Project

Northern Graphite Corporation holds 100% interest in the Bissett Creek mining lease and surrounding claims which are located 17km from the Trans Canada Highway between the cities of Ottawa and North Bay, Ontario, Canada. The site can be accessed by a good quality all weather road and labor, power, rail lines and water are all readily available.

A full feasibility study was completed on the property in 1989 by such prestigious engineering firms as Kilborn and Cominco Engineering. It concluded that the project was economic but it was not developed due to a subsequent decline in graphite prices. Over 8,000 meters of drilling had been completed in 242 holes and a large resource with a low strip ratio was identified, including a proven and probable reserve. Extensive metallurgical testing indicated that it could be processed with a standard flotation concentrator. Historical information is presented for informational purposes only. The feasibility study and reserve estimates were not completed in accordance with NI 43-101 and therefore should not be relied upon.

This work has been updated through a NI 43-101 Preliminary Economic Assessment and a NI 43-101 bankable Feasibility Study (“FS”). In September, 2011 the Company announced a significant increase in estimated resources based on the results from a 51 hole, 2,927 meter drilling program. The new resources indicate that production could be scaled to much higher rates to meet anticpated future growth in graphite demand.

Relative density 2.63t/m3, 10% dilution, 90% mine recovery, *rounded to nearest 1k, **rounded to nearest .1k
Effective September 12, 2011

Environmental and mine permitting are expected to be completed in the 4Q/2012 following which the Company will be in a position to begin construction, subject to financing. Construction will take approximately one year to complete. The FS estimated a probable reserve of 19 million tonnes grading 1.89% Cg based on indicated resources only and contemplated a 23 year operation which would produce up to 20,000 tonnes of graphite concentrate per year. The waste to ore ratio is 0.50 and operating costs over the first five years of operation are $851/tonne of concentrate. Based on a weighted average price of $2,600 per tonne for the sizes and grades of graphite that will be produced, the pre tax IRR is 23.1% and the NPV is $151 million (@8%). The capital cost of the mine is $102.9 million including a $9.4 million contingency. Almost all production will be high carbon, +80 mesh large flake and over 50% will be +48 and +32 mesh jumbo sized flake, resulting in premium pricing.

There are a number of low risk opportunities to further enhance the economics of the deposit including using owner rather than contract mining, upgrading some of the inferred resources to indicated, and expanding the mine. It also appears that the resource grade is conservative and potentially understated as extensive metallurgical work, including a pilot plant and bulk sample and locked cycle tests, indicated that the recovered grade is consistently 4-12% higher than predicted by the head grade. The Company’s objective is to achieve operating costs of less than $800/tonne.