4. TSX.V: LLG OTCQX: MGPHF 4
Robust Economics
Feasibility Study Results** (Sept 2015)
Direct CAPEX
Indirect CAPEX
Contingency
$115.6 million
$31.3 million
$14.4 million
Operating Cost (OPEX) $376 / tonne
Average Selling Price (USD $1,465) $1,905 / tonne
Internal Rate of Return (IRR)
44% (pre-tax)
34% (post-tax)
Payback Period
2.3 years (pre-tax)
2.6 years (post-tax)
Project Life
Using only 7% of Measured & Indicated Mineral Resources*
25 years
Net Present Value (NPV) @ 8% disc.
$600M (pre-tax)
$352M (post-tax)
Waste to Ore Stripping Ratio 0.8 : 1
âOur team has been deeply involved
in every aspect of this study,
working with all the partners from 25
different firms. These results give
us, in a very detailed way, what is
needed to successfully build and
operate the project.
All components have been derived
using measured and calculated, not
factored, values. Based on our
extensive experience in graphite,
production, we are confident that
they are realistic and achievable.â
- President and CEO, BenoĂźt Gascon
Press Release Sept 25th 2015
* Please see slide titled âMineral Reserve and Resources Estimatesâ in the appendix (page 35) for details regarding proven
& probable mineral reserves and measured and indicated mineral resources;
** See cautionary statements and legal disclaimers on slide 2;
*** FCA Baie-Comeau: Free Carrier Incoterms â Seller is responsible for the delivery to the custody of the buyerâs carrier.
(FCA Baie-Comeau***)
6. TSX.V: LLG OTCQX: MGPHF 6
The Value of High Grade Flake Graphite
Company Market Cap
(August 31st, 2016)
Grade (Cg) Cost/t Stage
Northern Graphite Corp., Canada (TSX: NGC) C$16M 2.2% C$675 Feasibility 2012
Focus Graphite Inc., Canada (TSX: FMS) C$19M 15.1% C$441 Feasibility 2014
Alabama Graphite Corp., USA (TSX.V: ALP) C$19M 2.6% (A)US$822 PEA 2015
Energizer Resources, Madagascar (TSX: EGZ) C$25M 7.0% US$353 Feasibility 2015
Syrah Resources Ltd, Mozambique (ASX: SYR) A$1.1B 19.0% US$286 Feasibility 2015
Nouveau Monde Mining, Canada (TSX: NOU) C$19M 4.0% C$660 PEA 2016
Magnis Resources Ltd, Tanzania (ASX: MNS) A$353M 5.4% US$559 Feasibility 2016
Leading Edge Materials., Sweden (TSX: LEM) C$36M 9.3% n/a Care/Maint 2015
Mason Graphite Inc. (TSX.V: LLG) C$100M 17.2% C$376 Feasibility 2015
If you can meet the customer's specifications via metallurgy
and product design, then its all about grade and distribution capabilities.
Feasibility Study Results*:
25 yrs of production at 27.8% Cg (avg.)
Strip Ratio of 0.8 : 1
Feasibility Study based on high
grade portion of deposit
Using only 7% of Measured and
Indicated Mineral Resources**
Note A: See Alabama PEA November 27th 2015, table 1-5, Page 1-14. Cost would likely be lower if based on a higher volume of production
*See cautionary statements on slide 2.
** See slide titled âMineral Reserves and Resources Estimatesâ in Appendix (page 35) for complete details and disclosures.
Source: Company Websites
7. TSX.V: LLG OTCQX: MGPHF
ï§ Graphite, along with diamonds and coal, are crystalline forms of carbon
Graphite 101
Graphene - individual layers -
Graphite - combined layers
ï§ Graphite is an essential but often unrecognized material for modern life
ï§ It has broad range of industrial applications due to its unique properties:
ïŒ Properties of both metals and non-metals (ideal for industrial applications)
ïŒ Highest natural strength and stiffness of any material
ïŒ Lightest weight of all reinforcement materials
ïŒ Very high melting (sublimation) point; low thermal expansion/shrinkage
ïŒ High electrical and thermal conductivity
ïŒ Low frictional resistance (excellent lubricant) and hydrophobic behaviour
ïŒ Non-toxic, chemically inert and high resistance to corrosion
Properties vary
depending on the
purity and size of the
graphite crystals;
this directly affects
the price of the
products sold
7
Details of Mason Graphiteâs
Partnership with NanoXplore
can be found in Appendix.
