QUANTUM GRAPHITE LIMITED - Interim / Quarterly Report 2014

ASIA PACIFIC I EUROPE I NORTH AMERICA

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QUARTERLY ACTIVITIES REPORT FOR THE PERIOD TO 30 SEPTEMBER 2014

Q3
2014 ASX:
VXL
&
VXLO

Capital Structure

Shares: 185,697,257 Listed options: 52,201,723 Unlisted options: 21,800,000 Unlisted performance rights: 1,375,000

Board of Directors

Graham Spurling, AM Non-executive Chairman

Christopher S. Darby Chief Executive Officer & MD

Glenister Lamont Non-executive Director

Ian Schache Non-executive Director

Jarek Kopias Company Secretary & CFO

Discovery
of
new
very
high-‐grade
Arterial
Flake[TM] graphite
grading
above 62%
graphitic
carbon.
Super
Jumbo
Flake
+5
mesh
identified
in
Uley
Pit
2
Discovery
of
significant
high-‐grade
intersections
of
flake
graphite
across Uley
Pit
Phase
I
Secondary
Processing
Circuit
completed
for
production commencement
ahead
of
regulatory
approvals.
Successful
completion
of
institutional
placement
of
$12M
oversubscribed and
SPP
completed.
Execution
of
80,000+
tonnes
of
sales
MoUs
for
global
flake
graphite customers.
Short-‐listed
term
sheets
from
a
number
of
debt
providers
to
establish
$35M in
senior
credit
facilities
for
Phase
II
expansion
in
2015

NOTE:
Presentations
were
released
during
Q3
2014
including
maps,
which
may
have
caused confusion.
Clarification
is
provided
in
the
discussion
of
geophysics
in
this
Q3
2014
Report
(see page
3).

COMPANY

Valence
Industries
was
listed
on
the
Australian
Securities
Exchange
(ASX)
and
its
issued
shares
(VXL)
and
options
(VXLO) commenced
trading
on
6
January
2014.

Valence
is
currently
completing
the
Phase
I
program
to
bring
the
existing
Uley
Graphite[TM] manufacturing
facilities
back into
production.
Concurrently
the
company
is
completing
the
Phase
II
Feasibility
Study
and
planning
for
its
Phase
III high
purity
facilities
and
its
Phase
IV
graphene
development
and
commercialisation
program
in
conjunction
with
the University
of
Adelaide.

Valence
Industries
is
the
100%
owner
of
the
Uley
Graphite[TM] manufacturing
facilities
in
South
Australia.
These
are
the only
graphite
manufacturing
facilities
in
Australia.

Those
facilities
include
significant
graphite
processing
plant, equipment,
infrastructure,
and
a
significant
graphite
Mineral
Resource.
These
assets
are
located
on
the
freehold
land and
within
the
Mining
Licences
owned
by
Valence
Industries.

Located
23
kilometres
from
Port
Lincoln,
the
regional
centre
for
the
Lower
Eyre
Peninsula
in
South
Australia,
Valence Industries’
Uley
Graphite[TM] manufacturing
facilities
are
also
recognised
as
containing
a
significant
area
of
flake
graphite mineralisation,
and
one
of
the
larger
coarse
flake
graphite
deposits
in
the
world.
Tertiary
metallurgy
programs
confirm a
strong
spread
of
flake
graphite
including
+5
Mesh
(super
jumbo
flake)
from
the
Uley
Graphite[TM] deposits.
Testing
has confirmed
Valence
has
no
amorphous
graphite
present.
The
deposit
contains
disseminated,
high-‐grade
flake
graphite and
the
mineralisation
is
near
surface.

During
the
quarter
Valence
Industries
undertook
$934,000
of
expenditure
on
recommissioning
of
the
Phase
I manufacturing
and
processing
plant,
$147,000
on
development
activities,
$108,000
on
production
activities
and $104,000
on
exploration
activities
with
committed
expenditure
in
place
over
the
next
quarter
in
line
with
the
program for
the
recommissioning
of
the
existing
facility
and
the
staged
ramp
up
in
production
using
existing
fines
stockpiles
and then
using
the
run
of
mine
stockpiles.

