Ceylon Graphite Announces Closing Of Second Tranche Of Private Placement

29th October 2020

Vancouver, British Columbia– October 29th, 2020 – Ceylon Graphite Corp. (“Ceylon Graphite” or the “Company”) (TSX-V: CYL) (OTC: CYLYF) (FSE: CCY) is pleased to announce that further to its press releases of October 19 and 23, 2020, it has issued an additional 21,265,000 units (“Units”) at a price of $0.0875 per Unit for gross proceeds of $1,860,687.50 in connection with the closing of a second tranche of its private placement financing (the “Offering”). In aggregate, Ceylon Graphite issued an aggregate of 51,428,556 units for gross proceeds of $4,500,000 pursuant to its private placement.

Each Unit is comprised of one (1) common share in the capital of Ceylon Graphite (a “Common Share”) and one (1) common share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to acquire one common share in the capital of Ceylon Graphite (“Warrant Share”) at an exercise price of $0.15 at any time up until October 28, 2023.

“We are very pleased with the overwhelming interest from sophisticated and strategic investors for this offering. Strategic battery metals are in significant demand globally and our goal is to be the premier producer of high-quality graphite for the energy storage industry. The Company has made significant progress over the past four years towards this goal. This financing will now allow us to aggressively grow our business through increased production, ramping up sales efforts for long term contracts and the commissioning of a processing unit,” said Bharat Parashar, Chairman and Chief Executive Officer.

PowerOne Capital Markets Limited and Primary Capital Inc. (collectively, the “Finders”) acted as Finders for the Offering.

The Company intends to use the net proceeds of the offering to accelerate the commercial production initiated earlier this year at its K1 site, finish development and attain mining licensing approval for its M1 site, advance development of additional sites and for general corporate purposes.

Ceylon Graphite paid the Finders a cash commission of $130,248.13 which was satisfied through the issuance of 1,488,550 Units. In addition, the Company issued to the Finders 1,488,550 non-transferable broker warrants (the “Broker Warrants”). Each Broker Warrant entitles the Finders to purchase one Unit at the price of $0.0875 per Unit at any time until October 28, 2023. All securities issued are subject to a statutory hold period of four months and one day.

Closing of the Offering is conditional on the receipt of final approval of the TSX Venture Exchange; conditional approval is in place.

Ceylon Graphite also announces that Mr. Paul Selvam Michel Devadoss will no longer be appointed a Director of the Company.

The Company also announces that on September 15, 2020 it arranged for a loan of $150,000 from Michael Judge, an arm’s length third party. In connection with the loan, the Company agreed to issue to the lender an aggregate of 250,000 common share purchase warrants (the “Debt Warrants”). Each Debt Warrant entitles the lender to acquire one common share in the capital of Ceylon Graphite at an exercise price of $0.15 at any time up until September 15, 2021.

About Ceylon Graphite Corp.

Ceylon Graphite is a public company listed on the TSX Venture Exchange, that is in the business of mining for graphite, plus the exploration for and development of graphite mines in Sri Lanka. The Government of Sri Lanka has granted the Company an IML Category A license for its K1 site and exploration rights in a land package of over 120km². These exploration grids (each one square kilometer in area) cover areas of historic graphite production from the early twentieth century and represent a majority of the known graphite occurrences in Sri Lanka. Graphite mined in Sri Lanka is known to be some of the purest in the world, and currently accounts for less than 1% of the world graphite production.

Further information regarding the Company is available at www.ceylongraphite.com

Bharat Parashar, Chairman and & Chief Executive Officer

[email protected]

Corporate Communications


Forward-Looking Information

This press release contains forward-looking information based on current expectations. Statements about the acquisition or disposition of securities of the Company by the Acquiror, among other things, are all forward-looking information. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such information can generally be identified by the use of forwarding looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, estimates, forecasts, projections and other forward looking statements will not occur. These assumptions, risks and uncertainties include, among other things, the state of the economy in general and capital markets in particular, and other factors, many of which are beyond the control of the Company. Risk factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: changes in laws, general economic and business conditions; and changes in the regulatory regime. The final exchange bulletin will not be issued if the Exchange determines that the Company has not met the conditions set out in the Exchange’s conditional approval letter. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements.

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 this release.

For further information or for a copy of the early warning report filed with the relevant Canadian Securities regulators in conjunction with this news release please contact Optimal Energy B.V., Attention: Jody Lenihan at 949.677.2299.