8. TSX.V: LLG OTCQX: MGPHF
3 Forms of Graphite
Flake
Highest Price, Lowest Supply
High Purity: 85%-99%+ carbon
Amorphous
Least graphitic of the three
Lower Purity: 60%-90% carbon
Vein/Lump
Uncommon & highly localized;
<1% of world production;
Marginal applications
45% 55%
Global
Production
Graphite is not a homogenous commodity; it occurs naturally in 3 forms:
Flake size, purity, impurities and shape,
directly affect the price of graphite
Large flake graphite currently sells at a premium,
but represents a much smaller market.
Li-ion batteries require further transformation steps of
purification, micronisation, spheroidization and coating.
Final products specifications mostly in the 15-20 microns range
8
US$Price
Year
Source: Industrial Mineral Magazine
9. TSX.V: LLG OTCQX: MGPHF
Flake
Graphite:
Flake Graphite Has The Most Applications
Flake Amorphous Vein/Lump Synthetic
Metallurgy (40%)
Refractories â â â
Crucibles â â â
Carbon Raisers â â â
Moulds & Castings â â
Molten Metal Protection â â
High Temperature Lubricants â â
Powder Metallurgy & Alloys â â
Electrical Applications (25%)
Alkaline & Lithium Batteries â â
Li-ion Batteries â â
Fuel Cells â â
Carbon Brushes â â â
Technical Applications (25%)
Expanded Graphite & Foils â
Thermal Management â
Flame Retardants â
Brake Linings & Clutch Facings â â â â
Insulation â â
Nuclear Reactors â
Plastics, Resins & Rubbers â â
Catalysts â â
Cloth & Fibers â â
Others
Pencils â â â â
Lubricants â â â â
Oil Drilling Additives â â
Paints â
9
ï§ Widest range of end uses
ï§ Increasing demand for
high purity flake graphite
ï§ No substitute:
Synthetic graphite has high
purity but is 4x the cost
Synthetic graphite (USD $7,000-20,000/t)
Natural flake (USD $2,000-3,000/t)
ï§ Flake graphite used in
batteries - not amorphous,
not vein
10. TSX.V: LLG OTCQX: MGPHF
ï§ China represents +70% of world production
ï§ China has experienced a significant increase in domestic demand
ï§ Export tariffs and new safety and environmental regulations have caused a reduction of
export supply and an increase in prices, resulting in a restocking phase (2011-2012).
ï§ China is experiencing a reduction of large and medium flake production
ï§ Issues of quality consistency
Flake Graphite â Investment Opportunity
ï§ Global consumption of natural graphite has doubled from 2000 to 2010
ï§ Urbanization of China and India is driving the demand of graphite
ï§ For graphite used in the battery application alone, demand is expected to
increase from 125,000 tons currently to 320,000-640,000 tons in 2020; a
growth rate of 10-18%*
ï§ Natural Graphite classified as one of 14 critical raw materials by the
European Union in 2014
ï§ ** Benchmark Mineral Intelligence: âMarket has doubled every 10 yearsâ
10
Graphite Global Consumption**
Restricted and Unstable Supply in China = Opportunity
Flake graphite production outside of China:
Timcal/Imerys
*Source: Cormark Securities Report on âElectric Graphiteâ, July 2011
Brazil Canada India Madagascar Norway Zimbabwe GermanyUkraine
11. TSX.V: LLG OTCQX: MGPHF
Market Behavior
11
Prices sensitivity
ï§ Very sensitive as seen in the restocking period of 2011
ï§ Natural graphite prices could increase by 3x to 4x and still be
lower than synthetic graphite
ï§ Generally represents a very small part of the customerâs costs
ï§ Published prices based mostly on refractory contracts, which
are cyclical, and tend to underestimate actual industry prices
as prices in electrical and technical applications are much more
stable
Decreasing North American production forced many customers to turn
to Chinese supply, however they are keen to return to local sourcing
ï§ China has quality consistency issues
ï§ Experienced management can meet exact specifications and deliver a more adapted product design
ï§ Just-in-time delivery is a very important factor
âThe sales prices used for the feasibility study reflect the current market dynamics.