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**GRAPHITE

MANUFACTURING
&
PROCESSING
PLANT
–
PHASE
I**

During
Q3
2014
Valence
Industries
prepared
to
complete
refurbishment
of
the
Phase
I
manufacturing
and
processing plant
at
its
flagship
Uley
Graphite[TM] facilities
in
South
Australia.

The
Phase
I
plant
has
two
circuits.

The
Primary Processing
Circuit
is
used
to
wash
and
grind
the
raw
run
of
mine
material
and
produce
a
feed
product
for
second
stage processing.
The
Secondary
Processing
Circuit
then
screens,
dries
and
packages
the
graphite
to
produce
Valence Industries
multiple
flake
graphite
product
lines.

**Phase

I
Program
–
Primary
Process
Circuit**

Valence
Industries
received
delivery
of
the
new
mill
that
forms
part
of
the
primary
processing
circuit
in
the
Phase
I plant
during
Q3
2014. The
installation
of
the
mill
along
with
the
remainder
of
the
Primary
Processing
Circuit
is
being completed
to
fit
the
schedule
for
full
commissioning.

**Phase

I
Program
–
Secondary
Process
Circuit**

The
work
on
the
Secondary
Processing
Circuit
is
effectively
complete.
The
Phase
I
program
has
verified
the
equipment operability,
plant
capacity
and
material
handling
for
future
processing
of
flake
graphite
in
the
Secondary
Processing Circuit.
Once
regulatory
approval
is
received
the
ramp-‐up
of
Phase
I
will
commence
with
fines
re-‐processing
over
at least
30
days
and
moves
to
staged
run
of
mine
production
over
the
planned
ramp-‐up
period
of
3
to
4
months
to
meet the
full
production
capacity
rate
of
14000
tpa.

The
operating
costs
of
the
Phase
I
plant
are
expected
to
be
relatively
high
initially,
and
the
Company
will
examine options
to
optimise
production
costs
following
the
ramp-‐up
in
production
volumes.
Valence
Industries
is
continuing
to recruit
additional
operational
shifts
to
be
brought
on
as
production
ramps-‐up
later
this
year.
Completion
of
the
Phase
I refurbishment
program
is
an
exciting
stage
for
the
Company
and
will
be
a
significant
milestone.
The
capacity
to
run the
only
graphite
processing
facility
in
Australia
is
a
significant
step
forward
and
confirms
Valence
Industries
leadership in
this
area
and
places
South
Australia
at
the
forefront
of
new
graphite
manufacturing
globally.

**DISCOVERY

OF
VERY
HIGH-‐GRADE
GRAPHITE**

Valence
Industries
has
discovered
new
and
significant
high-‐grade
very
large
flake
graphite
mineralisation.
This
area
is
a completely
new
area
of mineralised
pegmatite untouched
by
historical
drilling
and
entirely
in
addition
to
the
already known
mineralisation
that
forms
the
existing
JORC
(2012)
Mineral
Resource.
This
new
area
of
graphitic mineralised pegmatite has
been
encountered
from
near
surface
at
25
metres
dipping
down
to
120
metres
and
extending
across
a strike
distance
of
~75
metres.
Significant
intersections
of Arterial
Flake[TM] in
the
graphitic mineralised
pegmatite include 24%
graphitic
carbon
(gC)
over
6m
(from
48.0m)
including 61.5%
gC
over
2.6m (MD615).

It
is
anticipated
that
this
new
area
is
structurally
controlled mineralised
pegmatite and
remobilised
gneiss
that
has
an apparent
continuity
which
presents
as
an
area
best
described
as
an
“artery”
of
flake
graphite.

We
have
named
the unique
graphite
from
this
new
zone Arterial
Flake[TM] .
The
features
of
Valence
Industries’
new Arterial
Flake[TM] graphite include:

New
Discovery

A
unique
and
exciting
new
geological
discovery.

Very
high
grades
exceeding
60%+
gC.
Flake
graphite
grades
like
this
over
such
significant Very
High
Grade intercepts
have
not
been
previously
reported.

Easily
Accessed Found
from
near
surface
in
soft
dig
material
and
is
easily
accessed.

