ARCHER MATERIALS LIMITED — Investor Presentation 2016

May 25, 2016

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ARCHER EXPLORATION LIMITED

Archer’s Eyre Peninsula Graphite Projects

AGIA Graphite-Graphene Seminar

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26[th] May 2016

Gerard Anderson Managing Director

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Archer Exploration - company overview

ADD VALUE MONETISE

FIND

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100% of 13 tenements and 2 ELAs in South Australia covering graphite, magnesite, manganese, copper and gold

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Archer Graphite – 3 deposits and 10 prospects

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Tenement holding of 2,154km[2] on the Eyre Peninsula hosting 8.55Mt 2012 JORC graphite resource

Archers Key Graphite Assets	Archers Key Graphite Assets	Archers Key Graphite Assets	Archers Key Graphite Assets					Locations of Resources and Exploration Targets	Locations of Resources and Exploration Targets	Locations of Resources and Exploration Targets
Location			�Near Cleve-Darke		Peak-Kimba, Eyre Peninsula, South Australia
Total Area			�2,154km2
3 x Deposits			�Campoona Shaft, Central Campoona and Wilclo South JORC 2012 Resource of 8.55Mt @ 9.0% Cg (770,800t of contained graphite)						3
10 x Prospects			�Campoona South, Campoona North, Wilclo, Balumbah, Francis, Cut-Snake, Argent, Jamieson Tank, Lacroma and Ridgestone
Land			�1,403 acres surrounding the Sugarloaf carbon deposit
Ownership			�Agreement over sufficient land at Campoona Shaft for mining
Mining Permit			�MLP for Campoona Shaft completed awaiting lodging					2
Key Tenements*										1
Name			Permit	Interest	Defined Deposits
Wildhorse Plain2			�EL4693	100%	Campoona Shaft, Central Campoona
					Wilclo South deposit and Wilclo, Balumbah,
Waddikee			�EL4662	100%	Francis, Cut-Snake, Argent, Jamieson Tank,
					Lacroma and Ridgestone prospects
Carapee Hill			�EL4861	100%	Sugarloaf carbon deposit
Mt Messenger			�EL5383	100%	Limited exploration on tenement to date		Presentation outline:
Cleve West			�EL4893	100%	1 untested graphite target		1. 2.	Campoona Shaft Mine Lease Sugarloaf carbon	Proposal
North Cowell1			�EL4277	100%	2 untested graphite targets		3.	Waddikee Flake graphite

• ELA granted over extensions to Central Campoona resource and Sugarloaf

• 1 North Cowell renewed as EL5434

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1. Campoona Graphite – the elements

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Mine, processing & water

Development elements

• MC Campoona Shaft - covering the conventional open pit mine

• Pindari

• � MPL Sugarloaf - covering the Sugarloaf processing site and TSF

• � MLP Water - covering the Pindari Borefield and process water line Sugarloaf to Sugarloaf and potable water processing facility line from Jamieson Tank to Sugarloaf Campoona

• Shaft minesite

“Hub and spoke” development where satellite mines feed a centralised mineral processing facility

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Campoona Graphite - community consultation

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Longstanding community engagement with excellent community support for project

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• Focus group meeting in September 2013

• Established a Community Consultative Committee (CCC) with community representatives, Archer, invited guests (facilitated)

• CCC meetings held regularly (≈every 2 months) during 2013, 2014 and 2015

• Project newsletters distributed to wider community to coincide with most CCC meetings

• Written information in the EP Tribune

• Community open house information day

• Completed technical studies posted on Company website to allow progressive understanding of Project

• Annual Cleve Eyre Peninsula Field Days

• Liaised with Cleve Council, local and State government regulators through the life of project

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W E
ZONE OF
50m MINERALISATION
100m
0 50
metres
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Subcropping, boudinaged, steep westerly dipping, 20 – 50m wide graphitic schist within granitic proto-gneiss

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Campoona Shaft - mine

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Conventional, largely free dig open pit

Mining

• Compact site ≈ 68 Ha

• Conventional open pit mine largely free dig to 70m bgl

• Campaign day-shift only mining (notionally spring and autumn) to mine up to 140,000tpa of graphite ore grading 10% Cg

• Pit depth 100 metres

• Pit dry - rainfall harvested to augment bore water for dust suppression

• Small scale start-up of 10,000tpa via a drop cut directly into ore. Starter pit located west of ridgeline providing natural noise barrier to nearest receptor.

• E-WRSF constructed nominally in Years 5 - 8 following small scale start-up. Slopes battered to 20[o] and progressively rehabilitated.

