ECOGRAF LIMITED - Capital/Financing Update 2017

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21 JUNE 2017

ASX ANNOUNCEMENT

Updated 60ktpa Bankable Feasibility Study

Completion of BFS opens door to securing project financing

Kibaran Resources Limited (ASX: KNL), is pleased to announce the completion of its updated Bankable Feasibility Study (‘BFS’) and associated Environmental and Social Planning for its 100% owned Epanko Graphite Project (‘Epanko’) in Tanzania. The BFS, which incorporates conservative design parameters, has been subjected to rigorous due diligence by bank appointed Independent Engineers SRK Consulting (UK) Limited (‘SRK Consulting’) who confirms as follows: all technical areas have been significantly advanced to conform with the requirements of international project financing standards; and the Environmental and Social Management Planning and supporting impact assessments conform to relevant Tanzanian legislation, International Finance Corporation (‘IFC’) Performance Standards and World Bank Group Environmental Health and Safety Guidelines.

HIGHLIGHTS

The BFS is based on an increased production rate of 60ktpa to support new demand
Key BFS results:
Pre-tax NPV10 of US$211m
Internal rate of return: 38.9%
Capital cost of US$88.9m
Annual EBITDA of US$44.5m (A$59.3m)
Payback period of 3.4 years
Study subject to technical due diligence by bank appointed Independent Engineers SRK Consulting covering all study parameters and disciplines
Project conforms with Environmental & Social Management Planning and the supporting impact assessments conform to relevant Tanzanian legislation, IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines
Positive initial review and commencement of debt financing program under the leadership of Germany’s KfW IPEX-Bank (‘KfW’)
Executed marketing strategy with binding sales and offtake agreements in place covering production of 44ktpa, an additional 16ktpa is under negotiation with existing partners and leading German carbon groups
Project benefits from opportunity to connect to grid power and proximity to established transport corridor for market access
Testwork confirms ability to produce a higher grade graphite product of 99% carbon from fresh ore with no additional milling or cleaning stages
Upgraded BFS economics do not include sales into the high-growth lithium-ion battery markets or value-added products from the proposed downstream processing facility
Negotiations in progress with leading German industry groups for sale of downstream processed products
Opportunities for further on-strike exploration to extend mine life beyond 18 years and for other savings on implementation due to conservative design and costings

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Kibaran Resources Level 1/18 Richardson St West Perth WA 6005

Managing Director Media : Read Corporate Andrew Spinks Paul Armstrong T: +61 8 9388 1474

T: +61 8 6424 9000 E: [email protected] www.kibaranresources.com

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The BFS has demonstrated a highly robust business case for a 60ktpa operation at Epanko and has also substantially enhanced and de-risked the project’s development. Discussions are progressing with both existing and new blue-chip German industry partners for the sale of additional products. These arrangements will support the downstream processing of Epanko graphite to produce spherical graphite products for the high growth battery market, which has the potential to provide significant additional value and increase margin capture. A separate feasibility study on the production of battery grade spherical graphite and value add graphite products is currently being finalised and is expected to be released in Q3 2017.

Kibaran Managing Director Andrew Spinks commented: “This detailed updated feasibility study shows that Epanko is a world-class graphite project in every respect. The outstanding quality of the deposit underpins the project’s extremely robust economics, demonstrated by the strong alliance the project has managed to secure with a range of German industrial groups. Passing this milestone was the key catalyst to advance debt financing and allows Kibaran and its sales partners, industry groups and private equity groups that have previously expressed interest, to commence project financing discussions in detail.

The support of such partners has facilitated the increase in production to 60ktpa and underpins the commercial development of the downstream processing facility. This places Kibaran in the ideal position for the enormous growth forecast for graphite demand, on the back of the increased electrical vehicle and renewable energy battery boom. The downstream processing plant is expected to provide the Company with another source of substantial cash flow generation by supplying our products to lithium battery manufacturers.”

BANKABLE FEASIBILITY STUDY SUMMARY

SCOPE OF WORK

In order to achieve the highest standard required by our lenders and to accommodate an upgrade in production, Kibaran has undertaken a 12 month program of work recommended by SRK which encompassed almost every facet of the projects metrics, costing over US$8m and involving leading consulting teams from Australia, Africa and Europe. The quality of the BFS has been significantly enhanced through the involvement of SRK Consulting. Their diligence and rigour has resulted in a bankable level of project definition. Potential value adding opportunities have also been identified and will be incorporated as the project is progressed.

SRK Consulting, appointed as Independent Engineers for KfW, to perform KfW’s technical due diligence on the project concluded with the following:

The additional work SRK required to be undertaken by Kibaran to update the 2015 Feasibility Study has been completed in its entirety
All technical areas have been significantly advanced to conform with the requirements of international project financing standards
The Environmental and Social Management Planning and supporting impact assessments conform to relevant Tanzanian legislation, IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines

Achieving this positive outcome is the catalyst for securing debt financing for the Epanko project and Kibaran is now engaged with a number of lenders. Following a positive initial review, the Company has commenced an international debt financing program under the leadership of KfW, a leading German bank which has extensive experience in the successful financing of development projects around the world.

TECHNICAL

Over 8,000m of resource drilling was completed, together with a new program of geophysics and structural geology that has increased resource confidence levels, extended the scale of resource and importantly confirmed the continuity of graphite mineralisation along strike, which provides the potential to extend forecast mine life beyond the current 18 year plan.

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This drilling and associated testwork provided data for hydrological studies, geotechnical programs and the design and optimisation of new mining pits and a new mining schedule.

Additional metallurgical testwork was undertaken on both drill samples and on a 200 tonne bulk sample. The bulk sample was successfully processed through a commercial scale graphite plant to produce final processing parameters and provide credible production scale samples for assessment by key offtake partners.

During the study Kibaran explored the potential to generate a higher carbon grade product from <150 micron material for use as spherical graphite feedstock. Importantly, starting with high grade and large flake provides significant flexibility in process flowsheet design. Fresh material which comprises 28% of the Ore Reserve and 72% of the Mineral Resource produces a product grade of 99% carbon with no modifications to the process flowsheet. Both the Eastern and Western pits remain open at depth and any conversion of Mineral Resources to Ore Reserves will be fresh material.

GR Engineering have utilised this mining and processing data to refine designs for the mine processing flowsheet and optimise the overall mine configuration to provide the most effective and efficient operating plan for Epanko. This has included additional studies for all required infrastructure, associated access roads and minesite facilities.

SOCIAL, ENVIRONMENTAL AND SAFETY

Over US$2m of the total US$8m expenditure was directed to the environmental and social disciplines, in order to conform with IFC Environmental & Social Performance Standards and the Equator Principles and to progress the Resettlement Action Plan to near completion. This builds on the Company’s commitment to ensure global best practice in community relations and environmental management. The Kibaran team has a strong track record in community relations and environmental management with a previous project in which they were involved receiving two Presidential Awards in Tanzania for environmental excellence and with Mr Grant Pierce, our in-country Executive Director, receiving the Order of Australia Medal for his contribution to rural communities in Tanzania.

The environmental and social program was assisted by UK based Zyl Consulting and consisted of an intensive on-ground process of environmental review and social engagement involving the Company’s in-house social development and community relations team, together with experienced resettlement, social and environmental professionals such as independent valuers, surveyors, planners, architects and engineers.

In addition to the Company’s Resettlement Policy Framework and Social Engagement Plan which have been made public via the Kibaran website, a comprehensive environmental and social strategy has been developed in accordance with the Equator Principles and is supported by a suite of 14 detailed management plans to ensure impacts and risks are identified and managed in accordance with leading global standards.

KEY OUTCOMES

The BFS evaluated both a 40ktpa and 60ktpa graphite operation at Epanko, with the 60ktpa case delivering superior capital efficiency and financial outcomes under updated inputs.

Pre-production capital costs are estimated to be US$88.9m, including a US$7.1m contingency. The BFS results deliver an improved capital efficiency compared to the July 2015 study, as demonstrated by the 24% reduction in capital intensity from US$1,937/t to US$1,482/t concentrate. Capital cost estimates were re-quoted to reflect Q1 2017 market prices and monetary terms.

The BFS estimates a C1 Free-On-Board (FOB) operating cost of US$500/t and an All In Sustaining Cost (AISC) of US$572/t. The C1 FOB operating cost is significantly lower than the estimate in the July 2015 study of US$570/t (and AISC of US$622/t). The improvement is primarily due to lower power costs arising from accessing grid power after 2019 and the increased ore throughput delivering process cost efficiencies. Mining costs are based on a contractor mining scenario with the lower costs driven by the lower strip ratio compared to the July 2015 BFS (0.4 versus 1.1 waste to ore). Operating cost estimates were re-quoted to reflect Q1 2017 market prices and monetary terms.

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Table 1: Summary BFS Outcomes

Input	Unit
Graphite Production Operating Cost (C1-FOB) All in Sustaining Cost (AISC)* Pre-Production Capital NPV10 IRR	(Kt) (US$/t sold) (US$/t sold) (US$m) (US$m) %	60,000 500 572 88.9 211 38.9

* Includes royalties (US$39/t), sustaining capital (US$15/t), off-site corporate functions (US$10/t) and rehabilitation (US$8/t).

PROJECT FINANCING

A positive outcome of the technical due diligence of the updated Epanko BFS by the Independent Engineer SRK Consulting has been the catalyst to facilitate credit approvals by debt financiers. Following a positive initial review, a debt financing program has commenced under the leadership of Germany’s KfW to determine the optimum structure, quantum and terms of the debt facilities.

In conjunction with the KfW process, the Company is also working through assessment processes with Nedbank Limited, acting through its Corporate & Investment Banking Division (‘Nedbank CIB’), one of the largest banks in South Africa and a key lender across the African continent, together with Australia’s Export Finance and Insurance Corporation (‘EFIC’). Both institutions have indicated potential support for the proposed development and following completion of the BFS, the Company and the international banking group are currently preparing a detailed, multi-party program to complete all project requirements and secure debt financing facilities.

A number of strategic equity investors, including both industry participants and private equity groups, have also expressed interest in potential investment in the project and the downstream processing value adding initiatives. The Company is progressing these discussions in parallel with the debt financing program in order to determine the preferred debt and equity funding structure.

MARKETING AGREEMENTS AND ADDITIONAL CUSTOMER SUPPORT

The executed marketing strategy for the Epanko project is focused on the supply of high quality graphite products into specific geographic markets which are seeking a diversified and consistent long term supply partnership.

As a result, the project has secured strong support from German, Japanese and South Korean markets with existing sales and binding offtake agreements for 44ktpa of planned graphite production. The Company is in discussion with its key partners and other leading German carbon groups for the sale of an additional 16ktpa of graphite products. Negotiations are well advanced and the Company expects to formalise agreements in due course.

In addition, the Company has also received positive support for its proposed value adding downstream processing initiatives, including for the purchase of both battery grade (spherical) graphite production and byproducts (fines), together with co-investment in the planned downstream processing facilities.

The BFS is based on the conservative assumption that all products are sold into the German, Japanese and Korean markets for use in traditional graphite applications, primarily as refractory products in the production of steel and iron materials.

