Alabama Graphite: Reality in the Battery Space, page-16

Environmentally Responsible and Sustainable Purification Process; Exceeds Nuclear Graphite Purity Requirements


The Energy Graphite™ Company

Sourced and Manufactured in the United States of America


TORONTO, ONTARIO--(Marketwired - Feb. 17, 2017) - Alabama Graphite Corp. ("AGC" or the "Company") (TSX VENTURE:CSPG)(OTCQB:CSPGF)(FRANKFURT:1AG) is very pleased to announce that it has achieved 99.99997% Carbon total percentage by weight ("wt% C") purity from its sourced-in-USA graphite from its flagship, 100%-owned Coosa Graphite Project - located in Coosa County, Alabama, USA - via the Company's propriety, low-temperature thermal purification process. In addition to these positive ultra-high-purity graphite results, it is important to note that AGC's environmentally responsible and sustainable graphite purification process does not utilize acids that are commonly regarded as dangerous and environmentally harmful (e.g. hydrofluoric acid - as is commonly used in Chinese graphite production [source: Industrial Minerals Data, 2015] - hydrochloric acid, sulfuric acid, nitric acids, or alkali roasting, caustic-soda roasting, etc.), nor the need for copious amounts of scarce, clean water or costly, energy-intensive high-temperature thermal upgrading.

A total of 16 pounds ("lbs.") of 96.7 wt% C graphite concentrate was shipped from the Company's multi-ton Coosa Graphite Project Pilot Plant concentrate stockpile (please refer to the February 3, 2016 announcement, 'Alabama Graphite Corp. Reports Positive Pilot Plant Test Results for Coosa Graphite Project in Coosa County, Alabama, USA') to AGC's Coated Spherical Purified Graphite ("CSPG") laboratory in the United States as the feedstock for the purification trials. The purpose of the purification trials was to further demonstrate the efficacy of the Company's low-temperature thermal purification process, as well as to provide precursor material to manufacture and produce the Company's core product, CSPG - identified by the ULTRACSPG™ trademark, the very first trademarked sourced-in-USA and manufactured-in-USA natural battery-ready graphite for use in lithium-ion ("Li-ion") batteries - as well as battery-grade high-conductivity enhanced graphite products, including, Purified Micronized Graphite ("PMG"), Expanded Graphite ("EXDG"), and Delaminated Expanded Graphite ("DEXDG") for Li-ion battery cathode applications. DEXDG is a form of processed natural crystalline flake with significantly improved electrical conductivity in electrode matrixes. Additionally, DEXDG is preferable to conventional air-milled flake and/or premium quality synthetic graphite when higher conductivity properties are desired, such as applications at high discharge rates. EXDG is a precursor material to DEXDG and is synthesized from purified flake graphite by the Company's proprietary technology. As a result of its superior performance in batteries as a conductivity enhancement diluent, DEXDG is preferred over competing grades of flake and synthetic graphite currently being used for this application. PMG and DEXDG are used as conductivity enhancement additives in secondary (rechargeable) Li-ion batteries, primary (non-rechargeable) lithium batteries and alkaline batteries. AGC currently anticipates expanding its planned product line to include DEXDG additional battery-grade high-conductivity enhanced graphite products.
As indicated in the Company's November 30, 2015 announcement, 'Alabama Graphite Corp. Announces Positive Preliminary Economic Assessment for Coosa Graphite Project in Coosa County, Alabama, USA; Files Completed PEA NI 43-101 Technical Report', AGC's business model is predicated on the eventual downstream production of CSPG. However, in the process of producing CSPG, some non-spherical material will also be produced. The non-spherical material produced is considered an off-spec CSPG byproduct, yet 100% of byproduct produced can be utilized for battery-grade conductivity enhancement applications. The Company has demonstrated its ability to segregate the non-spherical material, classify, and further process into specialty battery-grade conductivity enhancement graphite products, specifically, PMG and DEXDG. In other words, AGC holds the potential to effectively utilize 100% of its secondary processed production. However, it is important to note that prior to commencing with commercial production, AGC must first complete a positive Feasibility Study, secure the required financing and then construct a mine and downstream CSPG processing and production facilities. It should be further noted that no supply agreement exists today with respect to U.S. Department of Defense ("DoD") Li-ion battery manufacturers or contractors.

