Alabama Graphite arranges $500,000 private placement

May 16, 2016

ALABAMA GRAPHITE CORP. ANNOUNCES PROPOSED NON-BROKERED PRIVATE PLACEMENT ADVANCING A BATTERY-GRADE GRAPHITE PROJECT IN THE UNITED STATES OF AMERICA

Alabama Graphite Corp. is proposing to complete a non-brokered private placement of up to approximately 3,333,333 units at a price of 15 cents per unit for total gross proceeds to the company of up to approximately $500,000. Each Unit is comprised of one common share in the capital of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”). Each Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.20 for a period of 24 months following the date of issue, subject to customary adjustment provisions.

AGC intends to use the net proceeds of the Private Placement for further advancing the Company’s development of its metallurgical process for producing coated spherical purified graphite (“CSPG”) for use in Lithium-ion batteries.

Certain insiders of the Company have indicated their support for the Private Placement. Any such participation would be a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) but will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transaction nor the consideration paid will exceed 25% of the Company’s market capitalization. The Private Placement was approved by all of the independent directors of the Company. 

The number of Common Shares potentially issuable to insiders of the Company pursuant to the Private Placement (including any Common Shares issuable upon the exercise of the Warrants) will represent not more than 10% of the Company’s currently issued and outstanding Common Shares on a non-diluted basis.

In connection with the Private Placement, the Company may pay a finder’s fee in cash and in the form of compensation warrants, subject to all necessary regulatory approvals.

The closing of the Private Placement is subject to the approval of the TSX Venture Exchange. The Company intends to close the Private Placement in one or more tranches as soon as practicable, subject to receipt of all necessary regulatory approvals. All securities issued pursuant to the Private Placement will be subject to a hold period of four months and one day in accordance with applicable Canadian securities laws.