QUANTUM GRAPHITE LIMITED — AGM Information 2014

Nov 17, 2014

Valence Industries

Presentation to Annual General Meeting Asia Pacific I Europe I North America

Valence (noun). the combining power of an element, especially as measured by the number of hydrogen atoms it can displace or combine with: carbon always has a valence of 4.

© Valence Industries Limited ASX : VXL ASX : VXLO

November 2014

Christopher S. Darby CEO & MD

Manufacturing+our+Carbon+Future+TM

Disclaimer

This+presenta5on+includes+certain+statements+that+may+be+deemed+forward;looking+statements.++All+statements+in+these+presenta5on+materials+(other+than+statements+of+historical+facts)+which+address+ future+produc5on,+ reserve+poten5al,+explora5on+ac5vi5es+&+events+or+developments+ that+ the+Company+expects,+are+ forward;looking+statements.+ +Such+ forward;looking+statements+include,+without+ limita5on:+ (i)+es5mates+of+ future+graphite+prices,+supply,+demand+&/or+produc5on;+ (ii)+es5mates+of+ future+cash+costs;+ (iii)+es5mates+of+ future+capital+expenditures;+ (iv)+es5mates+ regarding+5ming+of+ future+ development,+ construc5on,+ produc5on+ or+ closure+ ac5vi5es;+ (v)+ statements+ regarding+ future+ explora5on+ results;+ (vi)+ statements+ regarding+ cost+ structure,+ project+ economics,+ or+ compe55ve+ posi5on,+&;+ (vii)+statements+comparing+ the+Company's+proper5es+ to+other+mines,+projects+or+metals.+Although+ the+Company+believes+ that+such+ forward;looking+statements+are+based+on+ reasonable+ assump5ons,+such+statements+are+not+guarantees+of+future+performance+&+actual+results+or+developments+may+differ+materially+from+those+in+the+forward;looking+statements.++Factors+that+could+cause+ actual+results+to+differ+materially+from+those+in+forward;looking+statements+include+market+prices,+exploita5on+&+explora5on+successes,+con5nued+availability+of+capital+&+financing,+&+general+economic,+ market+or+business+condi5ons.+ +Investors+are+cau5oned+ that+any+ such+ statements+are+not+guarantees+of+ future+performance,+ that+ the+Company+expressly+disclaims+any+ responsibility+ for+ revising+or+ expanding+ the+ forward;looking+ statements+ to+ reflect+ actual+ results+ or+ developments,+ &+ that+ actual+ results+ or+ developments+ may+ differ+ materially+ from+ those+ projected,+ in+ the+ forward;+ looking+ statements.++

No+representa5on+or+warranty+is+given+by+the+Company+as+to+the+accuracy+or+completeness+of+the+informa5on+contained+in+this+presenta5on.++Neither+the+Company+nor+its+officers+or+employees+accept+ responsibility+or+liability+(to+the+maximum+extent+permiQed+by+law)+for+any+loss+of+damage+suffered+or+incurred+by+any+other+person+or+en5ty+however+caused+&+rela5ng+in+any+way+to+these+presenta5on+ materials+ including,+ without+ limita5on,+ the+ informa5on+ contained+ in+ the+ presenta5on+ material+ &+ its+ accuracy,+ completeness,+ currency+ or+ reliability.+ + This+ presenta5on+ does+ not+ cons5tute+ a+ recommenda5on+ regarding+ the+securi5es+of+ the+Company,+&+should+not+be+construed+as+legal+or+financial+advice.+ +It+has+been+prepared+ for+informa5on+purposes+only+&+contains+general+summary+ informa5on+&+does+not+take+into+account+the+circumstances+of+any+individual+investor.++Prospec5ve+investors+in+the+Company+are+encouraged+to+obtain+separate+&+independent+advice+with+regard+to+ any+investment+in+the+Company.++By+accep5ng+the+presenta5on+materials,+the+recipient+agrees+to+keep+permanently+confiden5al+the+informa5on+contained+herein.+