Note: AGC completed its Preliminary Economic Assessment ("PEA") for the Coosa Graphite Project on November 27, 2015. A PEA is not a Feasibility Study. The PEA is preliminary in nature, that it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these mineral resources will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

A total of 10 CSPG scientists contributed to this purification project for AGC - consisting of three PhD scientists and seven battery materials engineers working in the Company's dedicated, battery materials research laboratory - under AGC Chief Executive Officer Donald Baxter's and Director of Technology George C. Hawley's direction and supervision. For reasons of commercial confidentiality, AGC will not identify the arm's length, U.S.-based, independent battery anode materials laboratory utilized for the Company's downstream, secondary processing CSPG production facility (please refer to the Company's January 19, 2016 announcement, 'Independent Test Results: Alabama Graphite Corp. Succeeds in Producing High-Performance Coated Spherical Graphite (CSPG) for Lithium-ion Batteries').

Two separate graphite flotation samples were subjected to AGC's purification process, based on AGC's recently optimized metallurgical flowsheet for secondary processing. The purity results for both samples were measured at 100 wt% C. The graphite was extremely pure in that the amount of mineral impurities were below the limits of detection for a conventional Loss-on-Ignition ("LOI") test. AGC sent the two purified samples to a reputable, independent laboratory that performs Glow Discharge Mass Spectrometry ("GDMS") analysis on carbon. GDMS is a mature, versatile technique for measuring purity, which is widely recognized for being the most precise determination of the concentration of mineral impurities in graphite.

Coosa purified concentrate sample number one recorded a combined total of 1.135 ppm of registered elemental impurities (please refer to Table 1 below, under the subheading 'Coosa Purified Concentrate Sample No. 1 (ppm)'), yielding a purity measurement of 99.9999 wt% C ("6N"). Coosa purified concentrate sample number two recorded a very positive combined total of 0.292 ppm of registered elemental impurities (please refer to Table 1 below, under the subheading 'Coosa Purified Concentrate Sample No. 2 (ppm)'), yielding 99.99997 wt% C ("6N7") purity. The average of these two results is 0.7135 ppm of total registered elemental impurities (please refer to Table 1 below, under the subheading 'Coosa Purified Concentrate Average (ppm)'), yielding a combined average 99.99993 wt% C ("6N3") purity
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Table 1: GDMS Analysis of AGC's Coosa Purified Graphite Concentrates
The following are the results of AGC's GDMS analysis of the Coosa graphite concentrates after undergoing the AGC's low-temperature thermal purification:

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7
0			GDMS Analysis ofAGC's Coosa Purified Graphite Concentrates
1	Trace Mineral Impurities /Key Elements[/B]		Coosa Purified ConcentrateSample No. 1 (ppm)		Coosa Purified ConcentrateSample No. 2 (ppm)		Coosa Purified ConcentrateAverage (ppm)
2	Ag [/B](Silver)		0.002		0.000		0.001
3	Al (Aluminum)		0.002		0.000		0.001
4	As (Arsenic)		0.012		0.000		0.006
5	B (Boron)		0.036		0.062		0.049
6	Ba (Barium)		0.000		0.000		0.000
7	Be (Beryllium)		0.000		0.000		0.000
8	Ca (Calcium)		0.015		0.009		0.012
9	Cd (Cadmium)		0.001		0.000		0.0005
10	Co (Cobalt)		0.007		0.000		0.0035
11	Cr (Chromium)		0.004		0.001		0.0025
12	Cu (Copper)		0.005		0.000		0.0025
13	Fe (Iron)		0.005		0.013		0.009
14	Ga (Gallium)		0.000		0.003		0.0015
15	Ge (Germanium)		0.001		0.000		0.0005
16	Hf (Hafnium)		0.002		0.000		0.001
17	K (Potassium)		0.001		0.003		0.002
18	Li (Lithium)		0.000		0.000		0.000
19	Mg (Magnesium)		0.006		0.000		0.003
20	Mn (Manganese)		0.000		0.000		0.000
21	Mo (Molybdenum)		0.849		0.025		0.437
22	Na (Sodium)		0.000		0.008		0.004
23	Ni (Nickel)		0.000		0.008		0.004
24	P (Phosphorus)		0.003		0.000		0.0015
25	Pb (Lead)		0.007		0.000		0.0035
26	S (Sulfur)		0.038		0.049		0.0435
27	Si (Silicon)		0.019		0.030		0.0245
28	Sn (Tin)		0.000		0.036		0.018
29	Ta (Tantalum)		0.000		0.000		0.000
30	Te (Tellurium)		0.074		0.000		0.037
31	Ti (Titanium)		0.002		0.002		0.002
32	V (Vanadium)		0.033		0.039		0.036
33	W (Tungsten)		0.009		0.002		0.0055
34	Zn (Zinc)		0.002		0.002		0.002
35	Zr (Zirconium)		0.000		0.000		0.000
36	Elemental Impurities Grand Total		1.135(99.99990 wt% C)		0.292(99.99997 wt% C)		0.7135(99.99993 wt% C)

