Mr. Bruce Duncan reports

CANADA CARBON ADOPTS SHAREHOLDER RIGHTS PLAN

Canada Carbon Inc. has approved the adoption of a shareholder rights plan, effective immediately. The plan will be submitted to shareholders of the company at the next annual and special meeting of shareholders, which is expected to take place in June of 2014.

The plan encourages fair treatment of shareholders should an unsolicited takeover bid be made for the common shares of Canada Carbon. The plan is similar to other shareholder rights plans adopted by Canadian publicly listed companies, and is designed to provide the board and the shareholders with more time to consider an unsolicited takeover bid for the common shares. The plan is intended to discourage coercive or unfair takeover bids, and to provide the board with more time to assess and evaluate any unsolicited takeover bid, and to explore and develop, if appropriate, alternatives that enhance shareholder value and to give shareholders adequate time to consider any such transaction.

The plan has not been adopted in response to, or in contemplation of, any specific proposal to acquire control of the company. The plan is subject to acceptance by the TSX Venture Exchange and must be ratified by shareholders within six months of the effective date of the plan. If ratified by shareholders at the meeting, the plan will continue in force until the close of the third annual meeting of shareholders following the meeting, unless the plan is reconfirmed and extended at such meeting.

The board is of the view that the recent press releases detailing the quality of the Miller graphite, which achieved 99.9978-per-cent purity by rapid thermal upgrading and surpassed the nuclear graphite threshold, may have created an environment where an opportunistic takeover bid could be made for the common shares. Such an offer may not be in the best interest of all shareholders. Consequently, the board has adopted the plan, the benefits of which extend to shareholders should an offer be made for the common shares.

In connection with the plan, the board authorized the issuance of one right in respect of each common share outstanding as of the close of business on Feb. 28, 2014, and one right will attach automatically to each common share issued after such date. The rights issued under the plan will become exercisable only when a person, including any party related to it, acquires or announces its intention to acquire 20 per cent or more of the outstanding common shares without complying with the permitted bid provisions of the plan or without approval of the board. Should such acquisition occur, each right will, upon exercise, entitle a rightholder other than the acquiring person or related persons to purchase common shares at the exercise price, subject to the terms and conditions set forth in the plan.

The plan is not intended to prevent takeover bids. Pursuant to the terms of the plan, any bid that meets certain criteria intended to protect the interests of all shareholders will be deemed to be a permitted bid and will not trigger the plan. These criteria require, among other things, that the bid be made by way of a takeover bid circular to all holders of common shares other than the offeror under the bid and remain open for acceptance for not less than 60 days. If, at the end of such 60-day period, at least 50 per cent of the outstanding shares, other than those owned by the offeror or certain related parties, have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 days to allow other shareholders to tender.

We seek Safe Harbor.