• Trenches and bunds around WRSFs to contain run-off especially to the ephemeral creek west of W-WRSF

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• ROM stockpile sized to ensure Sugarloaf supplied between mining campaigns

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Conventional 16-year mining open pit operation

Campoona Shaft – mineral processing

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Mineral processing facility to be built on Company-owned land at Sugarloaf 12km west of Campoona

Mineral processing

• Small scale start-up producing 1,000tpa rising to 10,500 tpa of high purity graphite

• Process steps:

• Crushing

• Blunging

• Rougher Flotation

• Concentrate Milling

• Cleaner/Re-cleaner Flotation

• Screening

• Leaching

• Drying

• Bagging

• Flotation recovery and concentrate grade improve as pit deepens

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Free flowing well ordered froth conditions during bulk flotation resulting in less entrainment and excellent launder flow

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Campoona Graphite - infrastructure

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Power, water, transport and shipping

Process water

• High yielding fractured rock aquifer at Pindari located 7 kms north of Sugarloaf

• Saline water ≈ 22,500 ppm TDS - no other beneficial users as too saline for either cropping or stock use

• Two bores installed will supply full production supply of 100ML/yr that will drop to 60ML/yr with decant recycle

Potable water

• Agreement with SA Water for supply of 40ML - 80ML/yr

• Potable water required for final concentrate wash water and site domestic uses

Power

• Start-up operation may use diesel generation

• Full capacity electricity demand 0.8 MW

• 11kV line 4.75kms west of Sugarloaf plant

Transport

• Cleve-Kimba road B-Double capable

Port

• Port Adelaide preferred as container capable

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Sugarloaf plant site
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Pindari borefield located 7 kms due north of Sugarloaf processing site

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Campoona Graphite – product specifications

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Campoona graphite suitable for several applications including batteries and very high quality lubricants

• Rigorous metallurgical bench-scale testing completed

• ≈30 tonne bulk sample representing upper 30 metres of deposit used to refine flotation conditions and finalise process flowsheet

• Production of 1,000tpa rising to a maximum of up to 10,500 tpa high purity graphite

• Specifications:

• Carbon 98.5 – 99.5% Cg

• Sulphur <0.1%

• Fe < 100ppm

• Ni, Cu, V < 10ppm

• Specific gravity 2.35 g/cc

• Micronising to customer requirements

• Application in lithium-ion batteries tested

• Battery electrodes were compared with commercially available synthetic graphite powders, which were then used to construct coin cells in a half-cell configuration. The performance of Campoona graphite in terms of charge capacity, was at least equivalent to that of the commercially available synthetic graphite. (NB Over 30% of Li-ion batteries use synthetic graphite).

• High purity graphite concentrates to supply specific markets – batteries including Li-ion batteries, high quality lubricants, brake pads, ceramics

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SEM image of 99.5% Cg Campoona graphite

• Production levels not resource constrained

Central Campoona, a faulted off-set of Campoona Shaft, has the same metallurgical performance. Lacroma on EL4662 provides a third future ore opportunity that can be processed through the same plant

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Graphene research and DEVELOPMENT

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Two-year sole funded research collaboration with the University of Adelaide into Sugarloaf carbon, graphene and potential graphene applications

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Graphite Materials Prepared Semi-products Prepared Products Archer Product Examples
Graphene Nanosheets
Graphene
Oxide Sheets
Graphene Hydrogels
Archer
Graphene from raw Archer Graphite
Graphite
Graphene Aerogels
Graphene
Sheets
Graphene Aerogel
Composites
Graphite
Concentrates Membrane of graphene sheets from raw graphite
(92%)
Graphene Powders
Intercalated
Graphite
Graphene Films
Graphene aerogel from raw graphite
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Commercial applications needed to unlock graphene phenomenon

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Source: Company Presentations and ASX Announcements

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Campoona graphite delivers >99.9% graphene

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Pure graphene offers enormous commercial opportunities

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Raman data of graphite and prepared graphene showing typical D, G and 2D bands. Shift of 2D peak confirms the transformation of graphite into graphene.

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Summary of characterization results a) Photograph of prepared graphene powder in glass bottles (Total = 240g), b) typical particle size distribution of graphene particles, and c) high resolution SEM images of graphene sheets.

TGA of graphene powder combusted in air at a rate of 20 ° C/min confirming purity of prepared material

Product accreditation a key step towards commercial production

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Archer graphene in high tech applications

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Selected graphene products : graphene conductive film, conductive flexible polymer, graphene composite and electrodes for batteries and supercapacitors

• Pure graphene prepared using direct liquid phase mechanical exfoliation

• Graphene products (inks, conductive films, electrodes) all have excellent electrical conductivity performance

• Potential applications in solar cells, photovoltaics, printable electronics, supercapacitors, batteries etc.

