Alabama Graphite to reassess feasibility study

Oct 16, 2017

2017-10-16 15:26 ET – News Release

Mr. Donald Baxter reports

ALABAMA GRAPHITE PROVIDES CORPORATE UPDATE

Alabama Graphite Corp. has decided to reassess the feasibility study of its Coosa project, located in the American state of Alabama. The company’s mission is to become a vertically integrated green-energy supply chain producer of battery-ready graphite products for the American lithium-ion, lead-acid and alkaline battery industries.

A photo accompanying this announcement is available on-line.

On Nov. 30, 2015, Alabama Graphite announced its positive preliminary economic assessment, addressing both primary and secondary processing to produce specialty, ultra-high-purity, battery-ready graphite products, as opposed to sole primary processing to make traditional graphite concentrate for its Coosa graphite project — the most advanced flake graphite project in the contiguous United States. Since December, 2015, when president and chief executive officer Donald Baxter was appointed by the board of Alabama Graphite, the company has achieved several significant milestones, including but not limited to the following:

the execution of 31 non-disclosure agreements with potential end users, 14 of which are with U.S. Department of Defense battery contractors/manufacturers and a total of 24 potential end-users have received Alabama Graphite’s battery-ready graphite products for evaluation;
letter of intent to supply battery-ready graphite products to an established U.S. lead-acid battery manufacturer;
received positive evaluation results for ultra-purified micronized-graphite-conductivity enhancement product from RSR Technologies of Dallas, Tex. Testing showed dynamic charge acceptance improved by more than 194 per cent;
production of high-performance silicon-enhanced coated spherical purified graphite for lithium-ion batteries which exceeded maximum theoretical capacity for anode graphite;
commenced production of greater than 150 kilogram stockpile of American sourced and manufactured specialty battery-ready graphite for end-user qualification;
production of high-performance conductivity-enhancement graphite — delaminated expanded graphite for lithium-ion batteries;
99.999-per-cent certified graphite purity in a single pass via proprietary, environmentally sustainable purification process that provides complete elemental analysis;
research partnership with United States Department of Energy’s Oak Ridge National Laboratory;
receives positive preliminary battery-ready graphite test results;
announced positive, independent battery-ready graphite electrochemical test results from Physical Sciences Inc.;
demonstrated stable cycling for more than 80 cycles;
appointment of strategic advisers Auburn University Professor Emeritus Dr. Robert Cook, PG, and ZAF Systems chief executive officer and former president of leading U.S. Department of Defense battery manufacturer Eagle Pitcher, Randy Moore;
succeeds in producing high-performance CSPG for lithium-ion batteries;
Reported Positive Pilot Plant Test Results for the Coosa Graphite Project;
raised more than $3.6-million in equity investment at the company’s second-highest per-unit price in its more than five-year history.

Offtake/supply agreement negotiations

The company is in discussions with numerous potential battery and automotive clients. Of those discussions, Alabama Graphite is currently engaged in advanced discussions with three potential end-users for significant offtake/supply agreements. The identities of the specific potential end-users are being withheld for reasons of commercial confidentiality. Discussions are progressing well. Details will be released as permitted, if and when a material agreement has been executed.

150-kilogram stockpile of battery-ready graphite products

Further to Alabama Graphite’s May 1, 2017, announcement, the company is pleased to report that it has successfully completed prototype production from this more than 150-kilogram stockpile, under chief executive officer Donald Baxter’s direction and supervision. To the company’s knowledge, no other graphite development company has produced more battery-ready graphite. Independent characterization to analyze and electrochemically test the CSPG stockpiles in representative samples to validate the high electrochemical performance of the CSPG and consistency in electrochemical performance is under way and results will be disclosed as soon as they are available.

Additionally, the company is conducting long-term cycling efficiency testing to more than 500 cycles, and has completed more than 200 cycles to date. Details on these results will be disseminated as soon as they are available. The building of the CR2016 cells to test the CSPG and subsequent cycling efficiency testing takes several months to complete and long-term cycling test results will continue.

Feasibility study

On July 12, 2017, Alabama Graphite announced that it had awarded the contract for the feasibility study for the Coosa graphite project to AGP Mining Consultants Inc., the same independent engineering firm that produced the Company’s preliminary economic assessment. Per Alabama Graphite’s May 1, 2017, announcement, the feasibility study had been strategically deferred in order to focus on the company’s downstream prototype production, characterization and testing of its greater than 150-kilogram stockpile of American sourced and manufactured battery-ready graphite products for potential end-users. As the feasibility study is expected to take no more than 10 months to complete, coupled with the fact that Alabama’s permitting process is expected to take no more than six months the need to produce a significant amount of battery-ready graphite materials was far more important to the company than starting the feasibility study.

