Metallurgical Testing Confirms Process Plant Cost Savings

July 23, 2020 – Northern Graphite Corporation (NGC:TSX-V, NGPHF:OTCQB) (the “Company” or “Northern”) announces that comprehensive metallurgical testing carried out at SGS Lakefield has validated changes designed to simplify the flow sheet for the Bissett Creek Project and to reduce capital and operating costs. Testing indicated that the new flowsheet will increase average concentrate purities from 94.5 to 97.2 per cent with a small decline in recoveries (from 94.7 to 92.4 per cent) and large flake yields. Due to the premium paid for higher purity concentrates, the net effect will be an increase of approximately US$100/tonne in estimated concentrate sales prices.

 

Gregory Bowes CEO commented: “Northern is fortunate to have an economic project now based on selling larger flake sizes into higher priced, industrial markets. There is an immediate need for a new large flake mine and very few exist, particularly in politically stable jurisdictions.” He added: “Small flake graphite used in the battery market is currently priced under US$600/t which approximates the operating costs of many new projects. Higher prices are needed to stimulate the development of new supply which is critical for the EV industry to meet projected sales and to diversify supply away from China.”

 

The revised flowsheet uses semi-autogenous grinding alone followed by rougher flotation and two stages of polishing and cleaner flotation. A large regrind mill, small polishing mill, cleaner flotation circuit and sulphide tailings regrind circuit have all been removed. As a result, Bissett Creek will have one of the simplest flow sheets and lowest costs per tonne of ore mined and processed in the industry. Bissett Creek ore is relatively soft, has a low work index and readily splits along cleavage planes and at the graphite/gangue interface easily releasing the graphite flakes without excessive grinding. The deposit also has a low degree of weathering and little variability, both of which have created metallurgical challenges for other projects. Low costs combined with one of the best flake size distributions will result in Bissett Creek being one of the highest margin graphite deposits in the world.

 

The flowsheet changes were incorporated into updated project economics and sensitivity analyses and the results were released in late 2018 and 2019. They indicated that the changes along with a significant decline in the CDN dollar will more than offset labour and equipment cost inflation since the Feasibility Study was completed and result in higher margins and improved economics. Now that metallurgical testing has confirmed the effects of the new flow sheet, it will

be incorporated into the Company’s development plans.

 

About Northern Graphite

 

Northern’s 100% owned Bissett Creek graphite deposit is located in the southern part of Canada with ready access to labour, supplies, equipment and concentrate transportation whereas most of the Company’s peers are located in the

northern part of Canada or Africa. Bissett Creek is an advanced stage project with a full Feasibility Study and a Preliminary Economic Assessment which contemplates doubling production after three years of operation. Permitting is

well advanced and the Company is in a position to make a construction decision subject to financing.

 

The Bissett Creek Project has a reasonable capital cost, a realistic production rate relative to the size of the current market (which can be expanded as demand grows), and a very high percentage of L/XL/XXL flake. The latter will enable the Company to initially focus on higher priced and value-added industrial markets and expand into battery markets when economics improve. Unlike many graphite deposits, essentially all Bissett Creek production is “battery grade”.