Northern Graphite Corporation


The New Strategic Mineral

Forward Looking Statements
This Presentation may contain “forward-looking information” which may include, but is not limited to, statements with respect to: timing of the receipt of governmental approvals and/or acceptances; targets, estimates and assumptions in respect of production and prices; amount and type of future capital expenditures and capital resources; mineral reserves and mineral resources; anticipated grades; recovery rates; future financial or operating performance; costs and timing of the development of new deposits; costs, timing and location of future drilling; production decisions; costs and timing of construction; operating expenditures; costs and timing of future exploration; and environmental and reclamation expenses. There can be no assurance that future required regulatory approvals will be obtained or that anticipated transactions or proposed work and construction programmes will be completed satisfactorily. Often, but not always, forwardlooking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries and/or its affiliated companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forwardlooking statements contained herein are made as of the date of the applicable public record document which the information is derived from and the Company has disclaimed any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. Unless indicated otherwise, all dollar figures are in U.S. dollars.


This presentation and other information released by the Company uses the terms “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reserves do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Inferred resources are in addition to measured and indicated resources. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained herein or in other information released by the Company in the past and in the future, have been or will be prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. The requirements of NI 43101 are not the same as those of the SEC.

The Newest Strategic Mineral
• Growing industrial demand from emerging economies
- Prices have tripled

• Demand growth from new applications

- Li ion batteries, fuel cells, VRBs, nuclear power
• Chinese supply concerns (70% of world production) • EU and USA have named graphite a supply critical mineral • The leading undeveloped graphite deposit
- Large flake, high purity, scalable

• Located in Canada, close to infrastructure • Simple mining & metallurgy • BFS and permitting by 2Q 2012


Graphite 101
• One of two natural carbon polymers (diamonds) • Highest natural strength/stiffness of any material • Corrosion and heat resistant • Excellent conductor of heat and electricity • High lubricity • Lightest weight of all reinforcements


What is Graphite Used For?
• 5% annual growth rate this decade
– Driven by Asian steel and auto markets

• Major end uses
– Steel & refractories (41%) – Carbon brushes and batteries (21%) – Automotive parts (14%) – Lubricants (14%) – Other (10%)


Large and Growing Industrial Market

Nickel Graphite
(40% flake, 60% amorphous)

1,276,000 1,006,000 190,000 124,000 68,000 55,000 23,000

Molybdenum REE (oxides) Cobalt Tungsten Lithium


Green Energy Technologies
• Four emerging technologies with potential to use

multiples of current annual production
– – – – Lithium ion batteries Fuel cells Pebble bed nuclear reactors Vanadium redox batteries

• All have commercial versions now • Future demand not dependent on one technology


Lithium Ion Batteries
• Graphite is the anode material - no substitutes • It takes 20-30 times more graphite than Li (by

weight) to make Li ion batteries growing 20-30% annually

• Current Li ion battery demand 30,000 tpy and

- Replacement of traditional battery technologies
• Li ion batteries in cars will lead to rapid demand

growth (2kg of graphite in HEV, 25-50kg in EV)


Incremental Li Carbonate Demand in 2020
(000 tonnes)
EV Market Penetration 1% HEV Market Penetration 5% 10% 15% 20% 25% 49 82 116 150 183 5% 109 143 176 210 244 10% 185 218 252 286 319 15% 260 294 328 361 395 20% 336 370 403 437 470

(Canaccord Research)


Required Annual Flake Graphite Production
(000 tonnes)
2020 EV Market Penetration 1% 5% 2020 HEV Market Penetration 10% 15% 20% 25% 286 479 678 877 1,070 5% 637 836 1,029 1,228 1,310 10% 1,082 1,274 1,473 1,672 1,865 15% 1,520 1,719 1,918 2,111 2,310 20% 1,965 2,163 2,356 2,555 2,748

Current annual flake graphite production is 400,000 tonnes
-one tonne of Li carbonate equals 0.1879 tonnes of Li metal -one tonne of Li metal requires 10.375 tonnes of graphite -3 tonnes of graphite flake required to make 1 tonne of spherical graphite for Li ion batteries


Fuel Cell Demand
• All major car companies are working on fuel cell vehicles

(which contain 80kg of graphite) fuel cell vehicles by 2015”

