QUANTUM GRAPHITE LIMITED — Capital/Financing Update 2015

May 7, 2015

ASIA PACIFIC I EUROPE I NORTH AMERICA

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ASX ANNOUNCEMENT

ASX: VXL & VXLO

• 8 May 2015

Notice to Optionholders

• Optionholders may be eligible to participate in the Rights Issue if they first exercise their Options

• Optionholders must be allotted shares and have a registered address in Australia or New Zealand by no later than the Record Date of Monday 18 May to be eligible

Valence Industries Limited (the ‘Company’) has today announced a rights issue to eligible shareholders that have a registered address in Australia or New Zealand (‘Offer’). Optionholders have been sent a separate letter, also announced today, advising them of the actions they may take in relation to the Offer. In order to participate in the Offer in respect of the Options held by them, an Optionholder must first exercise their options and be registered as a holder of shares, with an address in Australia or New Zealand, no later than the Record Date, being Monday 18 May 2015.

To further assist optionholders in exercising their options, the Company provides the following information:

1. Complete the Notice of Exercise of Option form (accompanying this announcement) in relation to options you hold in the Company.

2. E-mail the completed option exercise form to info@valenceindustries.com no later than Friday 15 May.

3. Contact the Company on +61 8 8418 8564 to arrange electronic funds transfer of the value of your exercised options. Cleared funds must be received by the Company no later than Monday 18 May 2015 (Record Date). The Company cannot guarantee transfer times between financial institutions and recommends you act promptly to improve the chances of funds being received on time.

For convenience, a Notice of Exercise of Options is attached to this announcement.

This does not constitute financial advice or any recommendation in respect of the exercise of any options. If you are in doubt as as to how to act, you should consult your financial or other professional adviser.

For further information, please contact:

Jaroslaw (Jarek) Kopias info@valenceindustries.com CFO & Company Secretary +61 8 8418 8564 Valence Industries

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 8215 6400 I e: info@valenceindustries.com ABN 41 008 101 979

ABN 41 008 101 979

Valence Industries Limited

All Registry communications to: Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia Telephone: 1300 554 474 Facsimile: (02) 9287 0303 ASX Code: VXL Email: registrars@linkmarketservices.com.au Website: www.linkmarketservices.com.au

NAME AND ADDRESS OF OPTIONHOLDER

SRN/HIN

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Conversion Ratio 1 for 1 Expiry Date 31 July 2016

Notice of Exercise of Options

VALENCE INDUSTRIES LIMITED OPTIONS EXPIRING 31 JULY 2016 EXERCISE PRICE $A0.25

PLEASE COMPLETE BELOW (using block letters) – refer overleaf for details and further instructions on how to complete this form.

I/We apply to exercise the following number of options and attach a cheque in Australian currency drawn on an Australian branch of a financial institution for the amount payable. Please allot me/us Ordinary Shares calculated on the basis of one (1) Ordinary Share for every one (1) Option which I/we exercise. I/We agree to accept such Shares subject to the Constitution of Valence Industries Limited.

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----- Start of picture text ----- A NUMBER OF OPTIONS EXERCISED----- End of picture text -----

NUMBER OF OPTIONS EXERCISED B TOTAL PAYMENT REQUIRED at $A0.25 per , , . Option Exercised $A , , , , .

C PLEASE INSERT YOUR CHEQUE DETAILS

Cheques must be drawn on an Australian branch of a financial institution in Australian currency and made payable to “Valence Industries Limited” and crossed “Not Negotiable”.

Cheque Number BSB Account Number -

YOUR CONTACT DETAILS

D

Telephone Number where you can be contacted during business hours

( )

Contact Name (PRINT)

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Date / /

VXLO OPT001

How to complete the Notice of Exercise of Options

Please complete all relevant sections of this form USING BLOCK LETTERS. These instructions are cross referenced to each section of the notice.

A. Application for Shares under the Notice of Exercise of Options

You may exercise either part of, or all of, your Options holding. Please write in Box A the number of Options that you wish to exercise.

If you do not indicate the number of Options you wish to Exercise, the Company will exercise as many Options as your accompanying cheque will pay for. The number of Options exercised, however, will not exceed the number of Options that you hold.

B. Total Payment Required for Options Exercise

C. Cheque Details

Please enter your cheque details in Section C.

Cheques must be drawn on an Australian branch of a financial institution in Australian currency and made payable to “Valence Industries Limited” and crossed “Not Negotiable”.

D. Contact Details

Please enter your daytime contact telephone number so we can contact you regarding your notice, if necessary.

Please enter in Box B the total amount of the cheque required for the payment of the Options you wish to exercise at the Exercise Price of $A0.25 per Option.

NOTE: OPTIONS NOT EXERCISED BY 5.00 PM AEST 31 July 2016 WILL AUTOMATICALLY EXPIRE

How to Lodge the Notice of Exercise of Options

The completed notice with the accompanying payment must be mailed or delivered to the address set out below.

Mailing Address Valence Industries Limited Ground Floor 60 Hindmarsh Square Adelaide SA 5000

Personal Information Collection Notification Statement: Link Group advises that personal information it holds about you (including your name, address, date of birth and details of the financial assets) is collected by Link Group organisations to administer your investment. Personal information is held on the public register in accordance with Chapter 2C of the Corporations Act 2001. Some or all of your personal information may be disclosed to contracted third parties, or related Link Group companies in Australia and overseas. Your information may also be disclosed to Australian government agencies, law enforcement agencies and regulators, or as required under other Australian law, contract, and court or tribunal order. For further details about our personal information handling practices, including how you may access and correct your personal information and raise privacy concerns, visit our website at www.linkmarketservices.com.au for a copy of the Link Group condensed privacy statement, or contact us by phone on +61 1800 502 355 (free call within Australia) 9am–5pm (Sydney time) Monday to Friday (excluding public holidays) to request a copy of our complete privacy policy.