Drilling extends zone at graphite deposit of Stewart Lake

President Richard Scratch said two drills are active on the zone performing infill work on 50-ft centres. The zone, he said, remains open at dep th and to the south. Among the better results, from both zone 2 and zone 1:

Grade (%

Zone graphitic Hole (ft) Length carbon) 88-176 2 27 12.17 88-177 1 77.5 8.73

(incl.) 25 9.72 88-178 2 18 11 88-182 1 5.5 9.62 88-184 2 78 8.13

(incl.) 48 9.41

Scratch said several tons of crystalline flake graphite of various grades and flake sizes have been manufactured and representative samples shipped to potential end- users for internal evaluation.

According to Scratch, events in China (which is a leading graphite producer) augur well for his and other up-and-coming graphite producers. Reports from China indicate internal consumption has increased and some marginal mines have been closed, which will result in a shortfall to the world graphite market this year.

Meanwhile, Stewart Lake has entered into an agreement, subject to regulatory approval, with Middlefield Resource Fund 1988 Ltd Partnership II, for exploration funding worth up to $300,000. Scratch said the money will allow for continued exploration and completion of a feasibility study.

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