 19.8% and the NPV is $130M (@8%).
• The resource is large enough to significantly expand production in the future and the Company is currently preparing a preliminary Economic Assessment on an expansion case.
• Value added sales of spherical graphite for batteries are not included in the FS and the PEA.
• Indicative term sheets have been signed with Caterpillar Finance for $17.5 million in equipment financing and for potential participation in the project debt facility.
• Detailed engineering and design, which is the first step in implementing the FS, has commenced.