Completion Of Preliminary Economic Assessment On Restart of Namibian Operations

OTTAWA - Northern Graphite Corporation reported the completion of a Preliminary Economic Assessment (PEA) for the restart of its Okanjande/Okorusu graphite operation in Namibia. The report, which will be filed on Sedar shortly, concludes that Northern can bring the project back into production by mid 2023 at an average production level of almost 31,000 tonnes per annum of graphite concentrate with a C1 production cost of US$775/tonne. The capital required to initiate production is US$15.1M which includes the installation of a new, two-stage grinding circuit, additional regrind equipment in the flotation plant, and a new tailings storage facility.

The PEA indicates very robust project economics, with a Post Tax IRR of 62%, a Post Tax NPV of US$65M, and a payback of under 2 years based on a 10 year project life and a weighted average graphite price of US$1,500/tonne. The graphite price is based on a concentrate containing11% +50 mesh XL flake, 48% +80 mesh large flake, 24% +100 mesh medium flake and 16% +150 mesh small flake, and having an average carbon content of 96%.

Northern's Namibian operations consist of the Okanjande graphite deposit and the Okorusu processing plant located 70km away. Refurbishment of the Okorusu plant is well underway. The first 20 employees were engaged during June and have been active cleaning the site, stripping equipment, renovating offices and equipping the maintenance workshop. CREO has been appointed as the EPCM contractor, detailed engineering for the new grinding circuits has begun, and long delivery equipment items ordered.

"The results of the PEA confirm our expectations for the project and validate the decision to proceed with the acquisition and re-development at both Okanjande and Okorusu. We are well underway towards achieving our objective of first production within 9-12 months with an excellent workforce that is highly experienced in mining operations and 100% sourced within Namibia. The opportunity to expand production in the future is a huge, added bonus and something that Northern has already started to investigate," said, Dave Marsh, Chief Operating Officer.