First Graphene Ltd. — Capital/Financing Update 2013

May 14, 2013

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ASX Announcement

15 May 2013

SUSPENSION UPDATE

Mongolian Resources Limited (“MRL” or “the Company”, ASX:MRF) wishes to update stakeholders on the status of the voluntary suspension which has been in place since a trading halt was called on April 5[th] , 2013.

The ASX has advised the Company that it has determined that ASX Listing Rules 11.1.2 and 11.1.3 apply to the proposed acquisition of 100% of the issued capital in a wholly owned subsidiary of The Supreme Group, MRL Graphite Pvt Ltd, a wholly owned subsidiary of The Supreme Group of Sri Lanka which holds a 100% interest in 45 Sri Lankan graphite exploration licences (“Licences”) (the “Acquisition”).

Accordingly, the Company will be required to seek Shareholder approval for the Acquisition and meet the requirements of Chapters 1 and 2 of the ASX Listing Rules.

Further information on the Acquisition (including an independent geologist’s report on the Licences) will be provided to Shareholders in a notice of meeting. The voluntary suspension will be lifted when the Notice of Meeting is lodged with ASX.

Proposed acquisition of potential company making graphite projects in Sri Lanka.

On 9 April 2013 the Company announced it had reached agreed terms with The Supreme Group of Sri Lanka for the acquisition of 45km[2] of graphite exploration licences representing 45 Grids. The Acquisition is conditional upon the parties obtaining all requisite government, regulatory and shareholder approvals, and the Company being satisfied with the results of its due diligence on the Licences and the Licence holder.

The consideration for the Acquisition is:

1. Payment of a refundable US$100,000 Deposit at the time of entering into a Heads of Agreement.

2. Payment of the following upon settlement of the Acquisition;

   • a. An additional US$400,000 to be paid; and

   • b. 5,000,000 vendor shares in MRL to be issued. These shares will be subject to escrow for a period of 12 months from the time of the issue of the securities.

3. Issue of a further 5,000,000 vendor shares in MRL on conversion of any of the areas to a mining licence.

4. Payment of US$500,000 at the time of commencement of commercial mining activities.

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Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |

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On 12 April 2013 the Company confirmed it had executed the Heads of Agreement with The Supreme Group and had paid the Deposit amount.

Background on Sri Lankan Graphite

Sri Lanka is perhaps one of the most promising new frontiers in the graphite sector. The Asian nation currently produces a very small amount of graphite - approximately 4,000 metric tonnes (MT) yearly, according to the US Geological Survey (USGS). Sri Lanka has a long history in mining graphite and has the unique position of being the only producer of crystalline vein graphite. In 1916, 35% of the world’s graphite consumption (33,411 metric tonnes) was exported from Sri Lanka.

Vein & flake graphite are the highest-value natural graphite products found globally, the USGS notes. In 2012, prices for Sri Lankan vein and flake graphite averaged between US$1,900 to US$3,500 per tonne, significantly higher than prices reported for other graphite products, such as amorphous graphite.

Sri Lanka is a vibrant fast growing economy following from the 26 year conflict which ended in May 2009. The country’s GDP has grown consistently at a rate of 6.5% - 8% from 2010 – 12. Infrastructure in the areas of interest is excellent with suitable power, water, communications and a ready work force available.

Sri Lanka has favourable investment and tax regimes for the import of capital equipment and foreign investment in natural resources including the potential for a tax free holiday period of up to 10 years upon an investment agreement being approved by the Board of Investment (BOI). The legal system is based on the British common law system.

The country has a population of approximately 20 million people and a high literacy rate approaching 92%. As a Member of the Commonwealth English is taught and spoken as a second language.

