QUANTUM GRAPHITE LIMITED — Capital/Financing Update 2019

Jun 12, 2019

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

Quantum Graphite Limited

ABN

41 008 101 979

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 tobe issued	Ordinary Shares
2	Number of +securities issued or tobe issued (if known) or maximumnumber which may be issued	98,153,333
3	Principal terms of the +securities(e.g. if options, exercise price andexpiry date; if partly paid+securities, the amountoutstanding and due dates forpayment; if +convertiblesecurities, the conversion priceand dates for conversion)	Ordinary Shares: Fully paid

+ See chapter 19 for defined terms.

4	Do the +securities rank equally inall respects from the +issue datewith an existing +classof quoted+securities?If the additional +securities do notrank equally, please state:•the date from which they do•the extent to which theyparticipate for the nextdividend, (in the case of atrust, distribution) or interestpayment•the extent to which they do notrank equally, other than inrelation to the next dividend,distribution or interest	Ordinary Shares: Yes
	payment
5	Issue price or consideration	Issued pursuant to Offer Information Statement dated10December2018
6	Purpose of the issue(If issued as consideration for theacquisition of assets, clearlyidentify those assets)	Rights issue–Shortfall allocation
6a	Is the entity an +eligible entitythat has obtained security holderapproval under rule 7.1A?	No
	If Yes, complete sections 6b – 6hin relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i
6b	The date the security holderresolution under rule 7.1A waspassed	Not applicable
6c	Number of +securities issuedwithout security holder approvalunder rule 7.1	Nil
6d	Number of +securities issued withsecurity holder approval underrule 7.1A	Nil
6e	Number of +securities issued withsecurity holder approval underrule 7.3, or another specificsecurity holder approval (specifydate of meeting)	Not applicable

• 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)

Not applicable

Not applicable

Not applicable

The entity's issue capacity under rule 7.1 and rule 7.1A is unaffected by the issue described above.

11 June 2019

Number	+Class
7,660,580,941	Ordinary

• Number +Class 9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable) 1,000,000,000 Options to acquire
• 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11	Is security holder approval required?
12	Is the issue renounceable or nonrenounceable?
13	Ratio in which the +securities will beoffered
14	+Class of +securities to which the offerrelates
15	+Record date to determineentitlements
16	Will holdings on different registers (orsubregisters) be aggregated forcalculating entitlements?
17	Policy for deciding entitlements inrelation to fractions
18	Names of countries in which the entityhas security holders who will not besent new offer documents
	Note: Security holders must be told how theirentitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of acceptancesor renunciations

ordinary shares, exercise price $0.00, expiry date

20 July 2023

20	Names of any underwriters
21	Amount of any underwriting fee orcommission
22	Names of any brokers to the issue
23	Fee or commission payable to thebroker to the issue
24	Amount of any handling fee payable tobrokers who lodge acceptances orrenunciations on behalf of securityholders
25	If the issue is contingent on securityholders' approval, the date of themeeting
26	Date entitlement and acceptance formand offer documents will be sent topersons entitled
27	If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders
28	Date rights trading will begin (ifapplicable)
29	Daterightstradingwillend(ifapplicable)
30	How do security holders sell theirentitlements in full through a broker?
31	How do security holders sell part oftheir entitlements through a brokerand accept for the balance?

• 32 How do security holders dispose of their entitlements (except by sale through a broker)?
• 33 +Issue date

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 theadditional +securities, and the number and percentage of additional +securitiesheld 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 categories1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over
37	A copy of any trust deed for the additional +securities

+ See chapter 19 for defined terms.

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
• 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)

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

Number	+Class

Quotation agreement

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

+ See chapter 19 for defined terms.

• 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.

Sign here: ............................................................ Date: 13 June 2019

(Director/Company secretary)

Print name: SAL CATALANO

== == == == ==

+ See chapter 19 for defined terms.

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 placementcapacity is calculated
Insert number of fully paid +ordinarysecurities on issue 12 months before the+issue date or date of agreement to issue
Add the following:
Number of fully paid +ordinary securities•issued in that 12 month period under anexception in rule 7.2
Number of fully paid +ordinary securities•issued in that 12 month period withshareholder approval
Number of partly paid +ordinary•securities that became fully paid in that12 month period
Note:•Include only ordinary securities here –other classes of equity securities cannotbe added•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
Subtract the number of fully paid +ordinarysecurities cancelled during that 12 monthperiod
"A"

+ See chapter 19 for defined terms.

Step 2: Calculate 15% of "A"
"B"	0.15
	[Note: this value cannot be changed]
Multiply "A" by 0.15
Step 3: Calculate "C", the amount of placement capacity under rule 7.1that has already been used
Insert number of +equity securities issued oragreed to be issued in that 12 month periodnot counting those issued:
•Under an exception in rule 7.2
•Under rule 7.1A
•With security holder approval under rule7.1 or rule 7.4
Note:•This applies to equity securities, unlessspecifically excluded – not just ordinarysecurities•Include here (if applicable) the securitiesthe subject of the Appendix 3B to whichthis form is annexed•It may be useful to set out issues ofsecurities on different dates as separateline items
"C"
Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placementcapacity under rule 7.1
"A" x 0.15
Note: number must be same as shown inStep 2
Subtract "C"
Note: number must be same as shown inStep 3
Total ["A" x 0.15] – "C"
	[Note: this is the remaining placementcapacity under rule 7.1]

+ See chapter 19 for defined terms.

Part 2

Rule 7.1A –Additional placement capacity for eligible entities
Step 1: Calculate "A", the base figure from which the placementcapacity is calculated
"A"
Note: number must be same as shown inStep 1 of Part 1
Step 2: Calculate 10% of "A"
"D"	0.10
	Note: this value cannot be changed
Multiply "A" by 0.10
Step 3: Calculate "E", the amount of placement capacity under rule7.1A that has already been used
Insert number of +equity securities issued oragreed to be issued in that 12-month periodunder rule 7.1A
Notes:•This applies to equity securities – not justordinary securities•Include here – if applicable – thesecurities the subject of the Appendix 3Bto which this form is annexed•Do not include equity securities issuedunder rule 7.1 (they must be dealt with inPart 1), or for which specific securityholder approval has been obtained•It may be useful to set out issues ofsecurities on different dates as separateline items"E"

+ See chapter 19 for defined terms.

Step 4: Subtract "E" from ["A" x "D"] to calculate remaining placementcapacity under rule 7.1A
"A" x 0.10
Note: number must be same as shown inStep 2
Subtract "E"
Note: number must be same as shown inStep 3
Total ["A" x 0.10] – "E"
	Note: this is the remaining placementcapacity under rule 7.1A

+ See chapter 19 for defined terms.