Kibaran firmly believes that near term to medium term demand growth for graphite will be a function of Electric Vehicle (‘EV’) penetration rates (for which numerous independent forecasts are available). The interest in our battery grade graphite samples has significantly increased since the Company commenced its separate feasibility study with additional German support further aligning the Company strategy with German industry, which is expected to experience significant growth through participation in the EV supply chain.

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Figure 1: Forecast Global EV penetration rates by region

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Source: UBS, May 2017

DOWNSTREAM PROCESSING

Consistent with the demand outlook, Kibaran is nearing the completion of the feasibility study for the production of battery grade spherical graphite targeting value capture of high quality Epanko graphite in the battery anode supply chain and other value added products. The study is due to be completed in Q3 2017 and is based on a staged integration with the ramp-up of graphite production at Epanko. The initial downstream processing throughput of 10ktpa to deliver approximately 6ktpa spherical graphite with testwork supporting a 50% yield which is superior to existing feedstock.

It is planned to adopt a modular process route, enabling the Company to progressively scale the production of spherical graphite products in accordance with market demand. Preliminary results include:

Positive feedback from end users on product suitability from the industrial scale production of spherical graphite in testing facilities
Key properties, including particle size distribution, tap density and impurity levels are in-line with and meet leading battery anode manufacturer specifications
Design and work for micronisation and spherical shaping has been completed, with the purification process flowsheet nearing completion
Battery testing is continuing at leading testing facilities, with the results expected shortly

The initial results support the Company’s strategy to become a key player in the supply chain for the growing battery market, which is planned to be progressed through Kibaran’s existing binding agreement and partnership with Sojitz Corporation of Japan, supported by on-going discussions with key anode manufacturers.

Downstream processing is expected to provide a floor price for mine gate products, given the access to the value added markets through the additional processing facility .

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LEADERSHIP IN GRAPHITE PROJECT DEVELOPMENT

Accomplishing the positive outcomes of the BFS and the associated marketing and downstream processing progress provides the Epanko Graphite Project with a number of key competitive benefits in terms of early mover advantage.

Kibaran is the only listed graphite Company globally that has completed a BFS with Environmental and Social Planning which conforms with IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines. This status will be a significant advantage, given the emerging new markets for graphite, including batteries, are seeking to ensure graphite supply from sources which conform with such standards.

Key Competitive Advantages

Rigorous Independent Engineer’s due diligence significantly de-risks the project
Compliance with IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines provides green and social credentials which are now becoming pre-requisites for sales and partnerships
Secured sales and offtake agreements with established and credible partners in both Europe and Asia
Executed marketing strategy with strong alignment to German industry and the battery supply chain in Japan, Korea and Taiwan
Access to grid power and close proximity to road and rail infrastructure
Favourable gangue mineralogy with high degree of metamorphism which determines the graphite crystallinity
High proportion of large flake graphite products with high in-situ ore grade
Representative commercial scale testwork completed successfully, with a 200t bulk sample processed through an operating graphite plant providing samples to support process design testwork and marketing

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BANKABLE FEASIBILITY STUDY PROGRAM AND RESULTS

SCOPE OF WORK

GR Engineering Services Ltd (ASX:GNG), (‘GR Engineering’) completed the BFS based on the upgraded Mineral Resource Estimate undertaken by CSA Global Pty Ltd (‘CSA Global’) and the outstanding results from the metallurgical testwork. Conservative pricing estimates for flake graphite fractions were adopted by Kibaran using both current pricing and forecast demand by Roskill. The BFS capital and operating cost estimates are to a level of accuracy of ±10%.

The Environmental and Social Planning aspects of the BFS were completed to conform with IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines, a core requirement to enable project financing of emerging market domiciled projects such as Epanko.

This outcome needed to be reached as a prerequisite to securing project debt financing from Germany’s KfW and other lenders.

The BFS scope was determined in conjunction with feedback from the debt providers to target the delivery of a financeable project and a viable business model under prevailing graphite market conditions whilst also conforming with IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines.

The significant work program over the last 12 months is summarised below:

Programs of structural geology and further geological modelling
8,000 metres of drilling, geological, geotechnical and structural logging and sampling
Ground electromagnetic surveys and aerial VTEM and magnetics with identification of new targets for new high grade mineralisation
Update of mineral resource and mining ore reserves, with 40% increase in drilled Mineral Resources
Detailed mineralogical studies with consultants and with Australian Research Organisation, CSIRO
New pits designs and optimisations for expanded production
Detailed geotechnical studies for pit slope design parameters
Further metallurgical studies including variability and locked cycle testwork, additional flotation and comminution work to support 60ktpa case
Full scale 200 tonne bulk sample processed through a commercial scale plant providing staged samples for equipment specific testwork
Engineering design for tailings, roads, power and infrastructure
Design of processing plant for scope change to 60ktpa graphite product
Rebidding of capital equipment for 60ktpa design
New social and environmental baseline studies
Completion of 14 Social, Environmental and Safety management plans
Completion of Resettlement Policy Framework
Completion of Stakeholder Engagement Plan
Relocation Action Plan costed and nearing completion
New capital and operating cost estimates for scope change to 60ktpa of product
Completion of road survey and safety study
Independent pricing study commissioned from Roskill
Project development and marketing program securing further sales support

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Figure 2: Epanko Location Plan

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STUDY TEAM

The BFS was managed by GR Engineering utilising industry leading experts in relevant disciplines including:

GR Engineering Services Study Manager and Engineering Design CSA Global Mineral Resource and Geology Knight Piésold Hydrology and Infrastructure ECG Engineering Power and Electrical Engineering Independent Metallurgical Operations Metallurgy Intermine Engineers Mining and Ore Reserves George Orr & Associates Geotechnical Mine Design Trinity Promotions Social and Community Bollore Logistics Transportation planning and road safety assessment Zyl Consulting Resettlement planning, stakeholder engagement program, E&S risk assessment and development of ESMPs PML (Tanzania) Registered land surveys and valuers IMMMA/DLA Piper (Tanzania) Legal advisors for land access and resettlement programs MTL (Tanzania) EIA consultants SELCA (Tanzania) Planning and architectural design of resettlement buildings

All of the consultants have previously worked on African based projects, including in Tanzania. The BFS also had significant technical input from Mr Christoph Frey, Kibaran’s Director and specialist graphite consultant.

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ORE RESERVE STATEMENT

The Proven and Probable Ore Reserve estimated as part of the upgraded BFS is based on and inclusive of the Measured and Indicated Mineral Resource.

Table 2: Ore Reserve Statement >5% TGC

JORC Classification	Proven	Proven		Probable	Probable			Total
	Tonnes (Mt)	% TGC	Cont (Kt)	Tonnes (Mt)	% TGC	Cont (Kt)	Tonnes (Mt)	% TGC	Cont (Kt)
Oxide Transitional Fresh	4.2 0.5 1.0	8.48 7.99 8.36	356 43 85	3.0 0.6 2.3	7.54 8.96 8.95	227 55 206	7.2 1.1 3.3	8.09 8.51 8.77	583 97 291
Total	5.7	8.41	483	5.9	8.23	488	11.7	8.32	971

Notes: for Table 2 & 3 Tonnage figures contained within tables have been rounded to nearest 100,000. % TGC grades are rounded to 1 decimal figure. Abbreviations used: Mt = 1,000,000 tonnes. Rounding errors may occur in tables.

The Ore Reserve has been reported at a 5% cut-off grade due to a reduction in the economic cut-off grade determined by the BFS.

MINERAL RESOURCE ESTIMATE

The Ore Reserve forms part of a significantly larger JORC resource of 30.7Mt grading 9.9% TGC for 3,049kt graphite (67% classed as M&I). The extent of mineralisation in the resource envelope plus the potential for strike and depth extensions, highlights the potential to both increased production rates as market demand allows and extend the LOM.

A substantial amount of graphite mineralisation exists within the reported Mineral Resource at lower TGC grade at 5% TGC as follows, 113.3Mt at 7.2% TGC for 8.1Mt contained graphite (refer ASX release 31 March 2017, Epanko Mineral Resource Upgrade ).

Table 3: Mineral Resource Estimate for Epanko Deposit > 8% TGC

JORC Classification	Tonnage (Mt)	Grade (% TGC)	Contained Graphite (Kt)
Measured Indicated Inferred	7.5 12.8 10.4	9.8 10.0 9.9	738.9 1,280.0 1,030.6 3,049.5
Total	30.7	9.9

MINING

Mining operations will commence in the Eastern Pit and move to the Western Pit in Year 6 through to the scheduled reserve exhaustion in Year 16. The average LOM strip ratio is expected to be 0.4:1 (waste to ore).

Mining will be undertaken via conventional drill and blast with the fleet comprising of an 80t backhoe excavator and 40t off-highway haul trucks. The BFS is based on a mining contractor scenario.

The Western Deposit consists of mining a strike length of 1,360m along the top of the ridge to a depth of 210m in the south, and the Eastern Deposit sits partially over a hill within a small valley and will be mined to a depth of 125m and the pit will have a strike extent of 350m.

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Figure 3: Epanko Pits and Site Layout

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PROCESSING AND METALLURGY

The process plant is designed with a throughput capacity of 720ktpa for an average TGC grade of 96% and average annual production of 60ktpa. The process plant is based on a crush and grind comminution circuit (two stage crushing circuit with single stage rod mill) followed by rougher flotation. The tailings are reground in a ball mill before they enter the scavenger flotation. The rougher and scavenger concentrates are combined and fed into the primary cleaner section, consisting out of polishing mills and cleaner flotation banks. The concentrate is than screened into two size fractions, with subsequent polishing and four stage cleaning applied with no further milling required in the cleaning circuit. Product is then dewatered, dried and screened into saleable size fractions. The flowsheet is optimised for a high yield of large flakes, however it could be easily modified to get higher carbon content by flotation if required.

Table 4: Significant variability testwork was completed on the various ore types and built into the model

Flake Size	Western Oxide Western Fresh	Eastern Oxide	Eastern Fresh
Name Micron Mesh	Mass (%) Carbon Grade (%) Mass (%) Carbon Grade (%)	Mass (%) Carbon Grade (%)	Mass (%) Carbon Grade (%)
Jumbo >500 >300 >35 >50 Large >180 >80 Medium >150 >100 Small >106 >75 <75 >150 >200 <200	1.4 16.8 97.2 97.5 1.8 15.9 98.7 98.9 31.8 97.1 26.7 99.0 13.4 96.9 11.7 99.0 17.1 8.7 10.8 96.2 95.4 92.8 13.0 9.2 21.8 99.0 98.9 95.2	5.3 292 96.5 96.4 35.6 96.4 13.3 96.4 10.2 3.0 3.4 96.2 96.2 95.3	0.2 10.4 98.5 98.5 30.9 98.5 15.5 98.5 16.9 10.5 15.6 98.4 98.3 97.5

Table 5: The combined weighted life of mine distribution

Name	Micron	Mesh	Mass (%)	Carbon Grade (%)
Jumbo Large Medium Small	>500 >300 >180 >150 >106 >75 <75	>35 >50 >80 >100 >150 >200 <200	2.1 18.3 31.2 13.1 14.9 8.0 12.5	97.5 97.7 97.5 97.4 97.0 96.6 94.2

Notes for table 4 & 5. 1mm=1000 micron and fixed carbon content determined by Loss on Ignition method (LOI)

During the study Kibaran explored the potential to generate a higher carbon grade product from <150 material for use as spherical graphite feedstock. Importantly starting with high grade and large flake provides significant flexibility in process flowsheet design. Key findings included:

Fresh material which comprises 28% of the current Ore Reserve and 72% of the Mineral Resource produces an average product carbon grade of 98.2% and 99.0% carbon grade for the Western Pit with no modifications to the process flowsheet. Both the Eastern and Western pits remain open at depth and any potential additions below the current pit floor will be fresh material.
Potential to introduce low capital additional attritioning stages into the flowsheet to produce a higher grade carbon content product in <150 micron material for use in technology applications

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Figure 4: Epanko Simplified Process Flowsheet

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Figure 5: Detailed Plant Design

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INFRASTRUCTURE

Tailings Storage facility

The waste output (tailings) from the flotation process will be pumped from the processing plant to a Tailings Storage Facility (TSF).

