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.

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."

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.).