Several sources forecast sales prices that, if materialized, would have a positive
impact on the project economics.â - Executive Vice-President and CFO, Luc Veilleux
Press Release Sept 25th 2015
Restocking Period of 2011
$USPrice
Years
Prices cyclicality
12. TSX.V: LLG OTCQX: MGPHF 12
How is Graphite Sold?
ï§ Typical off-take agreements do not work
ï§ Graphite is an additive; generally a small part of cost
ï§ Market too fragmented
ï§ Graphite is not an openly traded mineral
ï§ Prices are negotiated between end-users and producers for
annual or multi-year contracts
ï§ There is a market for ALL types of produced
graphite material (all sizes and all purities)
Graphite Mine
Inventory of different sizes for different uses and end users
End-Users
Typical one-year supply contracts establishing
prices, specifications, volume, timing and delivery
The finished graphite product must be adapted to the buyers
ïŒ Requires the right finished product
ïŒ Requires strong relationships and
continuous contact with clients
ïŒ Management with over 5 decades of experience
ïŒ Years of client relations; large number of potential clients
ïŒ Experience selling for all applications & in all countries
13. TSX.V: LLG OTCQX: MGPHF
Grade Comparison
Mason Graphite (27.8%)
Syrah Resources (19.0%)
Syrah Resources (16.2%)
Focus Graphite (15.1%)
Valence Industries (12.1%)
Energizer Resources (7.0%)
Northern Graphite (2.2%)
0% Cg
5% Cg
10% Cg
15% Cg
20% Cg
25% Cg
30% Cg
*First 10 years
Feasibility Study Head Grade
13
Please refer to disclaimers regarding Mineral Reserves and Mineral Resources on Page 2 and Slide titled âMineral Reserves and Resources Estimates (page 35)
P&P Mineral Reserves cut-off grades: Mason Graphite 6%; Focus 3.1%; Energizer 4.5%; Northern Graphite 0.96%; Syrah 9%; Valence: 3.5%. Magnis: 3%
9,477,000
1,317,000
IN PIT RESOURCES
IN THE RESERVES
Tonnes of Graphite IN SITU
Mason Reserves and IN PIT Resources
(beyond Project Life of 25 years)
(25 years Project Life)
âNo further drilling will be necessary to
conduct the economic evaluation required to
eventually classify In-Pit Mineral Resources
as Mineral Reserves*â
Press Release March 1stth 2016
* There can be no assurance that they may be converted; please see further
cautionary statements on Page 2
Magnis Resources (4.8%)
14. TSX.V: LLG OTCQX: MGPHF
In Situ Metal Equivalence and Pit Structure
Source: TD Securities research department (Craig Miller) 2012
Graphite
@ $1,750/t
20.40%
=
Gold
@ $1,250/oz
9.1 g/t
Silver
@ $14/oz
800 g/t
Copper
@ $2.75/lbs
6%
= =
* Please refer to the cautionary notes on slide 2 of this presentation
(2012 Mineral Resource)
Feasibility Study Head
Grade: 27.8% Cg (2015) =
14
25 Years
Pit Limit
16. TSX.V: LLG OTCQX: MGPHF
Concentrator Location: Baie-Comeau
16
Jean-Noel-Tessier Industrial Park,
Baie-Comeau
ï§ Improved access to skilled labour
ï§ Better quality of life for workers
ï§ Net reduction in greenhouse gas emissions
ï§ Better access to service providers
ï§ Heavy Industry Zoning
ï§ Property tax reduction agreement (1st 5 years)
Very High Grade = Minimal Trucking
ï§ Average of 190,000 tonnes of ore / year
ï§ 7 days / week and 10 months / year
= 14 to 16 truck loads / day with 40-tonne trucks
Better Economics than
Typical Mine Site Location