The TSF design allows for an 18 year life of mine, at an average production rate of 60ktpa graphite product delivering an annual average of 660ktpa of tailings to the TSF.

Power

Epanko is expected to have installed power of 2.8MW and a maximum power draw of 2.4MW. The study has assumed on site diesel generation for project construction and the first years of production. From Year 2 power is expected to be sourced from the TANESCO grid through a dedicated 33kv powerline from an upgraded Ifakara Substation to Epanko.

Water

Process water supply for the main process will be sourced from the tailings storage facility and supernatant water storage. Raw water supply will be sourced from pit dewatering and the raw water supply borefield. The borefield will comprise two bores with sufficient capacity to supply the necessary volume required for the project infrastructure requirements.

Logistics

The Epanko project site can be accessed from the existing national road network to the chosen export port of Dar es Salaam. The transport route runs from Dar es Salaam to Epanko. The road from Dar es Salam to Ifakara is bitumen, and the 120km road from Ifakara to Epanko is predominantly compacted laterite.

The BFS assumes road haulage to the port of Dar es Salaam in bulk bags, however, as production increases a combined road-rail link may be utilised. Epanko is located ~120km from the Ifakara rail siding which links to Dar es Salaam.

Figure 6: Transport Logistics Epanko – Dar es Salaam

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Graphite product will be shipped from the port of Dar es Salaam. The port has an estimated capacity of 3.1Mt general cargo, 1Mt container cargo and 6.0Mt of liquid bulk cargo with 7 deep water berths.

Figure 7: Dar es Salaam Port Layout

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REGULATORY, SOCIAL AND ENVIRONMENTAL

The IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines are recognised as the global standard for assessing and managing environmental and social risks for projects domiciled in emerging markets. These guidelines have been adopted by leading financial institutions worldwide and compliance is a pre-requisite by all development banks and other leading international financial institutions for project financing. Kibaran have undertaken a comprehensive suite of Environmental, Social and Resettlement studies and prepared documentation which conforms with these guidelines.

Finalisation of Environmental and Social documentation including completion of ESIA, RPF, Stakeholder Engagement Plan and development of comprehensive suite of Environmental and Social Management Plans has been a critical element of the upgraded BFS.

Environmental Management Plans

EMP01	Air Quality and GHG Management Plan
EMP02	Noise and Vibration Management Plan
EMP03	Water Resources and Erosion Con Management Plan
EMP04	Biodiversity Ecosystems and Land Use
EMP05	Waste Management Plan
EMP06	Materials Management Plan
EMP07	Tailings Storage Facility Operating Manual

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Social Management Plans

RPF Resettlement Policy Framework SMP01 Stakeholder Engagement Plan SMP02 Community Health Management Plan SMP03 Artisanal and Small Scale Mining Interface Management Plan SMP04 Traffic and Road Safety Management Plan SMP05 Cultural Heritage Management Plan SMP06 Labour Management Plan SMP07 Social Development Plan (updated baseline studies)

The mine area impacts the hamlets of Epanko A, Kazimoto, Itatira, Mbera, Epanko B and Luli. Resettlement planning activities have been significantly progressed during the last 12 months, including public disclosure of the Resettlement Policy Framework (RPF), completion of survey and valuation program, establishment of the Resettlement Working Group, determination of entitlements and identification of the resettlement site. The Resettlement Action Plan (RAP) and design of the resettlement village is due for completion in July with public disclosure to follow.

Figure 8: Communities within Mine RAP Area

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PROJECT IMPLEMENTATION SCHEDULE

An overall Project schedule has been updated as part of this Study. The schedule has based on specific design requirements, preliminary vendor nominated manufacturing and delivery periods and in-house experience with similar projects. Some of the more significant schedule milestones are listed below:

Figure 9: Implementation Schedule

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PRODUCT SPECIFICATION AND MARKETING

The high proportion of >150micron flake size product and high graphitic carbon product grades allows Kibaran to sell product into established markets. Kibaran has demonstrated a high quality product, relative to incumbent production sources from China, through the securing of pre-production offtake agreements with ThyssenKrupp, European Trading Group and Sojitz Corporation which covers 73% of Epanko production once name plate capacity has been reached.

Figure 10: Epanko Flake Size distribution and in-situ grade

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Source: Company exchange releases
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Product specifications including carbon content and sizing has been developed in discussions with our binding sales and offtake partners and discussions with established graphite users and traders across both industrial and technology (battery) markets. The average carbon content of Epanko product envisaged by the BFS is >96% carbon grade across 4 size fractions to meet market demand which is currently dominated by traditional industries and is expected to maintain the majority of market share during the initial years of production.

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ADDITIONAL SALES SUPPORT AND DOWNSTREAM PROCESSING ARRANGEMENTS

In support of the expanded production rate of 60ktpa Kibaran has experienced additional demand from European and Southern Asian graphite markets. Discussions are well advanced and it is expected that this interest will be developed through additional sales agreements.

The Company has also received positive market support for its proposed value adding downstream processing initiatives, including for the purchase of both battery grade (spherical) graphite production and by-products (fines), together with co-investment in the planned downstream processing facilities.

Figure 11: Kibaran’s World Distribution

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Figure 12: Epanko Product Sales Agreements

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EPANKO PRICING

Kibaran engaged leading independent industrial minerals forecaster Roskill Consulting (‘Roskill’) to provide updated graphite product pricing forecasts, based on Industrial Minerals quoted prices.

Kibaran expects to produce a portion of larger flake size and higher carbon content products than is quoted by leading forecasters and therefore Kibaran has made adjustments to capture the expected prices for its higher quality Epanko product. Roskill prices are based on a CIF basis.

Summary BFS Life of Mine Pricing Model including adjustments and reference to Roskill Pricing Data

Micron/Mesh Sizing	Classification	Epanko Distribution (%) Carbon Grade (%)	Adjustment	2017 Price (US$/t)
+300/+50	Jumbo	20.34 97.5	+60% to average large flake pricing to reflect jumbo flake size	1,864
+180/+80	Large	31.18 97.5	+10% due to higher carbon content relative to Roskill pricing range (94-97% TGC) for large flake	1,282
+150/+100	Medium	13.14 97.4	+10% due to higher carbon content relative to Roskill pricing range (94-97% TGC) for large flake	1,093
-150/-100	Fine	35.36 95.9	No adjustment	823

The assumed 2017 basket price, after adjusting for CIF deductions, is US$1,181/t in the BFS and represents an 18% reduction to June 2015 study basket price of US$1,446/t.

Kibaran has not reflected any potential pricing dynamics from high growth markets in the BFS, including spherical and expandable graphite, however it is expected that graphite demand growth will be a function of Electric Vehicle penetration rates (for which numerous independent forecasts are available). Kibaran has demonstrated that Epanko product is desirable as a feedstock for spherical graphite and has superior expansion properties, which provides excellent suitability for production of expandable graphite.

Figure 13: Range of Pricing Outcomes amongst peer projects

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----- Start of picture text -----

5,000
4,000
3,000
2,000
Source: Company exchange releases
1,000
>500 >300 >180 18 >150 >75 <75
Product size spec ( micron )
Concentrate pricing assumptions (US$/t)
----- End of picture text -----

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CAPITAL AND OPERATING COSTS

Pre-production capital costs are estimated to be US$88.9m, including a US$7.1m contingency. The BFS results deliver an improved capital efficiency compared to the July 2015 study, as demonstrated by the 24% reduction in capital intensity from US$1,937/t to US$1,482/t. Capital cost estimates were re-quoted to reflect 2017 market prices.

Table 6: Pre-production Capital Costs (US$m)

	June 2017 60ktpa	July 2015 40ktpa
Mining Process Plant Infrastructure EPC Contingency Owners Cost	0.7 48.8 13.2 11.5 7.1 7.6	2.4 45.1 10.9 11.0 6.2 1.9
Total	88.9	77.5

The study estimates a C1 FOB cost of US$500/t and an All In Sustaining Cost (AISC) of US$572/t. This is significantly lower than the estimate in the July 2015 study of C1 FOB cost of US$570/t (and AISC of US$622/t) primarily due to lower power costs arising from accessing grid power after 2019 and the increased ore throughput delivering process cost efficiencies. Mining costs are based on a contractor mining scenario with the lower costs driven by the lower strip ratio compared to the July 2015 study (0.4 versus 1.1 waste to ore). Operating cost estimates were re-quoted to reflect Q1 2017 market prices and monetary terms.

Table 7: Operating Costs (US$/t FOB Dar es Salaam)

	June 2017	July 2015
Mining Processing Transport & Port Charges General & Administration	96 239 107 58	117 277 102 74
C1 cost FOB Dar es Salaam	500	570
Royalties Other sustaining costs*	39 33	43 9
All in sustaining cost	572	622

*June 2017 estimates include sustaining capital (US$15/t), off-site corporate functions (US$10/t) and rehabilitation (US$8/t).

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Key operating outcomes of the Epanko project are reported in the table below:

Table 8: Key Operating Metric Summary

Input	Unit	June 2017	July 2015
Development period Mine life Average annual throughput Strip ratio Average feed grade Graphite recovery Average product carbon grade Graphite production Mining cost Processing cost General & Administration cost Transport and port charges C1 FOB cost AII In Sustaining Cost Pre-production capital cost	(months) (years) (t) (waste to ore) (% TGC) (%) (%) (Kt) (US$/t processed) (US$/t processed) (US$/t processed) (US$/t sold) (US$/t sold) (US$/t sold) (US$m)	19 18 695,000 0.4:1 8.3 94.7 96 60,000 7.93 19.61 4.75 107 500 572 88.9	18 25 434,000 1:1 8.6 93.3 96 40,000 9.83 23.25 6.23 102 570 622 77.5

EPANKO OPERATING OUTCOMES

Ore Reserve and Mineral Resource Estimate

The updated Epanko Ore Reserve of 11.7Mt grading 8.32% TGC for 971Kt graphite (2015 estimate 10.9Mt grading 8.7% TGC for 938Kt contained graphite) supports the 60ktpa production rate for an 18 year LOM. An additional 64 holes for 7,644m were completed as part of the BFS update including 43 diamond holes of 5,899m and included in the Ore Reserve model. The Ore Reserve estimate was completed by Intermine Mining Consultants.

The quality of Epanko Graphite is driven by two geological aspects, firstly the dominant host gangue mineral is a calc silicate mineral with very little deleterious elements and the Epanko rocks have undergone extremely high metamorphic pressure and temperature creating a very high crystallinity.

