CCB - Letter to Premier May 27 2019

M. François Legault Premier ministre
Édifice Honoré-Mercier
835, boulevard René-Lévesque Est
3e étage
Québec (Québec) G1A 1B4

M. Jonathan Julien
Ministre de l'Énergie et des Ressources naturelles
Ministère de l'Énergie et des Ressources naturelles
5700, 4e Avenue Ouest
Québec (Québec) G1H 6R1

VANCOUVER, British Colombia, May 27, 2019 -- Premier Francois Legault, Minister Jonathan Julien and all the elected representatives of the Coalition Avenir Quebec, we would like to address comments made by Ugo Lapointe of Mining Watch on May 24, 2019.

Canada Carbon Inc. is proposing a very small environmentally benign project on private land involving marble and graphite. The graphite found on the Miller property in GSLR has been tested by independent labs and has proven to be the purest graphite in the world according to available data. Canada Carbon Inc. has many third-party reports which indicate that our project will cause no harm to the water supply nor will there be any acid mine drainage. Our reports have all been made public and we invite you to review our reports. Based on the Company’s Preliminary Economic Assessment (“PEA”), the Miller mine could inject $189.7 million in the local and regional economy, pay $70.5 million in tax, create 58 jobs during construction and more than 100 well-paid jobs during life of mine.

Canada Carbon Inc. received two certificates of compliance from the former council of GSLR that were used to submit our file to the CPTAQ. Once the new council was elected in November 2017 they immediately took steps to block the project and even went so far as to file false documents with the CPTAQ stating that Canada Carbon Inc. was not in compliance with municipal regulations. This false declaration resulted in Canada Carbon Inc.’s file being administratively closed by the CPTAQ and in effect, killed the project.

Canada Carbon Inc. believes very strongly in social acceptability. We interpret social acceptability as a process in which all interested stakeholders exchange dialogue and information regarding a proposed project with the view to determining the issues and attempting to find some acceptable resolutions to those issues. We began the process of engaging with the community and providing information about the project in 2017 prior to municipal elections. We held a full open doors session for the citizens of GSLR and had some discussions with the municipality and MRC that enabled us to find solutions or answers to address the main concerns of GSLR at the time (roads, property size, water, sound impact, work creation). Our efforts were blocked with the election of the new council for GSLR. Prior to, during and subsequent to the election, citizens of GSLR have been wrongly informed that the Miller project would poison their water and destroy their town. Subsequent to the election, we sent a letter to the new Mayor requesting a meeting to discuss the project but he never responded to our request. The new council of GLSR has never met with us to discuss their concerns or to show us any evidence for their claims that the Miller project would result in environmental damage.

The councillors of GSLR and Ugo Lapointe view social acceptability as a process whereby a handful of people fear monger and knowingly spread inaccurate information to the community with the view of turning residents against a project. We view this as defamation with the intent to damage. In GSLR and Mr. Lapointe’s version of social acceptability, there is no discussion with the mining company and no need for facts. GSLR and Mr. Lapointe know that the law has been broken and that there may be consequences. As a result, their plan of action has included the following:

• Continue to spread inaccurate information about the Miller project via the media so that the project will be vilified in the court of public opinion;
• Focus attention on the size of the damages lawsuit with the view of getting public sympathy;
• Attempt to discredit the Company’s PEA report by engaging an American engineer, whom Mining Watch has utilized in the past, to highlight all the risks in the project and to state that the project is not economic; and
• Pressure the government to change the laws so that GSLR will not be held accountable for their actions.

Canada Carbon Inc.’s Preliminary Economic Assessment was prepared by Tetra Tech, an international engineering firm, and took over a year to complete with the input of a number of consultants and experts. Significant effort went into the report and the Company stands by the information in the PEA. At the time of the PEA, the Company only had inferred resources. Predominantly on that basis, the American engineer hired by Mining Watch concludes that the project is not economically viable.

Subsequent to the release of the PEA in March 2016, a new resource estimate model was completed in 2017. The model significantly increased the overall resource that had been reported in the PEA and more importantly, transferred some of the inferred resources to the indicated category. SGS Canada is currently working on a new resource estimate based on the results of the Company’s last drill program. We expect to get those results shortly. The Company was working towards preparing its feasibility study when its Project was halted by the actions of GSLR.

There are risks in all projects but the existence of risk does not render a project unprofitable.

There is one statement made by Mr. Lapointe in his May 24, 2019 communication that is correct. The handling of this case will definitely impact the image of social acceptability and the mining industry in Quebec. Country risk is one of the greatest risks of mining. We suspect that the outcome of this case will deter future mining investment in Quebec as prospective investors realize that their projects can be halted and their rights can be stripped away at any time due to a change of municipal councillors that are allowed to act illegally without communication or facts that support their actions.

We would appreciate having a sit down meeting with you to discuss the real facts related to Canada Carbon Inc. and Grenville-sur-la-Rouge (GSLR).

Sincerely,

Canada Carbon Inc.

“R. Bruce Duncan”

CEO & Director

Contact Information
E-mail inquiries: info@canadacarbon.com
P: (604) 685-6375
F: (604) 909-1163