Has
super-‐jumbo
flake
sizes
that
from
independent
petrology
exceed
4mm
(+5
mesh).
This
has Super-‐Jumbo
Flake also
never
been
reported
previously. A
globally
unique
combination
of
high-‐grade,
super-‐jumbo
flake,
bulk
intersections
and
easily Globally
Unique mined
material.

**Potential

&
Current
Petrology**

Valence
Industries
has
commissioned
independent
petrological
testing
and
assessment
of
the
material
from
across
the area
of
the
in-‐fill
drilling
campaign
and
particularly
with
respect
to
the
newly
discovered mineralised
pegmatite zone. To
date
the
petrology
program
has
confirmed
that
the
assessed
material
includes
super
jumbo
flake
sizes
that
exceed
4

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millimetres
(+5
mesh).
The
petrology
assessment
is
the
first
step
in
determining
the
flake
size
distribution
of
the
new Arterial
Flake[TM] .

**Relationship:

New
Pegmatite
Zone
&
Established
Mineralisation**

The
new
zone
of
graphitic mineralised
pegmatite is
a
new
discovery.

Historical
drilling
and
the
existing
JORC
(2012) Mineral
Resource
did
not
find
this
area
and
did
not
take
this
area
of
mineralisation
into
account.
The
exact
relationship between
this
new
zone
of mineralised
pegmatite and
the
areas
previously
known
to
the
Company
is
starting
to
be understood
but
is
subject
to
ongoing
assessment.
Valence
Industries
will
update
the
existing
JORC
(2012)
Mineral Resource
and
intends
to
release
a
maiden
Ore
Reserve
for
inclusion
in
its
Phase
II
feasibility
study
program. Metallurgical
test
work
will
also
be
incorporated
in
the
feasibility
study
for
release
towards
the
end
of
2014.

All
data
has
now
been
received
from
the
in-‐fill
drilling
campaign
across
the
area
of
the
proposed
new
Uley
Pit
2,
which contains
the
Company’s
established
JORC
(2012)
Mineral
Resource.
The
drill
results
include
significant
additional
high-‐ grade
intersections.
These
are
high
grades
of
graphite
over
significant
intervals
and
hosted
in
material
that
is
easily excavated
and
transported
for
processing.

**Geophysics

&
In-‐Fill
Drilling**

Ahead
of
the
in-‐fill
drilling
program
the
company
analysed
historical
TEM
data
and
applied
new
interpretation
and mapping
techniques.
That
program
assisted
in
the
identification
of
current
and
future
exploration
targets
for
Valence Industries.

In
the
diagram
below
(Fig.
1)
this
data
analysis
is
represented
showing
responses
consistent
with
electrical
conductivity and
magnetic
susceptibility
measurements.

The
brown
area
(Fig.
1)
delineates
zones,
which
gave
a
relatively
lower
response
and
incorporates
the
area
mined historically
as
the
Uley
Pit
1
(purple).
The
company
now
knows
that
the
original
planned
extension
to
Uley
Pit
1
was designed
to
extend
into
the
green
area
to
the
East
of
Uley
Pit
1.

The
green
area
(Fig.
1)
delineates
an
area
of
relatively
higher
response.
That
area
of
relatively
higher
response
shown in
green,
within
the
confines
of
the
planned
Uley
Pit
2,
was
included
in
the
area
which
was
covered
by
the
in-‐fill
drilling campaign
this
year.

It
is
the
in-‐fill
drilling
in
that
area
of
green
within
the
planned
Uley
Pit
2
boundaries
which
led
to
the
results
which
have been
released
by
Valence
Industries
during
Q3
2014.
These
include
the
very
high-‐grades
of
graphitic
mineralisation. In
the
presentation
made
on
11
September
2014
(slide
11)
it
may
have
been
inferred
that
all
areas
of
green
are
high grade
however,
as
the
Company
continues
to
undertake
its
exploration
efforts
during
2014
and
2015
it
will
assess
the potential
for
economic
extraction
of
mineralisation
across
all
areas
of
geophysical
response,
given
its
current understanding
of
the
geological
regime.

