1  TSX – V NRT

Discovering Graphite Opportunities in Mexico & Canada

Jan 2014

 

Cautionary Note Forward-­‐looking  statements  Certain  statements  contained  herein  cons/tute  “forward-­‐looking  statements.”    Forward-­‐looking  statements   look   into   the   future   and   provide   an   opinion   as   to   the   effect   of   certain   events   and  trends   on   the   business.     Forward-­‐looking   statements   may   include   words   such   as   “plans,”  “intends,”   an/cipates,”   “should,”   “es/mates,”   “expects,”   “believes,”   “indicates,”   “targe/ng,”  “suggests,”  “poten/al,”  and  similar  expressions.    These  forward-­‐looking  statements  are  based  on  current   expecta/ons   and   entail   various   risks   and   uncertain/es.   Actual   results   may   materially  differ  from  expecta/ons,  if  known  and  unknown  risks  or  uncertain/es  affect  our  business,  or  if  our  es/mates   or   assump/ons   prove   inaccurate.     Investors   are   advised   to   review   the   Company’s  Annual   Informa/on  Form  filed  at  www.sedar.com   for  a  detailed  discussion  of   investment   risks.  The  Company  assumes  no  obliga/on  to  update  or  revise  any  forward-­‐looking  statement,  whether  as  a  result  of  new  informa/on,  future  events  or  any  other  reason.  While  Big  North  intends  to  re-­‐start  the  Nuevo  San  Pedro  mine,  the  Company  has  not  established  mineral  resources  and  has  not  completed   a   valid   mining   study   (as   defined   by   NI   43-­‐101)   to   support   a   produc/on   decision.  Historically,  a  produc/on  decision  under  these  circumstances  results  in  much  higher  economic  or  technical  risk.  Furthermore,  without  a  pre-­‐  feasibility  or  feasibility  study  and  a  graphite  reserve,  there  can  be  no  assurance  that  opera/ons  at  Nuevo  San  Pedro  will  be  profitable.      

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Management & Directors v  Spiro  Kletas,  President  &  CEO,  Director  –  Over  10  years  experience  in  the  financial  industry  with  7  years  in  the  public  capital  

markets,   working   for   several   Toronto   Exchange-­‐listed   companies   in   project   procurement,   corporate   development   and  financing.      

v  Cesar  J  Guajardo,  Director  –  Has  18  years  of  experience  in  the  graphite  business.  He  is  the  former  owner  and  Chairman  of  the  Board  of  Grafito  de  Mexico  SA  de  CV,  a  private  company  that  formerly  owned  the  El  Tejon  Flake  Graphite  Mine  and  Mill  in   Oaxaca,   Mexico.   Mr.   Guajardo   is   a   graduate   of   the   Universidad   de   Nuevo   Leon,   and   holds   a   degree   in   Industrial  Engineering.    Mr.  Guajardo  spent  22  years  with  Praxair  Mexico  and  was  the  former  Managing  Director  of  Praxair  Mexico  for  ten  years.    

v  Dean  Nawata,   Director   –  Over   18   years   of   public  market   experience,   nine   of  which   he   spent   as   a   licensed   stockbroker  focusing   on   financing   of   junior   mining   and   oil/gas   projects   with   NesbiW   Burns,   Research   Capital   and,   most   recently,  Raymond  James.  Mr.  Nawata  currently  holds  a  posiZon  in  Business  Development  for  49  North  Resources,  is  President  and  CEO  of  Olympic  Resources,  CFO/Director  of  Red  Star  Capital  Ventures    and  is  a  Director  of  Prima  Fluorspar  and  Greywacke  ExploraZon.  

v  Andrew  Rees,  Director  –  Mr.  Rees  is  currently  President  and  CEO  of  WellStar  Energy  Corp.  and  sits  on  the  board  of  directors  of   several  publicly   trading  companies.  Mr.  Rees  brings  15  years  of  public  company  experience  having  been   involved  with  developing  projects  from  concept  to  producZon.  Mr.  Rees  has  been  directly  involved  in  raising  over  $150  million  for  junior  resource  companies.  

v  Eric  Ostensoe  P.  Geo.,  Director  -­‐  Mr.  Ostensoe  is  a  consulZng  geologist  with  more  than  forty  years  direct  involvement  with  the  mining   and  mineral   exploraZon   industries.  Mr.   Ostensoe   supervises   property   exploraZon   and   development   projects  from  "grassroots"   to  advanced  stages  and  provides  recommendaZons  to  management  of   junior  and  medium  sized  public  companies.  