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The degree of metamorphism determines the graphite crystallinity and it is important to recognise this provides its physical and industrial properties. A favourable mineralogy ultimately determines recovery and quality which drives strong project economics.

The commercial benefit of these combined geological aspects is an easily liberated graphite flakes from a low cost simple flotation process that is saleable high quality graphite without further processing steps.

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A 200t bulk sample has outperformed the block model with assays reconciling the Ore Reserve block model grades. This positive reconciliation not only fully supports the integrity of the model but demonstrates the overall robust nature and significant upside of the Epanko Mineral Resource Estimate undertaken by CSA Global. Consistent positive reconciliations from both mineralised zones have been demonstrated.

FINANCIAL OUTCOMES

Key financial return outcomes of the Epanko project are reported in the table below. The pre–tax NPV10 of US$211m compares to the 2015 study estimate of US$197m.

Table 9: Key Financial Parameters

Input	Unit	June 2017	July 2015
Average product price Pre-tax geared NPV10 Pre-tax geared IRR Post tax geared NPV10 Post tax geared IRR Payback period post construction	(US/t FOB) (US$m) (%) (US$m) (%) (%)	1,181 211 38.9 147 25.7 3.4	1,446 197 41.2 124 30.0 2.7

* Corporate taxation rate 30%

* Financing assumption 55% debt (2015: 75%)

PROJECT ENHANCEMENT OPPORTUNITIES

Significant opportunities for further value enhancement including extension of mine life beyond 18 years, incorporation of high grade graphite (>10%) encountered outside current pit design and other savings on implementation due to conservative design and costings.

Project economics do not include product sales into the high growth lithium-ion battery markets through downstream processing.

Figure 14: Electro Magnetic Survey showing substantial mineralisation

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SPHERICAL GRAPHITE PRODUCTION AND DOWNSTREAM STUDY

Kibaran is nearing the completion of a feasibility study for the production of uncoated spherical graphite to capture the forecast demand growth in graphite anodes for lithium-ion batteries. The study is expected to be completed in Q3 2017.

Due to the high metamorphic gradient, Epanko graphite has a highly ordered crystal structure. This is supported by testwork indicating a D002 measure of 0.3356nm which compares to perfect crystallinity of 0.3354nm. A high level of crystallinity is important for battery applications.

The study has considered a number of potential milling and purification flowsheets, including site visits to spherical graphite production plants and potential equipment vendors outside of current producing facilities.

Figure 15: Current natural graphite process chain to anode material by process and geography

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Source: ProGraphite 2017 - Industrial Minerals Conference in Berlin

The initial findings favour a grinding and shaping (which are mechanical processes) flowsheet based on Chinese technology. The favoured purification (chemical) flowsheet design is based on Korean technology which is less acid intensive and therefore more environmentally sustainable than other technologies.

Key parameters of the study include:

Staged integration with the ramp up of production at Epanko
Initial production of 10ktpa value-added product, consisting of 6ktpa spherical graphite and 4ktpa of other value-added products, mainly specially screened and blended products, together with micronized products
Yield to spherical graphite of ~50%

The ability of bringing the downstream processing into production has been significantly strengthened given advanced discussion with leading German Carbon groups for the purchase of both battery grade (spherical) graphite production and by-products (fines), together with co-investment in the planned downstream processing facilities.

The Company expects that the completion of the feasibility study will result in the Company accessing a number of funding opportunities to develop the downstream processing project.

PROJECT FUNDING

Completion of the Epanko BFS and successful completion of the technical due diligence by the Independent Engineer SRK Consulting were the key catalysts to facilitate a positive credit assessment of the project by debt financiers.

SRK Consulting have confirmed that in addition to satisfying the scope of work agreed in 2016, all technical components of the BFS have been appropriately addressed in terms of project finance standards and that the Environmental and Social Planning conforms with the IFC Performance Standards and World Bank Group Environmental Health and Safety Guidelines.

Achieving this positive outcome ensures that the proposed development of Epanko has established a platform which conforms with the Equator Principles, a global risk management framework adopted by the world’s leading financial institutions for the assessment of environmental and social aspects of project funding submissions.

Following the positive initial review, a debt financing program has commenced under the leadership of KfW to determine the optimum structure, quantum and terms of debt facilities to enable, subject to all necessary approvals, a final investment decision to allow the commencement of mine construction.

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The focus of this funding process is to secure, with the support of KfW, an Untied Loan Guarantee from the Federal Republic of Germany, which supports the development of businesses that can supply products deemed to be important to the future of German industry. This guarantee provides political and commercial risk insurance cover for applicable loan funds advanced to such qualified projects facilitating the provision of loan funding from KfW under terms and conditions more favourable than ordinarily available through other lending institutions.

As previously reported, the Company has received a Letter of Interest confirming “ in-principle eligibility for cover ” under the Untied Loan Guarantee scheme and the process to obtain Final Approval involves:

Submission by KfW of a request for Preliminary Approval by the German Inter-Ministerial Committee, which will incorporate, inter alia, the term sheet for the proposed loan funding, a detailed project information memorandum, environmental and social impact assessment, base case financial model, together with key marketing, technical, insurance, legal and taxation reports.
Following the Preliminary Approval, completion and submission of final due diligence reports and other documents as required.

In conjunction with the KfW process, the Company is also working with Nedbank CIB, one of the largest banks in South Africa and a key lender across the African continent, together with Australia’s Export Finance and Insurance Corporation (‘EFIC’). Following recent discussions with KfW, Nedbank and EFIC, the parties are considering the potential to progress the project financing program on a joint basis so that the preparation of project assessments, key agreements and the finalisation of credit commitments and supporting loan documentation can be progressed expeditiously.

Competent Person Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Andrew Spinks, a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy. Andrew Spinks is employed by Kibaran Resources Limited. Mr Spinks has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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”. Andrew Spinks consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on information compiled by Mr David Williams, a Competent Person, who is a Member of The Australasian Institute of Mining and Metallurgy. David Williams is employed by CSA Global Pty Ltd, an independent consulting company. Mr Williams has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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”. David Williams consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Ore Reserve has been compiled by Mr Steve O'Grady. Mr O'Grady, who is a Member of the Australasian Institute of Mining and Metallurgy, is a full time employee of Intermine Engineering and produced the Mining Reserve estimate based on data and geological information supplied by Mr Williams. Mr O'Grady has sufficient experience that is relevant to the estimation, assessment, evaluation and economic extraction of Ore Reserve 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, Minerals Resources and Ore Reserves. Mr O'Grady consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

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JORC Code, 2012 Edition – Table 1

Section 1: Sampling Techniques and Data (Criteria in this section apply to all succeeding sections)

Criteria	Explanation	Explanation	Commentary
*Sampling*		Nature and quality of sampling (eg cut channels,	The Epanko deposit was sampled by reverse circulation (RC) holes, diamond
*techniques*		random chips, or specific specialised industry	core drilling and trenching.
		standard measurement tools appropriate to the	Sampling is guided by Kibaran’s protocols and quality assurance procedures.
		minerals under investigation, such as down hole	RC samples are collected by a riffle splitter using a face sampling hammer
		gamma sondes, or handheld XRF instruments,	diameter approximately 140 mm.
		etc). These examples should not be taken as	Diamond core (if competent) is cut using a core saw. Where the material is
		limiting the broad meaning of sampling.	too soft it is left in the tray and a knife is used to quarter the core for
		Include reference to measures taken to ensure	sampling. ¼ core was collected over nominal 1 metre intervals, but with +/-
		sample representivity and the appropriate	variation to fit to lithological boundaries.
		calibration of any measurement tools or systems
		used.	Trenches were sampled at 1 m intervals. These intervals were speared and
		Aspects of the determination of mineralisation	submitted for analyses.
		that are Material to the Public Report.
		In cases where ‘industry standard’ work has been	All samples were sent to Bureau Veritas laboratory in Rustenburg for
		done this would be relatively simple (eg ‘reverse	preparation and LECO analyses. All samples are crushed using LM2 mill to –4
		circulation drilling was used to obtain 1 m	mm and pulverised to nominal 80% passing –75 μm.
		samples from which 3 kg was pulverised to
		produce a 30 g charge for fire assay’). In other
		cases more explanation may be required, such as
		where there is coarse gold that has inherent
		sampling problems. Unusual commodities or
		mineralisation types (eg submarine nodules) may
		warrant disclosure of detailed information
*Drilling*		Drill type (eg core, reverse circulation, open-hole	RC drilling holes were complete at a diameter of 5 ¼” using a face sampling
*Techniques*		hammer, rotary air blast, auger, Bangka, sonic,	hammer. All RC samples were collected dry and riffle split after passing
		etc) and details (eg core diameter, triple or	through the cyclone. Diamond hole were drilled at PQ3 diameter for the
		standard tube, depth of diamond tails, face-	broken, weathered zones, before reducing to HQ3 for the fresh, more
		sampling bit or other type, whether core is	competent. Where possible diamond core was orientated using a Ezi-Ori
		oriented and if so, by what method, etc).	tool allowing orientated structural measurements to be taken
			Where terrain allowed, holes we designed to hit mineralisation
			orthogonally.
*Drill sample*		Method of recording and assessing core and chip	The RC rig sampling systems are routinely cleaned to minimize the potential
*recovery*		sample recoveries and results assessed.	for contamination. Drilling methods are focused on sample quality. Diamond
		Measures taken to maximise sample recovery	drilling (triple Tubed HQ diameter core) was used to maximise sample
		and ensure representative nature of the samples.	recovery when used.
		Whether a relationship exists between sample	The selection of RC drilling company, having a water drilling background
		recovery and grade and whether sample bias may	enables far greater control on any water present in the system; ensuring
		have occurred due to preferential loss/gain of	wet samples were kept to a minimum.
		fine/coarse material.	RC and Diamond holes were all assessed for the quality of samples. This
			data was recorded for each interval in the logging template. Sample
			techniques were chosen to ensure the all remained highly representative of
			the parent interval, for example by using a 3-tier riffle splitter.
			Sample quality and recovery was recorded for all intervals. No relationship
			exists between sample recoveryandgrade.
*Logging*		Whether core and chip samples have been	All RC holes were geologically logged using the detailed company template,
		geologically and geotechnically logged to a level	based on industry standards. All diamond holes were geological and
		of detail to support appropriate Mineral Resource	structurally logged using the same template in addition to geotechnical
		estimation, mining studies and metallurgical	logging using a separate industry standard template. Logged data is both
		studies.	qualitative and quantitative depending on field being logged.
		Whether logging is qualitative or quantitative in
		nature. Core (or costean, channel, etc)	Core photography was also captured for every tray of diamond core.
		photography.
		The total length and percentage of the relevant
		intersections logged.
*Sub-sampling*		If core, whether cut or sawn and whether quarter,	All RC holes were geologically logged using the detail company template,
*techniques*		half or all core taken.	based on industry standards. All diamond holes were geological and
*and sample*		If non-core, whether riffled, tube sampled, rotary	structurally logged using the same template in addition to geotechnical
*preparation*		split, etc and whether sampled wet or dry.	logging using a separate industry standard template. Logged data is both
		For all sample types, the nature, quality and	qualitative and quantitative depending on field being logged.
		appropriateness of the sample preparation	Core photography was also captured for every tray of diamond core.
		technique.	Trench samples were representatively collected across each 1m interval by
		Quality control procedures adopted for all sub-	3-tier riffle splitter in a dry environment where ground conditions allowed.
		sampling stages to maximise representivity of	Diamond samples were cut to ¼ core using a core saw. The same ¼ for each
		samples.	interval was samples throughout the length of all holes.
		Measures taken to ensure that the sampling is	All samples were submitted for assay.
		representative of the in situ material collected,	Sample preparation at the Bureau Veritas laboratory involves the original
			sample beingdried at 80° for upto 24 hours and weighed on submission to