ï§ Lower cost of operation
-Access to low cost and green hydroelectricity
ï§ Lower CAPEX
-Very small mining camp for 10 employees
-Reduction in diesel energy power generation
18. TSX.V: LLG OTCQX: MGPHF
ïŒ 51,900 tonnes per year of
Graphite concentrate production
ïŒ Process resulting in up to 97.5% of
finished product purity for coarse products
ïŒ Project life: 25 years, using 4.7 Mt (7% of
Measured and Indicated mineral
Resources*)
ïŒ Average head grade of 27.8% for project life
ïŒ Waste to ore stripping ratio of 0.8:1
ïŒ Construction period: 13 to 16 months
18
* Please see slide titled âMineral Reserve and Resources Estimatesâ in the appendix (page 35) for details regarding proven & probable
mineral reserves and measured and indicated mineral resources
** See cautionary statements and legal disclaimers on slide 2
*** FCA Baie-Comeau: Free Carrier Incoterms â Seller is responsible for the delivery to the custody of the buyerâs carrier
Feasibility Study Results**
Direct CAPEX
Indirect CAPEX
Contingency
$115.6 million
$31.3 million
$14.4 million
Operating Cost (OPEX) $376 / tonne
Average Selling Price (USD $1,465) $1,905 / tonne
Internal Rate of Return (IRR)
44% (pre-tax)
34% (post-tax)
Payback Periods
2.3 years (pre-tax)
2.6 years (post-tax)
Project Life
Using only 7% of Measured and Indicated Mineral Resources*
25 years
Net Present Value (NPV) @ 8% disc.
$600M (pre-tax)
$352M (post-tax)
Waste to Ore Stripping Ratio 0.8 : 1
(FCA Baie-Comeau***)
Feasibility Study Operational Highlights
September 2015
Cash Operating Costs Breakdown (per tonne of finished product)
Mining and Crushing $33 9%
Ore Transportation $128 34%
Processing $176 47%
General and Administration $39 10%
Total $376 100%
Capital Costs Breakdown (Direct)
Mining and Crushing $14.5M 12%
Concentrator $76.6M 66%
Tailings and Water Management $10.4M 9%
Building and Office Complex $14.0M 12%
Total Direct Cost $115.6M 100%
Capital Costs Breakdown (Indirect)
EPCM $18.2M 58%
Construction Temp Facilities $7.3M 23%
Commissioning $1.6M 5%
Other $4.2M 14%
Total Indirect Costs $31.3M 100%
Costs Breakdowns
19. TSX.V: LLG OTCQX: MGPHF
Flow Sheet of â1st Transformationâ
Feasibility Study, September 2015
(*) Please refer to cautionary statements on slide 2
ï§ Simple process with known and proven technologies
ï§ Pilot plant concluded Feb. 2015
ï§ Testing of additional processing technologies;
ï§ Characterization for the upcoming EIA;
TSX.V: LLG OTCQX: MGPHF 19
Resulting in products
for applications in:
ï§ Refractories
ï§ Crucibles
ï§ Carbon Raisers
ï§ Moulds & Casting
ï§ Molten Metal Protection
ï§ Fuel Cells
ï§ Expanded Graphite
& Foils
ï§ Thermal Management
ï§ Flame Retardants
ï§ Brake Lining & Clutch
Facings
ï§ Insulation
ï§ Plastics, Resins &
Rubbers
ï§ Cloth & Fiber
ï§ Lubricants
ï§ Oil Drilling Additives
ï§ Paints
20. TSX.V: LLG OTCQX: MGPHF 20
Value-Added Products: â2nd Transformationâ
May 2015:
Mason Graphite initiates detailed study for large-scale production
of value-added graphite products expected for completion in 2016.
Management Team Expertise:
ï§ Mason Graphiteâs management team involved in value-added products development,
production and sales at Imerys Graphite & Carbon.
ï§ Predominantly working with National Research Council (NRC), Hatch and COREM.
