Northern Graphite Corporation (NGC:TSXV, NGPHF:OTCQX) The New Strategic Mineral

This Presentation may contain “forward-looking information” which may include, but is not limited to, statements with respect to: timing of the receipt of governmental approvals and/or acceptances; targets, estimates and assumptions in respect of production and prices; amount and type of future capital expenditures and capital resources; mineral reserves and mineral resources; anticipated grades; recovery rates; future financial or operating performance; costs and timing of the development of new deposits; costs, timing and location of future drilling; production decisions; costs and timing of construction; operating expenditures; costs and timing of future exploration; and environmental and reclamation expenses. There can be no assurance that future required regulatory approvals will be obtained or that anticipated transactions or proposed work and construction programmes will be completed satisfactorily. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries and/or its affiliated companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of the applicable public record document which the information is derived from and the Company has disclaimed any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

Unless indicated otherwise, all dollar figures are in U.S. dollars.

Forward Looking Statements

This presentation and other information released by the Company uses the terms “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reserves do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Inferred resources are in addition to measured and indicated resources. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained herein or in other information released by the Company in the past and in the future, have been or will be prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. The requirements of NI 43-101 are not the same as those of the SEC.

CAUTIONARY STATEMENT REGARDING MINERAL RESOURCES

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The Newest Strategic Mineral

• Growing industrial demand from emerging economies

• Demand growth from new applications (Li ion batteries, etc.)

•  Chinese supply concerns (70-80% of world production)

•  EU and USA have named graphite a supply critical mineral

• Only one operating graphite mine in North America

•  The leading undeveloped graphite deposit - Large flake, high purity, scalable

•  Located in Canada, close to infrastructure

• Open pit mining & standard metallurgy

•  BFS completed and permitting expected 1Q-2013

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•  One of two natural carbon polymers (diamonds)

•  Highest natural strength/stiffness of any material

•  Corrosion and heat resistant

•  Excellent conductor of heat and electricity

•  High lubricity

•  Lightest weight of all reinforcements

•  Almost no recycling or substitution

Graphite 101

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•  5% annual growth rate this decade –  Driven by Asian steel and auto markets –  Automotive accounts for 14% of consumption

What is Graphite Used For?

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Nickel 1,770,000

Graphite 1,019,000 (50% flake, 50% amorphous)

Molybdenum 250,000 REE (oxides) 124,000 Cobalt 98,000 Tungsten 72,000 Vanadium 60,000 Uranium 50,000 Lithium 34,000

(tpy)

Large and Growing Industrial Market

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•  Four emerging technologies with potential to use multiples of current annual production –  Lithium ion batteries –  Fuel cells –  Pebble bed nuclear reactors –  Vanadium redox batteries

•  All have commercial versions now •  Future demand not dependent on one technology

Green Energy Technologies

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Lithium Ion Batteries •  Graphite is the anode material - no substitutes

•  There is 12 times more graphite than Li in a Li ion battery and it takes 30-40 times more graphite to manufacture them due to losses during processing

•  Current Li ion battery demand 30,000 tpy and growing 20-30% annually

- Replacement of traditional battery technologies

•  Li ion batteries in cars will lead to rapid demand growth (2kg of graphite in HEV, 25-50kg in EV)

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How Much Graphite is Required for EVs/HEVs?

1% 5% 10% 15% 20%

5% 286 637 1,082 1,520 1,965

10% 479 836 1,274 1,719 2,163

15% 678 1,029 1,473 1,918 2,356

20% 877 1,228 1,672 2,111 2,555

25% 1,070 1,310 1,865 2,310 2,748

EV Market Penetration

HEV Market Penetration

(000 tonnes)

-one tonne of Li carbonate equals 0.1879 tonnes of Li metal -one tonne of Li metal requires 10.375 tonnes of graphite -3 tonnes of graphite flake required to make 1 tonne of spherical graphite for Li ion batteries -THIS CHART PREPARED BY NORTHERN GRAPHITE-re: lithium carbonate demand (Cannacord)

Current annual flake graphite production is 560,000 tonnes

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•  All major car companies are working on fuel cell vehicles (which contain 80kg of graphite)

•  Fuel Cell Buses running with centralized fueling stations - London, Vancouver, Beijing, California

•  Walmart uses fuel cells to generate power at 17 California retail sites, as well as operating fuel cell powered forklifts at warehouses

Fuel Cell

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•  leading energy storage system for renewable energy sources such as wind/solar

•  virtually unlimited storage capacity, long battery life, low maintenance requirements, nominal environmental footprint.