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Criteria	Explanation	Explanation	Commentary
		including for instance results for field	laboratory. Crushing to nominal –4 mm. Sample is split to less than 2 kg
		duplicate/second-half sampling.	through linear splitter and excess retained. Sample splits are weighed at a
		Whether sample sizes are appropriate to the	frequency of 1/20 and entered into the job results file. Pulverising is
		grain size of the material being sampled.	completed using LM2 mill to 90% passing –75 μm.
			QAQC protocols were followed, including the use of field duplicate samples
			to test the primary sampling step for the RC drilling along with certified
			reference material and blanks.
			Sample sizes are considered appropriate with regard to the grain size of the
			sampled material.
*Quality of*		The nature, quality and appropriateness of the	Drill samples were sent to Bureau Veritas Rustenburg (South Africa) for
*assay data*		assaying and laboratory procedures used and	preparation and assaying. The following methodology is used by Bureau
*and*		whether the technique is considered partial or	Veritas for Total Graphitic Carbon (TGC) analyses.
*laboratory*		total.	Total carbon is measured using LECO technique. The sample is combusted in
*tests*		For geophysical tools, spectrometers, handheld	the oxygen atmosphere and the IR used to measure the amount of CO2
		XRF instruments, etc, the parameters used in	produced. The calibration of the LECO instrument is done by using certified
		determining the analysis including instrument	reference materials.
		make and model, reading times, calibrations	For the analysis of Graphitic Carbon, a 0.3g sample is weighed and roasted
		factors applied and their derivation, etc.	at 550oC to remove any organic carbon. The sample is then heated with
		Nature of quality control procedures adopted (eg	diluted hydrochloric acid to remove carbonates. After cooling the sample is
		standards, blanks, duplicates, external laboratory	filtered and the residue rinsed and dried at 75oC prior to analysis by the
		checks) and whether acceptable levels of	LECO instrument. The analyses by LECO are done by total combustion of
		accuracy (ie lack of bias) and precision have been	sample in the oxygen atmosphere and using IR absorption from the
		established.	resulting CO2produced.
			Laboratory certificates were sent via email from the assay laboratory to
			Kibaran. The assay data was provided to CSA Global in the form of Microsoft
			Excel files and assay laboratory certificates. The files were imported into
			Datamine.
			QAQC samples are inserted at 10% frequency with Standards, Blanks and
			Field Duplicates evenlycomprisingthat 10%.
*Verification of*		The verification of significant intersections by	Senior Kibaran geological personnel supervised the sampling, and
*sampling and*		either independent or alternative company	alternative personnel verified the sampling locations.
*assaying*		personnel.	Five RC holes were twinned with diamond drill holes.
		The use of twinned holes.	Primary data are captured on paper in the field and then re-entered into
		Documentation of primary data, data entry	spreadsheet format by the supervising geologist, to then be loaded into the
		procedures, data verification, data storage	company’s database. All digital logging templates contain in-built data
		(physical and electronic) protocols.	QAQC functionality to prevent incorrect data entry.
		Discuss any adjustment to assay data.	No adjustments are made to any assay data.
*Location of*		Accuracy and quality of surveys used to locate	Drill hole collar locations surveyed using a licensed surveyor with
*data points*		drill holes (collar and down-hole surveys),	Differential GPS equipment.
		trenches, mine workings and other locations used	UTM Zone 37 South was the grid system used.
		in Mineral Resource estimation.	No coordinate transformation was applied to the data.
		Specification of the grid system used.	Downhole surveys were completed using Reflex Ezi-Shot tool. Data was
		Quality and adequacy of topographic control.	collected via multi-shot for diamond holes and single-shot for RC.
			Topographic DTM was from a LIDAR surveyflown in 2015.
*Data spacing*		Data spacing for reporting of Exploration Results.	Spacing’s are sufficient for estimation and reporting of a Mineral Resource.
*and*		Whether the data spacing and distribution is	Drill hole locations are at a nominal 50 m (Y) by 25 m (X) spacing’s. Drill lines
*distribution*		sufficient to establish the degree of geological	were completed on an East-West basis.
		and grade continuity appropriate for the Mineral	Data spacing and distribution are sufficient to establish the degree of
		Resource and Ore Reserve estimation	geological and grade continuity.
		procedure(s) and classifications applied.	No compositing has been applied to exploration data.
		Whether sample compositing has been applied.
*Orientation of*		Whether the orientation of sampling achieves	Most holes have been orientated towards an azimuth so as to be able
*data in*		unbiased sampling of possible structures and the	intersect the graphitic mineralisation in a perpendicular manner. Drill pad
*relation to*		extent to which this is known, considering the	accessibility has required an adjustment to drill hole orientation to a few
*geological*		deposit type.	holes.
*structure*		If the relationship between the drilling orientation	Holes were drilled at dips ranging from -50 to -90 degrees, to best intercept
		and the orientation of key mineralised structures	the targeted geology given constraints of topography and access. Varying
		is considered to have introduced a sampling bias,	orientation of drill holes was taken into consideration when interpreting the
		this should be assessed and reported if material.	results.
*Sample*		The measures taken to ensure sample security.	Samples were stored at the company’s secure field camp prior to dispatch
*security*			to Bureau Veritas Dar es Salaam by a privately contracted transport
			company,who maintained securityof the samples.
*Audits or*		The results of any audits or reviews of sampling	Sampling procedures were independently reviewed by CSA Global as part of
*reviews*		techniques and data.	the preparation of the Mineral Resource estimate. Kibaran senior geological
			personnel reviewed sampling procedures on a regular basis.
			All drill hole results were collated and stored within a Microsoft Access
			database. A random selection of assays from the database was cross
			referenced against the laboratorycertificates.

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Section 2: Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section)

Criteria	Explanation	Explanation	Commentary
*Mineral*		Type, reference name/number, location and	The tenement is 100% owned by Kibaran’s wholly owned subsidiary
*tenement and*		ownership including agreements or material	TanzGraphite (TZ) Limited
*land tenure*		issues with third parties such as joint ventures,	The Epanko deposit lies within granted mining license ML548/2015.
*status*		partnerships, overriding royalties, native title
		interests, historical sites, wilderness or national
		park and environmental settings.
		The security of the tenure held at the time of
		reporting along with any known impediments to
		obtaining a licence to operate in the area.
*Exploration*		Acknowledgment and appraisal of exploration by	Historical reports exist for the project area as the region was first recognised
*done by other*		other parties.	for graphite potential in 1914 and 1959. No more recent information exists.
*parties*
*Geology*		Deposit type, geological setting and style of	The Mahenge Project is hosted within a quartz–feldspar graphitic schist,
		mineralisation.	part of a Neoproterozoic metasediment package, including marble and
			gneissic units. Two zones of graphitic schist have been mapped, named the
			Eastern Zone and the Western Zone. Mineralisation is believed to be the
			product of pre-existing carbonaceous sediments subjected to regional
			metamorphism induced by a north-south regional thrusting event. The
			graphitic schists contain between 3% and 25% Total Graphitic Carbon.
*Drill hole*		A summary of all information material to the	Sample and drill hole coordinates are provided in market announcement
*Information*		understanding of the exploration results including	previously released.
		a tabulation of the following information for all
		Material drill holes:
		`o` easting and northing of the drill hole collar
		`o` elevation or RL (Reduced Level – elevation
		above sea level in metres) of the drill hole
		collar
		`o` dip and azimuth of the hole
		`o` down hole length and interception depth
		`o` hole length
		If the exclusion of this information is justified on
		the basis that the information is not Material and
		this exclusion does not detract from the
		understanding of the report, the Competent
		Person should clearly explain why this is the case.
*Data*		In reporting Exploration Results, weighting	No high-grade cuts were considered necessary.
*aggregation*		averaging techniques, maximum and/or	Aggregating was made for intervals that reported over 1% TGC (Total
*methods*		minimum grade truncations (eg cutting of high	graphitic carbon). The purpose of this is to report intervals that may be
		grades) and cut-off grades are usually Material	significant to future metallurgical work.
		and should be stated.	There is no implication about economic significance. Intervals reporting
		Where aggregate intercepts incorporate short	above 8% TGC are intended to highlight a significant higher grade
		lengths of high grade results and longer lengths	component of graphite; there is no implication of economic significance.
		of low grade results, the procedure used for such	No equivalents were used because they are not relevant to graphite Mineral
		aggregation should be stated and some typical	Resource estimates.
		examples of such aggregations should be shown
		in detail.
		The assumptions used for any reporting of metal
		equivalent values should be clearly stated.
*Relationship*		These relationships are particularly important in	All drill holes have been orientated towards an azimuth so as to be able
*between*		the reporting of Exploration Results.	intersect the graphitic mineralisation orthogonally, where possible. Terrain
*mineralisation*		If the geometry of the mineralisation with respect	constraint restricted this on occasion. All interpretation considers the
*widths and*		to the drill hole angle is known, its nature should	orientation of the drill hole and the intercepted units.
*intercept*		be reported.	Given dip variations are mapped down hole length are reported, true width
*lengths*		If it is not known and only the down hole lengths	not known from the exploration results.
		are reported, there should be a clear statement
		to this effect (eg ‘down hole length, true width
		_not known’). _
*Diagrams*		Appropriate maps and sections (with scales) and	See main body of Mineral Resource Report.
		tabulations of intercepts should be included for
		any significant discovery being reported These
		should include, but not be limited to a plan view
		of drill hole collar locations and appropriate
		sectional views.
*Balanced*		Where comprehensive reporting of all Exploration	Results are presented in the body of this report.
*reporting*		Results is not practicable, representative
		reporting of both low and high grades and/or
		widths should be practiced to avoid misleading
		reporting of Exploration Results.

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Criteria	Explanation	Explanation	Commentary
*Other*		Other exploration data, if meaningful and	Field mapping was conducted early in the geological assessment of the
*substantive*		material, should be reported including (but not	license area to define the geological boundaries of the graphitic schist with
*exploration*		limited to): geological observations; geophysical	other geological formations. Geological mapping of trenches cut across the
*data*		survey results; geochemical survey results; bulk	strike of the host geological units provided important information used to
		samples – size and method of treatment;	compile the Mineral Resource estimate.
		metallurgical test results; bulk density,	Details of metallurgical test work are detailed in the body of this report, and
		groundwater, geotechnical and rock	in Section 3 of this Table.
		characteristics; potential deleterious or
		contaminating substances.
*Further work*		The nature and scale of planned further work (eg	No further drilling is planned at present although geological fieldwork will
		tests for lateral extensions or depth extensions or	continue during the next field season.
		large-scale step-out drilling).
		Diagrams clearly highlighting the areas of
		possible extensions, including the main geological
		interpretations and future drilling areas, provided
		this information is not commercially sensitive.

