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GRAPHITE ONE PROVIDES INAUGURAL PEA’S POST‐TAX RESULTS
January 30, 2017 – Vancouver, B.C. – Graphite One Resources Inc. (GPH: TSX‐V, GPHOF: OTCQX) ("Graphite
O n e " , “ G P H ” o r t h e " C o m p a n y " ) p r e s e n t s t h e p o s t ‐ t a x f i n a n c i a l results from its Preliminary Economic
Assessment ("PEA") that the Company announced on January 25, 2017 for the development of its 100%‐owned
Graphite One integrated, manufacturing project (the “Project”).
At the request of IIROC the Company is clarifying the following disclosure from its news release disseminated
on January 25, 2017.
The PEA projects a Net Present Value (“NPV”) for the Project on a pre‐tax basis of US$1,037 million using a 10%
discount rate, with an Internal Rate of Return (“IRR”) of 27%. On a post‐tax basis, the NPV is projected at
US$616 million using a 10% discount rate, with an Internal Rate of Return (“IRR”) of 22%. Annual production
of CSG and other graphite specialty materials is projected at 55,350 metric tonnes when full production is
reached in Year 6. A minimum of 40 years of indicated and infe rred resources grading 7% Cg (graphite) have
been identified in the target exploitation zone to sustain full scale operations, notwithstanding additional
potential resources immediately outside the target zone or the broader Graphite Creek property.
Summary of the Project’s Pre‐Tax Financial Results (US$ Million)
NPV of Net Cash Flow at 10% Discount Rate $1,037
IRR 27%
Payback Period in Production Year 4
Summary of the Project’s Post‐Tax Financial Results (US$ Million)
NPV of Net Cash Flow at 10% Discount Rate $616
IRR 22%
Payback Period in Production Year 4
The Project is conceived as a vertically integrated manufacturer of high grade Coated Spherical Graphite
(“CSG”) with mining and processing facilities near Nome, Alaska and advanced material processing done at a
dedicated graphite product manufacturing facility. Washington S t a t e i s a p o t e n t i a l s i t e f o r t h e p r o d u c t
manufacturing facility due to its established maritime links with Alaska, the availability of low‐cost power,
developed industrial sites and proximity to markets. The PEA w as prepared by the independent engineering
firm, TRU Group Inc. of Toronto, Ontario, under Canadian Securi ties Administrators' National Instrument 43‐
101 – Standards of Disclosure for Mineral Projects ("NI 43‐101").
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The post‐tax analysis assumes th e Project is based on 100% equi ty financing and its ownership and locations
make US federal and Alaska and Washington state taxes applicable. As the Project advances and the graphite
mining, processing and manufacturing plans are optimized, the Company will commission an accounting, legal
and tax study to determine the optimal corporate structure and economics.
The financial analysis used a 10% discount rate for the NPV and IRR analysis in the PEA and considers it the
a p p r o p r i a t e r a t e t h a t r e f l e c t s t h e m e a s u r e o f r i s k a t t h i s s t a ge o f t h e P r o j e c t . I n a n e f f o r t t o p r o v i d e
comparative results with others in the industry with similar stage projects, the Company also presented a NPV
and IRR using an 8% discount rate in the press release of Janua ry 25th, 2017. The Company emphasizes that
the 10% rate be used in evaluating the PEA.
QUALIFIED PERSONS
The independent qualified persons responsible for preparing the Graphite One PEA are R. James Robinson,
P.Geo., Ioannis (John) Roumeliotis, Ing., and Maureen Paterson, P. Eng. of TRU Group Inc. They have reviewed
and approved the contents of this press release.
David R. Hembree, C. P. Geo., the General Manager of Operations for Graphite One Alaska Inc., is the
company’s designated qualified person for this press release within the meaning of NI 43‐101 and has reviewed
and validated that the information contained in the release is consistent with that provided by the independent
qualified persons responsible for the PEA.
About TRU Group
TRU Group Inc are engineers, managers, planners and integrators focused on technology intensive industry.
The firm has a long standing strong capability in battery materials from resource through to end‐products
and have completed numerous assignments for several clients. More information is available on the TRU
Group website trugroup.com.
About Graphite One Resources Inc.
GRAPHITE ONE RESOURCES INC. (GPH: TSX‐V; GPHOF: OTCQX) continue s to develop its Graphite One Project
(the “Project”), whereby the Company could potentially become the dominant American producer of high
grade Coated Spherical Graphite (“CSG”) that is integrated with a domestic graphite resource. The Project is
proposed as a vertically integra ted enterprise to mine, process and manufacture high grade CSG primarily for
the lithium‐ion electric vehicle battery market. Graphite mine ralization mined from th e Company’s Graphite
Creek Property would be processed into concentrate at a graphite processing plant. The processing plant
would be located on the Graphite Creek Property situated on the Seward Peninsula about 60 kilometers north
of Nome, Alaska. CSG and other value‐added graphite products, would be manufactured from the concentrate
at the Company’s proposed graphite product manufacturing facility, the location of which is the subject of
further study and analysis.
