Alabama Graphite Corp. (TSX-V:ALP) (OTCQX:ABGPF) (FRANKFURT:1AG) is pleased to report positive pilot plant test results for its flagship Coosa Graphite Project.

AGC is the sole owner of the Coosa Graphite Project, located in east-central Alabama, USA. The Company’s mission is to become a vertically integrated green-energy supply chain producer of coated spherical purified graphite for the American lithium-ion battery industry.

The primary objectives for running the pilot-scale plant were as follows:

The following results support the effectiveness of the AGC’s primary processing metallurgical flow sheet and that the graphitic material from the Coosa Graphite Project can be upgraded to high-grade graphite concentrate by mechanical means – specifically, flotation and polishing – without the use of hydrofluoric, hydrochloric, sulfuric, nitric acids, and alkalis. The flow sheet will form the basis for a significant component of the Company’s upcoming Feasibility Study.

The main objective in designing the pilot plant was to achieve a high grade output regardless of the flake sizes of the input material – including the smaller flakes. Achieving this objective is expected to be a key requirement for easily and cost-effectively purifying all primary concentrate produced via AGC’s low-temperature thermal purification (a critical step in the Company’s secondary processing to produce CSPG). As a result of management’s graphite processing and optimization experience, AGC had the ability to design the circuit process to achieve this high overall grade for the pilot plant.

Some graphite development companies with traditional business plans focus on producing and selling a primary processed, run-of-mine, concentrate material and are most concerned with the disposition of flake sizes and the associated carbon grade. However, since AGC intends to divert all of the primary processed graphite concentrate that it will produce to secondary processed specialty graphite products, flake sizes are not the primary focus. AGC’s management believes that the primary evaluation metric for the Coosa Graphite Project’s pilot plant is carbon grade since jumbo or large flake sizes are not required for the manufacture of CSPG. Concentrate grade – not flake size – is what is important to AGC for secondary purification and processing.

AGC’s pilot plant has exceeded expectations in that a high carbon grade – averaging 96.7% Cg across all flake sizes – has been produced, meaning 100% of the concentrate to be produced via primary processing from the Coosa Graphite Project is expected to be suitable for secondary processing.

HIGHLIGHTS

The testing of the pilot plant has supported (at the scale of the pilot plant) the technical viability and operating performance of the process plant design for production of high-grade primary processed concentrate material, which, as outlined in AGC’s Preliminary Economic Assessment* for the Coosa Graphite Project would be diverted to secondary, specialty processing to produce CSPG for use in lithium-ion batteries, and purified micronized graphite for use in polymer, plastic and rubber composites, powder metallurgy, energy materials, and friction materials, among other applications.

President and Chief Executive Officer Donald Baxter commented, “The pilot plant results have demonstrated that the Coosa Graphite Project holds the potential to produce a high-carbon concentrate, across all flake sizes, from mechanical means – without chemical or thermal treatment. More importantly, however, is that the graphite concentrate produced is well suited for our secondary processing to produce specialty CSPG graphite.”

“Typically, when processing graphite, one expects to experience a significant drop off in grade with the smaller flake sizes. This is not the case with the Coosa material, with the -325 Mesh graphite concentrate grading 94.6% Cg,” stated Mr. Baxter. “Based on our graphite experience, we designed this circuit to maximize the grade of the fines and we are very pleased with this achievement. What I am most pleased with is that these pilot plant results support our business strategy in that all flake sizes appear to be suitable for our specialty secondary processing.”

The overall pilot plant recovery was 88.2% and the Company is confident that there is significant room to improve this metric. The first cleaner stage recoveries achieved 98.7% and 99.3% respectively, and it was noted that the main loss in recovery was from a single stream, namely the rougher tails. Accordingly, AGC’s management has identified this situation as an opportunity since management expects that the loss in recovery can be corrected by developing and optimizing a secondary grinding circuit.

