Coosa Graphite Project

Coosa County, Alabama

State of AlabamaComprised of 42,000 acres (more than 65 square miles), Alabama Graphite Corp’s flagship 100%-owned Coosa Graphite Project is located in western Coosa County, east-central Alabama, USA, in the heart of the historic, past-producing ‘Alabama Graphite Belt’ (source: U.S. Bureau of Mines). From the late 1800s through the 1950s, the Alabama Graphite Belt was home to significant graphite production. Large portions of the deposits found in this region are characterized by graphite-bearing material that is oxidized and has been weathered into extremely soft rock. The Company acquired the mineral rights to the Coosa Graphite Project in August 2012.

Following the announcement of positive preliminary metallurgical results, Alabama Graphite Corp. commenced an exploration program in April 2015 aimed at expanding the current resource estimate through step-out drilling to the northeast, southeast and southwest. The 2015 program consisted of infill drilling between the area of the previous indicated resource and inferred resources along the Northern Strat section.

On June 24, 2015, Alabama Graphite Corp. announced positive initial assay results. Not only did the results extend the limits of the graphitic mineralization to the northwest, but they were also of a higher graphitic content than what the Company expected to see from this area. The promising initial results led to Alabama Graphite Corp’s July 23, 2015 announcement of the expansion the 2015 drill program in an effort to target additional areas showing increased quantities of large flake graphite. The focus was on the Rosco Ridge zone located approximately 600 feet southeast and parallel to the established resource grid, and the Holy Schist trench. Metallurgical work from trenching in both these areas has yielded 28.2% and 30.5% large flake (+80 mesh), respectively. The 2015 drill program further substantiated the positive continuity of near-surface, oxidized, higher-grade graphitic material, increasing the amount of oxide material in the Coosa Graphite Project’s resource estimate and upgrading a significant amount of the previous inferred resource to the indicated resource category.

 

Alabama Graphite Belt

 

“We are very fortunate with the Coosa property as the weathered, soft oxide material provides more flexibility for test pitting and trenching than other hard-rock graphite deposits; a unique characteristic that differentiates Alabama Graphite from other flake graphite deposits in North America.”

Donald Baxter, P.Eng.
Co-Chief Executive Officer

 

COOSA GRAPHITE PROJECT MINERAL RESOURCE ESTIMATE

Alabama Graphite Corp. released an updated National Instrument 43-101 (NI 43-101) Mineral Resource Estimate on the Coosa graphite project on October 13, 2015. The 2015 Resource Estimate for Coosa includes Indicated Resources of 78,488,000 tons, grading 2.39%t graphitic carbon (Cg) at a 1% cutoff grade, for a total of 1,876,000 tons contained/in-situ graphite—the largest graphite Indicated Resource in the United States; and Inferred Resources of 79,443,000 tons, grading at 2.56% Cg at a 1% cutoff grade, for a total of 2,034,000 tons contained/in-situ graphite.

Alabama Graphite Corp. will use the updated 2015 mineral resource estimate to prepare its maiden Preliminary Economic Assessment (PEA) for the Coosa Graphite Project, currently underway and scheduled for publication on November 27, 2015. The updated Mineral Resource Estimate, coupled with the results from the Coosa Graphite Project’s 200-Ton Pilot Plant, will provide the Company with a solid foundation to develop the PEA. The forthcoming PEA will be based on management’s business strategy not to sell conventional, primary processed run-of-mine graphite, but to further process the run-of-mine graphite into a secondary processed, specialty graphite — in particular, ultra-high-purity coated spherical graphite (or ‘CSPG’) for use in lithium-ion batteries.

The updated Mineral Resource Estimate will form the basis for an additional program of cost-effective infill trenching, which the Company anticipates will further upgrade the mineral resources to the Measured and Indicated resource categories.

UPDATED MINERAL RESOURCE ESTIMATE

Resource
Category

Tonnage
(Tons)

Graphitic Carbon
(Cg %)

In-situ/Contained
Graphite (Tons)

Indicated 78,488,000 2.39 1,876,000
Inferred 79,433,000 2.56 2,034,000

@ 1.0% Cg Cutoff Grade

*Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

INDICATED MINERAL RESOURCE

Coosa Graphite Project Indicated Mineral Resource Cutoff Grade Variability

Cutoff Grade (%)

Tonnage
(Tons)

Graphitic Carbon
(Cg %)

In-situ/Contained
Graphite (Tons)

0.5 85,112,000 2.27 1,932,000
1.0 78,488,000 2.39 1,876,000
1.5 69,842,000 2.53 1,767,000
2.0 54,436,000 2.74 1,491,000

*Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

INFERRED MINERAL RESOURCE

Coosa Graphite Project Inferred Mineral Resource Cutoff Grade Variability

Cutoff Grade (%)

Tonnage
(Tons)

Graphitic Carbon
(Cg %)

In-situ/Contained
Graphite (Tons)

0.5 93,223,000 2.30 2,144,000
1.0 79,443,000 2.56 2,034,000
1.5 70,283,000 2.74 1,926,000
2.0 58,207,000 2.94 1,711,000

*Inferred Mineral Resources represent material that is considered too speculative to be included in economic evaluations. Additional trenching and/or drilling will be required to convert Inferred Mineral Resources to Measured or Indicated Mineral Resources. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

 

COOSA GRAPHITE: 99.99% Cg PURITY ACHIEVED

On September 29, 2015, Alabama Graphite Corp. announced preliminary purification trial results of the graphite concentrates from the Coosa Graphite Project. Purities of 99.99% Cg — across all flake sizes — were achieved using a conventional low-temperature thermal purification process at one of North America’s premier metallurgical laboratories (for reasons of commercial confidentiality, Alabama Graphite Corp. is not disclosing the identity of the arm’s-length metallurgical laboratory contracted for the Company’s ongoing graphite purification work). The purification trials were conducted on graphite concentrates produced by SGS Mineral Services of Lakefield, Ontario. The trials were based on a total product mix and were carried out across the total flake-size distribution (including, large-, medium- and fine-flake size fractions), in order to achieve a full-spectrum sampling of the Coosa Graphite Project’s graphitic material and its demonstrated purity.

Battery-Grade Purity — ‘made in USA’ graphite

SEMs

Figure 1: Image 1a: A secondary electron SEM micrograph of Alabama Graphite Corp’s 99.99% Cg purified graphite flake concentrate. Image 1b: Image 1b was taken at the exact same time as Image 1a, but using the backscattered electron detector. Backscattered electron imaging is used to differentiate between materials of different compositions – phases heavier than carbon will look bright, and pure carbon will look grey, as seen here. The even coloration demonstrates the capabilities of the Alabama Graphite Corp. purification process in producing 99.99% Cg purified graphite flake concentrate.

 

“The achievement of 99.99% Cg from the initial run of purification testing — without any optimization — only reaffirms our belief in the exceptional quality of the graphite material hosted on our Coosa property. AGC will now move forward with larger scale testing designed to optimize the purification process and further improve these excellent results. We have now begun sizing (micronization), shaping (spheronization) and carbon coating of our Coosa graphite material — known as coated spherical natural graphite or CSPG — to meet the requirements for use in Li-ion batteries, specifically for electric vehicles.”

Donald Baxter, P.Eng.
Co-Chief Executive Officer