The+informa5on+in+this+presenta5on+which+relates+to+Measured,+Indicated+&+Inferred+Mineral+Resources+compiled+in+accordance+with+the+JORC+Code+2012+is+based+on+informa5on+supplied+by+Ms.+Karen+ Lloyd,+Mr.+Ingvar+Kirchner+&+Ms.+Ellen+Maidens+as+detailed+in+the+Company's+ASX+announcements+on+17+November+2014+and+6+August+2014.+ +The+Company+confirms+that+it+is+not+aware+of+any+new+ informa5on+included+in+this+presenta5on.+ +Valence+confirms+that+all+material+assump5ons+underpinning+the+es5mates+in+this+report+con5nue+to+apply+&+have+not+materially+changed.+ +The+Company+ confirms+ that+ the+ form+ &+ content+ in+ which+ the+ Competent+ Person's+ findings+ are+ presented+ have+ not+ been+ materially+ modified.+ The+ informa5on+ in+ this+ announcement+ that+ relates+ to+ the+ Mineral+ Resources+pertaining+to+the+Company's+in;fill+drilling+campaign+results+is+based+on+informa5on+compiled+by+Ms+Karen+Lloyd,+who+has+been+engaged+as+General+Manager+–+Technical+Delivery+by+Valence+ Industries.+ + Ms+ Lloyd+ is+ a+ Member+ of+ the+ Australian+ Ins5tute+ of+ Mining+ &+ Metallurgy.+ + Ms+ Lloyd+ has+ sufficient+ experience+ that+ is+ relevant+ to+ the+ style+ of+ mineralisa5on+ &+ type+ of+ deposit+ under+ considera5on+&+to+the+ac5vi5es+being+undertaken+to+qualify+as+Competent+Persons+as+defined+in+the+2012+Edi5on+of+the+"Australasian+Code+for+Repor5ng+of+Explora5on+Results,+Mineral+Resources+&+ Ore+Reserves".++Ms+Lloyd+consents+to+the+inclusion+in+this+release+of+the+maQers+based+on+their+informa5on+in+the+form+&+context+as+it+appears.++++This+presenta5on+also+references+informa5on,+that+has+ not+been+updated+since,+previously+announced+on+6+August++2014+&+9+October+2014.

Photographs,+maps,+charts,+diagrams+&+schema5c+drawings+appearing+in+this+presenta5on+are+owned+by+&+have+been+prepared+by+or+commissioned+by+the+Company,+unless+otherwise+stated.+Maps+&+ diagrams+used+in+the+presenta5on+are+illustra5ve+only+&+may+not+be+drawn+to+scale.+Unless+otherwise+stated,+all+data+contained+in+charts,+graphs+&+tables+is+based+on+informa5on+available+at+the+date+of+ this+presenta5on.+By+accep5ng+this+presenta5on+the+Recipient+agrees+to+be+bound+by+the+foregoing+statements.++

Corporate Overview

ASX$Code:$VXL$&$VXLO$
Ordinary+Shares+	186.7m+
Op5ons+	68.4m+
Market+cap+(@60+cents)	$112m+
Cash+(End+Q3+2014)+	~$14.5m+
Debt+	Nil+

Major$Shareholders$
Strategic+Energy+Resources+Ltd+(Restricted)+	11.67%+
HSBC+Custody+Nominees+(Australia)+Ltd++	5.02%+
Avatar+Energy+Pty+Ltd+	4.11%+
EERC+Australasia+Pty+Ltd+(restricted)	3.55%+

