USA Graphite Inc. Canadian Project Selection

LAS VEGAS, NV -- (Marketwire) -- 01/04/13 -- USA GRAPHITE INC. (OTCBB: USGT) (the "Company") is pleased to inform its shareholders of its activities in selecting the location of a high-quality Canadian project for a potential acquisition.

Canada is one of the world's dominant producers of high grade flake graphite and, according to the United States Geological Survey ("USGS"), the United States imported 19% of its graphite from Canada in 2011. The Company expects this number to increase in 2012 and rise even further in 2013 as demand for graphite is soaring due to larger production runs on both products requiring graphite and new applications for the super-material graphene.

Due to Canada's proximity to the United States, its highly developed infrastructure, and the availability of skilled labor, the Company believes that ownership of a Canadian project, which would be able to supply sufficient tonnage of high-quality graphite to the Company's American operations, would enable the Company to assume a key strategic advantage.

The Company has identified the West Coast of Canada as the ideal location to acquire a project that would significantly augment the Company's operations. Eagle Graphite, which is a privately held Canadian corporation, is located on the West Coast of Canada and is one of only two natural flake graphite mines operating in North America. The Company believes that this district would be an ideal location for an acquisition.

The Company expects a deal to be stuck in the short term and will keep its shareholders updated. USA Graphite's CEO, Wayne Yamamoto, comments: "We are excited with our progress in selecting a high-quality Canadian project that can access Canada's world class graphite production and steer that tonnage back into our American operations."

About Graphite:

• Graphite is used in refractories - used to line high-temperature equipment; pencils; lithium-ion batteries - used in consumer electronics and electric vehicles, including the Nissan Leaf, Tesla Model S and others; fuel cells; and Pebble Bed nuclear reactors. It is used in foundries, lubricants and brake linings.
• Graphite is also used to produce graphene, a tightly packed single layer of carbon atoms that can be used to make inexpensive solar panels, powerful transistors, and even a wafer-thin tablet that could be the next-generation iPad* or iPod*.
• Graphene, extremely light and strong, has been called the world's next wonder material.
• The closure of graphite mines in China, which produces 75% of the world's graphite, has resulted in a fall in global graphite production to 1.3 million tonnes per annum in 2011. Like rare earths, China is restricting the export of graphite to protect its own domestic industries. The second largest producer is India, followed by Brazil, North Korea, Austria and Canada.

*trademarks of Apple Inc.

About USA Graphite:
USA Graphite is a publicly traded US exploration company focused on the acquisition, exploration and development of world-class graphite properties in North America. USA Graphite intends to become a domestic (US) graphite supplier. The USGS has reported that the USA has been a 100% net importer of graphite over the last 5 years, sending billions of dollars out of America. USA Graphite has holdings in Nevada, offering considerable potential for the discovery and development of large flake, high-grade graphite, whereby mineralization is exposed at surface and clearly evident at economic depths. For additional information please visit http://www.usa-graphite.com

"Safe Harbor" Statement:
Under The Private Securities Litigation Reform Act of 1995: The statements in the press release that relate to the Company's expectations with regard to the future impact on the Company's results from new products in development are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Notice Regarding Forward-Looking Statements - This press release includes forward-looking statements that involve a number of risks and uncertainties, including the success of the programs it is commercializing and developing. Further, the risks involve the ability of the Company to raise capital to fund its operations and the capital requirements for the development and marketing of its products. Investors are encouraged to review the risk factors listed or described from time to time in the Company's filings on Form 10-K, Form 10-Q, S-1 and others with the Securities and Exchange Commission.