v  Connie  Norman,  Corp  Secretary  

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Capital Structure

•  Issued  &  Outstanding        55.0  m  

•  Warrants            28.0  m    •  OpZons                  3.2  m    

•  Fully  Diluted            86.2  million    

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Investment Highlights •  Producing,  purchasing,  processing  and  selling  amorphous  graphite  

in  Sonora  Mexico    •  760  tons  sold  to  date  (Aug  –  Dec  2013)  •  Amorphous  graphite  accounts  for  approx  50%  of  natural  graphite  

market  and  over  90%  of  producZon  was  out  of  China  in  2012      •  Big  North  is  the  only  TSX.V  company  conducZng  business  in  

amorphous  graphite  •  Acquiring  the  El  Tejon  Flake  Graphite  Mine  and  Mill  in  Oaxaca,  

Mexico  •  Goal  to  further  near  term  cash  flow  by  adding  flake  graphite  

producZon  and  sales  

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Sonora Mexico Properties •  Big  North  acquired  3  past  producing  graphite  mines  in  Sonora,  Mexico  -­‐                                                                              

La  Fortuna,  Caraples  and  a  50/50  JV  in  the  Nuevo  San  Pedro  Graphite  mine.      •  Nuevo  San  Pedro  mine  in  the  process  of  being  re-­‐started:  Big  North  Graphite  to  

accelerate  the  start-­‐up  process.*      •  Started  assembly  of  processing  facility  April  2013  •  Started  test  mining  May  2013  •  First  sale  completed  Aug  2013  

•  Approx.  10  km  East  of  a  rail  line  with  direct  access  to  the  port  of  Guaymas  •  Area  of  good  infrastructure  and  access  •  Sonora  Mexico  has  produced  graphite  for  over  100  years  •  Approx.  50  km  SE  of  Hermosillo,  a  city  of  1  million  people  •  Nuevo  San  Pedro  is  approx  1km  away  from  the  La                Lourdes  graphite  mine,  which  has  been  operaZng                for  over  50  years  

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Sonora Mexico Property Map

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•  Nuevo  San  Pedro  is  an  approximately  11  hectare  property.  It  is  a  past  producing  mine,  which  is  in  the  process  of  being  restarted.  

•  Aki  Wiki  consists  of  approximately  145  hectares.  

•  Aki  Wiki  is  located  approximately  1.5  kilometers  south  of  the  historic  El  Cochi  graphite  mine.    There  are  two  past  producing  mines  on  the  property,  La  Fortuna  and  Caraples.    

                   

 

Buying and Processing April   22,   2013   News   Release:     “Big   North   …   announces   that,   as   part   of   the   Company's   business   plan,   the  

Company   has   started   buying   amorphous   graphite   from   local   private   producers   who   do   not   have   processing  

capabili/es.  Big  North  has   recently  acquired  approx  100   tons  of  amorphous  graphite   in  an  unprocessed   form  

from   two   local   miners.   Big   North   plans   to   purchase   graphite   from   local   producers   to   supplement   poten/al  

produc/on   from   the  Nuevo   San  Pedro   project.   The   Company  plans   to   process   the   purchased  graphite   to   the  

specifica/ons  of  future  customers  and  re-­‐sell  the  purchased  graphite  at  market  prices,  capturing  the  difference  

in  prices”.    

 

ü  Increase  “producZon”  without  the  tradiZonal  risks  of  mining  

ü  Many  small  family  run  graphite  mines  without  processing  ability  

ü  Minimum  grade  requirement  

ü  Capture  the  difference  on  pricing,  minus  processing  and  transport  

 

 

 

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Amorphous Graphite Stockpiles

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               Graphite  Stockpiles  at  Big  North  Graphite’s  Processing  Plant,  Sonora  Mexico  

 

El Tejon Flake Graphite Mine and Mill

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• LOI  signed  Dec  2013  • Mexico’s  only  past  producing  flake  graphite  mine  and  floataZon  mill  • Closed  due  to  graphite  prices  in  2002  • Ability  to  jump  start  –  all  infrastructure  in  place  • Produces  flake  graphite  (different  uses  than  amorphous  graphite)  

• Cesar  J  Guajardo,  Chairman  of  the  private  company  that  formerly  operated  El  Tejon,  joins  the  Board  of  Big  North  • He  has  18  years  of  graphite  producZon,        processing  and  sales  experience  in  Mexico  

 

El Tejon Flake Graphite Mine and Mill

•  500  hectare  property  -­‐  consists  of  the  El  Tejon  flake  graphite  mine  and  mill    •  The  El  Tejon  Property  is  located  in  the  state  of  Oaxaca,  approx  38  

kilometers  Northwest  of  the  City  of  Oaxaca,  in  the  town  of  San  Francisco  Telixtlahuaca.    

