QUANTUM GRAPHITE LIMITED — Capital/Financing Update 2014

Apr 28, 2014

ASIA PACIFIC I EUROPE I NORTH AMERICA

ASX ANNOUNCEMENT

ASX: VXL ASX: VXLO

29 April 2014

VALENCE INDUSTRIES GRAPHITE SALES COMMENCE

• Valence
  Industries
  has
  sold
  its
  first
  graphite,
  the
  first
  in
  Australia
  for
  over
  20
  years.

• Shipments
  to
  Japan
  to
  commence
  in
  coming
  weeks.

• Uley
  Graphite,
  from
  reprocessed
  material,
  will
  be
  used
  for
  applications
  ranging from
  industrial
  lubricants
  and
  refractories
  to
  battery
  applications.

• Valence
  Industries’
  Phase
  I
  Re-­‐commissioning
  Program
  continues.

Consistent with its development pathway, Valence Industries (ASX: VXL, VXLO) is pleased to announce that it has signed the first agreement for the sale of graphite from its Uley Graphite facilities in regional South Australia. This is the first sale of graphite by an Australian manufacturer for over 20 years and marks a significant milestone for the Company.

Active marketing to graphite customers has intensified over the last several months in Australia, Europe, North America and Asia, with the Company encouraged by the very positive response to the availability and quality of the Company's Uley Graphite. Valence Industries has now signed its initial sales agreement with a customer in Japan for uses ranging from industrial lubricants and refractories through to battery grade applications.

The sales have been made in a range of volumes and for a range of prices that reflect immediate commercial applications and will be fulfilled via progressive customer shipments, expected to commence in coming weeks. The initial sales are for a range of large flake graphite products with purity levels above 95%. The initial graphite shipments will also be used in programs for advanced testing and qualification for long term sales agreements.

The Company will release its Quarterly Report on Wednesday 30 April 2014 detailing the progress made in the Phase 1 recommissioning program.

For
further
information,
please
contact:

Christopher
S.
Darby CEO
&
Managing
Director Valence
Industries info@valenceindustries.com +61
8
8418
8564

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ASIA PACIFIC I EUROPE I NORTH AMERICA

**About

Valence
Industries**

Valence
Industries
(ASX:VXL)
is
the
owner
and
operator
of
the
only
graphite
manufacturing
facilities
in Australia
located
at
Uley
in
South
Australia
near
the
regional
centre
of
Port
Lincoln.
The
Company
is
bringing existing
infrastructure
into
production
with
a
focus
on
global
markets
across
multiple
graphite
product
ranges. Graphite
production
will
commence
in
early
2014,
with
plans
for
expanded
production
by
the
end
of
2014.

Located
only
23
kilometres
from
Port
Lincoln,
the
regional
centre
for
the
Lower
Eyre
Peninsula
in
South Australia,
Valence
Industries’
Uley
Graphite
project
is
recognised
as
a
significant
area
of
graphite mineralisation,
and
one
of
the
largest
coarse
flake
graphite
deposits
in
the
world.
The
deposit
contains disseminated,
high-­‐grade
flake
graphite
and
the
mineralisation
is
near
surface,
with
the
final
manufactured graphite
products
recognised
and
purchased
by
many
customers
for
its
high
quality.

The
company
holds
two
existing
Mining
Licences
and
two
associated
Retention
Licences,
along
with
an extensive
Exploration
Licence,
for
the
conduct
of
its
operations.
In
addition
Valence
Industries
is
in
the fortunate
position
of
owning
the
land
on
which
its
current
and
proposed
expanded
operations
are
conducted along
with
the
extensive
existing
infrastructure.

**Manufacturing

A
New
Carbon
Future**

The
Company
operates
as
an
industrial
manufacturer
of
high-­‐grade
flake
graphite
products
for
distribution and
sale
to
global
markets.
Valence
Industries
owns
established
processing
facilities
and
infrastructure
to manufacture
a
wide
range
of
graphite
product
lines
for
multiple
applications
and
multiple
industries.

The
Company
produces
and
sells
its
graphite
products
from
its
Uley
Graphite
facilities
in
regional
South Australia
for
delivery
to
diversified
markets
for
graphite
in
the
Asia
Pacific,
Europe
and
North
America.

As
a
vertically
integrated
manufacturer
of
specialist
graphite
product
ranges
Valence
Industries’
branded products
are
designed
to
meet
current
and
future
customer
demand.
This
program
includes
development
of
a significant
VXL
High
Purity
Graphite
Facility
program
and
a
range
of
future
Graphene
applications.

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