New Process Flow Sheet for Woxna Delivers Increased Graphite Volume, Purity and Yield of Large Flake

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug 12, 2013) - Flinders Resources Ltd. ("Flinders") (TSX VENTURE:FDR) is pleased to provide an update on the preliminary economic analysis ("PEA") of the Woxna Graphite Project in Sweden. Based on recent test work, the process flow sheet and mass balance calculations have now been completed. Processing has been considerably simplified with much of the existing plant and equipment used, delivering increased volumes of flake graphite at higher purity and larger flake size.

Highlights:

• 155,000 tonnes per annum of graphite mineralised rock at an average head grade of 10.3% is planned to be processed, well above historic levels.
  
  
• Using the results of the metallurgical test work, 96% of the graphite is expected to be recovered, yielding 16,710 tonnes per annum of graphite at full capacity.
  
  
• The graphite produced is expected to far exceed historical production in quantity, purity and flake size distribution including:
  
  
  • 3,070 tonnes/year of extra-large or jumbo flake graphite (+250 Micron or +60 mesh) at 95% purity. This high value product was never historically commercialised at Woxna;
  • 3,580 tonnes/year of large flake (+180-250 Micron or -60+80 mesh) at 94% purity, elevating this product into a higher price category;
  • 4,730 tonnes/year of medium flake graphite (+100-180 Micron or -80+140 mesh) at 92% purity; and
  • 5,330 tonnes/year of fine flake graphite (-100 Micron or -140 mesh) at 88 % purity
• Potential exists to further increase graphite production volumes by utilising surplus milling capacity already available at Woxna;
  
  
• Results from the PEA are expected to be issued later this month.
  
  

Mr Martin McFarlane, Flinders President and CEO, states, "Our investments in metallurgy and engineering have resulted in simplification of the process flow sheet, which together with elimination of past bottlenecks in the circuit is expected to deliver Flinders a considerable lift in graphite output in addition to the improvements in product grade and flake size previously announced. Importantly, our marketing studies also show the proposed production profile from Woxna will complement anticipated European graphite demand."

"We await the last few outstanding supplier costs which will enable us to finalise the preliminary economic assessment of Woxna and issue the results later this month."

Chris Stinton, BSc (Hons) (Minerals Engineering), CEng MIMMM, Senior Metallurgist with GBM Minerals Engineering Consultants of the United Kingdom, an independent consultant to the Company, is the qualified person as defined under National Instrument NI 43-10 and has reviewed and verified the metallurgical results referenced within this release.

On behalf of the Board

Martin McFarlane, President and CEO

About Flinders Resources

Flinders Resources Ltd. (TSX VENTURE:FDR) owns 100% of the Woxna Graphite Mine, a unique and strategic European graphite project in central Sweden. The Woxna Mine, with rated capacity of 10,000+ tonnes per year of flake graphite, operated from 1996 to 2001 when production was halted due to falling graphite prices. Since then, the Woxna Project has been placed on care and maintenance.

Today graphite prices are significantly higher than in 2001 underpinned by strong growth in graphite demand driven by a combination of steady growth in traditional uses such as steel production, lubricants, brake linings and batteries as well as double digit growth from new applications, in particular batteries for portable electronics and hybrid and electric vehicles.

Materially better graphite price today and forecast growth in graphite demand is why Flinders is evaluating re-starting the Woxna graphite mine. Flinders' Woxna mine is substantially funded, fully permitted, constructed and with moderate capital investment ready to be brought back to production. The Woxna Project is unique due to its high quality large graphite flake, long life expandable resource, first class existing infrastructure, potential to upgrade to value added lithium battery graphite and its strategic position within the European Union.

Certain information set out in this news release may constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (collectively, "Forward-Looking Statements"). All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are Forward-Looking Statements. Forward-Looking Statements are often, but not always, identified by the use of words such as "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can," "should," "could," or "might" occur or be achieved and other similar expressions. Forward-Looking Statements are based upon the opinions and expectations of the Company based on information currently available to the Company.

Forward-Looking Statements are subject to a number of factors, risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the Forward-Looking Statements including, among other things, the Company has yet to generate a profit from its activities; there can be no guarantee that the estimates of quantities or qualities of minerals disclosed in the Company's public record will be economically recoverable; uncertainties relating to the availability and costs of financing needed in the future; competition with other companies within the mining industry; the success of the Company is largely dependent upon the performance of its directors and officers and the Company's ability to attract and train key personnel; changes in world metal markets and equity markets beyond the Company's control; mineral reserves are, in the large part, estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized; production rates and capital and other costs may vary significantly from estimates; unexpected geological conditions; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; all phases of a mining business present environmental and safety risks and hazards and are subject to environmental and safety regulation, and rehabilitation and restitution costs; the Company does not maintain insurance against environmental risks; and management of the Company have experience in mineral exploration but may lack all or some of the necessary technical training and experience to successfully develop and operate a mine. Although the Company believes that the expectations reflected in the Forward-Looking Statements, and the assumptions on which such Forward-Looking Statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. 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 the Forward-Looking Statements are based will occur. Forward-Looking Statements herein are made as at the date hereof, and unless otherwise required by law, the Company does not intend, or assume any obligation, to update these Forward-Looking Statements.

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