Graphite has been found as disseminations in marble, in sulphide-bearing paragneiss, in pods and veins on the Property. In known occurrences, graphite can be alone or in association with other minerals, including pyroxene, scapolite, titanite, zircon and wollastonite (Spence 1920). Through trenching, Canada Carbon has identified many examples of graphite mineralization associated with marble and detritical rock sequences. Numerous variations of the graphite mineralization are observed within the Project area. Graphite primarily occurs in well crystallized euhedral flakes.

The Project represents an example of a granulite-hosted, high temperature graphite deposit, which could be paralleled to the Sierra de Aracena metamorphic belt described by Rodas et al. (2000), where the same type of graphite occurrences are found: I) stratiform graphite associated with gneiss and quartzite interbedded with calc-silicate series; II) disseminated graphite; III) graphite associated with anatectic tonalities and their restitic enclaves and IV) graphite veins. Graphite in all types of occurrences shows high crystallinity as revealed by the x-ray diffraction (XRD) study and thermal properties (Rodas et al. 2000).

Tetra Tech prepared an open pit mining study for the Project based on a target annual production of 1,500 t of refined graphite and 150,000 t of marble blocks. Canada Carbon provided Tetra Tech with a signed letter of intent with a potential mining contractor for mining graphite material, crushing to finer than 20 mm, and hauling to the mill and handling waste rock. Canada Carbon also provided rental rates for the leased supporting and ancillary mining equipment to be utilized for both the graphite and marble pits.

The graphite pit will be mined using conventional truck/loader open pit mining. The production cycle will include drilling, blasting, loading, and hauling, and will be performed by a mining contractor.

Marble will be cut into blocks using chain saws. First a horizontal bottom section, with a length of 20 m and a depth of 2.25 m, will be cut. Second, a back vertical section, with a length of 20 m will be cut at a depth of 2.25 m. Wood blocks will be used to prevent the marble blocks from falling. Vertical cross sections will be cut at approximately 2-m intervals to produce 2.25 m by 2.25 m by 2 m marble blocks. The marble blocks will then be separated and pushed down over a prepared cushion layer of crushed rocks using hydraulic block pushers. A fork loader will be used to load the marble blocks into a flatbed truck for off-site transportation.

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