The Kearney Mine

The Kearney Mine

History

The Kearney Mine and milling facility is known to have the largest confirmed mineral resource of any North American graphite project, and is one of the largest individual flake graphite deposits outside of China and North Korea.

Flake graphite was first identified in rocks outside of the Town of Kearney in Ontario, Canada, in the early 20th century. In 1989, an open pit mining and milling facility was constructed on 445-hectares of Crown land southeast of Graphite Lake and four kilometres west of Algonquin Park. The Kearney Mine remained operational through 1994, during which time it produced and processed almost one million tonnes of ore and 17,000 tonnes of flake graphite product, which was sold to Canadian and American customers. Under-capitalization during a drop in global graphite prices caused the Kearney Mine to close in 1994.

Currently in a state of temporary suspension, Kearney Mine has been under careful care and maintenance since its closure. Under new ownership and management since 2007, the Mine is presently undergoing a re-commissioning process that will lead to its reopening in 2015. When reactivated, it is estimated the Kearney Mine will process approximately one million tonnes of ore per year while producing 20,000 tonnes of natural, large flake, high carbon graphite concentrate.

Having been a fully operational facility in the past, the Mine enjoys the credibility of having produced a product that is known and highly regarded in the marketplace. Based on past operations, sales records and laboratory testing, the Kearney Mine will produce high quality, low impurity, commercially attractive graphite product.

The Kearney Mine will be a best-in-class asset for the production of natural flake graphite, given its mineral qualities and quantities and its location in a first-world country with immediate access to transportation infrastructure. This will help ensure stable, lower cost, reliable long-term delivery of product of consistent quality to all customers. Testing completed in January 2010 confirmed 43.5 million tonnes of Measured and Indicated Resources (2.34% Cg average) and 12.3 million tonnes of Inferred Resources (2.42% Cg average).

Because of the high product quality, Ontario Graphite Ltd. will have the ability and intends to sell directly to end-user customers, allowing for better response to customers' needs, development of strong customer relations and generation of high margins. Ontario Graphite will be one of only three producers of natural flake graphite in North America and will likely be the sole producer within two years of its re-commissioning.

A Closure Plan has been developed in accordance with Ontario Regulation 240/00 promulgated under Part VII of the Mining Act. The Closure Plan shows how the Kearney Mine will be shut down at the end of operation, with due regard to the protection of the environment, the restoration of the mine site and ensuring the interests of the Crown and the public are maintained.