The Supreme Group

The Supreme Group is a fast growing private Sri Lankan company with special focus on natural resource based investment opportunities. Current Business Interests include;

• Ownership of “SupremeSat-1” the first Sri Lankan satellite

• Bulk Commodity Trading – Mining and Mineral Trading with interests in Coal, Bitumen, PVC, Iron Ore etc

• Reinsurance

• Investments

• Oil & Gas

The Supreme Group through a subsidiary company hold exploration licences totalling 45km[2] in what has been described by the Sri Lankan Geological Survey and Mining Bureau (GSMB) as the best graphite areas. All grid areas have numerous old workings dating back as far as the 1880s and have not been worked since the 1930s. Mining techniques were rudimentary and mining ceased at the water table (approx 25m). The use of modern mining equipment, pumps and ventilation may allow deeper portions of the vein structures to be mined.

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Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |

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This transaction provides a significant opportunity for the Company to reopen areas of the Sri Lankan graphite industry and provide future upside in multiple locations. The potential also exists for small scale production to begin in the medium term following the refurbishment of existing underground workings at certain locations following conversion from exploration to mining. The Company will be actively applying for further license areas following the completion of the transaction.

MRL will have in The Supreme Group, a well respected local partner, to advise and assist with the implementation of the business plan. Furthermore The Supreme Group will be a significant shareholder in MRL upon completion of the Transaction contemplated and if mining licences issue. MRL has started in country investigations with the view toward commencing exploration activities shortly after the completion of the transaction. The company is also investigating the opportunity to expand the areas under license in the short term.

_________________________________________________________________________________ Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |

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_________________________________________________________________________________ Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |

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What is Graphite?

Graphite is a low density allotrope of the element carbon. This naturally occurring element is soft to touch has a melting point of 3,600 degrees Celsius and comes in black colour. In its innate form it is used as a dry lubricant. The electric conductivity of graphite makes it a popular choice for electrodes. Natural graphite comes in several forms: amorphous, flake and lump or vein graphite. Vein graphite is the purest and most expensive form of natural graphite, Sri Lanka is the only country producing vein graphite.

Types of Graphite & price

Types of Graphite & price
GraphiteProduct	Price (US$/t)
99% to 99.9% C, +50 mesh94% to 97% C, +80 mesh CIF	$4,500-$6,000$2,500-$3,000	MRL target product types
90%C,+80mesh	$2,000-$2,500
94% to 97% C, +100-80 mesh	$2,200-$2,500
90% C, +100-80 mesh	$1,500-$2,000
85%to 87%C,-100mesh	$1,500-$1,900
94% to 97% C, -100 mesh	$2,000 - $2,400
90%C,-100mesh	$1,400-$1,800
Amorphous Powder 80% to 85% C	$600-$800
Synthetic 99.95% C2	$7,000 -$20,000
Source www.Indmin.com3		Remnant Graphite from historical mining.

Whilst the historical use for graphite was in the manufacture of pencils and lubricants, graphite has many important new applications including its use in lithium ion batteries, fuel cells, nuclear and solar power which have the potential to significantly increase the demand for this critical element.

For instance, there is between 10 and 30 times more graphite required by weight to produce a lithium-ion battery than there is lithium. In addition, the recent discovery of a new material called graphene, which is derived from graphite, has also heightened interest. International research is now underway into a number of its potential applications including enhancing the speed and processing power of many modern electronic devices.

Uses of Graphite include

• Steelmaking / Refractories

• Graphite in Lithium Ion Batteries & Fuel Cells

• Brake Linings

• Lubricants

• Pebble Bed Nuclear Reactors (PBNR)

World production of natural graphite is approximately 1.1 million tonnes per year.

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Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |

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For further information: Craig McGuckin craig.mcguckin@mrltd.com.au Managing Director Mongolian Resources Ltd

Peter Youd peter.youd@mrltd.com.au Executive Director Mongolian Resources Ltd

_________________________________________________________________________________ Mongolian Resources Limited | ACN: 007 870 760 | Head Office: Suites 6 & 7 61 Hampden Road Nedlands WA 6009|

Tel: 1300 556 161 | Fax: 1300 534 987 | www.mongolian-resources.com |