• Several types of electrodes achieved resistivity of 0.5 Ohm/sq which can only be achieved with the highest purity graphene

Potential application in supercapacitors, solar cells, photovoltaics, printable electronics, batteries and sensors

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Archer graphene

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Research and Development

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Graphene aerogel

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Graphene aerogel close-up

Archer’s Production Pathway – “ The Silent D in Research”

• Looking to produce kilograms of “certified research-grade” graphene

• Sales proceeds to be catalyst to scale-up production

• Supercapacitors being made now with a view to securing a cornerstone investor to develop commercial-scale production

Taking steps to manufacture graphene on a commercial scale

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Sugarloaf carbon research and DEVELOPMENT

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Huge resource potential

• Sugarloaf hosts unique carbon deposit with an exploration target of 40 – 70Mt at 10-12% TC*

• Carbon within meta-pelite

• Geochemistry suggests iron sulphide deposit affinities with elevated copper and zinc, proximal manganese, silver and gold

• Copper “blows” on western flank of Sugarloaf Hill

• EM shows large conductive body at depth

• ELA 2015/215 approved which covers up to 4km extension to Sugarloaf

• It must be noted that whilst the Exploration Target is large, the potential quantities and grades presented in the Exploration Target are conceptual in nature, there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource .

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Huge Exploration Target likely to get much larger with grant of EL over ELA 2015/215

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2. Sugarloaf carbon research and DEVELOPMENT

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Unique carbon material

• Initial research conducted in collaboration with the University of Adelaide directed at creating graphene from Sugarloaf carbon was successful from both ores and concentrates

• Next was to try to use graphene to slow the solution rates of commercial fertiliser

Crystalline Campoona graphite

• Graphene extracted from Sugarloaf carbon was successfully applied as a coating to superphosphate which appreciably slowed the release rate of nutrients

• However, the cost of making graphene combined with the cost of applying a coating of graphene on an already expensive fertilizer, was likely to be cost prohibitive for farmers

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• Research then looked at Sugarloaf carbon itself given its unique physical and chemical characteristics that distinguish it from crystalline graphite

• Sugarloaf consists of porous, matted, predominantly nongraphitic carbon with low crystallinity

Porous carbon accretions from Sugarloaf

• Sugarloaf carbon has elevated concentrations of macro- and micro-nutrients that occur in both highly soluble and low solubility forms providing immediate release and longer-term release of nutrients to plants

• The nutrient levels are however too low for Sugarloaf carbon to be used as a fertilizer on its own

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Sugarloaf carbon has potential application as soil ameliorator

Sugarloaf carbon

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Improves soil wettability and moisture retention

• Initial results from Adelaide University indicate:

• carbon additions improve soil wettability and the soil’s ability to retain moisture

• presence of trace elements found in fertilisers

• assists plant growth

• This carbon could be produced at very low cost

• 40m thick outcropping horizon

• No beneficiation

• Simple mining, crushing and bulk loading

• Next phase of testing will include plant trials over entire growing “season” comparing dosage rates of Sugarloaf carbon and superphosphate

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Looking west from top of Sugarloaf Hill across Archer’s farm land

Plant trials being planned to confirm the ability of Sugarloaf carbon to ameliorate soil

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3. Waddikee – Flake graphite

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Wilclo South JORC 2012 Inferred Resource of 6.28Mt @ 8.8% Cg over a strike of 1.2 kms

• Large flake graphite intersected at Wilclo, Wilclo South, Francis, Cut-Snake and Argent

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Source: Company Presentations and ASX Announcements

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Airborne EM over EL4662 clearly identifies graphite horizons

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Waddikee

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Waddikee: EM provides excellent predictive vectoring tool for exploration for flake graphite. Three 400m spaced drill lines extended the deposit’s strike by a further 1.2 kms. Total Wilclo to Wilclo-South strike potential is over 11 kms.

