Northern Graphite Corp - Largest Battery Grade Graphite Deposit

8/2/2019 Northern Graphite Corp - Largest Battery Grade Graphite Deposit

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This Presentation may contain forward-looking information which may include, but is not limitedto, statements with respect to: timing of the receipt of governmental approvals and/oracceptances; targets, estimates and assumptions in respect of production and prices; amount andtype of future capital expenditures and capital resources; mineral reserves and mineral resources;anticipated grades; recovery rates; future financial or operating performance; costs and timing ofthe development of new deposits; costs, timing and location of future drilling; productiondecisions; costs and timing of construction; operating expenditures; costs and timing of futureexploration; and environmental and reclamation expenses. There can be no assurance that futurerequired regulatory approvals will be obtained or that anticipated transactions or proposed workand construction programmes will be completed satisfactorily. Often, but not always, forward-looking 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 orresults may, could, would, might or will be taken, occur or be achieved. Forward-lookingstatements involve known and unknown risks, uncertainties and other factors which may causethe actual results, performance or achievements of the Company and/or its subsidiaries and/or itsaffiliated companies to be materially different from any future results, performance orachievements expressed or implied by the forward-looking statements. Although the Company hasattempted to identify important factors that could cause actual actions, events or results to differmaterially from those described in forward-looking statements, there may be other factors thatcause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of the applicable public recorddocument 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 eventsor results or otherwise. There can be no assurance that forward-looking statements will prove tobe accurate, as actual results and future events could differ materially from those anticipated insuch statements. Accordingly, readers should not place undue reliance on forward-lookingstatements due to the inherent uncertainty therein.

Unless indicated otherwise, all dollar figures are in U.S. dollars.

Fo rw a rd Look ing St a tem en ts


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This presentation and other information released by the Company uses the terms resources,

measured resources, indicated resources and inferred resources. United States investors areadvised that, while such terms are recognized and required by Canadian securities laws, the SECdoes 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 economicallyand legally produced or extracted at the time the reserve determination is made. Mineralresources that are not mineral reserves do not have demonstrated economic viability. UnitedStates investors are cautioned not to assume that all or any part of measured or indicatedresources 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 theirexistence and as to whether they can be mined legally or economically. It cannot be assumed thatall 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 inferredresources exist, or that they can be mined legally or economically. National Instrument 43-101Standards of Disclosure for Mineral Projects (NI 43-101) is a rule developed by the CanadianSecurities Administrators, which established standards for all public disclosure an issuer makes ofscientific and technical information concerning mineral projects. Unless otherwise indicated, all

resource estimates contained herein or in other information released by the Company in the pastand in the future, have been or will be prepared in accordance with NI 43-101 and the CanadianInstitute of Mining, Metallurgy and Petroleum Classification System. The requirements of NI 43-101 are not the same as those of the SEC.

CAUTI ONARY STATEMENT REGARDI NG MI NERAL RESOURCES


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The New est St r a teg i c Mine ra l

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


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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

Gr aph i t e 101


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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%)

W hat i s Gr aph i t e Used For ?


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Nickel 1,276,000

Graph i t e 1 ,006 ,000

(40% flake, 60% amorphous)

Molybdenum 190,000REE (oxides) 124,000

Cobalt 68,000

Tungsten 55,000Lithium 23,000

(tpy)

La rge and Grow ing I ndu st r i a l Mark et


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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

Gr een En erg y Tech n o log ies


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Li t h i u m I o n Bat t er i es

Graphite is the anode material - no substitutes

It takes 20-30 times more graphite than Li (byweight) to make Li ion batteries

Current Li ion battery demand 30,000 tpy andgrowing 20-30% annually

- Replacement of traditional battery technologies

Li ion batteries in cars will lead to rapid demandgrowth (2kg of graphite in HEV, 25-50kg in EV)


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I n c rem en ta l Li Ca rbona t e Dem and i n 202 0

1% 5% 10% 15% 20%5% 49 109 185 260 33610% 82 143 218 294 37015% 116 176 252 328 40320% 150 210 286 361 43725% 183 244 319 395 470

EV Marke t Pene t r a t ion

HEV

Marke tPene t ra t ion

(000 tonnes)

(Canaccord Research)


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Requ i r ed Ann ua l Flake Gr aph i t e Pr odu ct ion

1% 5% 10% 15% 20%5% 286 637 1,082 1,520 1,96510% 479 836 1,274 1,719 2,16315% 678 1,029 1,473 1,918 2,35620% 877 1,228 1,672 2,111 2,55525% 1,070 1,310 1,865 2,310 2,748

202 0 EV Mark e t Pene t r a t ion

202 0 HEV

Marke tPene t ra t ion

(000 tonnes)

