Re-commission and Production – The Kearney Graphite Mine As of August 2013
Re-commission and Production –
The Kearney Graphite Mine
As of August 2013
Company Overview
History of the Kearney Graphite Mine 3
COMPANY OVERVIEW
Timeline
Graphite First Reported in Area
Prospecting & Mapping
Reserves Proved Up
Mill & Open Pit Construction
Operations by Cal Graphite
Cal Graphite Becomes Applied Carbon Technology
International Graphite Buys Mine
iCarbon Takes Over
iCarbon Becomes Ontario Graphite
Ontario Graphite Leading Reactivation Process
1979
1979 - 1981
1985-1986
1988
1989-1994
1993
1999
2006
2008
2011
2012 MNDM Approval of Mine Closure Plan
All Required Permits Received 2013
Kearney Mine Property Location 4
COMPANY OVERVIEW
Kearney Mine
Property
Property Location
The Mine is located in a politically stable, first-
world rate country, and in close proximity to
major North American graphite markets,
representing dependable and timely delivery
for customers and close proximity to ports for
shipment to European customers
The property is located 300 km north of Toronto,
Canada and is accessible through the Town of
Kearney via Highway 11 and east on Highway 518.
From Toronto, there are approximately 270 km of four-
lane highway, 30 km of paved municipal road, 10 km
of all-weather logging and mine site road.
The surrounding area has significant mining industry
support, with mining and process equipment vendors,
as well as readily available skilled and unskilled
labour.
Transportation costs are kept relatively low, and
product can be delivered directly to end-use
customers.
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COMPANY OVERVIEW
Positive Impact 6
COMPANY OVERVIEW
The Kearney Graphite Mine site is the largest confirmed mineral resource of any North American graphite deposit, and is one of the largest individual flake graphite deposits outside of China and North Korea The reactivation of the Kearney Graphite Mine will:
Enhance the environmental integrity of the site and surrounding area (improved tailings dam; larger polishing pond).
Create 80 direct full-time jobs, with three times that number in spin-off positions in the community.
Provide a significant economic stimulus to the region and help in the rejuvenation of the Kearney community.
Put the province on the world stage when it comes to graphite production.
Mineral Inventory
An NI43-101 Technical Report from January 2010 indicates a mineral inventory on the Kearney Mine property of 43.5 million tonnes of Measured and Indicated Resources at average grade of 2.34% Cg, plus 12.3 million tonnes of Inferred Resources at average grade of 2.42% Cg, based on a cut-off ore grade of 1.5% Cg
• At current mining plan throughput rate, the property has more than 31 years of production
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COMPANY OVERVIEW
Hawkins 43-101 Golder Associates Block Model
Mineral Zone Metric Tonnes Carbon grade (%) Metric Tonnes Carbon grade (%)
McGuire Zone
Measured Resources 10,613,339 2.50
Indicated Resources 16,061,706 2.46 25,560,000 2.26
Inferred Resources 9,740,410 2.52 36,085,000 2.15
Total Measured, Indicated, & Inferred Resources 36,415,455 2.48 61,645,000 2.20
Sheehan Zone:
Measured Resources 7,662,505 2.14 TBD TBD
Indicated Resources 9,618,875 2.11 TBD TBD
Inferred Resources 3,176,044 2.14 TBD TBD
Total Measured, Indicated, & Inferred Resources 20,475,424 2.34 TBD TBD
Kearney Graphite Mine Site 8
COMPANY OVERVIEW
Waste Rock Pile
Graphite Lake
Polishing Pond
Open Pit
Kearney Property Mill Area 9
COMPANY OVERVIEW
Environmental and Permitting
Kearney Mine Agencies and Permits 11
ENVIRONMENTAL AND PERMITTING
Ontario Ministry
of Northern
Development and
Mines (MNDM)
Ontario Ministry
of Environment
(MOE)
Ontario Ministry
of Natural
Resources (MNR)
Ontario Ministry
of Labour (MOL)
Environment
Canada Town of Kearney
Closure Plan and Financial Assurance
Aboriginal and Public Consultation
Mining tenure – leases
Certificates of Approval for emissions and discharges of water, dust, exhaust and noise
Permit to take water for dewatering pit and operational make-up from Graphite Lake
Plant septic system
Aboriginal and Public Consultation
Tailings dam structure approval – north starter dam and raise the existing south tailing dam as well as polishing pond raise
Polishing Pond dam repair and raise
Species at risk assessment (SARA)
Water crossings and roads
Timber cutting on Crown land
Aboriginal and Public Consultation
Health and Safety standards and pre-development review
Environmental Impact Assessment
Aboriginal and Public Consultation
Municipal permits
Environment
The Ministry of the Environment approved all final operating permits for the re-commissioning of the Kearney Graphite Mine in May 2013.