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T h e G r a p h i t e C r e e k P r o p e r t y c o n t a i n s A m e r i c a ’ s l a r g e s t k n o w n l arge flake graphite deposit. Resources
identified to date include 10.32 million tonnes of indicated resources grading 7.2 percent graphitic carbon
(“Cg”) and 71.24 million tonnes of inferred resources at 7.0 percent Cg identified, using a 6% Cg mining cut‐off
grade. Work on the Graphite Creek Property is progressing through the evaluation phase with environmental
baseline sampling programs and engineering studies in progress. Mineral beneficiation testing, mine,
infrastructure and processing plant design work, and a resource development drilling program are expected to
be undertaken in the months ahead.
ON BEHALF OF THE BOARD OF DIRECTORS
“Anthony Huston” (signed)
For more information on Graphite One Resources Inc. please visit the Company’s website,
www.GraphiteOneResources.com or contact:
Anthony Huston
CEO, President & Director
Tel: (604) 697‐2862
Email: [email protected]
Investor Relations Contact
1‐604‐684‐6730
CAUTIONARY STATEMENT
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
This release includes certain statements that are deemed to be forward‐looking statements. All statements in this release, oth er than
s t a t e m e n t s t h a t a r e c l e a r l y h i s t o r i c a l i n n a t u r e , a r e f o r w a r d ‐ looking statements. Generally, forward‐looking information can b e
identified by the use of forward ‐looking terminology such as “p roposes”, “expects”, or “is expe cted”, “scheduled”, “estimates”,
“projects”, “intends”, “assumes”, “believes”, “indicates” or variations of such words and phrases that state that certain acti ons, events
or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.
Forward‐looking information in this release includes, but is not limited to, statements regarding resource estimates and potential
mineralization, the interpretation and actual results of curren t exploration activities, changes in project parameters as plan s continue
to be refined, the actual ability to produce spherical graphite, ultimate further and final results of additional test‐work, estimated capital
and sustaining costs and the availability of equipment, labour and resources required, the anticipated applications of graphit e in high‐
tech, clean tech, energy storage and national security applicat ions and all other anticipated applications, international dema nd and
ability to transport and enter into such markets, the results of the TRU Group’s study being accurate regarding the characteristics of the
Graphite Creek mineralization, exploration drilling, exploitati on activities and events or developments that the Company expec ts, the
sustainability and ultimate environmental effects of spherical graphite, future joint ventures and partnerships, future prices of graphite,
possible variations in grade or recovery rates, are all forward ‐looking statements. Although the Company believes the expecta tions
expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from those in the forward‐looking statements. Factors that could
cause actual results to differ ma terially from those in forward ‐looking statements include: (i) volatile stock price, (ii) the results of the
product development test work may not be indicative of the advancement of the project as anticipated, or at all, (iii) market prices, (iv)
exploitation and exploration successes, (v) continuity of mineralization, (vi) uncertainties related to the ability to obtain necessary
permits, licenses and title and delays due to third party oppos ition, (vii) changes in governmen t policies regarding mining an d natural
resource exploration and exploitation, (viii) competition faced in securing experienced personnel, access to adequate infrastr ucture to
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support mining, processing, development and exploration activities and continued availability of capital and financing, and (ix) general
economic, market or business conditions. Readers are cautioned not to place undue reliance on this forward‐looking information, which
is given as of the date it is expressed in this press release, and the Company undertakes no obligation to update publicly or revise any
forward‐looking information, except as required by applicable securities laws. For more information on the Company, investors should
review the Company's continuous disclosure filings that are available at www.sedar.com.
Estimates of mineralization and other technical information inc luded or referenced in this press release have been prepared in
accordance with NI 43‐101. The definitions of proven and probable reserves used in NI 43‐101 differ from the definitions in SEC Industry
Guide 7. Under SEC Industry Guide 7 standards, a "final" or "ba nkable" feasibility study is required to report reserves, the t hree‐year
historical average price is used in any reserve or cash flow an alysis to designate reserves and the primary environmental anal ysis or
report must be filed with the appropriate governmental authority. As a result, the reserves reported by the Company in accordance with
NI 43‐101 may not qualify as "reserves" under SEC standards. In addition, the terms "mineral resource", "measured mineral reso urce",
"indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by NI 43‐101; however , these
terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements
filed with the SEC. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Investors are cautioned
not to assume that any part or all of the mineral deposits in t hese categories will ever be converted into reserves. "inferred mineral
resources" have a great amount of uncertainty as to their exist ence, and great uncertainty as to their economic and legal feas ibility. It
cannot be assumed that all or any part of an inferred mineral r esource will ever be upgraded to a higher category. Under Canad ian
securities laws, estimates of inferred mineral resources may no t form the basis of feasibility or pre‐feasibility studies, exc ept in rare
cases. Additionally, disclosure of "contained graphite (Cg) tonnes" in a resource is permitted disclosure under Canadian securities laws;
however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place
tonnage and grade without reference to unit measurements. Accordingly, information contained or referenced in this press release
containing descriptions of the Company's mineral deposits may not be comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements of United States federal securities laws and the rules and regulations thereunder.