Alabama Graphite Corp. Announces the Execution of Six Non-Disclosure Agreements with U.S Department of Defense Lithium-ion Battery Solution Providers for Coated Spherical Graphite (CSPG) Samples

TORONTO, ONTARIO--(Marketwired - July 18, 2016) - Alabama Graphite Corp. ("AGC" or the "Company") (TSX VENTURE:ALP)(OTCQX:ABGPF)(FRANKFURT:1AG) is very pleased to announce that it has entered into a total of six non-disclosure agreements ("NDAs") with United States Department of Defense ("DoD") lithium-ion ("Li-ion") battery manufacturers and suppliers for the purpose of carrying on discussions and due diligence evaluation of samples of AGC's American sourced and manufactured Coated Spherical Graphite ("CSPG"). The graphite used by AGC to produce its CSPG is sourced exclusively from the Company's flagship Coosa Graphite Project property, located in Coosa County, Alabama, USA. All six of the battery manufacturers are based in the contiguous United States. The testing by these DoD suppliers is designed to determine if AGC's CSPG would qualify for Li-ion battery applications - both for primary and secondary Li-ion batteries - specifically for DoD use. The names of the six DoD battery manufacturers are being withheld for reasons of commercial confidentiality. These six NDA agreements are in addition to the multiple NDA agreements AGC has entered into with U.S.-based entities that are not affiliated with the U.S. DoD.

Further to the Company's June 23, 2016 announcement (see: "Alabama Graphite Corp. Announces Shipment of American Sourced and Manufactured CSPG Samples to United States Department of Defense Lithium-ion Battery Solutions Provider"), AGC will be manufacturing CSPG evaluation samples to the material specifications provided from the various battery manufacturers. The DoD strongly encourages their contractors and suppliers to source their input materials from within the USA. As a result, several of these DoD battery manufacturers have sought out AGC as a potential future supplier of American sourced and manufactured CSPG.

Donald Baxter, AGC's President, Chief Executive Officer and Executive Director commented, "Without exception, all of the DoD contractors and suppliers we have entered into NDAs with have expressed that sourcing input materials from within the United States is more important than ever. AGC is focussed on becoming a U.S.-sourced green-energy supply chain producer for the United States government and defense sectors' battery solutions providers." Mr. Baxter added, "Although there is much work to be done, pending the initiation and completion of a positive Feasibility Study, followed by the financing and construction of a graphite mine and downstream CSPG processing and production facilities, I believe that AGC will be a viable domestic upstream supply option for these and other American lithium-ion battery manufacturing entities."

At this time, no further deal terms have been reached, nor has the Company entered into any letters of intent, offtake agreements, supply or customer agreements or any other form of definitive agreements with these battery manufacturers. As the Company's discussions remain at a preliminary stage only, there can be no assurance or guarantee that the Company will enter into a binding agreement.

Note: AGC completed its Preliminary Economic Assessment ("PEA") for the Coosa Graphite Project on November 27, 2015. A PEA is not a Feasibility Study. The PEA is preliminary in nature, that it includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA based on these mineral resources will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Additionally, the Company announces that, subject to regulatory approval, it has retained Venture Liquidity Providers Inc. ("VLP") to initiate its market-making service to provide assistance in maintaining an orderly trading market for the common shares of the Company.

According to the TSX Venture Exchange, "Market making offers several benefits to growing companies during their formative years. Having a committed market maker can promote market stability when there are gaps in natural liquidity, help to mitigate price volatility, and enhance the trading experience for investors. In fact, based on recent analysis by TSXV conducted between January 1, 2014 and August 2015, companies that engaged professional market maker services experienced a $0.02 decline in their average spread, an 18% increase in the number of days when a trade occurred, and a 6% decline in price volatility measured by the closing price against the 10-day moving average price." (source: TSX Venture Exchange's Exchange Feed, Issue 52, July 2016)

The market-making service will be undertaken by VLP through a registered broker, W.D. Latimer Co. Ltd. ("W.D. Latimer"), in compliance with the applicable policies of the TSX Venture Exchange and other applicable legislation. For its services the Company has agreed to pay VLP $5,000. per month. The engagement is for a period of 12 months, but can be terminated by either party at any time. The Company and VLP act at arm's length, and VLP has no present interest - directly or indirectly - in the Company or its securities. The finances and the shares required for the market-making service are provided by W.D. Latimer. The fee paid by the Company to VLP is for services only.

VLP is a specialized consulting firm based in Toronto providing a variety of services focused on TSX-V-listed issuers.

