1. APRIL 3, 2012
NORTHERN GRAPHITE CORPORATION – SPEC.BUY
NGC - TSX V
TARGET:
$3.19
$4.40 (from $2.10)
Lifting Target on Spherical Graphite News
PROJ. RETURN: 38% EVENT – Spherical Graphite Produced and Tested in Batteries
VALUATION: .1x NAV (from 1x) Yesterday, Northern Graphite announced that the Company has successfully
manufactured test quantities of spherical graphite from graphite concentrate
Share Data
produced from the Company’s 100% owned Bissett Creek deposit. The spherical
Basic Shares O/S (mm) 45.4
graphite has been evaluated in Lithium/graphite battery test cells and the
Fully Diluted (mm) 52.1
performance of these cells demonstrated that it meets or exceeds current commercial
Market Cap ($mm) 144.9
performance requirements and that Bissett Creek graphite does not contain any
Enterprise Value ($mm) 133.9
impurities that negatively affect cell performance. The cells were made and testing
Net Debt - WC ($mm) (11.1)
carried out in a highly qualified, independent laboratory.
Dividend N/A
Yield N/A IMPACT – Increasing Target Price to $4.40; Leader in the Space
Next Reporting Date June Spherical graphite work confirms NGC is the leading, advanced graphite play in
the group: Spherical graphite is used to make the anodes in Li ion batteries and is
$3.50
manufactured from the flake concentrate produced by graphite mining operations.
$2.50 Almost all the world’s spherical graphite is produced in China. Our research
indicates current processes to produce spherical are inefficient and highly polluting.
$1.50 NGC’s efforts to expand into this fast growing market are promising as the
Company may achieve a first mover advantage by developing an improved
$0.50
spherical process, and by offering a non-China located source of supply to lithium
Apr-11 Aug-11 Nov -11 Mar-12
ion battery manufacturers.
Short-term Technical Target
NGC is making new highs; a P&F chart Increasing target to $4.40: A main reason for our target price increase arises because
targets $3.90+ of the spherical test results announced. We now include a spherical graphite
production plant in our base case financial estimates, and production from this plant
Corporate Profile
will ramp higher over time. We have also reduced the discount rate to 10% from 12%
Northern Graphite Corporation is a
development-stage company. The Company
on the NPV of the graphite concentrate facility. Due to NGC’s strong share price
holds a 100% interest in the Bissett Creek appreciation, less dilution has also been incorporated into our model. Lastly, we
graphite project. Primary focus is the have decided to apply a 1.1x multiple to our $4.00 NAV calculation, to reflect NGC’s
development of this asset with an objective to leading position in the hot graphite space.
become one of the world’s largest producers of
large flake graphite. A LOOK AHEAD – BFS in Next 2 Months; Construction Afterwards
Based on the positive spherical test results, the Company will commence
Upcoming Events engineering and design work to define the capital and operating costs of a facility to
upgrade Bissett Creek graphite concentrate into spherical graphite. The objective is
Filing of Mine Closure Plan (1 month).
to provide Li ion battery manufacturers with a stable, secure source of supply that is
BFS within the next 2 months. produced in an environmentally acceptable manner. Filing of the mine closure plan
and completion of the BFS are the next catalysts. Both items are expected within the
next couple of months.
FYE Dec 31 2010A Q1/11A Q2/11A Q3/11A Q4/11E 2011E 2012E 2013E 2014E
Product Revenue $ 000 - - - - - - - - 75,500
EBITDA $ 000 (484.2) (125.3) (1,563.5) (358.8) (330.0) (2,362.0) (1,698.5) (3,539) 50,788
Earnings 2010A Q1/11A Q2/11A Q3/11A Q4/11E 2011E 2012E 2013E 2014E
EPS $/sh ($0.05) ($0.00) ($0.05) ($0.01) ($0.01) ($0.07) ($0.09) ($0.20) $0.56
P/EPS n/a n/a n/a n/a n/a n/a n/a -15.9x 5.7x
CFPS $/sh ($0.03) ($0.00) ($0.01) ($0.01) ($0.01) ($0.03) ($0.09) ($0.12) $0.65
P/CFPS n/a n/a n/a n/a n/a n/a n/a -27.0x 4.9x
Matt Gowing, CFA 416.860.8675, mgowing@mackieresearch.com
Raveel Afzaal, Associate 416.860.7666, rafzaal@mackieresearch.com
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.

