Eagle Graphite Engages US Capital Partners for US$30 Million Financing

Eagle Graphite is pleased to announce that it has engaged US Capital Partners Inc. of San Francisco (“US Capital”) as lender and advisor for due diligence engagement to fund of up to US$30 Million under a proposed debt facility (the “Facility”).

The contemplated Facility under due diligence engagement consists of a machinery and equipment financing, a term loan, and a convertible debt facility. The parties anticipate that Eagle will draw incrementally upon the various components of the Facility as it progresses through a series of project milestones.

Torey Marshall, Eagle’s EVP of Business Development, adds “The management of Eagle Graphite is always striving to introduce value to our shareholders and we see this funding package as a lever to unlock significant value in the Black Crystal project and create a springboard for further growth. We intend to continue to surprise the market and demonstrate the quality of our assets and the management team that brings value out in them.”

Eagle Graphite CEO Jamie Deith states “We are very excited to be working with US Capital on such a significant financing package. Successful closing on this facility would see the resumption of graphite production and further development and expansion of the Black Crystal graphite quarry. We are already the only junior public company with a permitted, operational graphite quarry in North America, and a long term supply agreement with a major North American customer. By further advancing the project we are cementing our position as a ready source for this critical material, and setting ourselves even further apart from our competitors.”

The Company advises that a decision to enter into production would not be based on a feasibility study of minerals reserves demonstrating economic and technical viability. Readers are cautioned that production may not be economically feasible and historically these projects have a much higher risk of economic or technical failure. The Company’s contractual obligations include commitments to produce graphite under a supply agreement. Failure to fulfill these obligations could have adverse consequences for the Company.

Key Terms Of The Facility

a) Machinery and Equipment Term Loan for up to $10.5 Million, with a 4 year term and a rate of Libor + 15%,

b) Term Loan for up to $9.5 Million, with a 4 year term at a rate of Libor + 8%,

c) Convertible Debt of up to $10 Million, with a 1Y term and conversion rate to be determined.

If successful estimated closing fees would be a total of 3% payable upon closing of either term loan facility, and 7% of proceeds plus 5% warrants all payable upon closing of any convertible debt.

Key Terms Of The Supply Agreement

Approximately 1,650 tonnes of graphite are to be delivered to the customer, or in the alternative, Eagle may refund any remaining balance of a prepayment amount of US$1.53 Million, plus accrued interest from June, 2016, by December 31, 2019. Once this obligation is satisfied, Eagle will deliver to the customer 3,075 tonnes of graphite per year until December 2023, with variable pricing determined using independent third party publications. Eagle and the customer have signed a Letter of Intent to negotiate an increase in annual quantities to as much as 12,500 tonnes, and to extend the term of the supply agreement to December 2031.

About US Capital Partners Inc.

Since 1998, US Capital Partners has been providing well-structured, custom finance solutions to private and public companies in the United States and abroad. Headquartered in San Francisco, US Capital Partners, operating with its affiliate US Capital Global Securities, LLC, is a full-service private investment bank with a wide distribution for debt and equity private placements. The group makes debt investments between $500K and $100MM, participates in debt facilities, and offers asset management, financial advisory services for buy-side and sell-side engagements, and capital formation, including early-stage financings requiring equity or debt.

To learn more about US Capital Partners, email Jeffrey Sweeney, Chairman and CEO, at jsweeney@uscapitalpartners.net, or call +1 (415) 889-1010, or visit www.uscapitalpartners.net.

Cautionary Statements

Disclosure Regarding Forward-Looking Statements: This press release contains certain “forward-looking information” within the meaning of applicable securities legislation. Such information is based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking information and accordingly, readers should not place undue reliance on such information. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. In evaluating forward-looking information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward looking information. The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company or its securities, its financial or operating results, as applicable.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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