Value-added processing and 2nd transformation:
ï§ Further purification;
ï§ Micronisation;
ï§ Purification & Micronisation;
ï§ Shaping (spheroidization) and coating for anode material
Impact and strategic positioning:
âMason announced a detailed study for large scale production of value-add products that
could materially increase margin estimates. The study should be completed in 2016, with the
National Research Council (Canada) and Hatch. Other graphite firms have made samples of
high margin materials, but we do not know of any other formal work on process design
today.â
â Rupert Merer, National Bank Financial, 2015
Resulting in products
for applications in:
ï§ Powder Metallurgy
and Alloys
ï§ Alkaline batteries
ï§ Li-ion Batteries
ï§ Fuel cells
ï§ Carbon Brushes
ï§ Flame Retardants
ï§ Brake Lining &
Clutch Facings
ï§ Insulation
ï§ Plastics, Resins
& Rubbers
ï§ Catalysts
ï§ Cloth & Fiber
ï§ Pencils
ï§ Lubricants
ï§ Paints
21. TSX.V: LLG OTCQX: MGPHF
Value-Added Products: â2nd Transformationâ
Purity of 99.9% Cg achieved in
preliminary purification trials
Flake Size Graphite (Cg)
+48 mesh 99.6%
+80 mesh 99.7%
+150 mesh 99.9%
4
Industrialization
21
Detailed Engineering
Construction
Production
Phase 1
completed
in 2015
Steps to develop raw materials for the energy storage value chain:
Initiating Phase 2
and 3 with NRC
23. TSX.V: LLG OTCQX: MGPHF
Technical Partners
23
Feasibility Study and Environmental & Social Impact Assessment
Value-Added Graphite Study
PEA, Metallurgical Testing and Resource Estimates
25. TSX.V: LLG OTCQX: MGPHF
Recent & Upcoming Milestones
25Mason Graphite has not made a formal production decision. A formal decision to proceed with production will be made after obtaining the certificate of
authorization and the appropriate construction financing.
2015 2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Completed Metallurgical Test Work (Q1 2013)
Completed PEA (Q2 2013)
Purification Testing (Q3 2013)
Mineral Resource Updates (Q4 2013 / Q4 2014)
Pilot Plant and Bulk Sample Testing (Q4 2014)
Completion of Feasibility Study (Q3 2015)
Filing of EIA and Permit Issuance
Construction Financing
Estimated Detailed Engineering/Construction
Estimated Production Start
Upcoming Catalysts:
ï§ Agreement with Pessamit First Nations (IBA) expected in 2016
ï§ Financing
ï§ Permitting
ï§ Value Added Graphite Study Results
29. TSX.V: LLG OTCQX: MGPHF
Partnership with Group NanoXplore Inc.
29
ï§ Mason Graphite owns 31%* of Group NanoXplore Inc.
ï§ Agreements with NanoXplore include:
ï§ License agreement for Thinned Graphite Process
ï§ Lab-for-Hire agreement for design of Value-Added graphite products
ï§ Mason Graphite acts as NanoXploreâs sales and
marketing agent, and sole graphite supplier
ï§ Benoit Gascon acting as Chairman of the Board;
Luc Veilleux acting as CFO of Group NanoXplore
Advanced materials company, the largest Canadian
producer of graphene and one of the largest
graphene producers in the world providing customers
with graphene-enhanced polymers, including master
batches in pellet form, few layer graphene powders,
and custom graphene solutions
Details of Partnership with NanoXplore:
* 2014: Mason Graphite acquired 40% interest in Group NanoXplore for $700 000. Remaining 60%
owned by management of Group NanoXplore Inc.
* 2015: Following external financing of $2.725M for a minority position of 21.6%, Mason Graphite
now owns 31% and the management of NanoXplore now owns 39%
30. TSX.V: LLG OTCQX: MGPHF
About Group NanoXplore Inc.