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N
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Fig.
1
–
3D
Interpretation
&
Modelling
of
TEM
Image
Data
(2014) Existing
Uley
Pit
1
(Purple)
&
Proposed
Uley
Pit
2
(Pink)

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**INSTITUTIONAL

PLACEMENT
&
SPP**

In
Q3
2014
Valence
Industries
was
pleased
to
announce
that:

It
had
received
firm
commitments
from
Institutional
and
sophisticated
investors
for
a
placement
of
new
shares
to raise
$12.0
million
(before
costs)
at
an
issue
price
of
$0.70
per
share
(Placement).
A
Share
Purchase
Plan
offered
to
all
eligible
shareholders
in
Australia
and
New
Zealand
at
a
price
of
$0.70
per share
underwritten
up
to
$3.0
million
(SPP).

The
Placement
and
SPP
were
both
priced
at
$0.70
per
share
which
represented
a
discount
of
13.6%
to
Valence Industries’
last
closing
price
on
the
ASX
before
the
trading
halt
for
the
Placement
and
was
equal
to
the
Company’s twenty
(20)
day
weighted
average
closing
price
on
the
ASX.

**Purpose

of
Capital
Raising**

The
funds
raised
from
the
Placement
and
SPP
will
be
applied
by
Valence
Industries
to
advance
the
company’s programs
for
growth
including:

Optimising
the
Company’s
feasibility
study
in
order
to
realise
maximum
benefits
from
the
high-‐grade
graphite mineralisation
across
the
Company’s
existing
JORC
(2012)
Mineral
Resource
and
the
new
area
of
mineralised pegmatite
recently
identified
by
Valence
Industries,
including:
revising
the
Company’s
JORC
(2012)
Mineral
Resource
on
completion
of
analysis
of
the
infill
drilling
results for
the
high
grade
material
identified
in
the
previously
known
ore
body
and
the
newly
discovered mineralised
pegmatite
zone;
optimising
the
proposed
Uley
Pit
2
and
mining
plan
for
the
high
grade
flake
graphite
mineralisation
in
the previously
known
ore
body
and
for
the
new
area
of
mineralised
pegmatite,
with
corresponding
adjustments to
capital
and
operating
costs;
assessing
the
required
minor
processing
and
manufacturing
changes
for
the
Phase
II
plant
to
take
advantage of
material
from
the
newer
high-‐grade
zones
and
the
area
of
mineralised
pegmatite;
assessment
of
the
graphite
flake
sizing
and
product
characteristics
of
the
new
grades
of
material
and
the potential
applications
and
associated
market
opportunities;
reassessment
of
the
opex,
capex
and
resultant
economics
for
the
Phase
II
expansion
program
in
light
of
the advantages
to
be
achieved
from
the
new
high-‐grade
material;
Providing
funding
flexibility
for
early
Phase
II
expansion
works
which
may
include
preparation
of
Uley
Pit
2, baseline
civil
work,
preparatory
infrastructure,
and
longer
lead
time
orders;
and
For
general
working
capital
purposes
including
to
permit
the
Company
to
maintain
its
operational
programs pending
the
delayed
regulatory
approvals.

**80,000+

TONNES
OF
SALES
MEMORANDA
OF
UNDERSTANDING**

In
Q3
2014
Valence
Industries
signed
multiple
new
Memoranda
of
Understanding
(MOUs)
for
flake
graphite
sales
in excess
of
80,000
tonnes
over
2
or
more
years.
The
MOU
volumes
cover
more
than
29,000
tonnes
annual
production of
graphite
from
Valence’s
flagship
Uley
Graphite[TM] facilities.
The
MOUs
with
four
customers
provide
Valence
with committed
contracts
for
delivery
of
significant
quantities
of
flake
graphite
year
on
year
and
are
for
a
defined
“collar” price
subject
only
to
final
product/grade
qualifications.
The
Company
is
pleased
with
the
price
levels
obtained
under the
MOUs,
which
are
consistent
with
its
expectations.