2. www.mackieresearch.com The MORNING CALL – NORTHERN GRAPHITE CORPORATION Page 2
VALUATION: INCREASING TARGET PRICE TO $4.40 FROM $2.10
The positive spherical test results have provided us with increased confidence in the
Company’s ability to build a spherical graphite production plant. Therefore, we have adjusted
our valuation approach to factor in the spherical graphite plant into our estimates. Other
revisions to our financial estimates and NAV include:
Volume progression of the spherical graphite an important driver of earnings: The Company
initially produces 3,000 tonnes of spherical graphite in 2014 and the production is ramped up to
the long-term run rate of 20,000 tonnes by 2020. Our estimate of an initial 3,000 tonnes per year
of spherical production seems reasonable considering that yesterday’s press release guides to
“the facility initially being based on approximately 20% of Bissett Creek’s production.” The
progression between sales of graphite concentrate versus that of spherical graphite is shown
below in the following figure.
Figure 1: Estimated Volumes of Graphite Concentrate versus Spherical Graphite
Production and EPS
30,000 $1.20
25,000 $1.00
Production (Tonnes)
20,000 $0.80
EPS
15,000 $0.60
10,000 $0.40
5,000 $0.20
0 $0.00
2014 2015 2016 2017 2018 2019 2020 2021 2022
Graphite Concentrate Production (tonnes) Spherical Graphite Production (tonnes) EPS
Source: Mackie Research Capital
Average selling prices versus operating costs: In our model, we have applied average selling
price (ASP) estimates to the spherical graphite production volumes (above) of $7,000/tonne.
Operating costs range between $2,800/tonne and $3,000/tonne during the life of the mine. On
the graphite concentrate production, we have maintained our long-term pricing estimates of
$2,300/tonne versus operating costs of $1,000/tonne. This pricing estimate compares to current
graphite pricing which values the average tonne of graphite produced and sold by NGC in
excess of $2,800/tonne.
Capex and financing assumption refinements: In our model, we were previously assuming
initial $70 million of capex to get the mine to start of production, at which point it was
producing 20,000 tonnes per year of graphite concentrate. As completion of the feasibility study
is getting closer (“one to two months from now”), management has indicated that additional
engineering work is suggesting that initial capex requirements for the graphite concentrate
facility have increased by $10 million to $80 million. We have made this adjustment to our
model, and have also added a further $10 million of investment to construct the spherical
graphite production facility. We have maintained a targeted 60% debt to capital on this capex,
and have revised our dilution assumption to take into account the strong price appreciation of
the NGC shares, and have assumed the equity is raised at an average price of $4.00/sh. Due to
the additional engineering that has been completed on the Bissett Creek operation, and the
nearness of the project reaching Bankable Feasibility Status (BFS), we have also reduced the
discount rate on the graphite concentrate project to 10%, from 12% previously. The table below
summarizes how the key line items in our financial model have changed.

