Northern Graphite Advances Purification Technology - Seite 2

A competitor of the Company, whose CEO is a former executive of Northern, recently released a Preliminary Economic Assessment ("PEA") which is based on a "proprietary low-temperature purification process" claimed as its own. Northern believes there is sufficient information in the PEA to conclude that this process is essentially a copy of the one developed by Northern at considerable time and expense. Northern considers its process to be proprietary intellectual property which is protected as a trade secret and confidential information at common law and through confidentiality agreements which remain in force. Any attempt to use the technology will be met with the appropriate legal response. Reagent consumption and reaction times are very low when the process is used on Northern's concentrates and this may not be the case for others.

About Spherical Graphite

SPG is flake graphite concentrate that has been micronized, rounded, purified and coated for use in LiBs. It is Northern's opinion that the complexities of making SPG are generally not well understood and costs are usually significantly underestimated. Coated SPG sells for $8-12,000/t and reported high margins based on production cost estimates of less than US$3,000/t are unrealistic.

Micronization and rounding are relatively straightforward and can be done with readily available equipment. It typically takes three tonnes of flake graphite concentrate to produce one tonne of SPG due to losses during these steps. Northern has achieved yields over 50 per cent. Generally, flake graphite between 100 and 150 mesh in size ("small flake") is used. Medium and large flake can also be used but it does not make economic sense to turn them into SPG at current prices. Flake sizes smaller than 150 mesh are generally not used because yields decline and purification is more difficult.

Purification is challenging due to regulatory and environmental issues relating to the wet chemical process and to the cost of the thermal approach. Northern's technology represents the first real, viable alternative. Coating, which consists of more than one step, is mainly done by a few large Japanese, South Korean and Chinese companies whose process technologies are considered trade secrets and are not disclosed. Coated SPG is an engineered product that will have to go through an extensive and rigorous qualification process in real LiBs (such as 18650 cells or pouch cells) before it is accepted by end users and actually used in batteries. Northern's proprietary coating technology has been successfully tested in coin cells and will now be tested in 18650 cells. For additional information on spherical graphite see: Spherical Graphite Summary.