Northern Graphite Corporation provided an update on several developments. Over 6 million warrants have been exercised early, providing the company around $2 million in proceeds. This will help fund Northern Graphite through completion of a feasibility study and permit approval, expected in Q1 2012. Following this, the company intends to proceed with financing construction at its Bissett Creek graphite mine. In addition, the company's largest shareholder applied to have its shares released from escrow earlier than planned to facilitate distribution to shareholders. Northern Graphite continues to advance its Bissett Creek project, which is considered one of the best graphite development assets due to its large flake content and potential to supply the battery industry.
Challenger August Investor Presentation 290811princeslea79
Challenger Energy’s strategy is to identify, acquire and appraise material upstream oil and gas
exploration opportunities
Mercury Stetson Prospect in North Texas, US
Two proven shale formations – Barnett and Woodford
Massive potential gas in place with OGIP estimated at 360 BCF/sq mile
Large prospect area – potentially up to 55,000 acres (86 sq miles)
Prospect is close to existing infrastructure
Contiguous land position of ~ 26,000 acres with a short term target of 35,000 acres.
Triple Crown Prospect in Texas, US
Significant acreage – 45,000 acres with options over a further 6,500 acres.
Large gas charged zones, Ellenburger (dolomite) and an unconventional Hybrid play which is geologically analogous to
Montney Hybrid Play in Western Canada with an estimated OGIP of 9 TCF.
Testing to commence shortly on both the Ellenburger and Hyprid Play
Karoo Basin in South Africa
Shale gas in Karoo Basin now a major focus for international E&P companies (eg Shell, Cheasapeake, Statoil and Sasol)
Challenger Energy’s permit of approx. 800,000 acres centred on only well within basin to flow significant gas to surface to
date, awaiting approval.
Independent US Energy Information Agency report suggests Risked Recoverable Resource of more than 7 TCF in
application area.
Attractive assets have exciting potential to grow significant shareholder value
Philippines Asia Mining Singapore_2011
Intex Resources Mindoro Nickel Project Philippines
The capex of USD2.5 Bn for the full scale project however
is also beyond the capability of an exploration company
like Intex Resources (Norway)
Challenger August Investor Presentation 290811princeslea79
Challenger Energy’s strategy is to identify, acquire and appraise material upstream oil and gas
exploration opportunities
Mercury Stetson Prospect in North Texas, US
Two proven shale formations – Barnett and Woodford
Massive potential gas in place with OGIP estimated at 360 BCF/sq mile
Large prospect area – potentially up to 55,000 acres (86 sq miles)
Prospect is close to existing infrastructure
Contiguous land position of ~ 26,000 acres with a short term target of 35,000 acres.
Triple Crown Prospect in Texas, US
Significant acreage – 45,000 acres with options over a further 6,500 acres.
Large gas charged zones, Ellenburger (dolomite) and an unconventional Hybrid play which is geologically analogous to
Montney Hybrid Play in Western Canada with an estimated OGIP of 9 TCF.
Testing to commence shortly on both the Ellenburger and Hyprid Play
Karoo Basin in South Africa
Shale gas in Karoo Basin now a major focus for international E&P companies (eg Shell, Cheasapeake, Statoil and Sasol)
Challenger Energy’s permit of approx. 800,000 acres centred on only well within basin to flow significant gas to surface to
date, awaiting approval.
Independent US Energy Information Agency report suggests Risked Recoverable Resource of more than 7 TCF in
application area.
Attractive assets have exciting potential to grow significant shareholder value
Philippines Asia Mining Singapore_2011
Intex Resources Mindoro Nickel Project Philippines
The capex of USD2.5 Bn for the full scale project however
is also beyond the capability of an exploration company
like Intex Resources (Norway)
Frontier exploration areas can offer the largest rewards but obstacles surrounding the acquisition of 2D regional seismic can stand in the way of making the best decisions in a reasonable timeframe. Even if you overcome the obstacles, a 2D seismic program is a costly solution. Acquiring conventional gravity and magnetic data provide a preliminary investigation of basement structures and sediment thickness but does not deliver information about reservoir. Optimal placement of seismic can mean the difference between relinquishing a block and drilling a discovery well.
SFD® represents a new generation of airborne geophysical surveys that can identify areas of reservoir potential within the sedimentary column, so you can focus your seismic programs and G&G resources on realizing it.
SFD® deliverables include a report which identifies and ranks areas for trap and reservoir prospectivity. SFD® interpretation results may be gridded to create a prospectivity map. Integration projects will ensure SFD® results are calibrated to existing G&G data.
Strike Graphite Corp. (TSXv: SRK) announces that it has begun mobilizing field crews to commence an exploration drill program at its Simon Lake Graphite Property in Saskatchewan.
Ontario Graphite: Considerations for Financial Investors in Mining Operations as presented at Industrial Minerals Grapihte Conference in December 2011.
Industrial Minerals Magazine spoke to Ryan Fletcher, director of investment company Zimtu Capital Corp., about graphite's growing prominence in the finance industry and investor confidence in commodities.
