RE:Canaccord: Tesla plans to use graphite from North AmericaUpdated Economics for the Expansion Case Preliminary Economic Assessment: On June 24, 2014, the Company announced that it had updated the 2013 PEA (the “2014 PEA Update”) to assess the economics of building a process plant with twice the capacity of the plant contemplated in the Company’s FS. The larger process plant was evaluated due to recent developments in the lithium ion battery industry and strong buyer interest in the extra large flake, high purity concentrates that will be produced using Northern’s proprietary purification technology. The 2014 PEA Update indicated a pre-tax internal rate of return (“IRR“) of 31.7% (26.7% after tax) and a pre-tax net present value (“NPV”) of $264.7 million ($178.9 million after tax) in the base case which was based on an 8% discount rate and a weighted average price of US$1,800/tonne of concentrate which reflected then current market conditions. Development capital costs in the 2014 PEA Update have been estimated at $134.1 million (including a 10% contingency) for an operation that will produce an average of approximately 44,200 tonnes of graphite concentrate annually over the first 10 full years of operation. Almost 90% of production will consist of large and extra large flake and battery grade graphite. There are also 27.3 million tonnes of Measured and Indicated resources and 24 million tonnes of Inferred resources that are not part of the mine plan and the deposit is still open such that further drilling may support further production expansions.