Mr. Anthony Huston reports

FOLLOWING ON THE RECEIPT OF A US$37.5 MILLION DEPARTMENT OF DEFENSE GRANT, GRAPHITE ONE ENTERS INTO LOAN AGREEMENT FOR UP TO US$5 MILLION

Graphite One Inc. and its wholly owned subsidiary, Graphite One (Alaska) Inc. (G1 Alaska), have entered into an unsecured loan agreement for advances of up to $5-million (U.S.) with Taiga Mining Company Inc., a controlling shareholder of the company. The loan agreement follows the announcement of a $37.5-million (U.S.) U.S. Department of Defense grant to accelerate completion of Graphite One's feasibility study.

"Graphite One thanks Taiga for its continued support, as the funding will allow the company to continue with delineating the scope and size of our resource," said Anthony Huston, founder and chief executive officer of Graphite One. "This funding, like the $37.5-million (U.S.) DoD grant announced this week, is not dilutive to our shareholders."

In March, the U.S. government's U.S. Geological Survey reported, "The Graphite Creek graphite deposit, located in the Kigluaik Mountains 60 kilometres north of Nome on the Seward peninsula, Alaska, is the largest known flake graphite resource in the U.S. and is among the largest in the world."

Proceeds from the loan will target doubling the Graphite Creek resource by infill drilling along trend to hole 22GC079, drilled 2.1 km west of the current block model, which encountered 58 metres of 4.18 per cent graphite.

The loan matures in one year and the interest on the loan will accrue on the outstanding balance at a rate of 12 per cent per annum. The loan can be drawn from time to time or all at once. As consideration for the loan being accessible to the company, G1 Alaska granted Taiga an option to purchase a net smelter return royalty interest (NSR) in 0.25-per-cent increments for every $1.25-million (U.S.) advance up to a maximum of 1 per cent on the 133 Alaska State claims owned or leased by G1, which the company bought back (refer to June 21, 2023, press release). The option may be exercised at any time prior to the maturity date and, if exercised, the outstanding balance of the loan and accrued interest will be deemed to be the consideration paid for the purchase of the NSR. The loan and the option to acquire the NSR are subject to approval by the TSX Venture Exchange.

The NSR commences on the first day of the month in which the first concentrate is produced from certain of the mineral claims for a period of 20 years. No securities will be issued and no commission, bonus or finder's fee will be paid in connection with the loan.

The loan constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transaction as Taiga is an insider and control person of the company. The company is relying on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the loan with Taiga does not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101.

Graphite One's supply chain strategy

With the United States currently 100 per cent import dependent for natural graphite, Graphite One is planning to develop a complete U.S.-based, advanced graphite supply chain solution anchored by the Graphite Creek resource. The Graphite One project plan includes an advanced graphite material and battery anode manufacturing plant expected to be sited in Washington State integrated with the development of the Graphite Creek property. The plan includes a recycling facility to reclaim graphite and the other battery materials, to be co-located at the Washington State site, the third link in Graphite One's circular economy strategy.

About Graphite One Inc.

Graphite One is developing its Graphite One project to become an American producer of high-grade anode materials on a commercial scale integrated with a domestic graphite resource. The project is proposed as a vertically integrated enterprise to mine, process and manufacture anode materials primarily for the lithium-ion electric vehicle battery market. As set forth in the company's 2022 prefeasibility study, graphite mineralization mined from the company's Graphite Creek property, situated on the Seward peninsula approximately 35 miles north of Nome, Alaska, would be processed into concentrate at an adjacent processing plant. Natural and artificial graphite anode materials and other value-added graphite products would be manufactured from the concentrate and other materials at the company's proposed advanced graphite materials manufacturing facility expected to be located in Washington State. The company intends to make a production decision on the project upon the completion of a feasibility study.

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