Lac Carheil Graphite Project, Quebec (MLS 100%)

The Company’s flagship Lac Carheil Graphite Project is located in a major graphite province in eastern Quebec, Canada (Figure 1).   The region is well accessed and local infrastructure includes hydroelectric power facilities, an under construction major highway re-route linking the project to Fermont and closely located rail facilities.  The iron-ore mining town of Fermont is situated 20km to the north of the current resources.

The Company has announced exceptionally high-grade and widespread graphite sampling results. These results confirm Lac Carheil’s potential to be one of the world’s most significant high-grade graphite projects which is ideally located to supply battery grade graphite to North American markets.

Of note, the existing Mineral Resources have been derived from less than 3% of the current 36 kms of mapped graphite trends within the project. The current Mineral Resources supported a Scoping Study Project for 15 years of production at 100,000 tonnes per annum of high-grade graphite concentrate.

Metallurgical test work has generated high-grade flotation concentrate results of up to 97% graphitic carbon (Cg). An initial concentrate sample despatched to Germany in 2023, produced battery grade purity spherical graphite (> 99.95% TGC).  Electrochemical (battery charging and durability) tests have confirmed Lac Carheil battery grade graphite is a premium-quality lithium-ion battery anode material with exceptional battery charging capacity and outstanding discharge performance and durability.

Further drilling and development studies are either planned or underway, including a pre-feasibility study on flake-graphite production (conducted by Lycopodium Minerals, Canada) and an options study on premium spherical graphite production for lithium ion battery anodes (with Anzaplan in Germany).

The Company is well progressed on its pathway to develop this critical mineral project in Canada at a time when North American markets are seeking secure long term supplies of domestic graphite.

Figure 1: Lac Carheil Graphite Project, key high-grade graphite trends, regional magnetics and planned drilling locations

Lac Carheil Mineral Resources and Upside Potential

Lac Carheil hosts a high-grade JORC-2012 Mineral Resource of 13.3Mt @ 11.5% graphitic carbon (Cg) which includes a high-grade Indicated Resource of 9.6Mt @ 13.1% Cg and an Inferred Resource of 3.7Mt @ 7.3% Cg (see location, Figure 1).

The Mineral Resource is on the Carheil trend, in the southeast part of the property and represents a zone of only 1.6km that has been trenched and drilled to date, with immediate potential to increase the resource through drilling.

The graphitic zone includes two main, steeply-dipping high-grade graphite horizons that remain open at depth and along strike (see Figure 2, below).

Figure 2: Cross section through the Carheil graphite Mineral Resource zone.

The Company has announced high-grade and widespread graphite sampling results from 80 samples on 10 identified graphitic trends on the property.  The exceptional results include one sample that contains 64.3% graphitic carbon (Cg) (Figure 1).  This sample is from a large electromagnetic (EM) anomaly to the west of the existing Mineral Resource, which continues for over 6km from the West Carheil trend and includes a large number of >20% Cg rock chip results.

The average grade of the 80 new samples is over 11% Cg and the combined strike-length of the identified high-grade graphitic zones is over 36km.

The drilling program plans to grow the existing Mineral Resource and test the regional prospectivity of additional graphite trends.

The key objectives of the new drilling program are:

1. To expand Lac Carheil’s Mineral Resource potential to support a much longer life of project (initially a doubling of life from 15-30 years).
2. To confirm prospectivity of nearby graphite trends to validate overall projects size potential.

Metallurgical Testwork

The Company is well advanced on an extensive PFS level metallurgy program with SGS Canada Inc at their Lakefield Laboratories in Ontario.

Results are being used to inform the design for a flake-graphite concentrate plant and overall PFS Study.

The PFS Study builds upon the company’s Scoping Study on a flake-graphite concentrate plant in 2020 which demonstrated strong cashflow potential at an operating cost estimate of US$433/t and over 100% cashflow margin at an average flake graphite concentrate price of US$885/t.  This is based on production of nearly 100kt per annum of 96.7% Cg flake graphite concentrate over a 14-year period and capital payback within four years.

An outcome of the Metallurgy Program with SGS is to produce a large concentrate sample for further down stream purification and battery anode test work to be conducted by Anzaplan in Germany.  This test program will be compared to the test work previously completed by ProGraphite in 2023 which demonstrated:

• Exceptional Yield of 65% into battery quality spherical graphite (compared to industry average of ~40%) – potential to substantially enhance the economics of spherical graphite production.
• Excellent Tap Density of 0.97 kg/litre (packing qualities of spheroids in lithium-ion battery). Well above acceptable standard of 0.90 kg/litre which results in higher battery capacity.
• Premium Battery-Grade spherical graphite carbon (Cg) purity of 99.96% Cg achieved using the environmentally-sustainable, low-temperature alkaline purification method to reach battery grade with a final acid wash to reach premium battery grade.

It was these results that provided the company the confidence to embark on its current PFS level studies.

Pre-Feasibility Study Advancing for High-Grade Critical Mineral Project

The Lac Carheil graphite project is strategically located in Quebec, Canada, close to the rapidly expanding electric vehicle (EV) and renewable energy battery markets North America.  Both the US and Canadian Governments have declared a number of minerals ‘critical’, including graphite. Both countries are seeking long term secure supplies of domestic resourced critical minerals for their downstream manufacturing facilities.

The current PFS for Lac Carheil is running at the same time as the drilling programs testing the greater resource potential and demonstrating to customers the potential long-life of the project. The PFS is investigating flake-graphite concentrate production potential as well as downstream processing to produce value added products, including premium spherical graphite to supply directly to the North-American lithium-ion battery market where demand for battery-grade graphite is growing rapidly.  The close proximity to these markets provides a strategic advantage over other projects globally.

Figure 3: Lac Carheil flake-graphite to battery anode flow sheet.