•  The  El  Tejon  Property  is  the  only  flake  graphite  mine  to  have  produced  in  Mexico.    

•  The  mine  and  mill  were  originally  built  in  1980  by  the  Government  of  Mexico.  In  1989,  a  second  processing  line  was  installed  to  increase  the  capacity  to  approximately  4400  tonnes  per  year  of  finished  graphite.    

•  El  Tejon  was  an  open  pit  mine,  and  the  mill  was  used  to  crush,  mill,  float,  dry,  screen  and  pack  final  product.    

•  Closed  in  2002,  due  to  low  graphite  prices.  At  the  Zme  of  closing,  approximately  80%  of  the  graphite  produced  was  sold  to  the  USA.  

•  Historically,  the  mine  produced  approximately  20%  large  flake  graphite  and  80%  medium  and  fine  flake  graphite.  

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Griffith/Brougham Graphite Properties - Ontario

•  Approximately  6,500-­‐hectare  land  posiZon  in  central  southeastern  Ontario  

•  High  value,  high  quality  large-­‐flake  graphite  exploraZon  target  

•  In  an  area  of  well-­‐established  access  and  infrastructure  

•  ProperZes  cover  substanZal  tracts                                                                                                                                                                                                      of  graphite-­‐prospecZve  Grenville-­‐age  marble                                                                                                                                                        +/-­‐gneiss  geology  and  are  unexplored  for  graphite                                                                                  using  modern  technology.    

•  To  the  southeast,  the  Brougham  Graphite  Property  is                                                                                                    anchored  by  two  historic  graphite  occurrences  (based  on                                                                                                                                Ontario  Geological  Survey  maps  from  the  1970's)    

•  EM  survey  completed  July  2012  

•  NI43-­‐101Technical  Report  released  Oct  2012  

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 Grand Lac du Nord Property - Quebec •  Approximately  2,009  hectare  land  package    •  Located  approximately  140  km  NW  of  Sept-­‐Iles,  by  road  •  8km  x  2km  graphiZc  paragneiss  formaZon    •  Similar  geology  to  other  graphite  deposits  and  mines  in  Quebec,  such  

as  Focus  Metals  Inc.'s  Lac  Knife  deposit,  Timcal  Graphite  and  Carbon's  Lac  des  Iles  mine.  

•  Originally  explored  by  SOQUEM  (2000/2001)  •  Phase  1  ExploraZon  completed  -­‐    confirmed    

 a  mulZple  graphite  bearing  structure  covering      an  area  approximately  4  km  by  2  km  with      results  of  up  to  5.31%  Graphite  in  grab  samples                                                                                                                                                                

   

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What is Graphite? •  CriZcal  supply  industrial  mineral  •  One  of  two  natural  carbon  polymers  (diamonds)  •  Light  weight  with  highest  natural    

strength  and  sZffness  of  any  material  •  Conductor  of  heat/electricity  •  Corrosion  and  heat  resistant  •  High  natural  lubricity  

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Amorphous Graphite •  Global  graphite  producZon  was  1.1  million  tons  in  2012,  approx  50%  of  which  is  amorphous  

graphite.  •  The  United  States,  Europe  and  China  have  included  graphite  among  the  short  list  of  criZcal  

metals  •  The  UnZed  States  produces  no  graphite  and  is  100%  dependent  on  imports  to  meet  it's  

industrial  and  technology  needs.  •  China  produces  70%-­‐80%  of  the  world’s  natural  graphite.    China  produced  over  90%  of  

world’s  amorphous  graphite  in  2012.      •  “Supply  security  is  a  big  concern”  for  amorphous  graphite  users  •  ConZnuing  government-­‐backed  consolidaZon  programs  in  the  Hunan  Province  is  seeing  over  

230  mines  reduced  to  20  •  Amorphous  graphite  sells  for  $350-­‐800/ton  depending  on  the  carbon  content  which  ranges  

from  65%  to  85%+  •  Amorphous  graphite  producZon  is  dominated  by  China,  with  approx  16K  tpa  from  Austria,  

12K  tpa  from  Mexico  and  300  tpa  from  Turkey  •  Amorphous  graphite  is  mainly  used  as  a  component  in  lubricants,  refractories,  steel  

producZon,  brake  linings,  clutch  materials,  gaskets  and  water-­‐based  paints    *Source:  Industrial  Minerals  

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Amorphous Graphite + Uses

•  Amorphous  graphite  is  actually  not  “amorphous”  as  all  graphite  is  crystalline.  It  is  microcrystalline  or  cryptocrystalline,  meaning  that  the  “flake”  size  is  very  small.  

