MARVEL GOLD LIMITED — Capital/Financing Update 2017

Jul 30, 2017

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31 July 2017

ISSUE OF PLACEMENT SHARES

Graphex Mining Limited (ASX: GPX) ( ‘ Graphex ’ or the ‘ Company ’) is pleased to advise that subsequent to the announcement on 24 July 2017, it has now issued a total of 11,745,454 fully paid ordinary shares (‘ Placement Shares ’) at an issue price of $0.22 per share (‘ Placement ’). A total of 8,731,809 Placement Shares have been issued in accordance with the Company’s placement capacity under ASX Listing Rule 7.1 and a total of 3,013,645 of the Placement Shares were issued in accordance with the Company’s placement capacity under ASX Listing Rule 7.1A. Directors subscribed for 300,000 shares, the issue of which is subject to shareholder approval at the Company’s next general meeting.

An Appendix 3B is attached with respect to the issue of the Placement Shares.

Additional disclosure under ASX Listing Rule 3.10.5A

Graphex provides the following additional information as required under ASX Listing Rule 3.10.5A in respect of the shares issued under the Company’s 10% placement capacity pursuant to ASX Listing Rule 7.1A:

1. The dilutive effect of the Placement on existing shareholders is as follows:

	Shares	%
Number of shares on issue prior to the Placement	58,212,063	83.2
Dilution as a result of issue under ASX LR 7.1A	3,013,645	4.3
Dilution as a result of issue under ASX LR 7.1	8,731,809	12.5
Number of shares on issue following the Placement	69,957,517	100.0

1. The issue of 3,013,645 Placement Shares issued under ASX Listing Rule 7.1A to sophisticated and professional investors was considered to be the most efficient and expedient means for raising capital to advance the Company’s Chilalo Graphite Project, in particular the finalisation of finance and offtake agreements and the completion of technical work associated with the conclusion of such agreements.

2. There were no underwriting arrangements entered into.

3. The fee payable by Graphex to Bridge Street Capital Partners, who acted as lead manager of the placement, comprises a cash fee of 6% of the funds raised pursuant to the Placement. No other costs were incurred in connection with the Placement.

SECONDARY TRADING NOTIFICATION - NOTICE PURSUANT TO SECTION 708A(5)(E) OF THE CORPORATIONS ACT 2001 (the ‘Act)

Re: Issue of 11,745,454 Placement Shares

The Act restricts the on-sale of securities issued without disclosure, unless the sale is exempt under section 708 or 708A. By Graphex giving this notice, sale of the Placement Shares will fall within the exemption in section 708A(5) of the Act.

Indiana hereby gives notice under Section 708A(5)(e) of the Act that:

• (a) the Placement Shares were issued without disclosure to investors under Part 6D.2 of the Act;

• (b) as at the date of this notice, Graphex has complied with:

• (i) the provisions of Chapter 2M of the Act as they apply to Indiana; and

• (ii) section 674 of the Act; and

• (c) as at the date of this notice:

• (i) there is no information that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• (ii) there is no "excluded information" within the meaning of sections 708A(7) and 708A(8) of the Corporations Act which is required to be disclosed under section 708A(6)(e) of the Corporations Act.

PHIL HOSKINS

Managing Director

For further information, please contact: Phil Hoskins – Managing Director Tel: +61 8 9200 4960

Stuart McKenzie – Commercial Manager and Company Secretary Tel: +61 8 9200 4960

Media Michael Weir and Richard Glass Citadel-MAGNUS Tel: +61 8 6160 4900

About Graphex

Graphex Mining Limited is an Australian exploration and development company, dedicated to advancing the world class Chilalo Graphite Project, located in south-east Tanzania. Chilalo is host to a high-grade mineral resource and has demonstrated an ability to produce a premium graphite concentrate with a substantial portion of large and jumbo flake material. Chilalo graphite possesses outstanding expandability characteristics, making it ideally suited to the rapidly growing expandable graphite market.

Graphex has an experienced board and management team with specific skills and extensive experience in African based project development, exploration, mining and processing. The Company has a long and well-established presence in Tanzania.

For more information, visit www.graphexmining.com.au.

2

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Graphex Mining Limited

ABN

77 610 319 769

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares (“Shares”)
	11,745,454 Shares
	Fully paid ordinary shares issued at $0.22 per Share. Issued pursuant to the share placement announced on 24 July 2017.

• See chapter 19 for defined terms.