More recently, and after discussions with American manufacturers in the lead-acid battery industry in particular, Alabama Graphite has decided to reassess production quantity targets for the feasibility study. In particular, the production tonnages in the PEA, specifically, as it pertains to purified micronized graphite and its derivative delaminated expanded graphite conductivity-enhancement products for battery cathodes, need to be reevaluated, as the original PEA production quantities are now deemed to be insufficient to address current market demand. Alabama Graphite intends to commence the feasibility study before the end of 2017, contingent on securing the required financing.

There is no deadline or expiry date for when the company’s feasibility study must be completed. The feasibility study is an important milestone, but by no means a critically time-sensitive one. There appears to be a misconception that the feasibility study must be commenced immediately. Several graphite development companies have completed/filed their feasibility studies years ago (and in one instance, more than five years ago) and all have yet to secure project financing or any binding offtake/supply agreements. These companies now sit stagnating with outdated feasibility study technical reports, with grossly irrelevant economic modelling, and their feasibility studies require updating at significant expense. Alabama Graphite management believes that its focus on battery material development may help Alabama Graphite avoid this fate. Some retail shareholders fail to recognize or understand the value of the significant downstream, technical, battery-related accomplishments Alabama Graphite has achieved to date. Alabama Graphite’s battery-ready-graphite technical accomplishments are what potential end-users are interested in. Although end-users do want a timeline for when Alabama Graphite could enter production of CSPG and/or PMG, many of these downstream entities do not know what a mining industry feasibility study is and the lack of a completed feasibility study does not preclude these companies from potentially doing business with Alabama Graphite.

Note, the Coosa graphite project consists of approximately 42,000 acres and is located on private land. There are no federal permitting issues for the company to contend with, only state-level permitting via the Alabama Department of Environmental Management. Independent engineering firm Thompson Engineering, of Mobile, Ala., is contracted as Alabama Graphite’s consultant leading the permitting process for the Coosa graphite project with ADEM. As announced on July 24, 2017, Alabama Graphite received the necessary national pollutant discharge elimination system construction storm water general permit for the potential discharges associated with the exploration activities necessary to complete the pending feasibility study.

Recent events

Asia trip

In September, chief executive officer Donald Baxter and Alabama Graphite management met extensively with a well-established Japanese potential end-user in the automotive industry. Additionally, Mr. Baxter presented a company overview and met with prospective investors in Hong Kong, Seoul, and Tokyo.

Southern Research’s southeast energy storage symposium

In late September, Alabama Graphite management attended Southern Research’s inaugural southeast energy storage symposium in Birmingham, Ala. Mr. Baxter presented a company overview and was a panelist on the energy storage technologies and applications panel at the two-day event. The Alabama Secretary of Commerce, Greg Canfield, delivered the event’s keynote address and discussed Alabama Graphite and spoke at length regarding Mercedes-Benz’s recent $1-billion investment in the state of Alabama to build a fully electric sports utility vehicle.

Additionally, Mr. Baxter and executive vice-president Tyler Dinwoodie visited both the Coosa graphite project and the Bama mine project, extensively walking both properties with project geologist and director of business development Jesse Edmondson, PG. The Alabama Graphite management team also met with Dr. Baldwin and Dr. McConnell II of Alabama-based Forest Owner Services.

Washington D.C. trip

On Oct. 3, 2017, Mr. Baxter and Mr. Dinwoodie attended the U.S. Senate Committee on Energy and Natural Resources’ full committee hearing to examine energy storage technologies. The purpose of the hearing was to examine the status of energy storage technologies, reviewing today’s technologies and understanding innovation in tomorrow’s technologies, noting that China is the dominant world leader producing and exporting the critical, battery-ready input materials to manufacture lithium-ion batteries — namely graphite, cobalt, lithium, and nickel — and that the United States currently imports 100 per cent of the aforementioned materials that it uses. Leading independent lithium-ion supply-chain expert and managing director of United Kingdom-based Benchmark Mineral Intelligence, Simon Moores, provided testimony. United States Senator Luther Strange of Alabama is a committee member of the U.S. Senate Committee on Energy and Natural Resources.

During the hearing, Committee Chairman, Senator Lisa Murkowski (R-Alaska), asked Mr. Moores: “Where do we go if we are in a situation where we are reliant on other nations (some 100 per cent) for critical minerals but also for the processing of these minerals? How vulnerable does this make us?” Mr. Moores responded by stating: “I would be very concerned about technologies that are going to be core to the next big industry — namely, energy storage. Because that will fundamentally alter the auto sectors and alter the energy space over the next 100 years. Those core minerals to the battery technology that will be central to that for the next 10 to 15 years is lithium-ion batteries. And that’s because of the cost, because of the scale they are going to be produced over the next five years with the rise of these battery megafactories around the world. I would be looking at the four critical raw materials that go into a lithium-ion battery, which are lithium, graphite, cobalt and nickel. Of those four, the U.S. imports 100 per cent of each. So, no mining of these specialty materials happens in the U.S.”

