Alabama Graphite Corp. Reports Positive Pilot Plant Test Results for Coosa Graphite Project in Coosa County, Alabama, USA

TORONTO, ONTARIO--(Marketwired - Feb. 3, 2016) -

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Alabama Graphite Corp. ("AGC" or the "Company") (TSX VENTURE: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 ("CSPG") for the American lithium-ion battery industry.

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

	•	Confirm the performance of the primary processing metallurgical flow sheet;
	•	Develop an optimized process design criterion (for primary processing) for the forthcoming Coosa Graphite Project Feasibility Study;
	•	Achieve a high-carbon concentrate suitable for AGC's proprietary secondary processing to produce specialty graphite products, namely CSPG for lithium-ion batteries; and
	•	Produce concentrate material for AGC's secondary processing development and optimization, subsequent secondary processing pilot plant (in support of the forthcoming Feasibility Study), and for evaluation by potential offtake partners.

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 AGC pilot plant was able to produce a high carbon grade, averaging 96.7% across all flake sizes;
	•	All size fractions greater than 325 mesh yielded between 96.2% and 97.2% total carbon; even -325 mesh material yielded 94.6% Cg;
	•	Overall recovery was 88.2%, which management considers good given the inversely proportional relationship between high concentrate grade and recovery; opportunities for improvement were identified, as first-stage cleaner recoveries achieved 99.3%;
	•	130 tons of graphitic material from the Coosa Graphite Project was processed in the pilot plant, netting the Company 3 tons of graphite concentrate;
	•	Average head grade of 3.09% total carbon (ranging from a minimum of 2.54% total carbon to a maximum of 3.48% total carbon); and
	•	AGC's graphite concentrate is expected to be quite amenable to secondary processing.

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 (announced on November 30, 2015), would be diverted to secondary, specialty processing to produce CSPG for use in lithium-ion batteries, and purified micronized graphite ("PMG") 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 ("SGS") of Lakefield, Ontario (which is a division of SGS Canada Inc.) and the testing of the pilot plant was managed by a Consulting Metallurgist for SGS, renowned graphite metallurgist Oliver Peters (the Principal Metallurgist of Metpro Management Inc.). 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.

Qualified Person

The disclosure herein regarding the scientific and technical information concerning the pilot plant testing results is based upon information prepared by or under the supervision of Oliver Peters, P.Eng., MSc, MBA, a Qualified Person as defined by National Instrument 43-101 ("NI 43-101") guidelines.

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

About SGS Mineral Services

SGS Mineral Services ("SGS") (which is a division of SGS Canada Inc.) 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. (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.

As announced on October 13, 2015, the Coosa Graphite Project hosts an National Instrument 43-101 ("NI 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 ("PEA") 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 (final) specialty, secondary-processed graphite products - a coated spherical graphite product ("CSPG") and a purified micronized flake graphite product ("PMG"). The PEA is not modelled on producing a final run-of-mine ("ROM") 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.

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.

Disclaimer for Forward-Looking Information

This press release contains forward-looking information under applicable Canadian securities laws ("forward-looking statements") that 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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