QUANTUM GRAPHITE LIMITED — AGM Information 2014

Nov 17, 2014

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ASIA PACIFIC I EUROPE I NORTH AMERICA

Tuesday, 18 November 2014

Chairman’s Address to the Annual General Meeting of Valence Industries

I am very pleased today to announce that our Port Lincoln Plant finally is ready to burst into operation after a lengthy gestation! The final beginning of our market driven Strategic Plan.

One of our less recognised non-cash assets is our market intelligence and customer identification in the world graphite sector. We have a precise knowledge of what products are needed today and a very knowledge based forecast of customer needs as we move into the graphite future.

Using this knowledge, our plans are to introduce progressively our product lines as they are applied to our customers’ today’s needs and tomorrow’s Advanced Manufactured products needs.

Our eyes are fixed firmly on profitable operation and maximised cash flow leading to share price enhancement.

The plant will operate in harmony with our penetration into the ever-changing market place. We plan to stabilise firstly our manufacturing and mining operations around our rejuvenated 14,000T per year name plated plant and progressively grow into our planned new investment in both plant and equipment to reach a total nameplate capacity of 64,000T per year.

This will not be a step change from 14,000T to 64,000T by simply producing commodity graphite. It will be a total facility investment in a profit driven and market driven system providing both commodity and Advanced Manufactured graphite products to an Advanced Manufacturing marketplace. The base plant will be constructed in 2015 and the full nameplate production and sales is estimated to be achieved two years beyond. It will depend how good we are in the market place with respect to both volume and price. Profit is the driver. Our system will be capable of meeting demand.

Valence cannot be seen as “just a mine”. The mine is one of the integral parts of a complete, coordinated, controlled networked system-----Mining-----Ore preparation-----Commodity Production-----Advanced Product Operations and Packaging-----Logistics-----Customer Service.

We will be competing in a highly competitive world market.

We do not have a dream!

We have a cohesive, coherent strategic plan that will be more clearly enunciated in our forthcoming Feasibility Study and Budget Plan.

The Board recognises that some mistakes have been made and quite a few roadblocks have occurred along the way so far. We must and will show our mettle in the forthcoming second year. We will soon strengthen our Board with a new member with complementary skills and we have already strengthened our operational structure.

Stringent Key Performance Indicators have been introduced.

All moves will facilitate greater concentration on the marketplace and shareholder relations, pursuit of excellence in operations and greater shareholder value.

Graham Spurling, AM Chairman Valence Industries Ltd.

w w w . v a l e n c e i n d u s t r i e s . c o m 60 Hindmarsh Square I Adelaide I South Australia I 5000 I Australia p: +61 8 8418 8564 I e: info@valenceindustries.com ABN 41 008 101 979