30
ï§ Provides high quality graphene (high purity with low defects) and very
dispersible enabling significant improvements with very small amounts of
added graphene, typically less than 1% by weight. The core technology is a
unique, low-cost manufacturing process which produces industrial volumes
of high quality graphene from graphite flake using a one-step and
environmentally friendly method
ï§ NanoXplore manufactures graphene-enhanced polymers in response to
customer interest in engineering plastics with enhanced electrical, thermal,
and mechanical properties. NanoXplore can increase thermal conductivity
(5X), improve mechanical strength and provide graphene enhanced plastic
pellets
âą Polymers:
âą Graphene enhanced polymers
âą Graphene enhanced engineering plastics
âą Graphene enhanced pellets & master batches
âą Paints & Coating
âą Energy Sector:
âą Improving energy capacity & charge rate of batteries
âą Improving conductivity of super-capacitors
âą Enabling transparent & flexible electrodes for solar cells
âą Thermal Management
âą Composite Materials
âą Lubricants and many others
Markets and Applications:
www.nanoxplore.ca
34. TSX.V: LLG OTCQX: MGPHF 34
Main Markets: USA - Europe - Japan
ï§ Graphite never ships by rail like a bulk
commodity does
ï§ Ports open markets to Europe and Asia
ï§ Most of the U.S. demand is in the North East
and the Mid-West
ï§ Shipping cost generally assumed by the
customer
ï§ Cost Insurance and Freight for EU of $110/t
used in Feasibility Study
36. TSX.V: LLG OTCQX: MGPHF
Mineral Reserves & Resources Estimates
* See cautionary statements on slide 2.
** The Mineral Reserves are the basis of the 25 years Mine Life of the Feasibility Study published in Sept 2015 (amended in March 2016) and are not
included in the âin-pitâ Measured and indicated Mineral Resources of 58.1 Mt grading 16.3% Cg (which have an equivalent drilling definition). The mineral
Reserves and the âin-pitâ Mineral Resources are included in the total Measured and Indicated Mineral Resources of 65.7 Mt grading 17.2% Cg (19.1 Mt of
Measured Resources grading 17.9% Cg and 46.6 Mt of Indicated Resources grading 16.9% Cg) that were reported in the Companyâs press release dated
December 15, 2014. The reference point for the Mineral Reserves Estimate is the mill feed. Mineral resources, which are not mineral reserves, do not have
demonstrated economic viability and were not included in the mine life or the economics of the feasibility study. Environmental, permitting, legal, title,
taxation, sociopolitical, marketing, or other relevant issues may materially affect the estimate of Mineral Resources. The same issues would need to be
considered when conducting an eventual economic evaluation in order to classify the In-Pit Mineral Resources as Mineral Reserves. In addition, there can
be no assurance that Mineral Resources in a lower category may be converted to a higher category, or that Mineral Resources may be converted to
Mineral Reserves.
36
Based on +/- 43,324 m
metres of drilling
GC Zone Resource
Mineral Reserves: Project Life â 1st 25 years
Resource Category
Tonnage
(t)
Grade
(% Cg)
Graphite
In-situ (t)
Measured 16,929,000 16.98 2,874,000
Indicated 41,205,000 16.03 6,603,000
Measured & Indicated 58,134,000 16.30 9,477,000
In-Pit Mineral Resources Beyond Project Life of 25 Years
6% cut-off grade
6% cut-off grade
Ore Category
Tonnage
(t)
Grade
(% Cg)
Graphite
In-situ (t)
Proven 2,003,000 25.05 502,000
Probable 2,738,000 29.77 815,000
Proven & Probable 4,741,000 27.77 1,317,000
38. TSX.V: LLG OTCQX: MGPHF
Excellent Metallurgy
Metallurgical Testing during the Feasibility Study confirmed the
preliminary results:
ï§ Graphite recoveries in excess of 94%
ï§ Concentrate purity of 95.9% for the +150 mesh cumulative
ï§ 27% of +80 mesh cumulative, including 14% of +50 mesh
38
Flake Size
Distribution
(%)
Carbon Content
(% Cg)
+50 mesh (Large Flake) 14% 95.6%
+80 mesh (Large Flake) 13% 96.4%
+150 mesh 15% 95.8%
-150 mesh 58% 91.2%
Total / Average 100% 93.2%
Preliminary Metallurgical Testing Completed in 2013
* Please refer to the press release dated February 22, 2013 for complete result details.