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Industrial Minerals Canada The Power of Graphite

Industrial Minerals Canada The Power of Graphite. June, 2009. FORWARD LOOKING STATEMENTS

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Industrial Minerals Canada The Power of Graphite

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  1. Industrial Minerals CanadaThe Power of Graphite June, 2009

  2. FORWARD LOOKING STATEMENTS This Presentation may contain “forward-looking information” which may include, but is not limited to, statements with respect to: timing of the receipt of governmental approvals and/or acceptances; targets, estimates and assumptions in respect of production and prices; amount and type of future capital expenditures and capital resources; mineral reserves and mineral resources; anticipated grades; recovery rates; future financial or operating performance; costs and timing of the development of new deposits; costs, timing and location of future drilling; production decisions; costs and timing of construction; operating expenditures; costs and timing of future exploration; and environmental and reclamation expenses. There can be no assurance that future required regulatory approvals will be obtained or that anticipated transactions or proposed work and construction programmes will be completed satisfactorily. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries and/or its affiliated companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of the applicable public record document which the information is derived from and the Company has disclaimed any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

  3. Investment Highlights • Growing industrial demand (BRIC) • Developing strategic applications-green initiatives • Supply issues in China (70% of world production) • Only major North American producer closing • Large, high quality 43-101 graphite resource • Good location, low stripping ratio, simple metallurgy • Letters of intent for > 200% of annual production

  4. What is Graphite? • A natural form of carbon (e.g coal, diamonds) • Excellent conductor of heat and electricity • Highest natural strength/stiffness • Lightest weight of all reinforcements • Maintains stability over 3,600 degrees C • Resists chemicals • High Lubricity

  5. What is it used for? Traditional Applications REINFORCING COMPONENT • Steelmaking • Refractories (high temperature liners) • Brake and clutch materials • Gaskets • Plastics ELECTRICAL AND THERMAL CONDUCTIVITY • Batteries • Semiconductors • Carbon brushes and bearings LUBRICATION • Oils and greases, powdered metals, foundry

  6. What is it used for? Hi Growth Strategic Applications • Lithium ion batteries in electric vehicles • Fuel cells • Nuclear reactors • Solar technology • Semiconductors • LCD and LED displays

  7. Lithium Ion Battery Demand • LIBs used in cell phones, lap tops • Graphite key component in battery electrodes • Lighter and smaller than NiMH batteries • Higher voltage, more power, longer life • 11kg of graphite in a hybrid electric vehicle (HEV) • Over 60M cars/yr and less than 2.5% are HEVs

  8. HEV Market Share Source: greencarcongress.com

  9. Li Ion batteries in the news…. Congressional stimulus bill includes tens of billions of dollars in loans, grants, and tax incentives for battery and HEV research and manufacture to jump-start US industry… Toyota has a goal of reaching global annual sales of 1M hybrid vehicles after 2010…battery joint venture with Matsushita Electric will start producing longer-lasting lithium-ion batteries in 2009 as it aims to roll out more electric cars…Sanyo plans to start two auto-use lithium-ion battery plants in Japan by July 2010 …No matter where you are in the world, lithium-ion batteries are seen as a huge part of the future of the automotive industry and companies are clamoring to invest in their future…Boston Power pursuing $100M in Federal Funds for Li-Ion Plant in Massachusetts Michigan awards $544M in tax credits to four battery companies with plans to invest more than $1.7 billion in Li-ion manufacturing facilities in the state… The National Alliance for Advanced Transportation Batteries has selected a site in Kentucky to build a more than $600M automotive lithium ion battery plant…

  10. Pebble Bed Modular Reactors • Small scale, high temperature reactors • Less costly to build and operate • Water cooling system not required • No large containment building • Fuel is uranium embedded in graphite balls • Each requires 100t of graphite plus 20-30 tpa • China committed to nuclear, first prototype built • 30 PBMR plants (6GW) by 2020 • 300GW of nuclear by 2050 including PBMR

  11. Graphite Prices • No standard spot price, negotiated between buyer and seller • Quoted prices represent longer term averages • Prices increase with flake sizes and carbon content

  12. The Market • 1 million tonnes per year demand • 70% of production from China • Increasing costs (labor/environmental issues) • Declining quality (high grading and smaller flake sizes) • Exports restrictions and export taxes • Security of supply issue • Lack of new mine development • Only North American producer to close “As a result of increasing regulation in China and a corresponding shortage of the raw material, the market for natural graphite is dramatically changing. Demand is increasing and significant price increases can be observed. “ Graphit Kropfmühl AG

  13. Bissett Creek Property • 100% owned • Proximity to markets, good infrastructure • 8,400m of drilling in 242 holes • Full feasibility completed in 1989 (Kilborn, Bacon Donaldson, Comminco Engineering) • 43-101 Preliminary Assessment in 2007

  14. Bissett Creek Resources • Indicated Resources 14.6Mt @ 2.24%C at 1.5% cutoff • Inferred Resources 18.0 Mt @ 2.21%C at 1.5% cutoff • 40 Year Mine Life • Only 10% of property drilled to date

  15. Bissett Creek Resources Flake size A human  hair is 100 microns thick. A dime is 1400 microns thick

  16. Bissett Creek Economics • $60M Capital Cost • 94% recovery with standard flotation • 2,500tpd processing rate • 19,000 tonnes of graphite produced per year • 0.66 waste to ore ratio • 10% mining dilution

  17. Bissett Creek Economics 43-101 NPV $88.1 million (10%) IRR 28% Payback 4 years

  18. Financing Requirements MCP permitting and monitoring $350,000 FT Pilot plant $1,500,000 ? Drilling $750,000 FT Feasibility $500,000 Metallurgical testing $300,000 FT Public company costs $1,000,000 Payables/loans $500,000 TOTAL $4,900,000

  19. Directors/Management/Advisors Gregory Bowes B.Sc. (geology), MBA Senior VP, Orezone Gold Corporation Iain Scarr B.Sc. (geology), MBA 30 years with Rio Tinto, Commercial Director and VP Exploration, Industrial minerals division George Hawley Research chemist/physicist 40 years of experience in Industrial Minerals in research, process and product development, market analysis and development Chris Crupi CA President/Director of Paramount Gold & Silver (PZG:TSX, NYSE.A) John Carter Project Manager 30 years of experience in design, fabrication and installation of mineral processing equipment, former President of Minpro International Bob Dinning CA Management consultant with 35 years of experience with various public and private companies

  20. Summary • Large, established resource, close to markets • Hi quality, low strip ratio, simple metallurgy • Growing demand (BRIC plus LiI batteries) • Supply concerns with China • Will be only major North American producer

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