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Northern strike projection
Wilclo South Resource of
6.38Mt grading 8.8% Cg
over 1.2kms is open to
the north and south for
several kilometres
Deposit open to the south
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Waddikee Flake graphite

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Wilclo South: ≈50% of graphite recovered as Extra Large, Large, Medium and Fine Flake

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• The Wilclo South deposit and Francis Prospect produced Extra Large, Large, Medium and Fine Flake graphite at grades of 91-92% Cg from basic Halutain superpanner sorting

• grades to improve with additional standard processing

• preliminary laboratory tests show excellent flake recovery

• inferred 42-55% of the graphite recoverable as Flake

	Graphite size		Grade		Graphite distribution in
	(µm)		(% Cg)		flake product (%)
	Extra large / Jumbo flake +425µm		92.2		5%
	Extra large flake +300µm		91.6		10%
	Large flake +180µm		91.8		29%
	Fine & Medium flake +75µm		92.3		56%
							Ex

+425µm Extra Large Flake

Extra Large Flake +300µm

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Large Flake +180µm

Medium Flake +125µm

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Fine Flake +75µm

Extremely coarse graphite released by knapping Argent outcrop (The square scale grid is 1 mm)

Flake aggregates from RC drill hole

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Disclaimer

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Competent persons statement

The exploration results and Exploration Target reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr Wade Bollenhagen, Exploration Manager of Archer Exploration Limited. Mr Bollenhagen is a Member of the Australasian Institute of Mining and Metallurgy who has more than twenty years experience in the field of activity being reported. Mr Bollenhagen has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ relating to the reporting of Exploration Results. Mr Bollenhagen consents to the inclusion in the report of matters based on his information in the form and context in which it appears.

The information in this report that relates to the Campoona Shaft and Central Campoona JORC 2012 Mineral Resource estimation has been prepared by Mr B. Knell who is a Member of the AusIMM and peer reviewed by Dr. C Gee who is also a Member of the AusIMM (CP). Mr Knell is a full time employee of Mining Plus Pty Ltd and Dr. Gee is a full time employee of Mining Plus Pty Ltd., both have more than five years’ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Knell has consented in writing to the inclusion in this announcement of the Mineral Resource estimation information in the form and context in which it appears. This information was prepared and first disclosed under the JORC Code 2012.

Forward looking statements

The information in this presentation is published to inform you about Archer Exploration Limited and its activities. Some statements in this presentation regarding estimates or future events are forward looking statements.

Although Archer Exploration Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results and outcomes will be consistent with these forward-looking statements.

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www.archerexploration.com.au

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Contact details

Archer Exploration Limited

Gerard Anderson Managing Director Ph: +61 8 8272 3288 Fax: +61 8 8272 3888 Email: ganderson@archerexploration.com.au

Thank you

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Appendix 1 - Archer Graphite Summary

JORC 2012 Graphite Resource of 8.55Mt @ 9.0% Cg

JORC 2012 Graphite Resource of 8.55Mt @ 9.0% Cg	JORC 2012 Graphite Resource of 8.55Mt @ 9.0% Cg
Executive Summary
1	Large Position in a Premium Graphite Location � 2,154km2 of tenements near Cleve-Darke Peak-Kimba on Eyre Peninsula, South Australia � Eyre Peninsula is Australia’s premier graphite exploration and production region
2	Multiple Discovered Resources1 � Combined JORC 2012 Resources for Campoona Shaft, Central Campoona and Wilclo South of 8.55Mt @ 9.0% Cg to give 770,800t of contained graphite −Campoona Shaft Total: 1.65Mt @ 9.2% Cg (151,400t contained graphite) −Central Campoona Total: 0.52Mt @ 11.1% Cg (58,000t contained graphite) −Wilclo South Total: 6.38Mt @ 8.8% Cg (561,400t contained graphite)
3	High Quality Graphite � Comprehensive metallurgical tests completed that demonstrate the ability to deliver high purity, high value, crystalline fine graphite (plant to be constructed at Sugarloaf) � Campoona Shaft graphite compares very well with synthetic graphite in lithium-ion batteries � Large to jumbo Flake recovered from Wilclo South and Francis and further Flake deposits indicated at Wilclo, Cut-Snake, Balumbah and Argent
4	Research Unlocking Product Potential � Sugarloaf “carbon” has unique physical and chemical properties that reinforce potential as broad acre, dryland soil conditioner � Pure graphene products derived from leached graphite concentrates
5	Exploration & Expansion Upside � High quality airborne EM and magnetic coverage across key areas � Numerous drilled graphite prospects requiring small amount of additional drilling to reach Resource status � High quality EM coverage strongly indicates Prospect continuity
6	Close to Existing Infrastructure Network � Power and major road infrastructure all located within the perimeter of the tenements with access to various port options � Substantial groundwater aquifer (Pindari) located ≈10km north of Sugarloaf plant site to supply the full process water needs of extended project. Agreement signed with SA Water for the supply of potable water to project . � Archer owns land at Sugarloaf and has a legally binding agreement to purchase land at Campoona Shaft

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1. Reported using a cut-off grade of 5%Cg Source: Company Website, ASX Announcements & Presentations