• “Toyota sees a clear path to commercial introduction of • Fuel cells vehicles, along with EVs, are part of the solution

to reducing dependence on non-renewable energy

• Honeywell, Siemens, Ballard Power and many others

targeting fuel cell markets for non-transportation uses could consume as much graphite as all other uses combined” – USGS, 2009

• “Large-scale fuel-cell applications are being developed that

Vanadium Redox Batteries
• leading energy storage system for renewable energy sources such as wind/solar • virtually unlimited storage capacity, long battery life, low maintenance requirements, nominal environmental footprint. • 300 tonnes of graphite per 1,000MW VRB


Pebble Bed Nuclear Reactors
• Smaller, safer, less costly to permit, build and operate • Fuel is uranium embedded in graphite balls
-3,000t of graphite to start, 600-1,000 tpy per 1,000MW

• China has operating prototype, and state-owned Huaneg
Group is building two pebble-bed reactors of 200MW each

-One of top 16 priorities in 2006-2020 Plan -30 planned by 2020


Chinese Production/Exports to Decline
• 70% of global production from China • Mainly low carbon, low value

powder or small flake

• Near surface, low cost oxide deposits being depleted • Mines deeper, higher cost, lower quality • Modernization and consolidation of industry • Increasing labor & environmental standards • Emphasis on value added processing • Export taxes, VAT and export licenses imposed
- Producers ask for “rare earth” type protection

• Currency appreciation will increase costs/prices

A Compelling Supply/Demand Story
• Growing demand from traditional uses • Growing demand from new industrial applications • Growing demand from green energy technologies • Market dependence on Chinese • Chinese supply issues • Lack of exploration, investment and new projects


Graphite Prices on the Rise

Demand growth combined with supply concerns have led to 78% price increase over the past 4 years

Source: Industrial Minerals Magazine


Premium Price for Size/Purity
Concentrate Purity


80-85% C Extra Large (+50) $600-800

90% C $2,000-2,500 $1,500-2,000 $1,400-1,800 -

94-97% C +$3,000 $2,500-3,000 $2,200-2,500 $2,000-2,400 Bissett Creek

Flake Size

Large (-50 +80) Medium (-80 +100) Fine (-100) Amorphous powder

Source: Industrial Minerals Magazine Prices, Roskill Industry Report


Evaluation of Graphite Deposits
• What is percentage of flakes vs -150 mesh fines?
- Flake is high growth, high value market - -150 is low growth, low price market - -150 is unsuitable for new applications and sometimes not salable

• What is distribution of flake sizes?
- Large, medium and fine

• What is carbon content of concentrates
- Higher carbon content equals higher price (90-98%)

• These questions can only be answered by

metallurgical testing

- Must be production, not in situ values


Large Flake, High Purity Deposit
• Even if some mines increase their production, this will not solve

the persisting supply problem for large flake crystalline graphite . Technographit, Feb/2009 amorphous graphite and there is a potential mismatch between supply and demand for flake graphite .Roskill Aug/2009

• Consumption of flake graphite is growing at the expense of

• Presently, large flake graphite supply is very tight due to

decreased production capacity of Chinese mines … Technographit, Mar. 2010 Industrial Minerals Magazine May, 2011

• The days of cheap, abundant graphite from China are over….


Spherical Graphite – Value Added Processing
• Used to make the anodes in Li ion batteries • Made from concentrate produced by mine • Concentrate must be micronized, rounded and purified to


• Bissett Creek graphite has been successfully upgraded to

spherical graphite

• Sells for $7-8,000 per tonne • Provide Li ion battery manufacturers with a stable, secure source

of supply that is produced in an environmentally acceptable manner


Bissett Creek Project
• 100km east of North Bay,


• Easily accessible, 17km

from Trans-Canada hwy, close to infrastructure North American steel and automotive markets

• Close proximity to major

• Freight cost advantage
100 km


Large Scalable Graphite Resource
•Full feasibility study in 1989 (including P&P reserve*) •2010 NI 43-101 Preliminary Assessment Report
2011 Updated Mineral Resources (Diluted)
Indicated Inferred

%Cg Cut-off
0.986 1.227 1.50 1.75 2.0

Tonnage* (metric tons)
25,983,000 24,588,000 19,954,000 16,031,000 11,921,000

Cg(%) by LECO
1.81 1.85 1.99 2.34 2.50

In Situ Graphite** (metric tons)
470,300 454,900 397,100 375,100 298,000

Tonnage* (metric tons)
55,038,000 50,472,000 33,672,000 21,417,000 14,584,000

Cg(%) by LECO
1.57 1.62 1.81 2.21 2.37

In Situ Graphite** (metric tons)
864,100 817,600 609,500 473,300 345,600

*Historical information is presented for information purposes only. The Feasibility Study and Reserve estimates were not completed in accordance with NI 43-101 and therefore should not be relied upon. ** Mineral resources are not mineral reserves and do not have demonstrated economic viability. ***The 43-101 Preliminary Assessment includes inferred mineral resources which are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the results projected in the Preliminary Assessment will be realized and actual results may vary substantially.