-one ton ne o f L i carbonate equa ls 0 .1879 t onnes o f L i meta l

- one t onne o f L i m e t a l r equ i r es 10 . 375 t onnes o f g raph i t e

-3 ton nes o f g raph i te f l ake requ i red to m ake 1 tonn e o f spher i ca l g raph i te fo r L i i on ba t te r ies

Cur r en t annua l f l a ke g r aph i t e p r oduc t i on i s 400 ,000 t onnes


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All major car companies are working on fuel cell vehicles

(which contain 80kg of graphite)

Toyota sees a clear path to commercial introduction offuel cell vehicles by 2015

Fuel cells vehicles, along with EVs, are part of the solutionto reducing dependence on non-renewable energy

Honeywell, Siemens, Ballard Power and many otherstargeting fuel cell markets for non-transportation uses

Large-scale fuel-cell applications are being developed thatcould consume as much graphite as all other usescombined USGS, 2009

Fu el Ce l l Dem an d


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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

Vanad ium Redox Bat t e r i es


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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, andstate-owned HuanegGroup is building two pebble-bed reactors of 200MW each

-One of top 16 priorities in 2006-2020 Plan

-30 planned by 2020

Pebb le Bed Nu c lear React or s


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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

Ch in ese Pr odu ct i on / Ex po r t s t o Decl i ne


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A Com pe l l ing Supp l y / Dem and St o ry

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


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D em a n d g r o w t h co m b i n ed w i t h s u p p l y co n ce r n s h a v eled t o 7 8 % pr i ce i ncrease ove r t he pas t 4 y ea rs

Source : I ndus t r i a l M ine ra l s Magaz ine

Gr aph i t e Pr ices on t h e Rise


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8 0 - 85 % C 9 0 % C 9 4 - 97 % C

Ext ra La rge (+50) - - + $ 3 , 0 0 0

Large (-50 +80) - $2,000-2,500 $2 ,500 -3 ,000

Med ium (-80 +100) - $1,500-2,000 $2 ,200 -2 ,500

Fin e ( -100) - $1,400-1,800 $2,000-2,400

A m o r p h o u s p o w d e r $600-800 - -

Source : I ndus t r ia l M inera ls Magaz ine Pr i ces , Rosk i l l I ndus t r y Repor t

Pr e m i u m Pr i ce f or Si ze/ Pu r i t y ( US$ / t o n n e)

Bisset t Creek

Concent ra t e Pur i t y

FlakeSize


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Eva lu a t ion o f Gr aph i t e Deposi t s

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 bymetallurgical testing

- Must be production, not in situ values


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Even if some mines increase their production, this will not solvethe persist ing supply problem for large flake crystalline graphite.Technog r aph i t , Feb / 200 9

Consum pt ion of flake graphite is growing at the expense ofamorphous graphite and there is a potential m ismatch between

supply and demand for flake graphite .Ro sk i l l A u g / 2 0 0 9

Presently, large flake graphite supply is very t ight due todecreased production capacity of Chinese minesTechn ogr aph i t , Mar . 20 10

The days of cheap, abundant graphite from China are over.I ndu s t r i a l M ine ra l s Magazine May , 20 11

Lar ge Flak e , H igh Pu r i t y Depos i t


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Used to make the anodes in Li ion batteries

Made from concentrate produced by mine

Concentrate must be micronized, rounded and purified to99.95%C

Bissett Creek graphite has been successfully upgraded tospherical graphite

Sells for $7-8,000 per tonne

Provide Li ion battery manufacturers with a stable, secure sourceof supply that is produced in an environmentally acceptablemanner

Sph er ica l Gr aph i t e Va lue Add ed Pr ocess ing


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100km east of North Bay,

Ontario

Easily accessible, 17kmfrom Trans-Canada hwy,close to infrastructure

Close proximity to majorNorth American steel andautomotive markets

Freight cost advantage

100 km

Bisset t Cr eek Pro j ect


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Full feasibility study in 1989 (including P&P reserve*)

2010 NI 43-101 Preliminary Assessment Report

Lar ge Sca lab le Gr aph i t e Resour ce

* H is to r i ca l i n fo rm at ion i s p resented fo r in fo r mat ion purposes on ly . The Feas ib i l i t y Study and Reserve es t imatesw ere no t c om p l e t ed i n acc o rdanc e w i t h N I 43 -101 and t he re f o re shou l d no t be r e l i ed upon .* * M i nera l r es ou rces a re no t m i ne ra l r ese r v es and do no t h av e dem ons t ra t ed econom i c v i ab i li t y .* * * The 43-1 01 Pre l im inary Assessm ent inc ludes in fe r red m inera l resources w h ich are cons idered too specu la t i vegeo log ica l ly t o have econom ic cons idera t ions app l ied to them tha t w ou ld enab le them t o be ca tegor i zed as m inera lreserves . Fur t herm ore , t here i s no cer ta in t y tha t t h e resu l t s p ro jec ted in the Pre l im in ary Assessmen tw i l l be rea l i zed and ac tua l resu l t s may v ary subs tan t ia l l y .

