Mr. Pav Jordan reports

NORTHERN GRAPHITE ANNOUNCES SECURED DEBT AND ROYALTY FINANCING AND AMENDMENTS TO SENIOR SECURED CREDIT FACILITY AND ROYALTY AGREEMENT

Northern Graphite Corp. has completed a financing consisting of $1-million (U.S.) in secured debt and $2-million (U.S.) in royalty financing provided by funds managed by Sprott Resource Streaming and Royalty Corp.

The financing was completed through amendments to the company's senior secured credit agreement and royalty agreement entered into with Sprott in April, 2022, in connection with the financing for the company's acquisitions of the Lac des Iles graphite mine (LDI) in Quebec and the Okanjande graphite mine in Namibia.

Under the amendments to the senior secured credit agreement, the company has obtained a senior secured loan from Sprott in the amount of $1-million (U.S.), in addition to the $12-million (U.S.) senior secured loan previously made by Sprott to the company in April, 2022. In addition, the company has exercised options under the agreement to capitalize the cash interest payments due on the loan up until Dec. 31, 2023, and add it to the principal amount of the loan, which will result in the principal amount of the loan being approximately $14.6-million (U.S.) after giving effect to the capitalization of the interest. The company has paid an interest payment option fee to Sprott in the amount of $50,000 (U.S.) for the capitalization of interest up to June 30, 2023, and will pay Sprott an additional interest payment option fee for the capitalization of the interest up to Dec. 31, 2023, in an amount equal to 10 per cent of the accrued and unpaid interest due on such date for the period between June 30, 2023, and Dec. 31, 2023. The principal amount of the loan bears interest at 9 per cent plus the greater of an adjusted three-month term SOFR (secured overnight financing rate) and 1 per cent and matures on April 29, 2026.

Under the amendments to the royalty agreement, the company has sold an additional royalty on gross sales revenue (GRR) from LDI to Sprott for $2-million (U.S.), in addition to the 9-per-cent GRR from LDI previously sold to Sprott for $4-million (U.S.) in April, 2022. The additional GRR is for 5 per cent of graphite concentrate sales revenue from LDI up until it has been paid on sales of 45,000 tonnes of graphite concentrate, after which it will be reduced to 0.25 per cent for the remaining life of mine at LDI.

The proceeds from the financing will be used for working capital of the company's Canadian operations including mining and processing operations at LDI. "We are very pleased to complete this additional financing and improve our cash position," commented Hugues Jacquemin, chief executive officer. "The financing, together with the sales ramp-up that we saw in the third quarter, will put Northern in a comfortable position to safely finance the restart of our Lac-des-Iles operation and prepare to ramp up production for the months to come. We would like to thank Sprott for their continuous support in our development."

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.

Qualified person

Gregory Bowes, BSc, MBA, PGeo, the chairman of Northern, 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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