March 7, 2013 (Source: Marketwire) Ottawa, ON — Northern Graphite Corporation (TSX VENTURE:NGC) is pleased to announce very positive results from a 61 hole, 3,425 meter drilling program on the Bissett Creek graphite project. The drill program was designed to infill a significant portion of inferred resources with the objective of upgrading them to the measured and indicated categories. In addition, the potential for higher grade zones to extend outside of the current resource model was tested. All 61 holes returned widths and grades as good as or better than those in the recently completed bankable Feasibility Study (“FS”).
A new resource estimate based on the drill results is expected to be completed by the end of March. The existing mine plan will then be revised and FS economics updated and released within a couple weeks thereafter. The current mine plan includes 1.5 million tonnes of inferred resources that are treated as waste with zero grade and it excludes a substantial amount of higher grade inferred resources. It is anticipated that the revised mine plan will show an increase in grade, a reduction in costs and a much longer mine life. The resource update and revised FS will be completed by AGP Mining Consultants.
Gregory Bowes, CEO, commented that: “the Bissett Creek project has low engineering, technical and political risk, reasonable capital costs and competitive operating costs. It is expected to produce the highest quality concentrates in the industry.” He added that “Once the FS is updated, we anticipate finalizing discussions with strategic partners and putting the mine financing package together.”
The current resource estimate consists of 25,903,000 tonnes of indicated resources and 55,038,000 tonnes of inferred resources at a 1% cut-off grade (mineral resources are not mineral reserves and do not have demonstrated economic viability). The FS estimated a probable reserve of 23 million tonnes at a grade of 1.89% Cg based on indicated resources only. Thirteen infill holes were drilled within the FS pit and returned significant intersections with grades higher than the average resource grade. Almost all the holes drilled outside the FS pit also intersected higher grades (see table and map). Many holes also contain lower, but still ore grade intersections, higher up in the hole. This material will likely be stockpiled and processed later in the mine life.
For a complete list of drill holes click here
All samples from the drill program were collected and supervised by Mehmet Taner, P.Geo., PhD and a QP, and delivered to SGS Mineral Services (Toronto). SGS is an ISO/IEC 17025 accredited analytical laboratory. The samples were ashed at 500°C to remove organic carbon. Carbonate carbon was estimated on one aliquot of the ashed sample using dilute perchloric acid to release CO2 which was then measured by a Coulometric analyzer. A second aliquot was used to estimate total carbon content. The second aliquot was combusted at 950°C and the carbon was converted to CO2 and measured by the coulometer. Graphitic carbon was calculated as follows: percentage of graphitic carbon (“Cg”) = percentage of total carbon in ashed sample minus percentage of carbon as carbonate in ashed sample. For QA/QC purposes, the Company inserted a total of 40 standards (one every 35th to 40th sample), intermittent with 19 blank samples. A field duplicate sample was generally taken in every hole (1/4 of the core) within well mineralized sections. A total of 29 duplicate samples were taken.
Don Baxter, P.Eng, President of the Company and a “Qualified Person” under 43-101, is responsible for and has reviewed and approved the technical content of this press release.
The Graphite Market
China currently produces 70% of the world’s graphite and an export tax and a licensing system have been instituted to restrict exports and encourage value added processing in China. Recently, the Chinese government banned any new plants, and imposed strict environmental regulations on existing plants, in the historic graphite mining and processing area of Qingdao. This follows calls for REE type protection and quotas from Chinese producers, the formation of a state owned amorphous graphite monopoly that is consolidating 210 amorphous graphite mines down to 20 and reducing production capacity from 600,000 to 510,000 tonnes per year, and the implementation of new rules and standards which will make graphite mines much more difficult to build and operate. No new graphite mines were built during the past economic cycle and the supply situation will become more acute as economic growth recovers. Both the European Union and the United States have declared graphite a supply critical mineral.
Northern Graphite is a Canadian company that has a 100% interest in the Bissett Creek graphite deposit located in eastern Ontario and is well positioned to benefit from the favourable supply/demand outlook for graphite. Northern is the only graphite company to have completed a bankable Feasibility Study and has a large flake, high purity, scalable deposit that is located close to infrastructure and has reasonable capital costs and very competitive operating costs.
This press release contains forward-looking statements, which can be identified by the use of statements that include words such as “could”, “potential”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “likely”, “will” or other similar words or phrases. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. The Company does not intend, and does not assume any obligation, to update forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by applicable securities laws. Readers should not place undue reliance on forward-looking statements.
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