**PHASE

II
FEASIBILITY
STUDY**

The
purpose
of
the
feasibility
study
remains
to
define
the
program
for
mining
the
proposed
new
open
pit
(Uley
Pit
2), evaluate
the
construction
of
a
new
Phase
II
full-‐scale
graphite
processing
facility
and
assess
the
opportunities
to market
the
Company’s
increased
production
into
the
growing
global
markets
for
graphite.
The
extension
of
the feasibility
study
program
is
considering:

Mineral
Resource The
full
nature
and
extent
of
the
Mineral
Resource
that
can
be
expressed
from
completing
the analysis
of
the
in-‐fill
drilling
results
and
updating
the
established
JORC
(2012)
Mineral
Resource.

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==> picture [47 x 49] intentionally omitted <==

In
particular,
to
incorporate
the
new
results
from
the
previously
known
area
of
graphitic mineralisation
and
the
new mineralised
pegmatite
zone .

Mining
Program The
opportunities
presented
to
further
optimise
the
proposed
layout
and
mining
optimisation for
Uley
Pit
2
and
correspondingly
deliver
relevant
adjustments
to
capital
and
operating
costs. This
may
include
re-‐assessment
of
optimal
mining
methods
to
recover
both
flake
graphite material
in
the mineralised
pegmatite
zone alongside
the
extraction
of
the
known
flake
graphite mineralisation.
Process
Program The
processing
changes
to
take
advantage
of
the
high-‐grades
in
the
area
of
previously
known graphitic
mineralisation
and
to
factor
in
manufacturing
from
the
new mineralised
pegmatite zone .

This
is
anticipated
to
be
reflected
in
minor
adjustments
to
the
Phase
II
Plant
design
to optimise
the
value
that
can
be
realised
from
both
areas
of
high-‐grade
graphitic
mineralisation.

Market
Program Assessment
of
the
flake
sizing
and
product
characteristics
of
the
new
grades
of
material
and
the potential
applications
and
associated
market
opportunities.
Valence
Industries
recently completed
metallurgical
test
drilling
to
provide
samples
to
assess
the
metallurgical characteristics
and
inform
the
potential
for
further
market
opportunities
from
the
new
high-‐ grade
areas.
Economics Review
and
reassessment
of
the
opex,
capex
and
resultant
economics
for
the
Phase
II
expansion program
in
light
of
the
advantages
to
be
achieved
from
both
the
new
high-‐grade
material
from the
previously
known
areas
of
graphitic
mineralisation
and
from
the
new mineralised
pegmatite zone .

The
revision
of
the
feasibility
study
program
is
underway
and
is
not
anticipated
to
involve
fundamental
reengineering or
redesign.
The
updated
feasibility
study
program
will
be
completed
over
the
coming
months
and
will
be
released
in 2014.

Valence
Industries
proposes
to
implement
as
soon
as
possible
those
stages
of
Phase
II
that
can
commence early.

This
may
include
preparation
of
Uley
Pit
2,
baseline
civil
work,
preparatory
infrastructure,
longer
lead
time orders,
detailed
design
and
engineering
and
early
contractor
involvement
(ECI).

**PHASE

II
EXPANSION
&
$35M
FUNDING
FACILITIES**

Valence
Industries
has
received
multiple
proposals
from
financiers
and
has
committed
to
establish
$35M
in
senior debt
facilities
from
short-‐listed
proponents
to
fund
construction
of
the
proposed
Phase
II
full-‐scale
process
plant.

Valence
Industries
has
welcomed
the
commitment
by
senior
debt
providers
for
the
finance
facilities
for
the
Phase
II expansion
program.
The
company
is
working
closely
with
the
short-‐listed
financiers
and
will
continue
to
retain
the right
to
assess
and
negotiate
competitive
terms
and
proposals
as
due
diligence
is
performed
by
the
financiers’ experts
on
the
Phase
II
feasibility
study
program
and
the
sales
contract
program
established
by
Valence
Industries
as part
of
the
conditions
precedent
to
funding.

The
proposed
debt
facilities
will
have
other
typical
conditions,
due-‐diligence,
security,
draw-‐down
and
project completion
requirements.
The
names
of
the
selected
senior
debt
providers
will
be
released
ahead
of
financial
close currently
scheduled
for
early
2015
and
Valence
Industries
will
continue
to
assess
project
acceleration
options
ahead of
such
funding.

This
development
allows
Valence
Industries
to
adopt
the
most
flexible
and
appropriate
funding
models
to
deliver sustainable
shareholder
value.

