Grids

Northern Graphite Closes Non-Brokered Private Placement

Northern Graphite Corporation (TSX VENTURE:NGC) (OTCQX:NGPHF) announces that it has closed its previously announced non-brokered private placement through the issuance of 6,206,377 common shares at a price of C$1.70 per share for gross proceeds of C$10,550,840.90. In connection with the private placement, and in accordance with the policies of the TSX Venture Exchange, the Company paid total finder’s fees of C$113,017 and issued 76,480 finder’s warrants, each exercisable to acquire one common share of the Company at a price of C$2.00 per share for a period of one year.

The net proceeds of the placement will be used to finance the completion of the bankable Feasibility Study ("FS") and permitting with respect to the Company’s Bissett Creek graphite project and for working capital and general corporate purposes, as well as detailed engineering and design and the acquisition of long lead time equipment upon the positive completion of the FS.

The placement is subject to the final approval of the TSX Venture Exchange. All securities issued under the placement are subject to a four month hold period expiring July 16, 2012.

Northern Graphite Corporation is a Canadian company that has a 100% interest in the Bissett Creek graphite project located in Ontario. Graphite prices have increased substantially due to the ongoing modernization of China and other emerging economies which has resulted in strong demand from traditional steel and automotive markets. In addition, new applications such as lithium ion batteries, vanadium redox batteries, fuel cells and nuclear power have the potential to create significant incremental demand growth.
 
It takes 20 to 30 times as much graphite as lithium to make a lithium ion battery and their use in the growing electric vehicles market is expected to require significant increases in graphite production. However, graphite production and exports from China, which produces 70% of the world’s supply, are expected to decline and an export tax and a licensing system have been instituted. Both the European Union and the United States have declared graphite a supply critical mineral.

Northern Graphite is well positioned to benefit from this compelling supply/demand dynamic with a high purity, large flake, scalable deposit that is located close to infrastructure. The Company has already demonstrated through lab and bench scale metallurgical work, and full pilot plant testing, that its proposed flow sheet can economically produce high quality, salable concentrates. The FS and permitting are expected to be completed in the first half of 2012, following which mine construction could commence, subject to the results of the FS and financing.

www.northerngraphite.com