Top+20+shareholders+hold+45.24%+

Chimaera+Capital+Ltd++ 2.46%+

Corporate Overview

Directors$&$Officers$	Senior$Management$
Graham+Spurling+AM+	Christopher+S.+Darby+
Chairman+	CEO+&+MD+
Christopher+S.+Darby+CEO+&+MD+	JarekKopiasCFO+&+Co.+Sec.+
Glenister+Lamont+	Christopher+Whiteley+
Non;exec+Director+	Chief+Commercialisa5on+Officer+
Ian+Schache	Chris+Hall+
Non;exec+Director+	Chief+Opera5ng+Officer+
JarekKopiasCFO+&+Co.+Sec.+	Karen+Lloyd+GM+Technical+Delivery+

Vertically Integrated Manufacturing

Phase+I+

• Recommission+14000/t+
• Primary+Process+Circuit+
• 2ndry+Process+Circuit+
• Personnel+Recruitment+
• Start+Manufacturing+
• 9++Month+Stockpiles+
• First+Customer+Sales+
• Regulatory+Approvals+

Phase+II+

• Complete+Phase+II+ Feasibility+Study+
• Capex+~$34;$35M+
• Expand+Capacity+~50000+ tpa++
• •New+Open+Pit+Mining+
• •Operate+Exis5ng+Facili5es+ ~14000+tpa+
• 90++Personnel+
• Increase+Sales+

Phase+III+

• Complete+Studies+
• +High+Purity+Processing+
• +Significant+Value+Add+
• +Direct+Entry+Tech+&+ BaQery+Markets+
• +Exis5ng+Customer+Base+
• +Immediate+Entry+to+ Advanced+Manufacturing+
• +Significant+Margin+ Advantages+

Phase+IV+

• •Graphene+Research+ Program+
• •New+&+Disrup5ve+ Technologies+
• Further+Advanced+ Manufacturing+
• +Direct+Synergies+to+ Exis5ng+Customers+
• +Spin;Off+Manufacturing+ Poten5al+

Production Plant

Production Plant

• 14,000 tonnes of graphite per year (smaller scale facility than Phase II)
• Proven historical production capability (working model for Phase II expansion)
• Established site workshop & support infrastructure
• Close to Port & Light Industry (15 minutes)
• Undergone Complete Refurbishment in 2014
• Site Operations Crews Recruited (No FIFO)
• ROM Stockpiles First for Production (lower grades than Uley Pit 2)
• Plant Ready as Planned & Now Waiting on Final SA Governmental Approvals

Feasibility Study Dec. 2014

Expanded+Manufacturing+Capacity+		Increased+Automa5on+&+QA/QC+
		PHASE+II+
Value+Added+Products+		Exis5ng+Plant+++New+Plant+++New+Uley+Pit+2+

Valence Industries Geology & Resource

JORC Resource (534,000t)

JORC Uley Pit 2 3.1Mt@ 11.7% Graphitic Carbon (gC)
Class	Tonnes+(M)	Grade+(gC)	Contained+Tonnes
Measured+	0.34+	17.92%+	60,000+
Indicated+	1.85+	11.84%+	220,000+
Inferred+	0.85+	8.89%+	80,000+
Total$	3.04$	11.69%$	360,000$

ROM Stockpiles 174,000t @ 6.23% gC (Inferred)

Uley Pit 2

Uley+Pit+2+–+3D+Delinea6on+of+JORC+2012+Mineral+Resource+–+Surface+Expression+(Nov.+2014)

VXL Arterial FlakeTM

Valence Industries VXL Graphite Market

Graphite Facts

Sales Strategy

MOU's signed with separate customers & agents representing 29,000+ tonnes of annual graphite production over 2+ years

Great+Progress+in++ less+than++ 12+Months+

Ready+to+Produce+ Graphite+Now+ once+approved+

Feasibility+Study+–+ Engineering,+Pit+Design,+ Sales+all+progressing+

Produc5on+Profile+&+ Profits+will+be+driven+by+ Customer+Knowledge+&+ Sales+Agreements++

Contact

Christopher S. Darby CEO & Managing Director Valence Industries Limited

info@valenceindustries.com I +61 8 8418 8564