Valence
Industries
will
assess
the
terms
of
the
proposed
facilities
and
sources
of capital
including
equity,
debt
and
trade
finance
to
determine
the
optimum
funding
mix
to
meet
both
construction and
working
capital
requirements
heading
into
Phase
II.

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CORPORATE

Valence
had
$14.45
million
cash
on
hand
as
at
30
September
2014.
Expenditure
on
exploration
activities
during
the quarter
amounted
to
$715,000.
A
summary
of
movements
and
balances
of
equity
securities
between
1
July
2014
and this
report
of
31
October
2014
are
listed
below:

	Ordinary Shares	Listed Options	Unlisted options	Performance rights
On issue at start of quarter	168,165,350	52,590,786	21,800,000	1,375,000
Share placement	17,142,844		-	-
Exercise of listed options	389,063	(389,063)	-	-
On issue at the date of this report	185,697,257	52,201,723	21,800,000	1,375,000

During
Q3
2014
the
Company
issued
17,142,844
ordinary
shares
at
$0.70
per
share
under
the
$12
million
placement announced
on
18
September
2014
and
355,000
ordinary
shares
at
a
price
of
$0.25
per
share
upon
the
exercise
of listed
options.
Subsequent
to
the
end
of
the
quarter,
a
further
34,063
shares
were
issued
upon
the
exercise
of
listed options.

**TENEMENT

LISTING**

TENEMENT NUMBER	TENEMENT NAME	BENEFICIAL INTEREST1	CHANGES DURING Q3 2014
ML 5561	Uley Graphite Mining Licence 1	100%	No change
ML 5562	Uley Graphite Mining Licence 2	100%	No change
RL 66	Uley Graphite Retention Licence 1	100%	No change
RL 67	Uley Graphite Retention Licence 2	100%	No change
EL 4778	Uley South Exploration Licence	100%	No change

Interests
held
as
at
the
end
of
the
quarter

Christopher
S.
Darby Chief
Executive
Officer
&
MD VALENCE
INDUSTRIES

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**APPENDIX

A
–
Forward
looking
and
Cautionary
statements**

Forward-‐Looking

Statement

Certain
statements
made
in
this
announcement,
including,
without
limitation,
those
concerning
the
Feasibility
Study, contain
or
comprise
certain
forward-‐looking
statements
regarding
Valence
Industries
Limited’s
exploration
activities, economic
performance
and
financial
condition.
Although
Valence
believes
that
the
expectations
reflected
in
such forward-‐looking
statements
are
reasonable,
no
assurance
can
be
given
that
such
expectations
will
prove
to
have
been correct.
Accordingly,
results
could
differ
materially
from
those
set
out
in
the
forward-‐looking
statements
as
a
result
of, among
other
factors,
changes
in
economic
and
market
conditions,
success
of
business
and
operating
initiatives,
changes in
the
regulatory
environment
and
other
government
actions,
fluctuations
in
graphite
prices,
exchange
rates
and business
and
operational
risk
management.
Valence
Industries
undertakes
no
obligation
to
update
publicly
or
release any
revisions
to
these
forward-‐looking
statements
to
reflect
events
or
circumstances
after
today's
date
or
to
reflect
the occurrence
of
unanticipated
events.

Competent

Person
Reference

The
production
targets
and
other
information
in
this
announcement
that
relates
to
Mineral
Resources
is
based
on,
and fairly
represent,
the
Mineral
Resources
and
information
and
supporting
documentation
extracted
from
the
report,
which was
prepared
by
a
competent
person
in
compliance
with
the
JORC
Code
(2012
edition)
and
released
to
ASX
by
the Company
on
18
November
2013.
The
Company
confirms
that
it
is
not
aware
of
any
new
information
or
data
that materially
affects
the
information
included
in
the
original
market
announcement.
All
material
assumptions
and
technical parameters
underpinning
the
Mineral
Resource
estimates
in
that
previous
release
continue
to
apply
and
have
not materially
changed.

