Mr. Paul Van Damme reports

NXA INC. SIGNS LETTER OF INTENT FOR PROPOSED BUSINESS COMBINATION WITH ONTARIO GRAPHITE LTD.

NXA Inc. has entered into a letter of intent dated April 16, 2014, to complete a business combination with Ontario Graphite Ltd. OGL is a privately owned Canadian mining company incorporated under the Business Corporations Act (Ontario), and committed to the responsible recommissioning and operation of the Kearney mine in Kearney, Ont., one of the largest confirmed graphite mineral resource projects in North America and among the largest individual deposits in the world.

It is currently contemplated that NXA, OGL and OGL's parent company, Ontario Graphite Ltd., a corporation existing under the laws of the Cayman Islands, will complete a business combination by way of share exchange, merger, amalgamation, arrangement or other similar form of transaction, which will result in OGL or OGL parent amalgamating with or becoming a wholly owned subsidiary of NXA (or such other entity that may be created for the purposes of completing the proposed transaction), or otherwise combining its corporate existence with a wholly owned subsidiary of NXA. As part of the proposed transaction, it is intended that common shares in the capital of NXA will be issued to holders of securities of OGL parent at an exchange ratio based on the relative values of NXA and OGL parent, which will be determined.

Upon completion of the proposed transaction, it is proposed that the company will become a mining issuer listed on Tier 2 of the TSX Venture Exchange, and is intended to be renamed Ontario Graphite (Canada) Ltd. The resulting issuer will carry on the business of OGL as currently constituted.

Approval of the LOI and the terms of the proposed transaction has been received from the board of directors of the company. Completion of the proposed transaction is subject to certain conditions, including the receipt of the exchange and regulatory approvals, disinterested approval of the shareholders of the company and the shareholders of OGL parent, completion of satisfactory due diligence by the company and OGL, completion of definitive legal documentation, and completion of a private placement by OGL or OGL parent. The private placement will involve an offering of subscription receipts, which subscription receipts are intended to be automatically exercisable for securities of OGL or OGL parent, as applicable, upon satisfactory completion or waiver of all conditions precedent to the proposed transaction. Each OGL security is intended to be exchanged for securities of NXA pursuant to, and upon completion of, the proposed transaction. The net proceeds of the private placement are intended to be used to further the recommissioning process of the Kearney mine.

It is expected that, in anticipation of the proposed transaction, the company will issue common shares in settlement of certain existing debts of the company, subject to approval of the exchange.

Trading of the common shares of the company has been halted and the common shares will remain halted in accordance with exchange policies until all required documentation with respect to the proposed transaction have been received, and the exchange is otherwise satisfied that the halt should be lifted.

A press release with further particulars relating to the proposed transaction will follow in accordance with the policies of the exchange.

Completion of the proposed transaction is subject to a number of conditions, including exchange acceptance and disinterested shareholder approval. The proposed transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the proposed transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the proposed transaction, any information released or received with respect to the proposed transaction may not be accurate or complete and should not be relied upon. Trading in the securities of NXA should be considered highly speculative.

We seek Safe Harbor.