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Superior Graphite Properties Group:

 

History of the Graphite Properties

These properties are in a known graphite-bearing region of British Columbia. The Geologic Survey of Canada undertook a study in 1965, known as the Reesor Report, which identified the presence of graphite in the area.
 

The Superior Group

The Company is the legal and registered owner of a total of 7,497 hectares containing graphite in the Slocan Mining Division in the Province of British Columbia .

Claims

Good Standing

Hectares

Tenure Numbers

Superior I - XXXII
April, 2015
975
348875-347430
Amar - Elie 1-10
April, 2015
250
300990 - 390999
Mother Superior
April, 2012
400
365015
Superior XXXIII - XXXVI
April, 2012
1,750
360029-360032
Superior 40
Oct, 2010
167
504887
Superior 50
Aug, 2010
208
504883
Koch 1-11, 14 + 15
April, 2009
1,381
504890
Amar Group 1-34
Aug, 2008
1,965
504885
Koch 12, 13
Sept, 2007
400
396526-396527

All of these filings are under the supervision of the local prospector who located the claims and acts as a consultant to the Company.


Exploration Highlights

Over the past six years, the Company has expended over $1 million CDN on exploration and drilling on the “Superior Group” of claims. The project is now at an advanced exploration stage.

The engineers, geologists, assayers and consultants who have been on the property and/or worked on the analysis of samples from the property, feel the graphitic inferred reserves have impressive potential and will in all likelihood prove to be a world class deposit in both size and quality.

We are confident that at the conclusion of our drilling programs, we will have in excess of 55,000,000 tons of reserves.

The industry standard for commercial development is 2,400,000 tons with a median grade of 9.0%. Our grades exceed this and our past exploration programs have indicated current inferred reserves of 30,000,000 tons on just 5 of the 7,497 hectares. Given the massive reserves anticipated from these deposits, we project a mine life in excess of 50 years. The mine would operate at an annual run of mine of 450,000 tons at commencement and increase to 1,800,000 tons at peak capacity. These operating levels could generate annual mine revenue from $16 million USD to $28 million USD.
 

Financial Projections

The following is a snapshot of the minimum financial return anticipated on just 5 of the 7,497 hectares of our mineral claims. These projections are based upon our present inferred reserves of 30 million metric tons with the minimum percentage of graphite recoverable (4.5%) notwithstanding that our present lab results indicate graphitic content from 7.4% to 13.31%.

They also use the market price of $2,500 USD per ton which is at the lower end of the scale for the high grade of our crystal graphite currently trading up to $1,000 USD per ton. Market prices for flake graphite are historically stable with few major spikes.

These projections do not factor in any increase in price due to the anticipated increase in demand arising from fuel cell conversion in the transportation or energy sectors nor increases in lithium-ion battery production.

Management believes that these projections are realistic as minimum recoveries and maximum costs estimates have been used in these computations.

Financial Snapshot:    5 Hectares the Main Zone

 
20 Years
6 Years
1 Year
Ore Processed
30,000,000 m3
9,000,000 m3
1,500,000 m3
Graphite Recoverable
1,350,000 m3
405,000 m3
67,500 m3
Mine Costs
$ 450,000,000
$ 135,000,000
$ 22,500,000
Revenue
$ 3,375,000,000
$ 1,012,500,000
$ 168,750,000
Gross Revenue
$ 2,925,000,000
$ 877,500,000
$ 146,250,000

As not all of the units will be explored by that date, there exists the possibility to define even further reserves.

If, as we reasonably anticipate, the reserves increase to 55,000,000 tons then our revenues increase significantly.

Financial Snapshot:   55,000,000 m3

 
20 Years
6 Years
1 Year
Ore Processed
55,000,000 m3
16,500,000 m3
2,750,000 m3
Graphite Recoverable
2,475,000 m3
742,500 m3
123,750 m3
Mine Costs
$ 825,000,000
$ 247,500,000
$ 41,250,000
Revenue
$ 6,187,500,000
$ 1,856,250,000
$ 309,375,000
Gross Revenue
$ 5,362,500,000
$ 1,608,750,000
$ 268,125,000

These projections are for the Superior Group and Amar Group of mineral claims. The Company has additional graphite claims called the Koch Group of claims which will undergo exploration next summer.

The Company is exploring multiple production possibilities ranging from production of 3,000 to 10,000 tons per day. Based upon these assumptions, the life of the project is as follows:

Mill Processing
Per Day
30,000,000 m3
Reserves
55,000,000 m3
Reserves
10,000 m3
10 years
18 years
5,000 m3
20 years
36 years
3,000 m3
33 years
61 years

 

Selected Financial Data and Pro Forma:

Completed Work to Date Presented in $CDN

1997 Acquisition Consideration $1,260,000
1998 Exploration Pearson, Hoffman, BLM Engineering, et al. )
1999 Drilling SNC-Lavelin et al. ) $600,000
2000 Exploration George Addie, P. Eng. et al. )
2001 Exploration and Geological - Main Zone $136,000
2002 Exploration and Geological - Main Zone $140,000
2003 Administration including filing fees and consultations $40,000
2004 Drilling and Testing of samples $150,000 - $175,000
2005 National Instrument 43-101 filed - Stephen B. Butrenchuk, P. Geol.


