Dr. Douglas Oliver reports

ALABAMA GRAPHITE RECEIVES PROMISING PRELIMINARY GEOPHYSICAL SURVEY RESULTS

Alabama Graphite Corp. has received preliminary results from the recent helicopter-borne geophysical surveys on its Coosa graphite project in Alabama. The preliminary results received include the time-domain electromagnetic (TDEM), magnetic (mag) and spectrometric (spec) surveys. ProspectAir Geosurveys of Gatineau, Que., conducted the geophysical surveys and is doing the data processing.

"The geophysical survey has identified multiple strong EM conductors associated with magnetic lows that represent new exploration opportunities," said Dr. Douglas Oliver, vice-president of exploration. "We see these newly defined targets as having the potential to significantly upgrade the company's resource."

The Coosa graphite project has been the subject of extensive exploration by the company. The objective presently is to ground truth the geophysical results. In particular, the results over the drill grid that defined the initial resource provide the means to correlate between the various surveys and the limits of graphite mineralization.

Of the various surveys conducted, the TDEM survey is the most important. Because graphite is a conductor, rocks containing graphite show a strong electromagnetic response. However, since sulphide minerals such as pyrite and pyrrhotite are also conductors, it is critical to be able to distinguish whether EM anomalies are caused by graphite or sulphides. The magnetic survey can help identify the cause of the EM anomaly. Graphite will show a magnetic low, whereas a response caused by sulphides will show a magnetic high.

With respect to the Coosa drill grid, the TDEM survey showed a very good correlation between the EM conductors and the intercepts of graphitic schist. The TDEM results further suggest that the resource remains open to the southeast, northeast and southwest. The grid also had a moderate magnetic response that is consistent with the observed sulphide content in the drill core.

"The correlation of these preliminary results with a known resource of flake graphite is an important step forward for Alabama Graphite," Dr. Oliver continued. "The final geophysical results will be used in conjunction with ongoing surface sampling to guide the next phase of exploration and metallurgical analysis."

Rick Keevil, PGeo, a qualified person as defined by National Instrument 43-101, and VP, project development, and a director of the company, has reviewed the contents of this press release.

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