Northern Graphite Announces Significant Increase in Measured and Indicated Resources

Northern Graphite Announces Significant Increase in Measured and Indicated 
Resources 
OTTAWA, ONTARIO -- (Marketwired) -- 05/07/13 -- Northern Graphite
Corporation (TSX VENTURE:NGC)(OTCQX:NGPHF) is pleased to announce a
new resource estimate for the Bissett Creek graphite project based on
results from a recent 61 hole, 3,782 meter drill program. The drill
program successfully achieved its objective of upgrading a
significant portion of inferred resources to the measured and
indicated categories. Measured and indicated resources are now
estimated at 69.8 million tonnes grading 1.74% graphitic carbon
("Cg") based on a 1.02% Cg cutoff grade compared to the previous
estimate of 26 million tonnes grading 1.81% Cg at a cutoff of 0.98%
Cg. There are an additional 24 million tonnes of inferred resources
grading 1.65% Cg (at a 1.02% Cg cutoff) in the new resource estimate. 
The mine plan in the existing bankable Feasibility Study ("FS") will
be revised based on the new resource model and the FS project
economics updated. The current mine plan includes 1.5 million tonnes
of inferred resources that are treated as waste with zero grade and
it excludes a substantial amount of higher grade resources previously
categorized as inferred. It is estimated that revised FS economics
will be available in 4-6 weeks. 
The revised FS economics will also contain a number of modifications
to the original capital and operating cost assumptions. Contract
mining will be replaced by owner mining which is expected to reduce
operating costs by over $100 per tonne of concentrate. Approximately
$7 million in capital will be added for mining equipment but will be
substantially offset by a number of reductions including removal of
costs for detailed engineering, which is already underway, and
modifications to the SAG mill drive and discharge layout. The Company
now plans to build a compressor station at the TransCanada pipeline
and transport compressed natural gas ("CNG") to site by truck due to
a substantial increase in the estimated cost of a pipeline. The CNG
option will result in slightly higher capital and operating costs
than those used in the FS. 
Gregory Bowes, CEO, commented that: "The objective of the revised FS
economics is to offset the effects of a recent decline in the
gr
aphite price which we feel is at or near the bottom of the cycle.
It is anticipated that the new model will show an increase in grade
and throughput, a reduction in costs and a much longer mine life." 


 
                     Bissett Creek Resource Estimate, May 6, 2013          
          -----------------------------------------------------------------
          Measured + Indicated Resources           Inferred Resources      
------   -------------------------------    -------------------------------
                                 In Situ                            In Situ
Cutoff      Tonnage     Cg%  Graphite (t)      Tonnage     Cg%  Graphite (t)
---------------------------------------------------------------------------
1.02     69,791,000    1.74    1,213,000    24,038,000    1.65      396,000
---------------------------------------------------------------------------
1.50     37,565,000    2.14      803,000    11,971,000    2.02      242,000
---------------------------------------------------------------------------
1.75     23,439,000    2.45      574,000     6,274,000    2.39      150,000
---------------------------------------------------------------------------
2.00     15,902,000    2.73      435,000     3,564,000    2.79      100,000
---------------------------------------------------------------------------
 
Notes: Resource shell is based on Measured, Indicated and Inferred         
        material, tonnages rounded to the nearest thousand.                
       Graphite price used is US$1,800 per tonne with an exchange rate of  
        $1Cdn=$1 US.                                                       
       Dilution and ore loss are considered to be zero.                    
       Feasibility Study costs and information have been used for Resource 
        Shell generation:                                                  
         Overburden Mining Cost        $1.85  per tonne material           
         Waste Mining Cost             $3.24  per tonne material           
         Ore Mining Cost               $4.15  per tonne ore                
         Process Cost                  $9.61  per tonne ore                
         General and Administrative    $3.41  per tonne ore                
         Recovery                      95%                                 
         Royalty                       $20    per tonne of concentrate     
       No mining restrictions relating to permitting were applied.         
       Wall slopes of 45 degrees in rock and 30 degrees in overburden.     
       Base mining cutoff of 1.02% Cg.                                     