Additionally, the purity levels AGC achieved exceeded the ASTM International ("ASTM") standard for nuclear-grade graphite, which has a purity threshold of 99.995 wt% C and, more importantly, less than 2 parts per million ("ppm") equivalent boron concentration ("EBC"). Based on ASTM standard D7219-08 'Standard Specification for Isotropic and Near-isotropic Nuclear Graphites', AGC's ultra-high-purity graphite exceeds the ASTM specification. Weapons-grade and reactor-grade nuclear graphite must be free of neutron-absorbing materials, especially boron, which has a large neutron capture cross section. The primary demand driver for ultra-high-purity graphite is nuclear applications, specifically Pebble Bed Modular Reactors ("PBMR").

AGC aspires to be an American-sourced-and-manufactured battery-graphite supplier and is confident that ≥ 99.9999 wt% C graphite holds the potential to make a better Li-ion battery; specifically, by allowing for superior electrochemical performance in Li-ion battery anodes compared to ≥ 99.95-wt%-C-pure anode material. Application of ultra-high-purity graphite is expected to result in the reduced rate of self-discharge reactions and consequently, in longer calendar life batteries. As such, AGC intends to conduct electrochemical tests on various purities in anodes, including the ≥ 99.9999 wt% C material. Further, AGC intends to pioneer studies on the role of mineral impurities in graphite and their long-term effect on performance in Li-ion batteries, particularly with respect to their long-term cycling performance. Because AGC believes it will eventually be able to easily, safely, sustainably, and responsibly produce such an ultra-high-purity graphite, management believes there may be potential additional benefits to its use in CSPG for use in Li-ion batteries, such as higher capacity, increased power, longer-lasting (increased calendar life), and safer batteries.

President and Chief Executive Officer Donald Baxter commented, "We have known for some time that AGC's graphite concentrate is quite amenable to secondary processing; however, our low-temperature thermal purification technology has exceeded my high expectations and we are extremely pleased with the results.

"Per our PEA technical report, AGC holds the potential to become a bottom-quartile cost producer of CSPG with the lowest initial CAPEX costs in the space. Sourcing and manufacturing our battery-ready graphite in the contiguous United States represents significant potential competitive advantages. Our commitment to the environment and environmental sustainability is something we take exceedingly seriously, but as these purification results indicate, we can adhere to the most stringent environmental standards without having to compromise whatsoever in terms of product quality," explained Mr. Baxter. "I believe that our ultra-high-purity flake will result in a higher performing CSPG product and, thus, a better battery. We look forward to further testing and investigation. Additionally, we intend to broaden our eventual product catalog to include our DEXDG battery-grade specialty conductivity enhancement materials, in addition to our PMG. We intend to realize 100% of our secondary-processed production, manufacturing in-demand specialty graphite products to sell into battery-graphite markets."
Executive Vice President, Tyler Dinwoodie stated, "Although these ultra-high-purity results are significant, I believe what is perhaps even more important is to understand how said purity results were achieved - without the use of toxic, environmentally harsh acids or costly upgrading with a significant sulfur CO₂ footprint. This is a critical point of differentiation between AGC and others in the space. We can thermally purify at a low temperature, without acid and we can achieve ultra-high-purity results.

"The battery manufacturers we are in discussions with demand a secure and accessible, yet consistently high-performing product; however, the means by which we manufacture our battery-ready CSPG are equally as important," said Mr. Dinwoodie. "Environmental sustainability and responsibility, coupled with complete supply-chain transparency and corporate social responsibility are paramount - both to our potential customers and to AGC."

Readers are cautioned that AGC is not yet in production and there is no guarantee that the Company will advance to full-scale production. If, following the completion of a Feasibility Study - which has not yet been commenced - AGC is able to advance the Coosa Graphite Project into production, the resulting graphite would be sourced from within the contiguous United States and the Company may have a potential competitive advantage over other producers of value-added graphite materials sourced from other countries, regardless of whether said materials were processed and/or manufactured in the United States of America

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