New Tax Regime User Guide Flexi Plan Revised (1).pptx
Northern Graphite Corporation - Research by Mackie Research Capital Corporation
1. NOVEMBER 14, 2011
NORTHERN GRAPHITE CORPORATION – SPEC.BUY
NGC - TSX V $0.90
NGC Warrant Exercise Update
TARGET: $2.10
PROJ. RETURN: 133% EVENT – Update on Warrant Exercise, and Other Developments
VALUATION: 1.0x NAVPS NGC provided an update this morning on several fronts. To date, 6.2 million of its
outstanding warrants have been exercised early resulting in proceeds to the
Share Data Company of approximately $2 million.
Basic Shares O/S (mm) 37.1
Fully Diluted 45.6 IMPACT – Transactions to Provide Trading Liquidity, Financing
Market Cap ($mm) 33.4
Enterprise Value (mm) 32.8 The early exercise of the 6.2 million warrants is an important development for NGC
Net Debt - WC ($mm) (0.7) as the funds provided will take the Company through completion of Feasibility
Dividend N/A Study (FS), and receipt of its Mine Closure Plan permit. Both events are expected to
Yield N/A occur in Q1/2012. Following these events, the Company intends to proceed with a
Next Reporting Date November
financing to allow for the start of construction at the Bissett Creek large flake
graphite mine. The timing of the FS completion has been pushed out to January,
$1.40
2012 from the end of this year due to delays in commissioning the pilot plant. NGC’s
$1.10 independent engineer, SGS, is working through an unusually high backlog of
$0.80 projects from other mining clients. Early next week, the pilot plant is expected to
$0.50 commence continuous operations, and approximately 130 tonnes of ore are to be
Apr-11 Jun-11 Jul-11 Aug-11 Oct-11 processed over a one week period. Data will also be collected for the FS.
Mindesta owns 9.75 million common shares of NGC of which 7.3 million remain
subject to an escrow agreement as part of NGC’s initial public offering. The terms of
Short-term Technical Target the escrow provide for early release of the shares to permit their distribution to
$1.40, next resistance. NGC is technically Mindesta shareholders, subject to TSX Venture approval. Mindesta has applied for
neutral in the short-term with $0.90 support. the early release of the shares from escrow to facilitate this distribution. We believe
this approval may take place within the next few weeks.
Corporate Profile
Northern Graphite Corporation is an ACTION – NGC Continues to Offer Premier Exposure to Graphite
development-stage company. The Company We regard today’s announcements as key positives in the advancement of Northern
holds a 100% interest in the Bissett Creek
Graphite Corp., and its flagship Bissett Creek large flake graphite deposit. The
graphite project. Primary focus is the
development of this asset with an objective to
actions should help alleviate a key concern regarding NGC’s limited trading
become one of the world’s largest producers of liquidity. Greater liquidity should lower the cost of capital in future financings. The
large flake graphite. proceeds realized in the warrant exercise should help fund Bissett Creek to the start
of construction.
Bissett Creek is one of the most highly prized graphite development projects in the
Upcoming Events world due to its unique metallurgy. The large flake content will allow it to realize
Commencement of 100 tonne pilot plant by premium pricing. Because of this NGC should be able to sign an off-take agreement
end of November. Test results due within ~4-
in the near future, and emerge as a leading supplier of graphite into the battery
5 weeks thereafter.
manufacturing industry.
BFS in Q1/ 2012.
FYE Dec 31 Q1/10A Q2/10A Q3/10A Q4/10A 2010A Q1/11A Q2/11A Q3/11E Q4/11E 2011E 2012E
Product Revenue $ 000 - - - - - - - - - - -
EBITDA $ 000 (484.2) (125.3) (1,547.9) (1,547.9) (1,547.9) (4,768.9) (6,677.1)
Earnings Q1/10A Q2/10A Q3/10A Q4/10A 2010A Q1/11A Q2/11A Q3/11E Q4/11E 2011E 2012E
EPS $/sh $0.00 ($0.05) $0.00 $0.00 ($0.05) ($0.00) ($0.04) ($0.04) ($0.03) ($0.11) ($0.15)
P/EPS n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
CFPS $/sh $0.00 $0.00 $0.00 $0.00 ($0.03) ($0.00) ($0.01) ($0.03) ($0.03) ($0.08) ($0.14)
P/CFPS n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Matt Gowing, CFA 416.860.8675, mgowing@mackieresearch.com
Raveel Afzaal, Associate 416.860.7666, rafzaal@mackieresearch.com
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
2. www.mackieresearch.com intra-day RESEARCH ALERT – NORTHERN GRAPHITE CORPORATION Page 2
RISKS TO TARGET
Risks include events that lead to graphite price cyclicality such as actions by Chinese producers who supply up to 80% of the
world’s graphite and have dumped product onto the markets in the past and pressured prices. Furthermore, 9.75mm of NGC
shares are owned by Industrial Minerals Inc, a bulletin board listed Company whose value is entirely comprised of this ownership
stake.
RELEVANT DISCLOSURES APPLICABLE TO: NORTHERN GRAPHITE CORPORATION
None Applicable.
ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the
recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of
the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations
expressed in this research report.
Information about Mackie Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations
which are in each of our rating categories is available on our web site at www.mackieresearch.com.
The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in
providing it does Mackie Research Capital Corporation assume any responsibility or liability. Mackie Research Capital Corporation, its directors, officers and
other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part
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