 
Mineral resources are estimated in conformance with the CIM Mineral
Resource definitions referred to in NI 43-101 Standards of Disclosure
for Mineral Projects. Pierre Desautels, P.Geo., Principal Resource
Geologist, and Gordon Zurowski, P.Eng., Principal Mining Engineer,
both of AGP Mining Consultants and Qualified Persons under NI 43-101
who are independent of the Company, have prepared and authorized the
release of the mineral resource estimates presented herein. This
mineral resource estimate is an update of the G Mining Services Inc.
NI 43-101 resource estimate presented in the Feasibility Study dated
August 23rd, 2012. 
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
title, taxation, sociopolitical, marketing, or other relevant issues. 
The quantity and grade of reported inferred mineral resources in this
estimation are uncertain in nature and there has been insufficient
exploration to define these inferred mineral resources as indicated
or measured mineral resources and it is uncertain if further
exploration will result in upgrading them to indicated or measured
mineral resources. 
SEE ADDITIONAL NOTES ON RESOURCE ESTIMATION METHODOLOGY AT END OF
PRESS RELEASE 
Environmental Permitting 
On October 31, 2012, the Company submitted the Mine Closure Plan
("MCP") for the Bissett Creek project to the Ministry of Northern
Development and Mines. The Government of Ontario advertises a 45 day
turnaround as part of their efforts to promote the province as a
mining friendly jurisdiction. However, the process is still ongoing
despite Bissett Creek being a relatively benign operation with no
major environmental issues. It has strong community support and
consultations with First Nation communities have been positive and
constructive. The Company is hopeful the MCP will be approved this
month which would enable construction to commence, subject to
financing. The MCP is an all-encompassing document that describes in
detail, the nature of the operations that will be carried out, the
current baseline environmental conditions, and the Company's plan for
rehabilitating the site and returning it to its natural state. A
number of other permits relating to air, noise, water, species at
risk, etc. are required prior to the commencement of operations and
follow in the normal course after acceptance of the MCP. Most of
these issues are already addressed in the MCP. 
Graphite Market Update 
Prices have declined from their highs of approximately $2,800/tonne
for hig
h purity, large flake graphite to the $1,400 to $1,800/tonne
range due to the slowdown in China and continued economic weakness in
the US and Europe. It appears that prices are now close to the
Chinese marginal cost of production. In addition, Chinese costs are
increasing as mines get deeper and older, labour, power and
transportation costs escalate, environmental regulations become more
stringent and the country's currency appreciates. China currently
produces 70% of the world's graphite and an export tax and a
licensing system have been instituted to restrict exports and
encourage value added processing in China. No new graphite mines were
built during the past economic cycle and the supply situation will
become more acute as economic growth recovers. Both the European
Union and the United States have declared graphite a supply critical
mineral. 
Don Baxter, P.Eng., President of the Company and a "Qualified Person"
under 43-101, is responsible for and has reviewed and approved the
technical content of this press release. 
Northern Retains Services of Renmark Financial 
Northern is also pleased to announce that it has retained the
services of Renmark Financial Communications Inc. ("Renmark") to
handle its investor relations activities. In consideration of the
services to be provided by Renmark, Northern has agreed to pay
Renmark a retainer of $5,000 per month for May and June, unless
extended by mutual agreement of the parties. Renmark does not have
any interest, directly or indirectly, in Northern or its securities,
or any right or intent to acquire such an interest. 
Northern Graphite Corporation 
Northern is a Canadian company that has a 100% interest in the
Bissett Creek graphite deposit located in eastern Ontario and is well
positioned to benefit from the favourable supply/demand outlook for
graphite. Northern is the only graphite company to have completed a
bankable Feasibility Study. Bissett Creek is a large flake, high
purity, scalable deposit with low engineering, technical and
political risk, reasonable capital costs and competitive operating
costs. Additional information is available under the Company's
profile on SEDAR at www.sedar.com and on the Company's website at
www.northerngraphite.com. 
This press release contains forward-looking statements, which can be
identified by the use of statements that include words such as
"could", "potential", "believe", "expect", "anticipate", "intend",
"plan", "likely", "will" or other similar words or phrases. These
statements are only current predictions and are subject to known and
unknown risks, uncertainties and other factors that may cause our or
our industry's actual results, levels of activity, performance or
achievements to be materially different from those anticipated by the
forward-looking statements. The Company does not intend, and does not
assume any obligation, to update forward-looking statements, whether
as a result of new information, future events or otherwise, unless
otherwise required by applicable securities laws. Readers should not
place undue reliance on forward-looking statements. 