The
information
in
this
report
that
relates
to
the
Feasibility
Study,
and
Mineral
Resources
is
based
on
information 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
Institute
of
Mining
and
Metallurgy.
Ms
Lloyd
has
sufficient
experience
that
is relevant
to
the
style
of
mineralisation
and
type
of
deposit
under
consideration
and
to
the
activities
being
undertaken
to qualify
as
Competent
Persons
as
defined
in
the
2012
Edition
of
the
“Australasian
Code
for
Reporting
of
Exploration Results,
Mineral
Resources
and
Ore
Reserves”.
Ms
Lloyd
consents
to
the
inclusion
in
this
release
of
the
matters
based
on their
information
in
the
form
and
context
as
it
appears.

Cautionary

Note

The
ongoing
studies
referred
to
in
this
report
is
based
on
mid
level
technical
and
economic
assessments
which
are insufficient
to
support
estimation
of
Ore
Reserves
or
to
provide
assurance
of
an
economic
development
case
at
this stage,
or
to
provide
certainty
that
the
conclusions
of
the
existing
studies
will
be
realised.
There
is
a
mid
level
of geological
confidence
associated
with
Inferred
and
Indicated
Mineral
Resources
and
there
is
no
certainty
the
production targets
will
be
realised.
The
Company
advises
that
the
plans
and
production
targets
reflected
in
this
announcement
are preliminary
in
nature
as
conclusions
are
partly
drawn
from
Indicated
and
Inferred
Resources.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Rule 5.5

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name
of
entity

Valence
Industries
Limited

	quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity	quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity	quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity	quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity
	Valence Industries Limited
	ABN 41 008 101 979 Consolidated statement of cash flows		Quarter ended(“currentquarter”) 30 September 2014
			30 September 2014

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (3.months) $A’000
		- (715) (109) (248) (798) - - 83 - -		- (715) (109) (248) (798) - - 83 - -
		(1,787)		(1,787)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - (2,397) - - - - - -		- - (2,397) - - - - - -
		(2,397)		(2,397)
		(4,184)		(4,184)

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Appendix
5B Mining
exploration
entity
and
oil
and
gas
exploration
entity
quarterly
report


1.13 Total operating and investing cash flows (brought forward)	(4,184)	(4,184)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (share issue expenses) Net financing cash flows	12,089 - - (5) - (299)	12,089 - - (5) - (299)
	11,785	11,785
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	7,601 6,853 -	7,601 6,853 -
	14,454	14,454

**Payments

to
directors
of
the
entity,
associates
of
the
directors,
related entities
of
the
entity
and
associates
of
the
related
entities**

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to theparties included in item 1.10	Current quarter $A'000
		125
		-
1.25	Explanation necessaryfor an understandingof the transactions
	Directors' fees,superannuation and consultingfeespaid to entities associated with Directors.

**Non-‐cash

financing
and
investing
activities**

2.1 Details
of
financing
and
investing
transactions
which
have
had
a
material
effect
on
consolidated assets
and
liabilities
but
did
not
involve
cash
flows Nil

2.2 Details
of
outlays
made
by
other
entities
to
establish
or
increase
their
share
in
projects
in
which
the reporting
entity
has
an
interest Nil

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**Appendix

5B Mining
exploration
entity
and
oil
and
gas
exploration
entity
quarterly
report Financing
facilities
available**

Add notes as necessary for an understanding of the position.
3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

**Estimated

cash
outflows
for
next
quarter**


4.1	Exploration and evaluation	100
4.2	Development	3,300
4.3	Production	750
4.4	Administration	800
	Total	4,950

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000	$A’000
	100
	3,300
	750
	800
Total	4,950
	Reconciliation of cash Current quarter $A’000 Previous quarter $A’000 1,654 309 - - - - 12,800 6,544 14,454 6,853
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other 30 to 90 dayterm deposits	1,654	309
	-	-
	-	-
	12,800	6,544
Total: cash at end ofquarter(item 1.22)	14,454	6,853

**Changes

in
interests
in
mining
tenements
and
petroleum
tenements**

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
		Not applicable
		Not applicable

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Appendix
5B Mining
exploration
entity
and
oil
and
gas
exploration
entity
quarterly
report