The pilot plant was designed in collaboration with, and built and operated by SGS Mineral Services of Lakefield, Ontario and the testing of the pilot plant was managed by a Consulting Metallurgist for SGS, renowned graphite metallurgist Oliver Peters. In August 2015, AGC prepared a 200-ton bulk sample of graphitic material from the Coosa Graphite Project’s resource grid, which was shipped to SGS. SGS processed a 130-ton sample of this material. Based on the successful yield and results of the pilot plant and for maximum cost efficiencies, the Company and SGS decided not to process the remaining 70 tons of graphitic material.

* Note: A preliminary economic assessment is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized.

About SGS Mineral Services

SGS Mineral Services is recognized as a world leader in the development of concentrator flow sheet design and pilot plant testing programs. SGS’ metallurgical services division was founded more than a half century ago and its metallurgists, hydro-metallurgists and chemical engineers are experienced in all the major physical and chemical separation processes utilized in the recovery of metals and minerals contained in resource properties around the world.

About Alabama Graphite Corp.

Alabama Graphite Corp. is a Canadian-based flake graphite exploration and development company as well as an aspiring battery materials production and technology company. The Company operates through its wholly owned subsidiary, Alabama Graphite Company Inc. With an advancing flake graphite project in the United States of America, Alabama Graphite Corp intends to become a reliable, long-term U.S. supplier of specialty high-purity graphite products. A highly experienced team leads the Company with more than 100 years of combined graphite mining, graphite processing, specialty graphite products and applications, and graphite sales experience. Alabama Graphite Corp. is focused on the exploration and development of its flagship Coosa Graphite Project in Coosa County, Alabama, and its Bama Mine Project in Chilton County, Alabama as well the research and development of its proprietary manufacturing and technological processing process of battery materials.

Alabama Graphite Corp. holds a 100% interest in the mineral rights for these two U.S.-based graphite projects, which are both located on private land. The two projects encompass more than 43,000 acres and are located in a geopolitically stable, mining-friendly jurisdiction with significant historical production of crystalline flake graphite in the flake graphite belt of central Alabama, also known as the Alabama Graphite Belt (source: U.S. Bureau of Mines). A significant portion of the Alabama deposits are characterized by graphite-bearing material that is oxidized and has been weathered into extremely soft rock. Both projects have infrastructure in place, are within close proximity to major highways, rail, power and water, and are approximately three hours (by truck or train) to the Port of Mobile, the Alabama Port Authority’s deep-seawater port and the ninth largest port by tonnage in the United States (source: U.S. Army Corps of Engineers/USACE). The state of Alabama’s hospitable climate allows for year-round mining operations and the world’s largest marble quarry (which operates 24 hours a day, 365 days a year in Sylacauga, Alabama), is located within a 30-minute drive of the Coosa Graphite Project.

As announced on October 13, 2015, the Coosa Graphite Project hosts an National Instrument 43-101 Indicated Mineral Resource Estimate of 78.5 million tons grading 2.39% graphitic carbon (Cg) – the largest Indicated Mineral Resource of flake graphite in the United States. On November 30, 2015, Alabama Graphite Corp. announced the results of its NI 43-101 Preliminary Economic Assessment for the Coosa Graphite Project, indicating a potentially low-cost project with potential positive economics. The PEA is based on the Coosa Graphite Project producing two finished specialty, secondary-processed graphite products – a coated spherical graphite product and a purified micronized flake graphite product. The PEA is not modelled on producing a final run-of-mine graphite concentrate product typical of other conventional flake graphite projects. The products Alabama Graphite Corp. intends to produce are targeted to address the needs of clean-tech and green-energy customers; products that are in high demand, and command the highest prices in the flake graphite space, with historically inelastic pricing. Please refer to the Company’s technical report titled “Alabama Graphite Corp. Preliminary Economic Assessment (PEA) on the Coosa graphite Project, Alabama, USA” dated November 27, 2015, prepared by independent engineering firms AGP Mining Consultants Inc. and Metal Mining Consultants Inc., and filed on SEDAR at www.sedar.com.