Northern Graphite Announces Update of Expansion Case PEA

FOR: Northern Graphite Corporation 
JUNE 24, 2014 
Northern Graphite Announces Update of Expansion Case PEA 
Project shows robust economics despite low graphite price environment 
OTTAWA, ONTARIO--(Marketwired - June 24, 2014) - Northern Graphite Corporation
(TSX VENTURE:NGC)(OTCQX:NGPHF) announces that it has updated the Preliminary
Economic Assessment (the "PEA") on its 100% owned Bissett Creek
graphite project to assess the economics of building a process plant with twice
the capacity of the plant contemplated in the Company's Feasibility Study
("FS"). The larger process plant was evaluated due to recent
developments in the lithium ion battery industry and strong buyer interest in
the extra large flake, high purity concentrates that will be produced using
Northern's proprietary purification technology. 
The updated PEA indicates that the Bissett Creek Project has very attractive
economics even at or below current depressed graphite price levels. The pre-tax
internal rate of return ("IRR") is 31.7% (26.7% after tax) and the
pre-tax net present value ("NPV") is $264.7 million ($178.9 million
after tax) in the base case which is based on an 8% discount rate and a
weighted average price of US$1,800/tonne of concentrate which reflects current
market conditions. 
Development capital costs in the updated PEA have been estimated at $134.1
million (including a 10% contingency) for an operation that will produce an
average of approximately 44,200 tonnes of graphite concentrate annually over
the first 10 full years of operation. Almost 90% of production will consist of
large and extra large flake and battery grade graphite which is by far the
highest ratio in the industry. There are also 27.3 million tonnes of Measured
and Indicated resources and 24 million tonnes of Inferred resources that are
not part of the PEA mine plan and the deposit has not yet been closed off by
drilling, all of which indicates that further production expansions are
Gregory Bowes, CEO, commented that: "It has been reported that multiple
new graphite mines will be required to supply proposed lithium ion battery
manufacturing plants because graphite deposits typically produce a high
percentage of non battery grade material, and two thirds of the material that
is battery grade is lost in the manufacturing process. However, Bissett Creek
may be the only mine that is required to meet market demand due to its very
high percentage of battery grade material, lower manufacturing losses and
future expansion potential." 
Summary of updated PEA Results                                              
Potential Economically Extractable Resources (million                      
 tonnes)(i)                                                       40.5Mt(i)
Feed Grade (% graphitic carbon)                                    1.83%(i)
Waste to ore ratio                                                   0.25:1
Annual processing rate (tonnes per year)                          2,000,000
Processing rate (tonnes per day - 92% availability)                   5,480
Project life (based on 2.0 Mtpa)                                   21 years
Mill recovery                                                         94.7%
Average annual concentrate production (tonnes - first 10                   
 years)                                                              44,200
Capital cost ($ millions - including 10% contingency)                $134.1
Sustaining capital ($ millions)                                       $55.1
Cash operating costs ($/tonne of concentrate)                          $736
Mining costs ($/tonne of process feed material)                       $3.74
Processing costs ($/tonne of process feed material)                   $7.78
General and administrative costs ($/tonne of process feed                  
 material)                                                            $1.45
Concentrate transportation to Montreal ($/tonne of process                 
 feed material)                                                       $0.55
CDN/US dollar exchange rate                                $0.95US = $1 CDN 
(i) The PEA production plan is based on 24 million tonnes ("Mt")
grading 2.20% Cg (as estimated in the FS) being processed first followed by the
processing of 16.1 million tonnes of Measured and Indicated resources grading
1.26 % Cg from a low grade stockpile. All grades are diluted. Mineral resources
that are not mineral reserves do not have demonstrated economic viability. 
PEA Update             
(base case)            
Average graphite price (US$ per tonne)      $2,100      $1,800      $1,500
Pre tax Net Present Value @8% (CDN$                                       
 millions)                                  $380.9      $264.7      $148.4
Pre tax IRR (%)                              40.7%       31.7%       22.2%
After tax Net Present Value @8% (CDN$                                     
 millions)                                  $257.9      $178.9       $99.0
After tax IRR (%)                            33.9%       26.7%       18.9% 
The PEA was originally undertaken to demonstrate the ability to meet expected
future growth in graphite demand by substantially increasing production from
the Bissett Creek deposit after three years of operation based on Measured and
Indicated resources only. The PEA built on the Feasibility Study completed by G
Mining in August, 2012 and the expanded resource model, mine plan and updated
FS economics completed by AGP Mining Consultants ("AGP") in
September, 2013. P&E Mining Consultants Inc. ("P&E") reviewed
the AGP mine plan and modified it to commence production at the expanded 2.0
Mtpa production rate in Year 1 rather than ramping up in Year 3 and to more
aggressively backfill the open pit with waste. WorleyParsons Canada updated the
capital and operating costs for the process plant which represents a portion of
the total capital and operating costs for the project. Consistent with industry
practice, the estimates have been prepared with an engineering accuracy of
+15/- 20%. 
Graphite Markets and Pricing 
Graphite prices have fallen 50% or more from their 2012 peak due to the
economic slowdown in China and a lack of growth in the US, Europe and Japan.
Recently, it has been reported that Chinese flake production has fallen 30% as
uneconomic and polluting mines are being closed. Current prices are at the
marginal cost of production for many producers which should limit further price
declines. The weighted average price that would be realized by Bissett Creek
concentrates in the current market is estimated at US$1,800/t which is the
highest in the industry because approximately 50% of production will be +50
mesh extra large flake and another 40% is +80 mesh large flake. Current
graphite pricing is approximately $2,100/t for +50 mesh XL flake concentrates,
$1,300/t for +80 mesh large flake, $1,100/t and $900/t for +100 mesh and +150
mesh medium and small flake respectively, and less than $500/t for -150 mesh
fines. Typical graphite deposits only have about 15% XL flake and over one
third -150 mesh fines, and would realize average prices in the range of
$1,000-1,200 per tonne of concentrate under current conditions, assuming a
market for the fines. 
Qualified Persons 
Ken Kuchling, P.Eng., Senior Mining Associate of P&E Mining Consultants
Inc. prepared the revised mine plan for the PEA update. Dan Peldiak, P.Eng.,
Principal Process Engineer WorleyParsons Canada prepared the revised capital
and operating costs for the process plant. Andrew Bradfield, P.Eng., of
P&E, who is independent of the Company, approved and authorized the
disclosure of the technical information contained in this press release.
Readers should refer to the NI 43-101 technical reports relating to the FS and
the PEA for further details with respect to the Bissett Creek Project. 
Northern Graphite Corporation 
Northern Graphite Corporation is a Canadian company that has a 100% interest in
the Bissett Creek graphite deposit located in eastern Ontario. The Company
expects graphite prices to outperform those of other commodities in an economic
recovery because of Chinese supply problems and the continued rapid growth in
new uses such as lithium ion batteries. Bissett Creek is the only true large
flake deposit and the only one with a bankable Feasibility Study and its major
environmental permit. It also has the best infrastructure of any new graphite
project, the lowest capital costs and the highest operating margin. A copy of
this press release which includes detailed cash flows for the updated PEA
economics, as well as additional information on Northern, can be found at and 
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. 
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. 
Northern Graphite Corporation
Gregory Bowes
(613) 241-9959
Northern Graphite Corporation
Stephen Thompson
(613) 241-9959 
INDUSTRY:  Manufacturing and Production - Mining and Metals 
-0- Jun/24/2014 13:24 GMT
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