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Northern Graphite Sets $20M Financing For Mine Purchase

Northern Graphite Corp. has provided the terms of the private placement being conducted in connection with its previously announced acquisition of the producing Lac des Iles graphite mine in Quebec and the Okanjande graphite deposit/Okorusu processing plant in Namibia from subsidiaries of Imerys Group for approximately $40-million.

Under the private placement, Northern, through a syndicate of agents led by Sprott Capital Partners LP, and including Cormark Securities Inc., Canaccord Genuity Corp. and Tamesis Partners LLP, will sell, on a commercially reasonable efforts private placement basis, up to 26.75 million subscription receipts of the company at a price of 75 cents per subscription receipt to raise aggregate gross proceeds of approximately $20-million. The agents shall have the option, exercisable at any time prior to three business days before the closing date, to increase the size of the private placement by up to 4,012,500 subscription receipts under the same terms for additional gross proceeds of up to approximately $3-million. Affiliates of the Sprott Group have indicated their intention to participate in the private placement through an investment of approximately $3.75-million in subscription receipts.

The net proceeds from the private placement will be used by the company to partially finance the purchase price for the transaction. In addition, $3-million (U.S.) of the purchase price for the transaction will be satisfied by issuing units to Imerys on the same terms and conditions as the units issuable on exercise of the subscription receipts.

Each subscription receipt shall be deemed to be automatically exercised, without payment of any additional consideration and without further action on the part of the holder thereof, into one unit of Northern upon satisfaction of the escrow release conditions (as defined herein). Each unit shall comprise one common share of Northern and one-half of one share purchase warrant of Northern. Each warrant shall be exercisable to acquire one common share at a price of $1.10 per common share for a period of 24 months from the date the escrow release conditions are satisfied.

The gross proceeds of the private placement, less 50 per cent of the agents' cash commission (as described herein) and certain expenses of the agents, will be deposited in escrow on closing of the private placement until the satisfaction of certain release conditions, including that all conditions precedent to the proposed transaction have been met.

In the event that the escrow release conditions have not been satisfied prior to 80 days following the closing of the private placement, or the company advises the lead agent or announces to the public that it does not intend to satisfy the escrow release conditions or that the proposed transaction has been terminated, the aggregate issue price of the subscription receipts (plus any interest earned thereon) will be returned to the applicable holders of the subscription receipts, and the subscription receipts will be automatically cancelled and be of no further force and effect.

In connection with the private placement, the agents will be entitled to receive a cash fee equal to 6 per cent of the aggregate gross proceeds of the private placement, and such number of compensation warrants equal to 6 per cent of the number of subscription receipts issued under the private placement. Each agent's warrant will be exercisable for one common share at an exercise price of 75 cents per common share for a period of 24 months following the date the escrow release conditions are satisfied.

About Northern Graphite Corp.

Northern Graphite is a Canadian company, listed on the TSX Venture Exchange, that is focused on becoming a world-leading producer of natural graphite and on the upgrade of mine concentrates into high-value products critical to the green energy revolution, including electric vehicles, lithium-ion batteries, fuel cells and graphene, as well as advanced industrial technologies.

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