Mr. Hugues Jacquemin reports

NORTHERN GRAPHITE THIRD QUARTER OPERATIONAL AND DEVELOPMENT PROJECT UPDATE

Northern Graphite Corp. has provided a third quarter update on its operations at the Lac des Iles (LDI) Quebec graphite mine and the Okorusu/Okanjande project in Namibia, as well as its plans to expand mine concentrate production and build the capacity to upgrade it into battery anode material (BAM) in North America and Europe.

Lac des Iles

The LDI operation continued to perform well in the third quarter with 53,263 tonnes of ore milled at an average feed grade of 6.4 per cent graphite. Recovery was 89.3 per cent resulting in concentrate production of 3,068 tonnes with an average grade of 96.9 per cent (versus 96.0 per cent in the previous two months), and a flake size distribution of 13.5 per cent plus 50 mesh, 22.3 per cent minus 50 by plus 80 mesh, 20.5 per cent minus 80 by plus 150 mesh and 43.7 per cent minus 150 mesh. There was a significant drop in the strip ratio to 4.4:1 resulting in reduced mining and hauling costs per tonne of ore mined. A scheduled annual two-week shutdown was implemented during July/August to allow for planned maintenance in the plant on key items of process equipment and minor repairs to some support structures.

Hugues Jacquemin, chief executive officer, commented that: "Our third quarter performance demonstrates that following the acquisition of Imerys SA's natural graphite division Northern has successfully established itself as the only North American graphite producer and a company with industry leading production growth prospects. As a result, we are ideally positioned to benefit from continued EV demand growth and U.S. and Canadian government support for the establishment of secure, local, ESG compliant supply chains for critical minerals including the conversion of mine concentrate to battery anode material."

Namibian operations update

The capital program leading to the restart of the Namibia operation continued on schedule during the third quarter. Highlights include successful recommissioning of the existing PLC system within the plant and the introduction of water through much of the flotation circuit. Work also commenced on the replacement of piping around the flotation section and a redundant ball mill was removed to make way for a new scrubber due on site early in 2023. All long-lead items of equipment have been ordered and detailed engineering for the new grinding circuit is well advanced. The use of a dry tailings disposal system is being investigated which has the potential to reduce both capital costs and water consumption.

The local management team has been boosted by the appointment of a plant manager and a support services manager and the Namibian-based group process manager and vice-president, human resources, have been included in Northern's corporate staff. Staffing up of the health, safety, and environment and accounting groups has also progressed and there are now 38 permanent employees engaged, all sourced within Namibia.

Northern has adopted initiatives to empower small businesses operating in Otjiwarongo and to provide on the job training opportunities for apprentices from credible vocational training institutions in Namibia. The start-up activities, the subsequent construction and the improvement of the processing plant at Okorusu present an excellent opportunity for apprentices to receive intensive on-the-job training in their respective trades, and for small contractors to gain experience operating in a world-class construction environment. As part of its corporate social responsibility investment drive Northern has committed to internship contracts with 10 final-year apprenticeship students in various technical fields from the Namibia Institute of Mining and Technology. During this 12-month period each apprentice is assigned an experienced coach and taken through intensive training in their respective trade. A monthly allowance is provided to each apprentice during the internship after which Northern plans to introduce a new cohort of students annually.

Mine development projects

On Oct. 5 Northern announced the acquisition of a 100-per-cent interest in the Mousseau West graphite project, a key component in its plans to extend the life of Lac des Iles after the existing pit is mined out and thus ensure continued employment and economic benefits for the Antoine-Labelle regional municipality and the Province of Quebec. With ore from Mousseau West, Northern believes the LDI plant can produce up to 25,000 tonnes per year (tpy) of concentrate with a seven-day operating schedule. In addition, the company continues to identify and evaluate other potential sources of ore in the area.

During the quarter work continued on advancing the Bissett Creek, Ont., project in preparation for raising financing to finance its development. The company is finalizing major permits and negotiating agreements with first nation groups as well as updating the feasibility study with an initial production target of 40,000 tpy for phase 1 of operation. The ultimate production capacity is in the order of 100,000 tpy. Northern has continued its dialogue with federal and provincial governments to obtain support to develop a mine which will be part of an Ontario mine to market supply strategy supporting the production of battery anode materials.

In Namibia, Northern has prepared a statement of work for its large Okanjande development project which has the potential to produce up to 150,000 tpy. It will be seeking quotations from several engineering firms to prepare a preliminary economic assessment for the project which will form the basis to start seeking financing for the project.

Battery materials development

Northern is aggressively advancing its strategy of upgrading mine concentrate into anode material for the lithium-ion battery and EV (electric vehicle) markets. Continuing testing of graphite from the company's projects, both internally and by potential partners, continues to demonstrate that they are ideally suited for battery applications in terms of milling, shaping, purification, coating and electrochemical properties.

The company is actively involved in discussions and negotiations with technology and OEM (original equipment manufacturer) partners in both the United States and Europe which want to collaborate with a quality supplier of graphite that has both current production and the capacity to support future growth. These discussions centre on volume requirements and the timing thereof, and plans for downstream conversion facilities in both North America and Europe. Discussions are also being held with various government organizations at both the federal and provincial level to gain support to speed up the development of the battery anode supply chain, with a particular focus on Canada, in Ontario and Quebec.

Other downstream development activities

In addition to the battery materials market, Northern has continued to expand its presence in various other downstream segments through its existing customer base. A particular focus is on graphene applications and the use of graphite to provide enhanced thermal and electrical properties in a variety of high-value composite applications. The company is having continuing discussions with customers and other companies in this space that are looking for support to develop these markets. As the only graphite producer in North America and on target to become the third largest outside of China, Northern is well positioned to invest in these new downstream markets and to support their growth.

About Northern Graphite Corp.

Northern is a Canadian, TSX Venture Exchange-listed company that is focused on becoming a world leader in producing natural graphite and upgrading it into high-value products critical to the green economy including anode material for LiBs/EVs, fuel cells and graphene, as well as advanced industrial technologies.

Northern is the only significant graphite-producing company in North America and targets becoming the third largest outside of China when its Namibian operations come back on line in mid-2023. The company also has two large-scale development projects, Bissett Creek in Ontario and Okanjande in Namibia, that will be a source of continued production growth in the future. All projects have battery-quality graphite and are located close to infrastructure in politically stable countries.

About graphite

Graphite is a natural, pure form of carbon. It is not a carcinogen and because it is not burned, it is not a source of CO2 (carbon dioxide). Graphite has many industrial uses as a lightweight reinforcement, conductive additive and fire retardant. It has come to prominence because it is the largest component of a lithium-ion battery (and an important one in fuel cells), and it requires the largest production increase of any battery mineral to meet forecast EV demand. And China dominates production and processing. For these reasons it is recognized as a critical mineral by the United States, European Union and Canada.

Qualified person

Gregory Bowes, BSc, MBA, PGeo, is a qualified person as defined under National Instrument 43-101 and has reviewed and approved the content of this news release.

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