•  Amorphous  graphite  is  used  in  the  refractories  industry  to  manufacture  crucibles,  ladles,  molds,  nozzles  and  troughs  that  can  withstand  the  very  high  temperatures  associated  with  molten  metal,  parZcularly  the  casZng  of  steel.  

•  The  electrodes  used  in  many  electrical  metallurgical  furnaces,  including  the  electric  arc  furnaces  used  in  steel  processing,  are  manufactured  from  graphite.  In  the  producZon  of  steel  itself,  graphite  is  used  as  a  carbon  raiser  to  strengthen  steel.  It  is  also  used  in  blast  furnace  linings  for  the  producZon  of  iron  because  of  its  high  thermal  conducZvity.  

•  Amorphous  or  fine-­‐flake  graphite  is  used  in  brake  linings,  gaskets  and  clutch  materials.    

•  Foundry  facing  mold  wash  uses  amorphous  or  fine-­‐flake  graphite  in  a  water-­‐based  paint  to  coat  the  mold,  thereby  allowing  ease  of  separaZon  of  the  casted  object  from  the  mold  auer  the  metal  has  cooled.  

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Graphite Major End Uses

41%  

14%  

14%  

11%  

10%  

10%  Steel  &  Refractories  

AutomoZve  parts    

Lubricants    

Carbon  Brushes  

BaWeries  

Other  

Source:    Merchant  Research  &  ConsulZng  (2011)   17  

 

Supply/Demand Dynamics

•  Industrial  demand  growing  5%  per  annum  over  last  10  years  due  to  industrializaZon  of  emerging  economies  such  as  China  and  India  

•  European  Union  and  USA  named  graphite  a  mineral  in  criZcal  supply  

•  Lack  of  exploraZon  and  development  over  last  20  years  and  China  producing  +70%  of  the  world’s  graphite  

•  Chinese  producZon  and  exports  expected  to  decline  due  to  China’s  strategy  to  keep  value  added  manufacturing  in  the  country  

•  Graphite  market  is  more  than  40  Zmes  larger  than  lithium  and  rare  earths  markets    •  Demand  for  graphite  increasing  globally  for  green  technology  applicaZons  which  have  potenZal  to  

consume  more  graphite  than  all  current  uses  combined  

Source:  Industrial  Minerals,  Supply  Situa*on  Report:    Graphite  demand  soars  above  pre-­‐crisis  Levels,    April  2011   18  

 

Graphite Global Demand

Source:  Industrial  Minerals  Magazine   19  

 

Key Milestones ü  Big  North  Completes  Qualifying  TransacZon-­‐  Dec  2011  ü  Acquired  First  graphite  asset  -­‐  March  2012  ü  Strategic  AcquisiZon  of  addiZonal  assets  –  April/Sept  2012  ü  Commence  ExploraZon  on  Canadian  properZes  -­‐  May/June  2012  ü  AddiZons  to  Management,  OperaZonal  and  Technical  Teams  -­‐  June/July  2012  and  ongoing  ü  AcquisiZon  of  past  producing  Assets  in  Mexico  -­‐  Sept  2012  ü  Close  acquisiZon  of  Mexico  properZes  –  Nov  2012  ü  Start  assembly  of  processing  plant  ü  Accelerate  re-­‐start  of  Nuevo  San  Pedro  Mine  –  ongoing  ü  Commence  test  mining  of  amorphous  graphite  in  Mexico  ü  Amorphous  graphite  sales  q  Increase  producZon,  enhancing  processing,  growing  sales  and  securing  long-­‐term  ovake  

partners  q  Move  El  Tejon  project  towards  producZon  

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Contact Info:

Spiro  Kletas,  President  &  CEO  spiro@bignorthgraphite.com    info@bignorthgraphite.com  

 www.bignorthgraphite.com  

 Big  North  Graphite  Corp.  

Suite  350  -­‐  885  Dunsmuir  Street  Vancouver,  BC  

V6C  1N5  604.629.8220  (Office)  

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