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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 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.
Located in Canada, close to infrastructure Simple mining & metallurgy BFS completed and permitting expected 4Q-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
Graphite
(50% flake, 50% amorphous)
1,019,000
250,000 124,000 98,000 72,000 60,000 50,000 34,000
All have commercial versions now Future demand not dependent on one technology
and it takes 30-40 times more graphite to manufacture them due to losses during processing 20-30% annually
(Canaccord Research)
Toyota sees a clear path to commercial introduction of Dr. Yucong Wang, Manager, Department of Materials
Technology, GM believes that fuel cells will play a major role in vehiclesApril, 2012 California retail sites, as well as operating fuel cellpowered forklifts at several warehouses could consume as much graphite as all other uses combined USGS, 2009
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Emphasis on value added processing Export taxes, VAT and export licenses imposed
- Producers ask for rare earth type protection - Amorphous graphite monopoly already created - Strict standards proposed for new graphite mines
Graphite Prices
Price Range for +80 mesh, 94-97%C graphite $3,250 $3,000
Demand growth combined with supply concerns have $2,750 $2,500 led to 78% price increase over the past 4 years
$2,250 $2,000 $1,750 $1,500 $1,250 $1,000 $750 $500 $250 $0 2004 2005 2006 2007 2008 2009 2010 2011 20
Low
High
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(US$/tonne)
Flake Size
Large (-50 +80) Medium (-80 +100) Fine (-100) Amorphous powder
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 decreased production capacity of Chinese mines Technographit, Mar. 2010 Industrial Minerals Magazine May, 2011
purified to 99.95%C
Spherical graphite sells for $6-8,000 per tonne Objective is to provide Li ion battery manufacturers with a stable,
Ontario
from Trans-Canada hwy, close to infrastructure North American steel and automotive markets
%Cg Cut-off
0.986 1.227 1.50 1.75 2.0
Cg(%) by LECO
1.81 1.85 1.99 2.34 2.50
Cg(%) by LECO
1.57 1.62 1.81 2.21 2.37
*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
Limit of surface outcrop Limit of inferred resources BFS pit (indicated resources)
500 meters
Simple Mining
Deposit at surface, no overburden Continuously mineralized throughout Low waste-to-ore ratio Conventional open pit mining
100m
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 including bulk sample and pilot plant tests Low crushing and grinding costs High recovery of large flakes High purity concentrate
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+32 mesh XXL flake +50 mesh XL flake +80 mesh large flake +150 mesh medium/fine flake
BFS Parameters
C$102.9M capital cost (incl. $9.2M contingency) 2,500 tpd plant capacity 19,000 tpy of graphite production (1st five years) 0.50 waste-to-ore ratio Cash cost of $851/t of concentrate (1st five years) 23 year life-of-mine with expansion potential
Timeline to Production
Approval of Mine Closure Plan Financing Start Construction Commercial Production 4Q-2012 4Q-2012 4Q-2012 1Q-2014
Upside Potential
Upgrading inferred to indicated (higher grade and
production, lower costs and longer mine life than BFS)
Owner vs contract mining will reduce costs to $800/t Metallurgy indicates grade understated by 4-12% Capital cost savings Value added processing (spherical graphite) Higher graphite prices (economic growth, supply
disruptions)
Mine expansion
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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
Value Proposition
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 3-4x scalable production Close to infrastructure/markets/transportation Simple mining & metallurgy BFS completed, full permitting by late 2012 One year to build mine
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Whats Next?
Permitting Value added processing Strategic partners/offtake agreements Financing/Construction/Production Mine expansion