Work to be Completed

2008 Drilling, environmental assessment, open pit design & plant design
2009 Build out of Mill and infrastructure for production
2010 Production planned to begin Summer 2010
 

Basic Pro Forma Expressed in USD

The Company intends to mine between 3,000 and 10,000 tons per day for 150 days and to mill between 1,500 and 5,000 tons per day for 300 days.

The cost of mining the ore per ton is $15.00 and the price range per ton of graphite is approximately $2,500 with percentages of graphite ranging between 4.5% graphite per ton to 9.0% graphite per ton.

The tables below show the figures based on these assumptions.

Table 1:
The Company mines 3,000 tons per day for 150 days and mills 1,500 tons per day for 300 days.
No. Tons/ Grade Graphite Price Income Expense Gross
Milling
Tons/ Of Year % Tons/ $ $ $15 / Ton Profit $
Day Days Year Ton
1,500 300 450,000 4.50% 20,250 2,500 50,625,000 6,750,000 43,875,000
1,500 300 450,000 5.00% 22,500 2,500 56,250,000 6,750,000 49,500,000
1,500 300 450,000 5.50% 24,750 2,500 61,875,000 6,750,000 55,125,000
1,500 300 450,000 6.00% 27,000 2,500 67,500,000 6,750,000 60,750,000
1,500 300 450,000 6.50% 29,250 2,500 73,125,000 6,750,000 66,375,000
1,500 300 450,000 7.00% 31,500 2,500 78,750,000 6,750,000 72,000,000
1,500 300 450,000 7.50% 33,750 2,500 84,375,000 6,750,000 77,625,000
1,500 300 450,000 8.00% 36,000 2,500 90,000,000 6,750,000 83,250,000
1,500 300 450,000 8.50% 38,250 2,500 95,625,000 6,750,000 88,875,000
1,500 300 450,000 9.00% 40,500 2,500 101,250,000 6,750,000 94,500,000

 

Table 2:
The Company mines 6,000 tons per day for 150 days and mills 3,000 tons per day for 300 days.

No. Tons/ Grade Graphite Price Income Expense Gross
Milling
Tons/ Of Year % Tons/ $ $ $15 / Ton Profit $
Day Days Year Ton
3,000 300 900,000 4.50% 40,500 2,500 101,250,000 13,500,000 87,750,000
3,000 300 900,000 5.00% 45,000 2,500 112,500,000 13,500,000 99,000,000
3,000 300 900,000 5.50% 49,500 2,500 123,750,000 13,500,000 110,250,000
3,000 300 900,000 6.00% 54,000 2,500 135,000,000 13,500,000 121,500,000
3,000 300 900,000 6.50% 58,500 2,500 146,250,000 13,500,000 132,750,000
3,000 300 900,000 7.00% 63,000 2,500 157,500,000 13,500,000 144,000,000
3,000 300 900,000 7.50% 67,500 2,500 168,750,000 13,500,000 155,250,000
3,000 300 900,000 8.00% 72,000 2,500 180,000,000 13,500,000 166,500,000
3,000 300 900,000 8.50% 76,500 2,500 191,250,000 13,500,000 177,750,000
3,000 300 900,000 9.00% 81,000 2,500 202,500,000 13,500,000 189,000,000

 

Table 3:
The Company mines 10,000 tons per day for 150 days and mills 5,000 tons per day for 300 days.

No. Tons/ Grade Graphite Price Income Expense Gross
Milling
Tons/ Of Year % Tons/ $ $ $15 / Ton Profit $
Day Days Year Ton
5,000 300 1,500,000 4.50% 67,500 2,500 168,750,000 22,500,000 146,250,000
5,000 300 1,500,000 5.00% 75,000 2,500 187,500,000 22,500,000 165,000,000
5,000 300 1,500,000 5.50% 82,500 2,500 206,250,000 22,500,000 183,750,000
5,000 300 1,500,000 6.00% 90,000 2,500 225,000,000 22,500,000 202,500,000
5,000 300 1,500,000 6.50% 97,500 2,500 243,750,000 22,500,000 221,250,000
5,000 300 1,500,000 7.00% 105,000 2,500 262,500,000 22,500,000 240,000,000
5,000 300 1,500,000 7.50% 112,500 2,500 281,250,000 22,500,000 258,750,000
5,000 300 1,500,000 8.00% 120,000 2,500 300,000,000 22,500,000 277,500,000
5,000 300 1,500,000 8.50% 127,500 2,500 318,750,000 22,500,000 296,250,000
5,000 300 1,500,000 9.00% 135,000 2,500 337,500,000 22,500,000 315,000,000

 

 



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