AGC will continue to update shareholders and the market in a timely fashion of further material developments with respect to this and other potential American-based CSPG end users, as we are able to disclose. Please note, certain potential end users preclude the Company from announcing any aspect of its relationship and activities, ranging from the execution of a non-disclosure agreement to the shipment(s) of sample material.

On behalf of the Board of Directors of

ALABAMA GRAPHITE CORP.

Donald K. D. Baxter, P.Eng., President, Chief Executive Officer and Executive Director

Qualified Person

Donald K. D. Baxter, P.Eng., President, Chief Executive Officer and Executive Director of Alabama Graphite Corp., is a Qualified Person as defined by National Instrument 43-101 ("NI 43-101") guidelines, and has reviewed and approved the content of this news release.

About Alabama Graphite Corp.

Alabama Graphite Corp. is a Canadian-based flake graphite exploration and development company as well as an aspiring battery materials production and technology company. The Company operates through its wholly owned subsidiary, Alabama Graphite Company Inc. (a company registered in the state of Alabama). With an advancing flake graphite project in the United States of America, Alabama Graphite Corp intends to become a reliable, long-term U.S. supplier of specialty high-purity graphite products. A highly experienced team leads the Company with more than 100 years of combined graphite mining, graphite processing, specialty graphite products and applications, and graphite sales experience. Alabama Graphite Corp. is focused on the exploration and development of its flagship Coosa Graphite Project in Coosa County, Alabama, and its Bama Mine Project in Chilton County, Alabama as well the research and development of its proprietary manufacturing and technological processing process of battery materials.

Alabama Graphite Corp. holds a 100% interest in the mineral rights for these two U.S.-based graphite projects, which are both located on private land. The two projects encompass more than 43,000 acres and are located in a geopolitically stable, mining-friendly jurisdiction with significant historical production of crystalline flake graphite in the flake graphite belt of central Alabama, also known as the Alabama Graphite Belt (source: U.S. Bureau of Mines). A significant portion of the Alabama deposits are characterized by graphite-bearing material that is oxidized and has been weathered into extremely soft rock. Both projects have infrastructure in place, are within close proximity to major highways, rail, power and water, and are approximately three hours (by truck or train) to the Port of Mobile, the Alabama Port Authority's deep-seawater port and the ninth largest port by tonnage in the United States (source: U.S. Army Corps of Engineers/USACE). The state of Alabama's hospitable climate allows for year-round mining operations and the world's largest marble quarry (which operates 24 hours a day, 365 days a year in Sylacauga, Alabama), is located within a 30-minute drive of the Coosa Graphite Project.

On November 30, 2015, Alabama Graphite Corp. announced the results of PEA for the Coosa Graphite Project, indicating a potentially low-cost project with potential positive economics. Please refer to the Company's technical report titled "Alabama Graphite Corp. Preliminary Economic Assessment (PEA) on the Coosa graphite Project, Alabama, USA" dated November 27, 2015, prepared by independent engineering firms AGP Mining Consultants Inc. and Metal Mining Consultants Inc., and filed on SEDAR at www.sedar.com.

Note: a preliminary economic assessment is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized.

* Inferred Mineral Resources represent material that is considered too speculative to be included in economic evaluations. Additional trenching and/or drilling will be required to convert Inferred Mineral Resources to Measured or Indicated Mineral Resources. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve.

For further information and updates on the Company or to sign up for Alabama Graphite Corp. News, please visit www.alabamagraphite.com or follow us on Twitter, Facebook and LinkedIn.

Forward-Looking Statements

This press release contains forward-looking information under applicable Canadian securities laws ("forward-looking statements"), which may include, without limitation, statements with respect to any potential relationships between the Company and any end users and/or the DoD. The forward-looking statements are based on the beliefs of management and reflect Alabama Graphite Corp.'s current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current view of Alabama Graphite Corp. with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of graphite; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the Company's publicly filed documents. Forward-looking statements are also based on a number of assumptions, including that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen breakdowns, that no labor shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and Alabama Graphite Corp. undertakes no obligation to update forward-looking statements (unless required by law) if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements. Alabama Graphite Corp. cautions that the foregoing list of material factors and assumptions are not exhaustive. When relying on Alabama Graphite Corp. forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and assumptions and other uncertainties and potential events.

Alabama Graphite Corp. has also assumed that the material factors and assumptions will not cause any forward-looking statements to differ materially from actual results or events. However, the list of these factors and assumptions is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.

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