The mine has been maintained since its shutdown and is currently in compliance with all environmental and regulatory requirements.
Ontario Graphite received permits for construction on the Polishing Pond, North and South Tailings dams from the Ministry of Natural Resources in 2012.
The polishing pond is the final stage of water treatment in the sewage works, which produces water suitable for discharge into the environment.
Upon completion of the polishing pond dam raise, the pond will be 4.5 times larger than before, greatly increasing storage capacity thereby reducing the need for fresh water from surrounding lakes
The increased storage capacity of the polishing pond will extend the retention time of the water from 5 days to 20 days, producing a better quality of water at the discharge
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ENVIRONMENTAL AND PERMITTING
Environment
Water Quality – Provincial Standards on Water Quality
Ontario Graphite is also required to monitor the water quality downstream to ensure
that predicted concentrations are maintained.
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ENVIRONMENTAL AND PERMITTING
ECA
Previous Standards
ECA
Today’s Standards
Total Suspended Solids, mg/L 15 15
Oils and Greases (total), mg/L 15 5
Phenols, mg/L 0.02 0.01
Total Concentration
Nickel, mg/L
Copper, mg/L
Zinc, mg/L
Lead, mg/L
0.25 0.25 0.25 0.25
0.1
0.05
0.1
0.05
Cumulative Concentration of Pb, Cu, Zn and Ni, mg/L 0.5 0.25
Total Iron, mg/L 1 1
Cadmium, mg/L 0.001 0.001
Ammonia (NH3-N), mg/L 10 2
Arsenic, mg/L 0.5 0.05
pH 6.5-8.5 6.5-8.5
Environmental Sustainability
Ontario Graphite is committed to the environmental sustainability of the Kearney Graphite Mine site.
Waste rock generated while mining may be reused as a source of aggregate for ongoing construction projects
Two additional mine heat sources will be reused:
Radiated heat from generators will be re-directed into the mill building to supply heat for the employees and equipment during winter operation
Exhaust heat will be re-directed and reused in the important graphite drying process
85 per cent of the water used is recycled in the milling stage, reducing the need to use clean (untouched) water from the surrounding lakes
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ENVIRONMENTAL AND PERMITTING
Re-commission and Production
Previous Production
Mining and mineral processing operations were undertaken on the property
from May 1990 through May 1994
The planned mine production and raw ore throughput rate of 3,000 tonnes (3,300 tons)
per day, or one million tonnes per year, was never attained due to a number of design and
operational bottlenecks in processing facilities.
These bottlenecks are known and well understood by the Company, and the start-up
capital and pre-production plan for the processing plant specifically target these
bottlenecks for correction and elimination in order to improve future plant efficiencies.
At the time that it was closed in May 1994, the Mine had achieved an annual run-rate of
10,000 tonnes per year at a weighted average of 94.6% Cg.
Based on test work and historical production records from 1994 operations, the Company
anticipates a Cg recovery in the concentrate of 85% during the first two years and 90%
thereafter, with a 94-97% Cg content in all fractions of the graphite mineral concentrate
product.
