Mr. Hugues Jacquemin reports

NORTHERN GRAPHITE RESUMES PROCESSING AT NORTH AMERICA'S ONLY PRODUCING GRAPHITE MINE AMID RISING MARKET DEMAND

Northern Graphite Corp. has resumed processing ore at Lac des Iles (LDI), North America's only producing graphite mine, amid rising market demand and to restock inventories for certain products.

Sales volumes at Quebec-based LDI rose each month in the third quarter. Total sales for the three-month period were 2,587 metric tonnes, representing an increase of more than 25 per cent over the 2,016 tonnes sold in the second quarter, based on preliminary, unaudited data.

"What we saw starting in the third quarter was that customers were really coming off the sidelines to secure supply for the year after a hiatus in the first half," said Northern chief executive officer Hugues Jacquemin. "With sales volumes up more than 25 per cent in the third quarter, together with what we are forecasting into the fourth quarter and next year, we believe there will be continuing strong demand for our product, and we have resumed processing at LDI to make sure we have continuous supply."

The LDI mine and plant were temporarily placed on care and maintenance during the second and third quarters of 2023 amid challenging markets and lower prices for its products, while the company continued to supply customers from stockpiled inventories. Global graphite markets were negatively impacted by lower-than-anticipated demand from steel and electronics markets and after China removed electric vehicles (EV) sales incentives at the end of last year. These factors led to excess Chinese graphite production coming to export markets at lower prices.

"We saw a total shift in demand after China reinstated EV incentives this year," said Mr. Jacquemin. "We also had the Oct. 20 news that China would start imposing controls this December on certain graphite exports used in battery making, which will drive further supply concerns. Fortunately for our customers, Northern has immediate capacity available to supply the market and we also have the ability to scale quickly with our mine in Namibia."

LDI has been supplying graphite markets for over 30 years, from refractory bricks for steelmaking to heat management in mobile phones, and friction and lubrication products for brakes and brake linings for the global automobile industry. Recent testing verified that LDI graphite can be processed into battery anode material (BAM), a key component of lithium-ion batteries, and can perform at or above the standards of commercially available reference materials.

Graphite has been classified by the U.S. Department of Energy as one of five minerals deemed critical for the development of EV batteries and the energy transition, but it has largely been overshadowed by other battery minerals like lithium, cobalt, nickel and manganese. For a vehicle to qualify for the full $7,500 (U.S.) EV tax credit reflected in the landmark U.S. Inflation Reduction Act (IRA), a minimum percentage of the critical minerals by value in the battery (such as graphite, lithium and cobalt) must be sourced from the United States or one of the countries with which the U.S. has a free trade agreement. Minimum requirements begin at 40 per cent and increase to 80 per cent by 2026 and 100 per cent by 2028.

Northern's LDI mine and facilities in Quebec, and its Okanjande mine and facilities in Namibia, are fully permitted, and the company is engaged with governments and automakers as it pursues its strategy to be the next-generation carbon materials company for the energy transition. The company has a sustainable, integrated, mine-to-market-to-battery solution that will be eligible for credits on EV batteries produced by the United States and its trading partners that are coming into force through the end of the decade under the terms of the IRA.

"As the only producer of graphite in North America, we are in a critical position, more than ever, to service graphite demand from North American battery makers," said Mr. Jacquemin.

Investor relations agreements update

Further to the company's press release dated Oct. 11, 2023, announcing the engagement of Senergy Communications Capital Inc. to provide investor relations and marketing services to the company for an initial period of four months, Northern confirms Senergy does not have any right or intent to acquire an interest in the company. In addition, all direct and indirect consideration payable to Senergy consists only of the $25,500 fee (plus harmonized sales tax) payable under the agreement as disclosed. This fee has been paid upfront out of the working capital of the company.

In addition, further to the company's press release dated Oct. 11, 2023, announcing the engagement of Outside The Box Capital Inc. (OTBC) to provide investor relations and marketing services to the company, the company announces it has amended the terms of its agreement with OTBC. The number and exercise price of the stock options to be granted to OTBC has been changed from 666,667 options exercisable at 30 cents per share to 615,384 stock options exercisable at 32.5 cents per share. Similar to the previously announced options, all options are exercisable for a period of two years and vest in four equal tranches, each of which will be 153,846 options under the revised terms, on each of the dates which are three, six, nine and 12 months from the date of grant and, in the event the OTBC agreement is terminated in accordance with its terms, all options that have not yet vested will expire and be terminated as of the date of termination of the agreement. In addition, the company will also pay OTBC a fee of $50,000 per quarter during the term of the agreement, payable in arrears as of each quarter-end as previously announced; however, the restriction that no amount of the fee would be payable to OTBC unless it exercised the options which had vested as of the applicable quarter-end has been removed. The company also confirms OTBC does not have any right or intent to acquire an interest in the company, other than the stock options noted above. In addition, all direct and indirect consideration payable to OTBC consists only of the $50,000 quarterly fee payable under the agreement and the stock options as disclosed. The quarterly fee will be paid out of the working capital of the company.

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 energy transition, including anode material for lithium-ion batteries/EVs, fuel cells and graphene, as well as advanced industrial technologies.

Northern is the only graphite producing company in North America and will become the third-largest producer outside of China when its Namibian operations come back on-line. The company also has a large-scale development project, Bissett Creek, in Ontario that it expects 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 jurisdictions.

We seek Safe Harbor.