Section 3: Estimation & Reporting of Mineral Resources (Criteria listed in section 1, and where relevant in section 2, also apply to this section)

Criteria	Explanation	Explanation	Commentary
*Database*		Measures taken to ensure that data has not been	Data used in the Mineral Resource estimate is sourced from an MS Access
*integrity*		corrupted by, for example, transcription or keying	database, maintained by Kibaran. The data has been normalised and
		errors, between its initial collection and its use for	referential integrity between tables has been set through table relationships
		Mineral Resource estimation purposes.	and key fields to ensure unique identifiers, which are consistent throughout.
		Data validation procedures used.	Relevant tables from the data base were exported to MS Excel format and
			converted to csv format for import into Datamine Studio RM software for
			use in the Mineral Resource estimate.
			The Kibaran database was validated by CSA Global and the database was
			found to be fit for purpose to support the Mineral Resource estimate.
			Validation of the data import include checks for overlapping intervals,
			missing survey data, missing assay data, missing lithological data, and
			missing collars. The Total Graphitic Carbon (TGC) grade was cross checked
			against the Total Carbon(C) grade to ensure TGC<=C.
*Site visits*		Comment on any site visits undertaken by the	The Competent Person (Mineral Resources) visited site in March 2014. The
		Competent Person and the outcome of those	RC drilling rig was in operation and the CP was able to review drilling and
		visits.	sampling procedures. Outcrop showing mineralisation was examined and
		If no site visits have been undertaken indicate	geologically assessed. Planned drill sites were examined and assessed with
		why this is the case.	respect to strike and dip of the interpreted geological model. Trenches were
			examined and a re-enactment of sampling procedures was presented by the
			Kibaran geological staff. Sample storage facilities were inspected. There
			were no negative outcomes from any of the above items, and all samples
			and geological data were deemed fit for use in the preparation of the
			Mineral Resource estimate.
*Geological*		Confidence in (or conversely, the uncertainty of)	There is a high level of confidence in the geological interpretation, based
*interpretation*		the geological interpretation of the mineral	upon lithological and structural logging of diamond drill core, and
		deposit.	lithological logging of RC chips. Trenches cut orthogonal to the strike of the
		Nature of the data used and of any assumptions	geology demonstrated the geometry of the deposit, and clearly showed
		made.	graphitic mineralisation. Deposit scale geological mapping provide a
		The effect, if any, of alternative interpretations on	geological framework for the interpretation. Geophysical models (VTEM)
		Mineral Resource estimation.	support the geological interpretation.
		The use of geology in guiding and controlling	Drill hole intercept logging and assay results (RC and diamond core),
		Mineral Resource estimation.	structural interpretations from drill core and geological logs of trenches
		The factors affecting continuity both of grade and	have formed the basis for the geological interpretation. Assumptions were
		geology.	made on depth and strike extension of the graphitic schists, using drill hole
			and trench sample assays as anchor points at depth and at intervals along
			strike. Geological mapping also support the geological interpretation which
			supports the Mineral Resource estimate.
			No alternative interpretations were considered because the exposed
			geology in outcrop supports the current interpretation.
			Graphitic mineralisation is hosted within graphitic schist, which is mapped
			along its strike within the license area. Total graphitic carbon is assumed to
			be likewise continuous with the host rock unit. Metallurgical characteristics,
			principally flake size, has been observed to be of a consistent nature when
			observed in outcrop, trench exposure and diamond drill core at numerous
			locations within the license area.
			The graphitic schist is open along strike and down dip in Epanko West. The
			Epanko East deposit is interpreted to be a recumbent fold, open along strike
			to the north and south. A sub-vertical shear zone offsets the stratigraphy
			down dip along the lower fold limb.
			The TGC mineralisation domains are contained within the graphitic schist
			lithological domain.

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Criteria	Explanation	Explanation	Commentary
			Weathering domains representing oxide, transitional and fresh were
			modelled and were used during grade interpolation to constrain grade
			interpolation, and were allocated different density values.
			Lithological domains representing schists, gneisses and marble were
			interpreted and modelled.
			Major structural features, mainly sub-vertical shears and faults, were
			modelled and used to assess drill data during preparation of the Mineral
			Resource estimate.
*Dimensions*		The extent and variability of the Mineral Resource	The Epanko West Mineral Resource estimate is approximately 2,150 m in
		expressed as length (along strike or otherwise),	strike, 250 m in plan width and reaches 450 m depth below surface. The
		plan width, and depth below surface to the upper	Epanko East Mineral Resource is approximately 320 m in strike, 400 m in
		and lower limits of the Mineral Resource.	plan width and reaches 160 m depth below surface.
*Estimation*		The nature and appropriateness of the estimation	The geological models were interpreted and prepared by Kibaran using
*and modelling*		technique(s) applied and key assumptions,	Surpac software. Datamine Studio RM software was used for block
*techniques*		including treatment of extreme grade values,	modelling, grade interpolation, mineral resource classification and
		domaining, interpolation parameters and	reporting. GeoAccess Professional and Snowden Supervisor were used for
		maximum distance of extrapolation from data	geostatistical analyses of data.
		points. If a computer assisted estimation method	The TGC domain is coincident with the graphitic schist lithological domain,
		was chosen include a description of computer	and is based upon a nominal 3% lower TGC cut-off grade.
		software and parameters used.	The graphitic schist interpretations were based upon geological
		The availability of check estimates, previous	interpretations of mineralised outcrop and trenches and logging of diamond
		estimates and/or mine production records and	drill core and RC chips. The Mineral Resource model consists of 3 domains
		whether the Mineral Resource estimate takes	of TGC mineralisation, with 1 domain in the Western Zone and 2 zones in
		appropriate account of such data.	the Eastern Zone.
		The assumptions made regarding recovery of by-	Mineralisation domains were encapsulated by means of 3D wireframed
		products.	envelopes. Domains were extrapolated along strike or down plunge to half
		Estimation of deleterious elements or other non-	section spacing or if a barren hole cut the plunge extension before this limit.
		grade variables of economic significance (eg	Top cuts were not used to constrain extreme grade values because the TGC
		sulphur for acid mine drainage characterisation).	grade distribution did not warrant their use. All samples were composited to
		In the case of block model interpolation, the block	1 m intervals, following a review of sample length distribution that most
		size in relation to the average sample spacing and	sample lengths were 1m. All drill hole data (RC and Diamond) and trench
		the search employed.	assays were utilised in the grade interpolation. A twin drilling programme
		Any assumptions behind modelling of selective	confirmed the RC drill holes could be used with the diamond core samples
		mining units.	as part of the grade interpolation. A statistical study of the trench assay data
		Any assumptions about correlation between variables.	demonstrated a slightly higher grade TGC population to the conventional drilling sample assay results, and a decision was made to limit the influence
		Description of how the geological interpretation was used to control the resource estimates.	of the trench sample data to the Oxide weathering zone. Two block models were prepared, for the Epanko West and Epanko East
	 	Discussion of basis for using or not using grade cutting or capping. The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.	zones, with parent cell sizes 10 m E x 25 m N x 20 m RL for each, compared to typical drill spacing of 25 m x 50 m in the well drilled areas. Grade estimation was by Ordinary Kriging (OK), and Inverse Distance Squared (IDS) estimation was concurrently run as a check estimate. The composited drill sample data were statistically analysed, examining the relationship between TGC and weathering profiles, hole types, and
			structural domains. A variography study was also carried out examining the
			influence of structural domains (principally the impact of the D2 faults in the
			Western Zone). Within the oxide domain there was a population difference
			noted, but no discernible population differences were noted in the fresh
			rock domain. Variogram models present a very low relative nugget effect
			(<15%) for the Western and Eastern zones, with ranges typically between
			90m and 170m. Short ranges at the first sill were also modelled.
			Due to the low nugget effect, a low number of samples were required for
			grade interpolation, with a minimum of 4 and maximum of 12 composited
			samples were used in any one block estimate for the Western and Eastern
			Zones. A maximum of 5 composited samples per drill hole were used in any
			one block estimate. Cell Discretisation of 5 x 5 x 5 was used. Grade
			interpolation was run within the individual mineralisation domains (Epanko
			East), acting as hard boundaries. The Base of Complete Oxidation acted as a
			hard boundary for both Western and Eastern deposits.
			The current Mineral Resource was checked against the previously reported
			Mineral Resource (June 2015) and showed an increase in global tonnage,
			with a 41% increase in Measured and Indicated tonnes, but with negligible
			change in TGC % grade. The stability of the TGC grade following more
			drilling demonstrates the low variability of TGC within the host units.
			No depletion of the Mineral Resource due to mining activity was required
			due to no mining having occurred historically. The Mineral Resource was
			truncated at Northing 9,037,320 m N (UTM37S), this being the northern
			boundary of the license area.
			No by products were modelled.
			No selective mining units were assumed in this model.
			Thegrade model was validated by1)creatingslices of the model and