•  300 tonnes of graphite per 1,000MW VRB

Vanadium Redox Batteries

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Pebble Bed Nuclear Reactors

•  Smaller, safer, less costly to permit, build and operate

•  Fuel is uranium embedded in graphite balls - 3,000t of graphite to start, 600-1,000 tpy per 1,000MW

•  China has operating prototype, and state-owned Huaneg Group is building two pebble-bed reactors of 200MW each

-One of top 16 priorities in 2006-2020 Plan

-30 planned by 2020

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•  Maximize value of natural resources

•  More professional management of resources

•  Rationalization and consolidation of industry

•  Improvement in labor and environmental standards

•  Reduction in illegal mining

•  Emphasis on value added processing

•  Increased costs due to currency appreciation

Chinese Natural Resource Strategy

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•  Existing mines older and deeper •  Producers call for REE type protection •  State owned amorphous graphite

monopoly formed -210 mines consolidating into 20 -production decline from 600,000 to 510,000tpy

•  Strict regulations imposed on both existing and new graphite mines

•  Government has banned new graphite plants in Quindao Province

•  20% export duty, 17% VAT, export license required

Chinese Graphite Industry

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Source: Industrial Minerals Natural Graphite Report 2012

Graphite Prices + projection

 

 

Expected  production    

Current  price  level  

NGC  cost  

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80-85% C 90% C 94-97% C

Extra Large (+50) - - +$1,800

Large (-50 +80) - $1,200-1,600 $1,400-1,800

Medium (-80 +100) - $950-1,200 $1,050-1,400

Fine (-100) - $850-1,050 $900-1,200

Amorphous powder $600-800 - -

Source: Industrial Minerals Magazine

Premium Price for Size/Purity (US$/tonne)

Bissett Creek

Concentrate Purity

Flake Size

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•  Used to make the anodes in Li ion batteries

•  Made from concentrate produced by mine

•  Concentrate must be micronized, rounded and purified to 99.95%C

•  NGC is developing proprietary process and has successfully upgraded its graphite to spherical and tested in batteries

•  Spherical graphite sells for $6-8,000 per tonne if coated, average Chinese export price for uncoated, $4,000 per tonne

•  Objective is to provide Li ion battery manufacturers with a stable, secure source of supply that is produced in an environmentally acceptable manner

Spherical Graphite – Value Added Processing

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•  100km east of North Bay, Ontario, Canada

•  Easily accessible, 17km from Trans-Canada hwy, close to infrastructure

•  Close proximity to major North American steel and automotive markets

•  Freight cost advantage, one day delivery vs six weeks or more from China

Bissett Creek Project

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• 1989 and 2012 bankable Feasibility Studies • 26M tonnes of indicated and 55M tonnes of inferred resources at 0.986Cg cut-off (90 year mine)** • Probable Reserve 19M tonnes @ 1.89%C (excl. inferred resources)

Large Scalable Graphite Resource

** Mineral resources are not mineral reserves and do not have demonstrated economic viability.

2011  Updated  Mineral  Resources  (Diluted)**       Indicated   Inferred  

%Cg  Cut-­‐off  

Tonnage  (metric  tons)  

Cg(%)    by  

LECO  In  Situ  Graphite  (metric  tons)  

Tonnage  (metric  tons)  

Cg(%)    by  

LECO  In  Situ  Graphite  (metric  tons)  

0.986   25,983,000   1.81   470,300   55,038,000   1.57   864,100  

1.227   24,588,000   1.85   454,900   50,472,000   1.62   817,600  

1.50   19,954,000   1.99   397,100   33,672,000   1.81   609,500  

1.75   16,031,000   2.34   375,100   21,417,000   2.21   473,300  

2.0   11,921,000   2.50   298,000   14,584,000   2.37   345,600  

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•  Deposit at surface, no overburden •  Continuously mineralized throughout •  Low waste-to-ore ratio

