Mining Claims

The Property consists of 176 mining claims covering 9,583 hectares (23,680 acres) and comprised of 56 Alaska State mining claims and 120 located Alaska state mining claims (Figure 2, Blue).

Figure 2: Graphite Creek Mining Claims
Figure 2: Graphite Creek Mining Claims

Former Federal Mining Claims

The Company gained control of the historic 24 Federal claims (shown in red in Figure 2) through a long-term lease agreement with Kougarok, LLC, an Alaska company held by the original stake holders (the “Lease”).

In March 2018 and under the terms of the Lease, Kougarok completed the conversion of its 24 Federal unpatented lode mining claims to State of Alaska mining claims with the Alaska Department of Natural Resources. The Company in turn transferred to Kougarok thirteen of its Alaska state mining claims that overlapped with the lands of 4 of the Federal claims and simultaneously leased them back from Kougarok under the terms of the Lease.  This will relieve the Company of the need to comply with certain federal regulatory requirements since federal lands are no longer involved and is anticipated to simplify the permitting process for the Project.

The Lease has an initial term of twenty years commencing January 2014 with provision to extend through the Project’s life. The payments and production royalties due under the lease are:

  • Annual advance royalty payments of $30,000 until 2019, then $40,000 in 2020, $50,000 in 2021 and in successive years - the previous year's advance royalty plus $10,000.  The annual advance royalty is paid each year until production begins and all are recoupable from production royalties.
  • Production royalties:
    • (a) 5% from lands in the 4 former federal claims staked in 1943;
    • (b) 2.5% from lands within the other 20 former federal claims;
    • (c) Except as provided in (b) above, 5% from lands within the claims staked by Graphite One Alaska; and,
    • (d) Except as provided in (a) above, 2.5% from lands within the claims purchased by Graphite One (Alaska);

The Company has the option to reduce production royalties by up to 2% by paying Kougarok LLC $2,000,000 for each 1% reduction of the royalty.

Purchased Claims (56)

The Company purchased 56 Alaska state mining claims in two transactions, with each transaction acquiring 28 claims covering the same lands and representing the junior and senior state mining claims that overlap and surround the 24 Federal claims. Some of the Purchased state claims overlapped with the former Federal claims leased by the Company and conveyed to the State.

The first group of 28 claims was purchased in 2012 and carried a 2% production royalty on future production from the covered area.  In 2020, the Company excercised its right and purchased the 2% royalty.

The second group of 28 claims was purchased in 2015 and carries a royalty interest equal to 1% on production from the claims.  The Company can purchase the royalty for $500,000 at any time within 36 months following the start of mine production.  

Staked Claims (120)

Graphite One (Alaska) Inc. has staked 120 Alaska state mining claims, some for potentially locating infrastructure.

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