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F I EL D REPORT Alabama Graphite soon to be the newest and only graphite producer in the US by Kathrine Moore East-central Alabama, United States, once hosted 43 major graphite mines and 30 processing plants. Clay, Coosa and Chilton counties produced more than 100 million pounds between 1910 and 1953. Today, there are no graphite producers in the US. China produces the bulk of the world's graphite; production, from China, in 2011 equalled 600,000 tonnes with production expected to increase. In the same year India produced 140,000 tonnes, Brazil produced 76,000 tonnes, North Korea produced 30,000 tonnes, Canada produced 25,000 tonnes and Romania produced 20,000 tonnes. Sri Lanka, Ukraine, Madagascar, Mexico and Norway all contributed thousands of tonnes to 2011 production numbers. China, Canada and Brazil are the major suppliers of crystalline flake and flake dust graphite. (Source: United States Geological Society's Mineral Commodity Summaries 2012). In recent years, investor interest in graphite has grown due to its use in fuel cells, lithium ion batteries, and carbon fibre technology. However, the bulk of production is used in refractory, crucible, foundry and steel making applications. Graphite demand for application in the developing fuel cell industry could eventually eclipse demand for all other uses. The US imported 70,000 tonnes of graphite in 2011. US imports have risen from 59,000 tonnes in 2007 to 70,000 tonnes in 2011, more than twice Canada's entire 2011 production. Danny Spine, President of Alabama Graphite Company Corp. [ALP-CNSX; Frankfurt: 1AG], plans to put the Alabama graphite industry back to work after a 60-year lay-off. The company's Coosa Graphite Project, in Alabama's Graphite belt, is host to what he describes as a 38 www.resourceworld.com "pre-discovered" deposit; it hosted historically-economic production in the 1910-1953 era. Grades from over 100 samples averaged 4.25% and a significant amount of the graphite on the property presents as large flake. The entire range of near surface mineralization is weathered and oxidized which makes maintaining flake integrity easier when processing. Spine said that the Coosa Graphite Project could potentially supply ~40% of US demand in its first year of production. The Coosa Project is entirely on private land which means that there is no cumbersome permitting process for exploration. There are no First Nations issues and there is a great deal of expressed support from the surrounding underemployed community. Alabama's Department of Conservation and Natural Resources has also voiced their support. The property is large enough that the planned production zone is placed well back from any local waterways. Spine has already developed a positive relationship with the area's River Keeper and has begun base-line water quality monitoring. Infrastructure is in place; the project has convenient access to power, water, roads, rail and a port. "We are serious about getting this project into production," said Spine. We started drilling at the end of September and completed the 6,000-metre drill program on December 20." Scott Wilson (Metal Mining Consultants) was engaged in November to help with preparation of the NI 43-101 resource estimate, to be published in the first half of this year. Wilson concurred that the 200-foot (61m) centres inside the drilled grid would be sufficiently tight enough to provide confident drill density for the report to be considered an indicated resource. Doug Oliver, the Exploration Director said, "We Drill on site at Alabama Graphite's Coosa Project have outlined a potential oxidized resource that is 35 – 80 feet thick and a reduced, non-oxidized zone that comprises another 150 feet of thickness. Production plans will describe an open pit operation. "We have seen an 1,800-feet true width in the graphite-bearing horizon and it has a strike length measured in miles. And we have a lot of those miles in our 42,000 acres," Spine added. Some encouraging results from the drill program include the following: in hole AGC-12-007C, the interval from 36.58 to 83.82m (120 to 275 feet) averaged 2.87% Cg. Included in this 47.24m (155 feet) interval was 6.10 metres (20 feet) grading 4.62% Cg. In hole AGC-12-009C, the interval from 27.43m (90 feet) to the bottom of the hole averaged 2.97% Cg. Included in this 124.97m (410 feet) interval was 9.14m (30 feet) grading 3.55% Cg and 19.81m (65 feet) grading 3.78% Cg. Spine is already thinking beyond profebruary 2013