•  Conventional open pit mining

Typical cross-section of Bissett Creek orebody

Simple Mining

100m

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•  Successful 130MT bulk sample and pilot plant test, December 2012

•  Variability testing completed

•  Column flotation processing (92-95% recoveries)

•  Low crushing and grinding costs

•  High recovery of large flakes

•  High purity concentrate

Simple Metallurgy

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Bissett Creek Production

• 20% +32 mesh XXL flake 98%C

• 35% +50 mesh XL flake 97%C

• 35% +80 mesh large flake 96%C

• 10% +150 mesh medium/fine flake 94%C

Large Flake, High Purity Concentrate

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•  C$102.9M capital cost (incl. $9.2M contingency)

•  2,500 tpd plant capacity

•  19,000 tpy of graphite production (1st five years)

•  0.50 waste-to-ore ratio

•  Cash cost of $851/t of concentrate (1st five years)

•  23 year life-of-mine (excludes 50+ years of

inferred resources)

BFS Parameters

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•  Upgrading inferred resources to indicated

- increase grade

- reduce costs

- extend mine life

•  Owner mining will reduce costs to under $800/t of graphite concentrate

•  Value added processing (spherical graphite-batteries)

•  Mine expansion (90 year mine life)

Upside Potential

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2012 Drill Program

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Pro Forma Economics*

Graphite Price (US$/t) $2,800 $2,100 $2,100* $1,800*

Pre-tax (millions)

Avg annual cash flow (1st 5yrs) $34.0 $21.0 $26.0 $19.9

IRR (%) 25.9 15.6 22.7 17.1

NPV @8% $182.8 $72.0 $169.0 $104.7

After-tax (millions)

Avg annual cash flow (1st 5yrs) $30.8 $21.0 $25.0 $19.9

IRR (%) 22.4 13.7 19.6 14.8

NPV @8% $125.0 $47.0 $110.0 $65.4

*with project improvements identified in BFS, no value added processing or mine expansion

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Approval of Mine Closure Plan 1Q-2013

Start detailed engineering & design 1Q-2013

Financing 2Q/3Q-2013

Start Construction 3Q/4Q-2013

Commercial Production 4Q-2014

Timeline to Production

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Northern Graphite Share Structure

Shares Outstanding 49,081,281

Options & Warrants 4,071,480

Fully-Diluted 53,152,761

Management & Insiders 10%

Geologic Fund 10%

•  $8.1 million in cash, no debt

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•  $17.5M lease financing with Caterpillar

•  $40-50M in debt financing

- Caterpillar to participate

•  Equity contribution from Strategic Partner?

•  Sale of royalty + equity investment?

•  Small equity private placement?

Mine Financing

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Gregory Bowes B.Sc (geology), MBA CEO and Director Formerly Senior VP, Orezone Gold Corporation

Don Baxter P. Eng President Formerly President, Ontario Graphite Corporation

Stephen Thompson CPA, CA Chief Financial Officer CPA (Illinois) Formerly Vice President Finance, Ottawa Hydro Limited

Ron Little P. Eng Director President and CEO, Orezone Gold Corporation (ORE:TSX) Iain Scarr B.Sc (geology), MBA Director Former Commercial Director, Rio Tinto industrial minerals division, VP Corporate Development, Lithium One

Jay Chmelauskas MBA Director President/Director, Westerm Lithium Corp.

K. Sethu Raman PhD Director Independent Mining Consultant

Don Christie CA Director Former CFO, Continental Gold

George Hawley Technical Advisor 40 years of experience in industrial minerals R&D, market analysis and development

Experienced Management & Board

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ü  Large, growing industrial market ü  Demand growth from emerging applications ü  Supply concerns with China ü  Largest flake, highest purity deposit ü  3-4x scalable production ü  Close to infrastructure/markets/transportation ü  Standard mining & metallurgy ü  BFS completed, full permitting early 2013 ü  18 months to build mine

Value Proposition

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•  Commence detailed engineering and design

•  Receive major permit for construction

•  Drill results from 2012 infill program

•  New resource calculation

•  Update BFS economics

•  Further spherical graphite test results

•  Strategic partners/offtake agreements

•  Financing/Construction/Production

•  Mine expansion

What’s Next?