2011 Updated Mineral Resources (Diluted)Indicated Inferred

%Cg

Cut-offTonnage*

(metric tons)Cg(%)

by LECOIn Situ Graphite**

(metric tons)Tonnage*

(metric tons)Cg(%)

by LECOIn Situ Graphite**

(metric tons)0.986 25,983,000 1.81 470,300 55,038,000 1.57 864,1001.227 24,588,000 1.85 454,900 50,472,000 1.62 817,600

1.50 19,954,000 1.99 397,100 33,672,000 1.81 609,5001.75 16,031,000 2.34 375,100 21,417,000 2.21 473,300

2.0 11,921,000 2.50 298,000 14,584,000 2.37 345,600


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Ex pans ion Po ten t ia l


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Deposit at surface, no overburden

Continuously mineralized throughout Low waste-to-ore ratio

Conventional open pit mining

Typical cross-section of Bissett Creek orebody

Sim p le M in in g

1 0 0 m


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Bulk sampling, pilot plant testing, and extensive labwork 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

Sim p le Met a l lu r gy


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Pr i ce / t o n n e

2 0 % + 3 2 m e sh su p er f la k e 9 8 % C + $ 3 ,0 0 0

3 5 % + 5 0 m e sh j u m b o f lak e 9 7 % C + $ 3 ,0 0 0

3 5 % + 8 0 m e sh l ar g e f l ak e 9 6 % C + $ 2 ,7 5 0

1 0 % + 1 5 0 m esh m e d iu m / f in e f lak e 9 4 % C + $ 2 ,0 0 0

We igh ted ave r age r evenue pe r t onn e $2 ,800

Larg e Flake , H igh Pur i t y Concen t r a t e


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C$70-80 MM capital cost

2,500 tpd processing rate

19,000 tonnes of graphite produced per year


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Completion of Bankable Feasibility Study 2Q-2012

Approval of Mine Closure Plan 2Q-2012

Start Construction 3Q-2012

Commercial Production 3Q-2013

Tim e li ne to Pr odu ct i on


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Conservative 43-101* Current

( $ CDN / t o n n e )

Average p r i ce $1,300 $1,700 $2,500

Costs 1,000 1,000 1,000

Marg in $300 $700 $1,500

($CDN)

N et ca sh f l o w ( $ M) $108.3 $371.5 $937.0

NPV ( $M @10% ) $3.9 $75.6 $180.4

I RR ( % ) 10.6 24.0 42.0

Ann ua l cash f low $3.9 $9.3 $28.7

High Pr ice Lever age

* The 43-101 Pre l im in ary Assessm ent inc ludes in fe r red m inera l resources w h ich are cons idered toospecu la t i ve geo log ica ll y t o have economic cons idera t ions app l ied to them tha t w ou ld enab le them to becategor i zed as m in era l reserves . Fur t herm ore , t here i s no cer ta in t y tha t t h e resu l t s p ro jec ted in thePre l im inary Assessment w i l l be rea l i zed and ac tua l resu l t s may v ary subs tan t ia l l y .


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Gregor y Bow es B.Sc (g eo logy ) , MBA CEO and DirectorFormerly Senior VP, Orezone Gold Corporation

Don Bax t er P . Eng PresidentFormerly President, Ontario Graphite Corporation

St ephen Thom pson CA CPA (Illinois) Chief Financial OfficerFormerly Vice President Finance, Ottawa Hydro Limited

Ron L i t t le P . Eng DirectorPresident and CEO, Orezone Gold Corporation (ORE:TSX)

I a in Scar r B .Sc (g eo logy ) , MBA DirectorFormer Commercial Director, Rio Tinto industrial minerals division, VP Corporate Development, Lithium One

Jay Chm elausk as MBA DirectorPresident/Director, Westerm Lithium Corp.

K. Se thu Ram an PhD DirectorIndependent Mining Consultant

Don Chr is t ie CA DirectorFormer CFO, Continental Gold

George Haw ley Technical Advisor40 years of experience in industrial minerals R&D, market analysis and development

Ex per ienced Managem en t & Boa rd


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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

S u m m a r y


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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

Nex t St eps

Documents

Northern Graphite Corp - Largest Battery Grade Graphite Deposit