3. www.mackieresearch.com The MORNING CALL – NORTHERN GRAPHITE CORPORATION Page 3
Figure 2: New versus Old Estimates
2014 2015
New Old New Old
Sales ($000) 75,500 63,658 79,604 55,919
EBITDA ($000) 50,788 47,346 45,274 38,389
Interest Expense ($000) (2,688) (2,352) (2,464) (2,156)
Amortization (4,500) (3,500) (4,500) (3,500)
Net income 30,746 29,171 27,020 23,023
EPS (FD) $0.56 $0.44 $0.49 $0.35
CFPS (FD) $0.65 $0.50 $0.58 $0.40
Net debt (net cash position), 000s 29,287 19,107 27,768 22,583
Source: Mackie Research Capital
Applying a 1.1x multiple to our NAV & Lifting our Target Price to $4.40/sh: Northern
Graphite’s Bissett Creek’s graphite mine is one of the nearest to production, relative to the other
publicly traded graphite companies. Now with its spherical results, NGC has also demonstrated
significant process in aligning itself with the fast growing lithium-ion battery market. Taking
into account the strong macro-economic dynamics of the graphite market, and the increasing
appetite amongst investors to gain exposure to the sector, maintaining an overweight position
in NGC is a strategy expected to continue to produce outperformance. NGC’s leading position
among graphite junior companies warrants a 1.1x multiple to our NAV. We are maintaining our
SPEC. BUY rating on the Company.
Figure 3: Updated NAV-based price target: $4.40/share
Bissett Creek Project Net Asset Value
(C$ millions, unless otherwise indicated)
Mining Assets Ownership Discount $MM $/share
Graphite Concentrate Plant 100.0% 10.0% $8.0 $0.14
Anode Plant 100.0% 12.0% $212.7 $3.69
Total Mining Assets $220.7 $3.83
Financial Assets
Cash & Cash Equivalents $10.0 $0.17
Long-Term Debt $- $-
Total Financial Assets $10.0 $0.17
NAV multiple $MM $/share
Net Asset Value 1.1x $253.8 $4.41
Diluted Shares Outstanding (MM)* 57.60 --
* Diluted shares outstanding include ~$36mm equity financing at $4.00/sh to construct the project.
Source: Mackie Research Capital

4. www.mackieresearch.com The MORNING CALL – NORTHERN GRAPHITE CORPORATION Page 4
Upcoming Catalysts and Milestones: The following is an updated timeline that management
highlighted to institutional investors in recent marketing meetings. With the spherical graphite
news release announced yesterday, we expect filing of the mine closure plant and completion
of the BFS as the next catalysts. Both items are expected within the next couple months.
Figure 4: Planned Timeline as of March 28, 2012 Investor Meetings
Source: Mackie Research Capital

5. www.mackieresearch.com The MORNING CALL – NORTHERN GRAPHITE CORPORATION Page 5
RISKS TO TARGET
Risks include events that lead to graphite price cyclicality such as actions by Chinese producers who supply up to 80% of the
world’s graphite and have dumped product onto the markets in the past and pressured prices.
RELEVANT DISCLOSURES APPLICABLE TO: NORTHERN GRAPHITE CORPORATION
1. Within the last 3 years, Mackie Research Capital has received compensation for investment banking and related services
from the issuer.
ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the
recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of
the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations
expressed in this research report.
Information about Mackie Research Capital Corporation’s Rating System, the distribution of our research to clients and the percentage of recommendations
which are in each of our rating categories is available on our web site at www.mackieresearch.com.
The information contained in this report has been drawn from sources believed to be reliable but its accuracy or completeness is not guaranteed, nor in
providing it does Mackie Research Capital Corporation assume any responsibility or liability. Mackie Research Capital Corporation, its directors, officers and
other employees may, from time to time, have positions in the securities mentioned herein. Contents of this report cannot be reproduced in whole or in part
without the express permission of Mackie Research Capital Corporation. (US Institutional Clients - Mackie Research USA Inc., a wholly owned subsidiary of
Mackie Research Capital Corporation, accepts responsibility for the contents of this report subject to the terms and limitations set out above. US firms or
institutions receiving this report should effect transactions in securities discussed in the report through Mackie Research USA Inc., a Broker-Dealer registered
with the Financial Industry Regulatory Authority (FINRA)).
Toronto 416.860.7600 - Montreal 514.399.1500 - Vancouver 604.662.1800 - Calgary 403.218.6375 - Regina 306.566.7550 - St. Albert 780.460.6460