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Criteria	Explanation	Explanation	Commentary
			comparing to drill holes on the same slice; 2) swath plots comparing average
			block grades with average sample grades on nominated easting, northing
			and RL slices; and 3) mean grades per domain for estimated blocks and
			flagged drill hole samples. Each validation step complemented the others.
			The Mineral Resource estimation process was peer reviewed within CSA
			Global.
			Kibaran reported (13 April 2016) the results from 200 tonne bulk samples
			from the Western and Eastern Zones, with both samples reconciling
			favourablywith the local estimated blockgrades.
*Moisture*		Whether the tonnages are estimated on a dry	Tonnages are estimated on a dry basis.
		basis or with natural moisture, and the method of
		determination of the moisture content.
*Cut-off*		The basis of the adopted cut-off grade(s) or	A reporting cut-off grade of 8% TGC is used to report the Mineral Resource.
*parameters*		quality parameters applied.	A series of grade tonnage reports were prepared for Kibaran and an
			examplepresented in the bodyof this announcement.
*Mining factors*		Assumptions made regarding possible mining	It is assumed the deposit, if mined, will be developed using open pit mining
or		methods, minimum mining dimensions and	methods.
*assumptions*		internal (or, if applicable, external) mining	Geotechnical drilling, logging and rock strength and shear strength analyses
		dilution. It is always necessary as part of the	have completed.
		process of determining reasonable prospects for	Preliminary wall angles have been recommended for use in the pit
		eventual economic extraction to consider	optimisations. Wall angles will be review by the Mining and geotechnical
		potential mining methods, but the assumptions	consultants prior to the mine planning and scheduling stages.
		made regarding mining methods and parameters
		when estimating Mineral Resources may not
		always be rigorous. Where this is the case, this
		should be reported with an explanation of the
		basis of the mining assumptions made.
*Metallurgical*		The basis for assumptions or predictions	During 2016-2017 a series of comminution and flotation tests have been
*factors or*		regarding metallurgical amenability. It is always	conducted on composite samples selected from the oxide, transition and
*assumptions*		necessary as part of the process of determining	primary zones of both deposits. These have been done at a range of grades
		reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding	between 5%TGC and 8.9%TGC to determine whether there is any variability of recovery to concentrate in the weathering zones of each deposit. In
		metallurgical treatment processes and	addition two locked cycle tests are in progress to determine ultimate
		parameters made when reporting Mineral	recoveries from the East and West fresh material.
		Resources may not always be rigorous. Where	Batch variability flotation testwork was completed.
		this is the case, this should be reported with an	The recovered flake graphite is clean, with no visible natural mineral
		explanation of the basis of the metallurgical assumptions made.	impurities. The graphite concentrate is amenable to standard metallurgical recovery
			processes. The recovered product is considered marketable, with a binding
			offtake and partnership agreements with several European and Japanese
			graphite trader.
*Environmental*		Assumptions made regarding possible waste and	Preliminary designs for a valley fill tails dam and waste dumps with a life of
*factors or*		process residue disposal options. It is always	up to 19 years have been produced
*assumptions*		necessary as part of the process of determining	Epanko is located in a sub-equatorial region of Tanzania and is subject to
		reasonable prospects for eventual economic	heavy seasonal rainfall, with rapid growth of vegetation in season.
		extraction to consider the potential	A strategy for both subsurface, surface water and decant water
		environmental impacts of the mining and	management has been prepared for the BFS study.
		processing operation. While at this stage the
		determination of potential environmental
		impacts, particularly for a greenfields project,
		may not always be well advanced, the status of
		early consideration of these potential
		environmental impacts should be reported.
		Where these aspects have not been considered
		this should be reported with an explanation of the
		environmental assumptions made.
*Bulk density*		Whether assumed or determined. If assumed, the	Density was calculated using wet immersion techniques, conducted both by
		basis for the assumptions. If determined, the	analytical laboratories and by Kibaran field staff. Significant additional
		method used, whether wet or dry, the frequency	testwork has been conducted since the previous Mineral Resource estimate
		of the measurements, the nature, size and	was announced. Particularly in the Eastern Zone fresh material which was
		representativeness of the samples.	previously not identified. The Epanko West density database is based upon
		The bulk density for bulk material must have been	267 diamond core samples, and Epanko East based upon 25 diamond core
		measured by methods that adequately account	samples, with samples wax coated prior to immersion in a water bath.
		for void spaces (vugs, porosity, etc), moisture and	Density samples were loaded into Datamine drill hole files and flagged
		differences between rock and alteration zones	against lithological, mineralisation, weathering and structural domains. A
		within the deposit.	statistical study resulted in assignment of mean density values according to
		Discuss assumptions for bulk density estimates	lithology and weathering. Density values of 1.92 t/m3, 2.33 t/m3 and 2.84
		used in the evaluation process of the different	t/m3 were applied to the oxide, transitional and fresh weathering domains
		materials.	respectively for the Mineral Resource located in the Western Zone. Density

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Criteria	Explanation	Explanation	Commentary
			values of 1.76 t/m3, 2.43 t/m3and 2.79 t/m3 were applied to the oxide,
			transitional and fresh weathering domains respectively for the graphitic
			schist domain in the Eastern Zone.
*Classification*		The basis for the classification of the Mineral	Classification of the Mineral Resource estimates was carried out taking into
		Resources into varying confidence categories.	account the geological understanding of the deposit, quality of the sample
		Whether appropriate account has been taken of	data, quality of the local block estimates, quality of density data, and drill
		all relevant factors (ie relative confidence in	hole spacing. Metallurgical results related to flake size and sample purity, as
		tonnage/grade estimations, reliability of input	well as marketing agreements in place supported the classification, as per
		data, confidence in continuity of geology and	Clause 49 (JORC 2012).
		metal values, quality, quantity and distribution of	The Mineral Resource is classified as Measured, Indicated and Inferred, with
		the data).	geological evidence sufficient to confirm geological and grade (and quality)
		Whether the result appropriately reflects the	continuity within the Measured volumes, between points of observation
		Competent Person’s view of the deposit.	where data and samples are gathered. The Indicated classification level was
			applied to the volumes where geological evidence is sufficient to assume
			geological, grade and quality continuity.
			The Inferred classification level was applied to the volumes where geological
			evidence is sufficient to imply but not verify geological, grade and quality
			continuity.
			Mineral Resource classification was carried out by stepping through both
			the West and East models, and creating 3D wireframe surfaces constraining
			the resource classification levels (Western Zone) or by applying northing and
			easting limits (Eastern Zone). Weathering profiles also controlled the
			classification, with the oxide weathering zone generally classified at the
			same or higher level to the adjacent blocks in transitional and fresh zones,
			due to high confidence in the geological continuity of graphitic schist as
			observed in outcrop and from trench data.
			All available data was assessed and the competent person’s relative
			confidence in the data was used to assist in the classification of the Mineral
			Resource.
			The current classification assignment appropriately reflects the Competent
			Person’s view of the deposit.
*Audits or*		The results of any audits or reviews of Mineral	An independent due diligence review of the current Mineral Resource is
*reviews*		Resource estimates.	beingundertaken at the time ofpreparation of this announcement.
*Discussion of*		Where appropriate a statement of the relative	An inverse distance estimation algorithm was used in parallel with the
*relative*		accuracy and confidence level in the Mineral	ordinary kriging interpolation. Results were very similar between the
*accuracy/*		Resource estimate using an approach or	methods.
*confidence*		procedure deemed appropriate by the Competent	No other estimation method or geostatistical analysis has been performed.
		Person. For example, the application of statistical	The Mineral Resource is a local estimate, whereby the drill hole data was
		or geostatistical procedures to quantify the	geologically domained, resulting in fewer drill hole samples to interpolate
		relative accuracy of the resource within stated	the block model than the complete drill hole dataset, which would comprise
		confidence limits, or, if such an approach is not	a global estimate.
		deemed appropriate, a qualitative discussion of	Relevant tonnages and grade above nominated cut-off grades for TGC are
		the factors that could affect the relative accuracy	provided in the body of this report. Tonnages were calculated by filtering all
		and confidence of the estimate.	blocks above the cut-off grade and sub-setting the resultant data into bins
		The statement should specify whether it relates	by mineralisation domain. The volumes of all the collated blocks were
		to global or local estimates, and, if local, state the	multiplied by the dry density value to derive the tonnages. The graphite
		relevant tonnages, which should be relevant to	metal values (g) for each block were calculated by multiplying the TGC
		technical and economic evaluation.	grades (%) by the block tonnage. The total sum of all metal for the deposit
		Documentation should include assumptions made	for the filtered blocks was divided by 100 to derive the reportable tonnages
		and the procedures used.	of graphite metal.
		These statements of relative accuracy and	No production data is available to reconcile results with, apart from bulk
		confidence of the estimate should be compared	sample results discussed earlier.
		withproduction data, where available.

Section 4: Estimating & Reporting of Ore Reserve

Criteria	Explanation	Explanation	Commentary
*Mineral*		Description of the Mineral Resource estimate	The JORC 2012 compliant Mineral Resource models for the Epanko deposits
*Resource*		used as a basis for the conversion to an Ore	have been developed by CSA Global and Associates and the Ore Reserve has
*estimate for*		Reserve.	been determined based on these models.
*conversion to*		Clear statement as to whether the Mineral	The stated Mineral Resource is inclusive of the Ore Reserve.
*Ore Reserves*		Resources are reported additional to, or inclusive
		of, the Ore Reserves.
*Site visits*		Comment on any site visits undertaken by the	A site visit was not undertaken by the Competent Person as a site visit
		Competent Person and the outcome of those	would not materially affect the determination of the Reserve. The
		visits.	Competent Person has relied on reports from other independent
		If no site visits have been undertaken indicate	consultants and site surveys in determining the viability of the Reserve.
		why this is the case.
*Study status*		The type and level of study undertaken to enable	Studies undertaken and the modifying factors applied to enable the Mineral
		Mineral Resources to be converted to Ore	Resource to be converted to an Ore Reserve are based on a Bankable
		Reserves.	Feasibilitylevel estimation of costs,modifyingfactors andparameters that

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Criteria	Explanation	Explanation	Commentary
		The Code requires that a study to at least Pre-	the resulting mine plan is technically achievable and economic.
		Feasibility Study level has been undertaken to
		convert Mineral Resources to Ore Reserves. Such
		studies will have been carried out and will have
		determined a mine plan that is technically
		achievable and economically viable, and that
		material Modifying Factors have been
		considered.
*Cut-off*		The basis of the cut-off grade(s) or quality	The cut-off grade applied is based on the profitability of the resource block
*parameters*		parameters applied.	after modifying factors and the metallurgical and mass recovery are applied
			to the insitu tgc grade. The nominal cut-off grade for processing is around
			2.6% tgc. However to maintain concentrate output a raised cut-off grade of
			6.25% tgc for the Western zone and 4% tgc for the Eastern zone has been
			applied to ensure the concentrate production target of 60kt per year is
			achieved within theplant limit of 720ktperyear.
*Mining factors*		The method and assumptions used as reported in	Mining dilution and ore loss factors were applied based on weathering and
or		the Pre-Feasibility or Feasibility Study to convert	the expected influence of blasting in these profiles. The mineralisation zones
*assumptions*		the Mineral Resource to an Ore Reserve (i.e.	consisting of graphitic schist are up to 75m wide in the Eastern and Western
		either by application of appropriate factors by	zones
		optimisation or by preliminary or detailed	Geotechnical parameters applied to the designs are based on investigations
		design).	by George Orr and Associates. The detailed mine designs have been
		The choice, nature and appropriateness of the	reviewed by George Orr and Associates.
		selected mining method(s) and other mining	Installation of hydraulic monitoring and depressurisation bores with ongoing
		parameters including associated design issues	geotechnical review will be required to ensure the long term stability of final
		such as pre-strip, access, etc.	walls.
		The assumptions made regarding geotechnical	Minimum mining widths have been considered in the Western pit design.
		parameters (eg pit slopes, stope sizes, etc), grade	The optimisation was undertaken using only the Measured and Indicated
		control and pre-production drilling.	resource classifications. Inferred resource has been treated as waste.
		The major assumptions made and Mineral	The Ore Reserve has been determined constrained by the detailed pit
		Resource model used for pit and stope	designs.
		optimisation (if appropriate).	The mining infrastructure will consist of the contractor laydown, offices and
		The mining dilution factors used.	workshops with haulage roads to access the top of the eastern and western
		The mining recovery factors used.	mining areas. All waste will be used in the TSF construction. A low grade
		Any minimum mining widths used.	dump will be constructed over the life of mine. Infrastructure is not
		The manner in which Inferred Mineral Resources	detrimental in determining the Reserve.
		are utilised in mining studies and the sensitivity of
		the outcome to their inclusion.
		The infrastructure requirements of the selected
		mining methods.
*Metallurgical*		The metallurgical process proposed and the	Processing will consist of a grinding, flotation and concentrator to produce a
*factors or*		appropriateness of that process to the style of	high quality graphite concentrate. The process is a proven method for the
*assumptions*		mineralisation.	extraction of the graphene to a concentrate.
		Whether the metallurgical process is well-tested	Metallurgical factors applied by weathering and zone based on testing
		technology or novel in nature.	undertaken by IMO in conjunction with GRES.
		The nature, amount and representativeness of	During 2016‐2017 a series of comminution and flotation tests have been
		metallurgical test work undertaken, the nature of	conducted on composite samples selected from the oxide, transition and
		the metallurgical domaining applied and the	primary zones of both deposits. These have been done at a range of grades
		corresponding metallurgical recovery factors	between 5%TGC and 8.9%TGC to determine whether there is any variability
		applied.	of recovery to concentrate in the weathering zones of each deposit. In
		Any assumptions or allowances made for	addition, two locked cycle tests were completed to determine ultimate
		deleterious elements.	recoveries from the East and West fresh material.
		The existence of any bulk sample or pilot scale	The recovered flake graphite is clean, with no visible natural mineral
		test work and the degree to which such samples	impurities.
		are considered representative of the orebody as a	The graphite concentrate is amenable to standard metallurgical recovery
		whole.	processes. The recovered product is considered marketable, with a binding
		For minerals that are defined by a specification,	offtake and partnership agreements with several European and Japanese
		has the ore reserve estimation been based on the	graphite traders.
		appropriate mineralogy to meet the
		specifications?
*Environmental*		The status of studies of potential environmental	Environmental and social management plans have been implemented
		impacts of the mining and processing operation.	An Environmental certificate has been received
		Details of waste rock characterisation and the	Designs for a valley fill TSF years have been completed by Knights Piésold for
		consideration of potential sites, status of design	the processing life of 19 years.
		options considered and, where applicable, the	The deposit is located within and surrounding the area of the Epanko village
		status of approvals for process residue storage	farming area, and Kibaran are holding ongoing discussions with local
		and waste dumps should be reported.	landholders and community groups to keep them well informed of the
			status and futureplanned directions of theproject.