Expansion Potential


Simple Mining
• Deposit at surface, no overburden • Continuously mineralized throughout • Low waste-to-ore ratio • Conventional open pit mining


Typical cross-section of Bissett Creek orebody


Simple Metallurgy
• Bulk sampling, pilot plant testing, and extensive lab work previously completed by Cominco/Kilborn/BD • Conventional flotation processing (92-95% recoveries) • Confirmed by independent tests in 2007 and 2011 • Additional pilot plant testing 4Q 2011


Large Flake, High Purity Concentrate
•20% •35% •35% •10%

+32 mesh super flake


+$3,000 +$3,000 +$2,750 +$2,000

+50 mesh jumbo flake 97%C +80 mesh large flake 96%C

+150 mesh medium/fine flake 94%C

Weighted average revenue per tonne



Project Parameters
• C$70-80 MM capital cost • 2,500 tpd processing rate • 19,000 tonnes of graphite produced per year • <0.50 waste-to-ore ratio • Cash cost of $1,000 per tonne • 40 year life-of-mine with expansion potential
The 43-101 Preliminary Assessment includes inferred mineral resources which are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the results projected in the Preliminary Assessment will be realized and actual results may vary substantially.


Timeline to Production
Completion of Bankable Feasibility Study 2Q-2012 Approval of Mine Closure Plan Start Construction Commercial Production 2Q-2012 3Q-2012 3Q-2013


High Price Leverage
Conservative ($CDN/tonne) Average price Costs Margin ($CDN) Net cash flow ($M) NPV ($M @10%) IRR (%) Annual cash flow $108.3 $3.9 10.6 $3.9 $371.5 $75.6 24.0 $9.3 $937.0 $180.4 42.0 $28.7 $1,300 1,000 $300 $1,700 1,000 $700 $2,500 1,000 $1,500 43-101* Current

*The 43-101 Preliminary Assessment includes inferred mineral resources which are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Furthermore, there is no certainty that the results projected in the Preliminary Assessment will be realized and actual results may vary substantially.


Northern Graphite Share Structure
Shares Outstanding Warrants Options Fully-Diluted Management & Insiders Geologic Fund Sprott Global 45,437,439 3,717,914 2,975,000 52,130,353 10% 12% 6%

- $12 million in cash, no debt


Experienced Management & Board
Formerly Senior VP, Orezone Gold Corporation

Gregory Bowes B.Sc (geology), MBA

CEO and Director President Chief Financial Officer Director Director Director Director Director Technical Advisor

Don Baxter P. Eng

Formerly President, Ontario Graphite Corporation

Stephen Thompson CA CPA (Illinois) Ron Little P. Eng

Formerly Vice President Finance, Ottawa Hydro Limited President and CEO, Orezone Gold Corporation (ORE:TSX)

Iain Scarr B.Sc (geology), MBA Jay Chmelauskas MBA K. Sethu Raman PhD Don Christie CA George Hawley

Former Commercial Director, Rio Tinto industrial minerals division, VP Corporate Development, Lithium One President/Director, Westerm Lithium Corp. Independent Mining Consultant Former CFO, Continental Gold

40 years of experience in industrial minerals R&D, market analysis and development


 Large, growing industrial market  Demand growth from emerging applications  Supply concerns with China  Highest percentage of large flake production  Highest revenue & margin/tonne of concentrate  Only mine with 4-5x scalable production  Close to infrastructure/markets/transportation  Simple mining & metallurgy  Bankable feasibility, full permitting 2Q-2012  One year to build mine

Next Steps
• Variability testing – 1 month • File Mine Closure Plan – 1 month • Complete bankable feasibility study - 2 months • Negotiate financing/offtake with strategic partners • Initiate detailed engineering, site preparation,

order long lead time equipment

(subject to FS results)

• Major permits in 2Q 2012 • Mine Financing (1-3 months) • Construction of mine – 1 year

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