 
Notes on Mineral Resource Estimation Methodology
 
1.  The updated mineral resource is based on 268 diamond drill holes
    totalling 14,361 metres of historic and recent drilling. This includes
    117 surface diamond drill holes totalling 6,919 metres completed under
    Northern's supervision from 2007 to 2012.
 
2.  All drill holes are diamond drill core and were sampled and assayed over
    their entire length in the mineralize section of the core of mostly 1 m
    sample intervals. A QA/QC program was in place since the 2010 drill
    program, which included the insertion of standards, duplicates and
    blanks.
 
3.  Specific gravities were determined by ALS Mineral services for a
    representative number of rock and mineralization types provided by
    Northern Graphite. A total of 657 determinations exist in the database.
    The specific gravity was weighted by the lithology count for each of the
    domains. There was no variation from the average specific gravity of all
    mineralized domains and a value of 2.72 was applied to the entire block
    model.
 
4.  A detailed review of the geological mapping, geological logs and grade
    distribution led to the development of three-dimensional (3D) domain
    models based primarily on grade boundaries and partially on lithological
    units. The wireframing resulted in two higher grade envelopes based on a
    natural cut-off grade ranging between 2.5% and 2.8% Cg. These two
    envelopes reside within a lower grade graphitic gneiss domain averaging
    1.4% Cg. A mostly barren zone exists below these high grade units and
    forms the bottom footwall contact of the mineralization. Seven minor
    barren units were also modelled within the mineralized zone to tie the
    surface mapping with the drilling. These domains were utilized in the
    variography studies and in grade interpolation constraints. The model
    prepared for the May 6, 2013 resource estimate was updated based on the
    new 2012 diamond drilling information.
 
5.  For treatment of outliers each statistical domain was evaluated
    separately and no top cut was necessary. However, a search restriction
    was used on threshold values of 6% Cg to restrict the influence of the
    highest values during the interpolation.
 
6.  The composite intervals selected were 3.0 metres.
 
7.  A 3D geological block model was generated using GEMS(C) software. The
    block model matrix size is 8 metres x 8 metres x 3 metres in
    consideration of Northern Graphite planning to use a 6 meter bench
    height for drilling and blasting but sampling and mining in 3 meter
    flitches. Ordinary kriging was used for all domains with inverse
    distance and nearest neighbour check models. The interpolation was
    carried out in multiple passes with increasing search ellipsoid
    dimensions. Classification for all models was based primarily on the
    pass number, distance to the closest composite and drill density map.
    The measured classification was downgraded in areas where the
    interpolation of the grade relied mostly on historical drill holes.
 
8.  The reported mineral resources are considered to have reasonable
    prospects of economic extraction. A Lerchs Grossman optimized
    constrain
ing shell was generated to constrain the potential open pit
    material. This shell was designed using design parameters from the
    recently completed Feasibility Study. The constraining shell extends
    down to the barren unit at the bottom of the model.
 
9.  The rounding of tonnes as required by NI 43-101 reporting guidelines may
    result in apparent differences between tonnes, grade and contained
    graphite. 

  
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Contacts:
Northern Graphite Corporation
Gregory Bowes
CEO
(613) 241-9959 
Northern Graphite Corporation
Don Baxter, P.Eng.
President
(705) 789-9706
www.northerngraphite.com 
Renmark Financial Communications Inc.
John Boidman
(416) 644-2020 or (514) 939-3989
jboidman@renmarkfinancial.com 
Renmark Financial Communications Inc.
Bettina Filippone
(416) 644-2020 or (514) 939-3989
bfilippone@renmarkfinancial.com
www.renmarkfinancial.com
 
 
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