Alabama Graphite Corp. Announces Multi-Kilogram Shipment of American Sourced and Manufactured Samples to United States Department of Defense (DoD) Lithium-ion Battery Manufacturer

TORONTO, ONTARIO--(Marketwired - Aug. 15, 2016) - Alabama Graphite Corp. ("AGC" or the "Company") (TSX VENTURE:ALP) (OTCQX:ABGPF) (FRANKFURT:1AG) is very pleased to announce that further to its June 23, 2016 announcement ('Alabama Graphite Corp. Announces Shipment of American Sourced and Manufactured CSPG Samples to United States Department of Defense (DoD) Lithium-ion Battery Solutions Provider'), the Company has manufactured and shipped three one-kilogram evaluation samples of its Purified Micronized Graphite ("PMG") to a U.S.-based leader in both Lithium-ion ("Li-ion") and lithium batteries for a diverse range of military applications under contract from the United States Department of Defense ("DoD"). AGC conveyed sub-10 micron, fine-sized PMG made from the Company's Coosa Graphite Project material - located in Coosa County, Alabama, USA - that will be tested in various defense applications; specifically, primary (non-rechargeable) lithium batteries. All requisite downstream secondary processing to manufacture Coosa PMG was conducted in the United States of America.

Employing nearly 700 people, this international battery company is known for its extensive expertise and experience in battery development for the DoD. Although government and defense accounts for the vast majority of the battery manufacturer's revenues, it designs and manufacturers both primary and secondary (rechargeable) lithium batteries for multiple other industries, including healthcare/medical, critical stationary energy storage, safety, and industrial markets. The aforementioned company will remain unnamed for reasons of commercial confidentiality.

Execution of Additional NDAs with U.S. DoD Li-ion Battery Manufacturers

Further to AGC's July 18, 2016 announcement ('Alabama Graphite Corp. Announces the Execution of Six Non-Disclosure Agreements with U.S Department of Defense Lithium-ion Battery Solution Providers for Coated Spherical Graphite ("CSPG") Samples'), the Company announces the execution of an additional two non-disclosure agreements ("NDAs") with U.S. DoD lithium-battery manufacturers and suppliers for the purpose of carrying on discussions and due-diligence evaluation of samples of AGC's American-sourced and -manufactured CSPG and PMG for use in lithium batteries. These two new agreements bring AGC's total of DoD-related agreements to eight currently, and are in addition to the multiple NDA agreements AGC has entered into with U.S.-based entities that are not affiliated with the U.S. DoD.

AGC's President, Chief Executive Officer, and Executive Director, Donald Baxter commented, "As we continue to advance our CSPG and PMG graphite initiatives, I am extremely pleased to report that we have conveyed a significant-sized sample of our 100% U.S. sourced and manufactured battery-ready material to yet another DoD manufacturer. This multi-kilogram shipment is important because it demonstrates that we can produce battery-ready graphite to a battery manufacturer's precise specifications, and as importantly, that we can do so in comparatively significant quantities - with a very short lead time.

"This particular DoD battery manufacturer requested samples of both AGC's CSPG and PMG materials. The company required kilogram quantities of PMG immediately for a primary lithium application development project. Additionally, we are preparing CSPG samples for this and multiple other DoD contractors. The interest we have received thus far from U.S. DoD battery manufacturers for our battery-ready graphite is extremely encouraging," stated Mr. Baxter.

AGC will continue to update shareholders and the market in a timely fashion of further material developments with respect to this and other potential American-based end users, as we are able to disclose. Please note, certain potential end users preclude the Company from announcing any aspect of its relationship and activities, ranging from the execution of an NDA to the shipment(s) of sample material(s).

AGC Announces Granting of Stock Options

Further to AGC's August 8, 2016 announcement ('Dr. Gareth Hatch Appointed to the Board of Directors of Alabama Graphite Corp.'), the Company announces that it has granted incentive stock options to purchase up to 400,000 common shares at an exercise price of $0.15 per share for a period of two years to Dr. Hatch, in accordance with the provisions of its stock-option plan.

On behalf of the Board of Directors of

ALABAMA GRAPHITE CORP.

Donald K. D. Baxter, P.Eng., President, Chief Executive Officer and Executive Director

Qualified Person

Donald K. D. Baxter, P.Eng., President, Chief Executive Officer and Executive Director of Alabama Graphite Corp., is a Qualified Person as defined by National Instrument 43-101 guidelines, and has reviewed and approved the content of this news release.

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. (a company registered in the state of Alabama). 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.

On November 30, 2015, Alabama Graphite Corp. announced the results of PEA for the Coosa Graphite Project, indicating a potentially low-cost project with potential positive economics. 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.

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.

* Inferred Mineral Resources represent material that is considered too speculative to be included in economic evaluations. Additional trenching and/or drilling will be required to convert Inferred Mineral Resources to Measured or Indicated Mineral Resources. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

For further information and updates on the Company or to sign up for Alabama Graphite Corp. News, please visit www.alabamagraphite.com or follow us on Twitter, Facebook and LinkedIn.

Forward-Looking Statements

This press release contains forward-looking information under applicable Canadian securities laws ("forward-looking statements"), which may include, without limitation, statements with respect to any potential relationships between the Company and any end users and/or the DoD. The forward-looking statements are based on the beliefs of management and reflect Alabama Graphite Corp.'s current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current view of Alabama Graphite Corp. with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of graphite; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the Company's publicly filed documents. Forward-looking statements are also based on a number of assumptions, including that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen breakdowns, that no labor shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and Alabama Graphite Corp. undertakes no obligation to update forward-looking statements (unless required by law) if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements. Alabama Graphite Corp. cautions that the foregoing list of material factors and assumptions are not exhaustive. When relying on Alabama Graphite Corp. forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and assumptions and other uncertainties and potential events.

Alabama Graphite Corp. has also assumed that the material factors and assumptions will not cause any forward-looking statements to differ materially from actual results or events. However, the list of these factors and assumptions is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

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