Mr. Moores’ complete written testimony to the Senate Committee on Energy and Natural Resources can be found on-line.

Afterwards, Mr. Baxter and Mr. Dinwoodie had a productive meeting with Dr. Benjamin Reinke and Lane Dickson, professional staff members of the U.S. Senate Committee on Energy and Natural Resources. Additionally, Mr. Baxter and Mr. Dinwoodie met with United States Senator Richard Shelby of Alabama and his senior staffers, as well as U.S. Representative Gary Palmer, representing Alabama’s 6th Congressional District, and senior staffers for Sen. Luther Strange.

Upcoming events

Alabama Graphite expects to complete a number of important de-risking events in the upcoming months, including the initiation of a definitive feasibility study and piloting program. The company also intends to initiate the permitting process for the Coosa graphite project and has already commenced an environmental baseline study.

Expected upcoming milestones

electrochemical test results for the company’s 150-kilogram stockpile of CSPG;
200-plus-cycle, long-term cycling data for the company’s 150-kilogram stockpile of CSPG; additional continuing cycling data to more than 500 cycles;
intellectual property development as it pertains to two environmentally sustainable graphite purification technologies;
acquisition of new mineral rights leases for critical, strategic minerals in the state of Alabama;
initiation of the feasibility study for the Coosa graphite project and pilot plant program for secondary-processed battery-ready graphite;
advancement of project permitting, including the completion of the environmental baseline study.

Alabama Graphite’s senior management will be attending, presenting and/or exhibiting at several industry events in the near future.

Benchmark Mineral Intelligence’s graphite supply chain 2017′

Alabama Graphite’s senior management will be attending Benchmark Mineral Intelligence’s graphite supply chain 2017 event from Nov. 5 to Nov. 7, 2017, held at the Balboa Bay Resort in Newport Beach, Calif. Anyone wishing to meet with Alabama Graphite’s senior management is asked to please email the company’s vice-president of investor relations, Ann-Marie Pamplin to schedule a meeting.

Mines and money London 2017

In addition to exhibiting and meeting with potential investors, Alabama Graphite chief executive officer Mr. Baxter will be presenting during the battery metals events at mines and money London 2017, held at the business design centre in central London, U.K., from Nov. 27 to Nov. 30, 2017. Anyone wishing to meet with Alabama Graphite’s senior management is asked to email Ann-Marie Pamplin to schedule a meeting.

121 mining investment London

Alabama Graphite will be providing a company overview and will be meeting with prospective investors during the two-day 121 mining investment London event hosted at 8 Fenchurch Pl., London, U.K., on Nov. 27 and Nov. 28, 2017. Anyone wishing to meet with Alabama Graphite’s senior management is asked to email Ann-Marie Pamplin to schedule a meeting.

Prospecters and developers association of Canada 2018

Alabama Graphite will be exhibiting at the annual prospectors and developers association of Canada international convention, trade show and investors exchange, held from March 4 to March 7, 2018, at the Metro Toronto Convention Centre in Toronto, Canada. Alabama Graphite’s booth will be located in the investors exchange, booth number 2514 (the same booth location as PDAC 2017). Chief executive officer Mr. Baxter and executive vice-president Mr. Dinwoodie will be available for meetings with shareholders and stakeholders over the four-day event. Anyone wishing to meet with Alabama Graphite’s senior management is asked to email Ann-Marie Pamplin to schedule a meeting.

Qualified person

Donald Baxter, PEng, president, chief executive officer and executive director of Alabama Graphite, is a qualified person as defined by National Instrument 43-101 guidelines, and has reviewed and approved the content of this news release.

About Alabama Graphite Corp.

Alabama Graphite is a Canadian-based flake graphite exploration and development company as well as an aspiring battery materials production and technology company. The company operates through its wholly owned subsidiary, Alabama Graphite Company Inc. (a company registered in the state of Alabama). With an advancing flake graphite project in the United States of America, Alabama Graphite intends to become a reliable, long-term U.S. supplier of specialty high-purity graphite products. A highly experienced team leads the company with more than 100 years of combined graphite mining, graphite processing, specialty graphite products and applications, and graphite sales experience.

We seek Safe Harbor.

http://alabamagraphite.com/news-releases-2017/