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RE-COMMISSION AND PRODUCTION
Kearney Mine Project Ontario Graphite Ltd
PROCESS FLOW DIAGRAM
Jaw Crusher
Primary Screen
SAG Mill
Rougher Flotation
Ball Mill
Secondary Screen
1st Cleaner Flotation
2nd Cleaner Flotation
Concentrate Thickener
Belt Filter
Torbed Dryer
Dryer Bagfilter
Sifter Screens
(-150µm) (-180µm +150µm) (-300µm +180µm) (+300µm)
Concentrate Baggers
Tailings Pond
Mineral Process Primary Equipment 18
RE-COMMISSION AND PRODUCTION
Area Previous Operations Refurbished Mill Circuit
Crusher 16' x 5' apron feeder Substituted with ramp
Crusher Allis Chalmer's 60"/48" jaw crusher Same - refurbished
SAG Mill 2 - vibrating syntron feeders 2 - Telsmith 36” x 15' apron
feeders
SAG Mill 18' x 9' Koppers SAG mill (removed) New 18' x 9' Bateman SAG mill
SAG Mill 5' x 16' Tyler Ty-level wet screen (removed) 3 - New Derrick screens
Flotation 2 - 144 cu ft rougher column cells Same – refurbished
Flotation 1 - 144 cu ft cleaner column & 1 36 cu ft cleaner
column Same – refurbished
Flotation 8' x 12' regrind ball mill Same – refurbished
Flotation 2 - 4' x 12' Derrick wet screens 3 - 4' x 12' Derrick wet screens
Dewatering Thickener tank - width 26' height 14' Same - refurbished rakes
Dewatering Vacuum pump filter (removed) New filter – Belt filter
Dewatering Wyssmount dryer 24'H x 17'Dia (removed) New dryer – Torbed Dryer System
Product
Sizing True-Balance sifter screens (removed)
New sifter screens – Great
Western Manufacturing Sifter
Screens
Packaging Paper and bulk baggers (removed) Bulk bagger - to be selected
Core Team Members: Management and Advisors 19
RE-COMMISSION AND PRODUCTION
Bobby Cooper Director Mining industry executive with
40+ years of diversified multi‐site experience with open pit and underground mines involving base metals, precious metals, coal, diamonds and uranium, worldwide
President & CEO Kennecott Corporation
Rio Tinto Global Mining Executive Various senior positions with
ARCO Minerals, Kennecott Corp., Arch Minerals and Kerr McGee Coal Corporation
Jerry Janik
General Manager
20+ years industrial experience
including 7 years as GM of
industrial mineral operations
Area Operational Manager,
Carmeuse Industrial Sands
Plant Manager, UNUMIN
Canada’s Nepheline Syenite
Operations
Plant Superintendent and
Supervisory positions plus Quality
Control Supervisor for industrial
minerals plants
Duel degree in Geology and
Mineral Engineering
Stantec Consulting Closure Plan and Environmental Permitting Bill Steibel – Senior VP Sheldon Smith – Senior Hydrologist Piero Amodeo – Regulatory specialist; ex-MOE (18 years) Greg Crooks – Principal, Environmental Services Miller Thompson Canadian Legal Counsel Dan Rothberg – Partner; mining industry specialist Sandra Gogal – Leading expert on First Nations consultation John Tidball – Certified specialist on environmental law
Edelman Canada Public Relations Cameron Summers –VP, Public Affairs Sarah McEvoy – Senior Account Director Melissa Zanette – Senior Account Manager
Mike Coscia
Senior Vice President, Sales
and Marketing
20+ years of industrial minerals
marketing experience to Ontario
Graphite.
Sales Director America's at SGL
Carbon and has also worked
with
Cabot Corporation, H.C. Starck
and Exxon Chemical
Corporation
Master's of Science degree in
Chemical Engineering from
Northeastern University.
Ellerton Castor
CFO and Chief Administrative
Officer
15+ years in investment banking
and M&A advisor to variety of
companies in the U.S., Canada,
Europe and S.A.
Founder and Managing Director
Panterra Partners, LLC
Managing Director, Latin
America M&A and Merchant
Banking Banc of America
Securities
Senior Associate Corporate
Finance & M&A Morgan Stanley
Significant Competitive Advantages
During Production
High Quality and Full Service Capability: Based on past operations, sales records and laboratory
testing, the Kearney Mine will produce large flake, high quality, low impurity, commercially attractive
graphite product. In addition, the Company will be one of only two producers of natural flake graphite in
North America.
Direct Marketing to End-Users: Because of product quality, the Company will have the ability and
intends to sell directly to end-user customers rather than through blenders or brokers, thus allowing
better response to customers’ needs, stronger customer relations and higher margins.
Limited Direct Competition: There is no current natural graphite production in the U.S. and none in
foreseeable future. Currently, there is minimal production from two existing producers in Canada, both
nearing depletion of reserves. Two recently announced graphite projects in Canada are both still in pre-
feasibility stage and have not yet fully proven out their resource.
Competitive Operating Cost: Production costs will be very competitive with alternative producers’
delivered cost and the Mine will be better able to withstand price fluctuations in marketplace.
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RE-COMMISSION AND PRODUCTION