Appendix 3B Page 1

04/03/2013

4

Do the[+] securities rank equally Yes in all respects from the[+] issue date with an existing[+] class of quoted[+] securities? If the additional[+] securities do not rank equally, please state:

• the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $2,584,000 6 Purpose of the issue Issued pursuant to the share placement announced (If issued as consideration for on 24 July 2017 to fund development of the Chilalo the acquisition of assets, Graphite Project, working capital and general clearly identify those assets) corporate purposes. 6a Is the entity an[+] eligible entity Yes that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B , and comply with section 6i

6b The date the security holder 17 November 2016 resolution under rule 7.1A was passed 6c Number of[+] securities issued 8,731,809 without security holder approval under rule 7.1

6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	3,013,645	3,013,645	3,013,645
	Nil
	Nil
	The shares were issued at $0.22 per Share, the issue price being agreed on 19 July 2017. The 15 day VWAP to 19 July 2017 was $0.278. The issue price of $0.22 represents a 20.86% discount to the 15 day VWAP. The VWAP was sourced from Bloomberg.
	N/A
	See Annexure 1
	31 July 2017
	Number	+Class
	69,627,509	Ordinary Shares

• See chapter 19 for defined terms.

Appendix 3B Page 3

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9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	• 330,008 (escrowed to 14 June 2018) • 5,927,359, exercisable at $0.25 each, expiring 8 June 2019 (escrowed to 14 June 2018) • 2,350,000, exercisable at $0.20 each, expiring 9 June 2019 (escrowed to 14 June 2018) • 520,000, nil exercise price, expiring 9 June 2019, vesting 1 July 2017 (escrowed to 14 June 2018) • 715,000 nil exercise price, expiring 9 June 2021, vesting 1 July 2017, 1 July 2018 and 1 July 2019 (escrowed to 14 June 2018) • 650,000, exercisable at $0.20 each, expiring 9 June 2019 • 594,319, nil exercise price, expiring 9 June 2019, vesting 1 July 2017 • 1,608,638, nil exercise price, expiring 9 June 2021, vesting 1 July 2017, 1 July 2018 and 1 July 2019 • 6,200,308 exercisable at $0.25 each, expiring 8 June 2019	• Unquoted restricted shares • Unquoted Options • Unquoted Options • Unquoted Options • Unquoted Options • Unquoted Options • Unquoted Options • Unquoted Options • Unquoted Loyalty Options

10 Dividend policy (in the case of a The Entity has not yet established a dividend policy. trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

	11	Is security holder approval	Is security holder approval	Is security holder approval	Is security holder approval	N/A
		required?
	12	Is the issue renounceable		or		N/A
		non-renounceable?
	13	Ratio in which the	+securities			N/A
		will be offered
	14	+Class of+securities to which				N/A
		the offer relates
	15	+Record date to	determine			N/A
		entitlements
	16	Will holdings on	different			N/A
		registers (or subregisters)		be
		aggregated for	calculating
		entitlements?
	17	Policy for deciding entitlements				N/A
		in relation to fractions
	18	Names of countries in which		the		N/A
		entity has security holders who
		will not be sent	new offer
		documents
		Note: Security holders must be told how		their
		entitlements are to be dealt with.
		Cross reference: rule 7.7.
	19	Closing date for	receipt		of	N/A
		acceptances or renunciations
					N/A
20	Names of any underwriters
21	Amount of any underwriting fee				N/A
	or commission
22	Names of any brokers to the issue				N/A
23	Fee or commission payable to the				N/A
	broker to the issue

• See chapter 19 for defined terms.

Appendix 3B Page 5

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24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of[+] securities ( tick one )

(a) ✓ +Securities described in Part 1 (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

• 38 Number of[+] securities for which +quotation is sought

39 +Class of +securities for which quotation is sought

40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities?

If the additional[+] securities do not rank equally, please state: the date from which they do the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• See chapter 19 for defined terms.

Appendix 3B Page 7

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41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that noone has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................Date: 31 July 2017 Print name: Stuart McKenzie (Company Secretary)

• See chapter 19 for defined terms.

Appendix 3B Page 9

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Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

art 1	art 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the +issue date or date of agreement to issue	55,000,000
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	2,983,275 fully paid ordinary shares pursuant to the exercise of Loyalty Options from 15 September 2016 to 26 June 2017 112,610 fully paid ordinary shares (Appendix 3B, 8 December 2016) 116,178 fully paid ordinary shares (Appendix 3B, 21 June 2017)
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	Nil
“A”	58,212,063

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	8,731,809
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

• Insert number of[+] equity securities issued 8,731,809 fully paid ordinary shares or agreed to be issued in that 12 month (Appendix 3B, 31 July 2017) period not counting those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4

• Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C” 8,731,809

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

placement capacity under rule 7.1
“A” x 0.15	8,731,809
Note: number must be same as shown in
Step 2
Subtract“C”	8,731,809
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	0

• See chapter 19 for defined terms.

Appendix 3B Page 11

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

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

Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
“A” 58,212,063
Note: number must be same as shown in
Step 1 of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10 5,821,206
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
Insert number of [+] equity securities issued 3,013,645 fully paid ordinary shares
or agreed to be issued in that 12 month (Appendix 3B, 31 July 2017)
period under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
“E” 3,013,645
----- End of picture text -----

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	5,821,206
Subtract“E” Note: number must be same as shown in Step 3	3,013,645
Total[“A” x 0.10] – “E”	2,807,561

• See chapter 19 for defined terms.

Appendix 3B Page 13

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