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Criteria	Explanation	Explanation	Commentary
			Relocation discussions for the families directly impacted by the project are
			well advanced.
			Epanko is located in a sub‐equatorial region of Tanzania and is subject to
			heavy seasonal rainfall, with rapid growth of vegetation in season. A
			strategy for both subsurface, surface water and decant water management
			has been prepared for the Bankable Feasibility Study.
			Acid forming waste rock occurs in both zones. As all waste rock will be
			required for the construction of the TSF measures will be taken to
			encapsulate it within the construction of the TSF.
*Infrastructure*		The existence of appropriate infrastructure:	Land acquisition, purchase and rental agreements for the areas affected by
		availability of land for plant development, power,	mining and siting of process plant and infrastructure are currently being
		water, transportation (particularly for bulk	finalised through the RAP process.
		commodities), labour, accommodation; or the	The concentrate will be transported by a public access road to be upgraded
		ease with which the infrastructure can be	before connecting to the main road network at Mahenge.
		provided, or accessed.	Labour and accommodation for the majority of the workforce will be
			available in the major regional centre of Mahenge. The camp is being built
			on site for senior staff.
*Costs*		The derivation of, or assumptions made,	Mine operating costs are based on haulage distances and monthly total
		regarding projected capital costs in the study.	movement targets that were used in unit cost estimation by contractor MCC
		The methodology used to estimate operating	Mining from South Africa.
		costs.	Mine administration and ancillary costs have been based on current market
		Allowances made for the content of deleterious	levels.
		elements.	Processing costs include allowances for crushing, beneficiation, processing,
		The source of exchange rates used in the study.	administration and transport. These costs have been costed by GRES.
		Derivation of transportation charges.	Deleterious elements are not a factor.
		The basis for forecasting or source of treatment	All quotes are in US dollars.
		and refining charges, penalties for failure to meet	Quotes for transport and port handling have been used.
		specification, etc.	Royalties have been included as government takes 3.3% value of saleable
		The allowances made for royalties payable, both	concentrate.
		Government andprivate.
*Revenue*		The derivation of, or assumptions made	The concentrate price of is based on a basket price as determined by the
*factors*		regarding revenue factors including head grade,	percentage of size fractions of the concentrate product was applied in the
		metal or commodity price(s) exchange rates,	Reserve determination.
		transportation and treatment charges, penalties,
		net smelter returns, etc.
		The derivation of assumptions made of metal or
		commodity price(s), for the principal metals,
		minerals and co-products.
*Market*		The demand, supply and stock situation for the	In accordance with Clause 49 of the JORC Code (2012), the product
*assessment*		particular commodity, consumption trends and	specifications and general product marketability were considered in order
		factors likely to affect supply and demand into	to support the Mineral Resource Estimate for Industrial Minerals. The
		the future.	following metallurgical characteristics are considered exceptional and
		A customer and competitor analysis along with	provide Epanko with significant competitive and commercial advantages:
		the identification of likely market windows for the	The expansion rates for Jumbo (+50 mesh) flake is 490 ml/g which is up to
		product.	30% higher than graphite produced in China.
		Price and volume forecasts and the basis for	An ultra-high purity of 99.98% Carbon is achievable.
		these forecasts.	The ash melting point of 1,305oC is up to 150oC higher than graphite
		For industrial minerals the customer specification,	produced in China.
		testing and acceptance requirements prior to a	The resource has a very low percentage of fine flake (< 75 micron), with only
		supply contract.	15.8% reporting to this size fraction.
			The extremely high percentage of large flake provides higher basket prices
			and revenue from sales.
			Test work has confirmed the graphite mineralisation is suitable for the
			'expanded' and ‘spherical’ battery market and has no limitations on its uses.
*Economic*		The inputs to the economic analysis to produce	The Reserve estimate is based on inputs from open cut operations,
		the net present value (NPV) in the study, the	processing, transportation, capital and contingencies to generate a life of
		source and confidence of these economic inputs	mine financial model.
		including estimated inflation, discount rate, etc.	Economic inputs have been sourced from contractors and suppliers.
		NPV ranges and sensitivity to variations in the	The NPV has been calculated using a discount rate of 10%. Inflation has not
		significant assumptions and inputs.	been included in the optimisation.
			The NPV of the project is positive at the commodity price used. The
			sensitivity of the market price is a driving factor of the projects viability.
			Sensitivities of +/- 10% were assessed.
*Social*		The status of agreements with key stakeholders	Kibaran has engaged in local stakeholder negotiation and was covered as
		and matters leading to social licence to operate.	part of the ESIA certificate the companyreceived.
*Other*		To the extent relevant, the impact of the	No natural occurring risks have been identified at this stage that will affect
		following on the project and/or on the estimation	the project operation. A formal process to mitigate risks will be completed
		and classification of the Ore Reserves:	prior to project implementation.
		Any identified material naturally occurring risks.	A mining licence over the mine area has been granted. ML 548/2015.

==> picture [29 x 32] intentionally omitted <==

Criteria	Explanation	Explanation	Commentary
		The status of material legal agreements and
		marketing arrangements.
		The status of governmental agreements and
		approvals critical to the viability of the project,
		such as mineral tenement status, and
		government and statutory approvals. There must
		be reasonable grounds to expect that all
		necessary Government approvals will be received
		within the timeframes anticipated in the Pre-
		Feasibility or Feasibility study. Highlight and
		discuss the materiality of any unresolved matter
		that is dependent on a third party on which
		extraction of the reserve is contingent.
*Classification*		The basis for the classification of the Ore Reserves	Only Measured and Indicated Resource within the LOM designs have all
		into varying confidence categories.	been converted respectively to a Proven and Probable Ore Reserve.
		Whether the result appropriately reflects the	No Probable ore reserve has been derived from a Measured Mineral
		Competent Person’s view of the deposit.	Resource.
		The proportion of Probable Ore Reserves that	No Inferred Resource has been considered or included in the Reserve.
		have been derived from Measured Mineral	The result appropriately reflects the Competent Person’s view of the
		Resources (if any).	deposit.
*Audits or*		The results of any audits or reviews of Ore	An independent due diligence review of the current Reserve is being
*reviews*		Reserve estimates.	undertaken at the time of preparation of this announcement
			The Reserve estimate has been reviewed internally by Kibaran personnel
			and is considered to appropriately reflect the results of the application of
			the modifyingfactors to the Mineral Resource.
*Discussion of*		Where appropriate a statement of the relative	The design, schedule and financial model on which the Ore Reserve is based
*relative*		accuracy and confidence level in the Ore Reserve	has been completed to a feasibility standard.
*accuracy/*		estimate using an approach or procedure deemed	A degree of uncertainty is associated with geological estimates and the
*confidence*		appropriate by the Competent Person. For	Reserve classification reflects the level of confidence in the Resource.
		example, the application of statistical or	Modifying mining factors, revenue prices, geotechnical and processing
		geostatistical procedures to quantify the relative	parameters are of a confidence level reflecting the level of the study and the
		accuracy of the reserve within stated confidence	Reserve estimate would remain economically viable with any negative
		limits, or, if such an approach is not deemed	impacts applied to the factors or parameters.
		appropriate, a qualitative discussion of the
		factors which could affect the relative accuracy
		and confidence of the estimate.
		The statement should specify whether it relates
		to global or local estimates, and, if local, state the
		relevant tonnages, which should be relevant to
		technical and economic evaluation.
		Documentation should include assumptions made
		and the procedures used.
		Accuracy and confidence discussions should
		extend to specific discussions of any applied
		Modifying Factors that may have a material
		impact on Ore Reserve viability, or for which
		there are remaining areas of uncertainty at the
		current study stage.

AI assistant

ECOGRAF LIMITED — Capital/Financing Update 2017

64830_rns_2017-06-20_ef560bf6-1ecf-4175-8739-e8c39644e477.pdf

21 JUNE 2017

ASX ANNOUNCEMENT

Updated 60ktpa Bankable Feasibility Study

Completion of BFS opens door to securing project financing

HIGHLIGHTS

BANKABLE FEASIBILITY STUDY SUMMARY

SCOPE OF WORK

TECHNICAL

SOCIAL, ENVIRONMENTAL AND SAFETY

KEY OUTCOMES

PROJECT FINANCING

MARKETING AGREEMENTS AND ADDITIONAL CUSTOMER SUPPORT

Figure 1: Forecast Global EV penetration rates by region

DOWNSTREAM PROCESSING

LEADERSHIP IN GRAPHITE PROJECT DEVELOPMENT

Key Competitive Advantages

BANKABLE FEASIBILITY STUDY PROGRAM AND RESULTS

SCOPE OF WORK

STUDY TEAM

ORE RESERVE STATEMENT

MINERAL RESOURCE ESTIMATE

MINING

Figure 3: Epanko Pits and Site Layout

PROCESSING AND METALLURGY

INFRASTRUCTURE

Tailings Storage facility

Power

Water

Logistics

REGULATORY, SOCIAL AND ENVIRONMENTAL

Environmental Management Plans

Social Management Plans

PROJECT IMPLEMENTATION SCHEDULE

PRODUCT SPECIFICATION AND MARKETING

ADDITIONAL SALES SUPPORT AND DOWNSTREAM PROCESSING ARRANGEMENTS

Figure 12: Epanko Product Sales Agreements

EPANKO PRICING

CAPITAL AND OPERATING COSTS

EPANKO OPERATING OUTCOMES

Ore Reserve and Mineral Resource Estimate

FINANCIAL OUTCOMES

PROJECT ENHANCEMENT OPPORTUNITIES

SPHERICAL GRAPHITE PRODUCTION AND DOWNSTREAM STUDY

Source: ProGraphite 2017 - Industrial Minerals Conference in Berlin

PROJECT FUNDING

Competent Person Statement

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ECOGRAF LIMITED Capital/Financing Update 2017