Graphite One Announces Initial Coated Coin Cell Results

Graphite One Resources Inc. ("Graphite One", "GPH" or the "Company") is pleased to announce the results from the initial performance tests on coin cells manufactured with the Company's premium grade, coated spheroidized graphite ("C-SPG"). The benchmark test results show that the application of a coating produces little change in the important reversible discharge capacity of the coin cells and an increase in efficiency, measured in terms of reduced irreversible capacity loss ("ICL"). These results conform with the anticipated performance of SPG that has a properly applied coating. In addition, the test results demonstrate repeatable charge/discharge performance as previously observed in coin cell tests using uncoated SPG ("U-SPG") as announced in our press release of May 20, 2016.

• Coin Cell Tests Show Little Change in Reversible Discharge Capacity and Performance Between the Coated and Uncoated SPG
• Results Support High Performance, Repeatability and Stability - All Indicators of the High-Quality of GPH Graphite
• Potential Answer to Electric Vehicle Battery End-Users' Quest for High-Power

"These first coated coin cell results indicate that our C-SPG maintained high reversible capacity, while improving efficiency as measured by ICL," said Anthony Huston, CEO of Graphite One. "The results were impressive when compared to those for typical coated natural graphite and a top synthetic graphite."

The best test results for reversible capacity from coin cells manufactured with the Company's uncoated and coated SPG are presented in Figure 1. These will form the baseline for future confirmatory testwork that will test a larger sample lot of coin cells manufactured with graphite representative of the target exploitation zone of the deposit. To put them in perspective, these results are compared to the reversible discharge capacities for typical coated natural graphite and a top synthetic graphite.

To view Figure 1, please visit the following release: http://media3.marketwire.com/docs/gph0620fig1.pdf.

The test work is being conducted on the Company's STAX graphite - the acronym used to describe the graphite that shows naturally occurring Spheroidal, Thin, Aggregate and eXpanded - structures sourced from the Company's Graphite Creek deposit near Nome, Alaska. There is presently no U.S. production of flake graphite.

Reversible discharge capacity for the best coated coin cell was 370.1 Ah/kg - 0.5% below the theoretical maximum for natural graphite - showing only a 0.5% drop in reversible capacity with the applied coating on the basis of comparing best results for uncoated and coated SPG. Discharge capacity is a measure of a battery's energy storage capability once charged.

While previously-tested U-SPG coin cells registered ICL above 10%, all three coin cells with C-SPG registered ICL below 10% demonstrating an improvement in efficiency as a result of the coating application. The best result from coin cells using C-SPG registered an ICL of 6.3%. The slight reduction in reversible capacity accompanied by the beneficial decrease in ICL conforms to the anticipated outcome of a successfully applied coating on SPG. This behaviour was apparent in the coin cells that completed the testing cycle as summarized in the following table.

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/gph0620fig2.pdf.

Coin cell 1220 (see Figure 2) successfully completed three charge/discharge cycles as seen in the accompanying figure, the second and third discharge curves show almost complete coincident overlap with the first discharge curve, attesting to repeatability in performance across subsequent charge/discharge cycles. This behaviour is consistent with observations for coin cells manufactured with the Company's U-SPG, as previously reported on May 20, 2016.

The current results conclude the exploratory product development program. The findings will be applied to optimize some aspects of spherical graphite production in the next phase of testwork that will use concentrate generated from the current mineral processing testwork as feedstock. The next product development test phase will use graphite feedstock representative of the target exploitation zone at Graphite Creek with the objective to reproduce the best results and generate additional sample product for interested third parties.

"Up to this point, EV battery end-users have had to make a choice between systems that deliver high-power (near 100 kW) and high-energy (tens of kW hours between each charge). Based on these new results and observations made when processing STAX graphite, we will focus our development work on determining whether our STAX-derived SPG can deliver both high-energy and high-power performance," Huston added. "We continue to be encouraged by the naturally occurring properties being revealed in our Graphite Creek graphite."

Huston continued, "It is important to note that the economics of our project will not be known at any level of confidence before the completion of a preliminary economic assessment ('PEA'), preliminary feasibility study or feasibility study." The Company's PEA is expected to be completed in Q3 2016.

Test Methodology

Toronto-based, independent industry consultants TRU Group are directing the Company's testwork program with U-SPG and C-SPG. The testwork reported here was performed at a United States laboratory recognized for its capabilities in graphite characterization, processing and electrochemical performance (battery) testing. Neither the Company nor TRU Group has a direct or indirect relationship with the laboratory. The laboratory undertaking the exploratory product development test work has been certified by the US Department of Defense's Defense Contract Management Authority to be ISO 9001:2008 Compliant in Quality Systems. TRU does not wish to disclose the name or specific location of the laboratory testing facilities in order to maintain its competitive advantage. For competitive reasons graphite companies do not typically disclose details of the laboratories doing their product test work.

The graphite used for the coin cell tests was extracted from surface historic mine working samples which were first segregated into three lots by visual inspection. Each lot was then analyzed to determine which of the three corresponded to the mineralogy of the higher graphite grading zone (Zone 1) targeted for initial exploitation as identified in the Company's conceptual study prepared by TRU Group. The graphite sample lot that corresponded to Zone 1 was then characterized to confirm the occurrence of STAX morphology. Once this was confirmed, that sample was processed to extract an impure concentrate, which was subsequently purified to at least 99.98+% fixed carbon. This material was then processed into SPG. A coating was applied to the same combined size fractions of SPG that were previously used in coin cells tested with U-SPG.

As previously reported, high (74%) conversion yield from flake graphite to SPG was achieved at lower energy intensity by direct spheroidization of the purified flake graphite - an achievement attributed to the STAX graphite morphology and properties inherent to the Company's Graphite Creek deposit. As these samples were selected, they may not be representative of the Graphite Creek deposit as a whole and the findings of these preliminary metallurgical results must be confirmed by further test work on drill core samples.

Follow-up testwork will be conducted on graphite concentrate produced from testwork currently underway that is validating the mineral processing flowsheet using drill core segments from Zone 1.