==> picture [48 x 49] intentionally omitted <==

**Issued

and
quoted
securities
at
end
of
current
quarter**

Description
includes
rate
of
interest
and
any
redemption
or
conversion
rights
together
with
prices
and
dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions

7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues - Placement - Options exercised (b) Decreases through returns of capital, buy- backs	185,663,194	152,846,552
	17,142,844 355,000	17,142,844 355,000	70.00 cents 25.00 cents	70.00 cents 25.00 cents
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

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7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	68,485,786 3,500,000 (vested) 1,550,000 (31 Oct 14 KPI) 500,000 (30 Jun 15 KPI) (unvested)	52,235,786 - - -	Exercise price 25.00 cents 25.00 cents 25.00 cents 25.00 cents	Expiry date 31 July 16 31 July 16 31 July 16 31 July 16

	355,000	355,000	25.00 cents	31 July 16
	-	-	-	-
7.7 Performance Rights (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	687,500 687,500	- -	Exercise price Nil Nil	Expiry date (*KPI* *based*) 31 October 14 30 June 2015
	-	-
	-	-
	-	-
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

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**Compliance

statement**

1 This
statement
has
been
prepared
under
accounting
policies,
which
comply
with
accounting
standards
as defined
in
the
Corporations
Act
or
other
standards
acceptable
to
ASX
(see
note
5).

2 This
statement
does
give
a
true
and
fair
view
of
the
matters
disclosed.

Sign
here: Date:
31
October
2014 Company
secretary Print
name: Jaroslaw
(Jarek)
Kopias

Notes

1 The
quarterly
report
provides
a
basis
for
informing
the
market
how
the
entity’s
activities
have
been
financed
for
the
past quarter
and
the
effect
on
its
cash
position.
An
entity
wanting
to
disclose
additional
information
is
encouraged
to
do
so,
in
a note
or
notes
attached
to
this
report.
2 The
“Nature
of
interest”
(items
6.1
and
6.2)
includes
options
in
respect
of
interests
in
mining
tenements
and
petroleum tenements
acquired,
exercised
or
lapsed
during
the
reporting
period.
If
the
entity
is
involved
in
a
joint
venture
agreement and
there
are
conditions
precedent
which
will
change
its
percentage
interest
in
a
mining
tenement
or
petroleum
tenement, it
should
disclose
the
change
of
percentage
interest
and
conditions
precedent
in
the
list
required
for
items
6.1
and
6.2.
3 Issued
and
quoted
securities: The
issue
price
and
amount
paid
up
is
not
required
in
items
7.1
and
7.3
for
fully
paid securities.
4 The
definitions
in,
and
provisions
of, AASB
6:
Exploration
for
and
Evaluation
of
Mineral
Resources and AASB
107:
Statement
of
Cash
Flows apply
to
this
report.
5 Accounting
Standards: ASX
will
accept,
for
example,
the
use
of
International
Financial
Reporting
Standards
for
foreign entities.
If
the
standards
used
do
not
address
a
topic,
the
Australian
standard
on
that
topic
(if
any)
must
be
complied
with.

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VALENCE
INDUSTRIES ULEY
GRAPHITE[TM] MINING
&
MANUFACTURING
SITE SOUTH
AUSTRALIA,
AUSTRALIA

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AI assistant

QUANTUM GRAPHITE LIMITED Interim / Quarterly Report 2014

65646_rns_2014-10-30_b11b861d-58bf-4d7c-be4d-4955a36718c1.pdf

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD TO 30 SEPTEMBER 2014

Capital Structure

COMPANY

**GRAPHITE

**Phase

**Phase

**DISCOVERY

**Potential

**Relationship:

**Geophysics

**INSTITUTIONAL

**Purpose

**80,000+

**PHASE

**PHASE

CORPORATE

**TENEMENT

**APPENDIX

Forward-‐Looking

Competent

Cautionary

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

**Payments

**Non-‐cash

**Appendix

**Estimated

**Changes

**Issued

**Compliance

Notes

AI assistant

QUANTUM GRAPHITE LIMITED — Interim / Quarterly Report 2014

65646_rns_2014-10-30_b11b861d-58bf-4d7c-be4d-4955a36718c1.pdf

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD TO 30 SEPTEMBER 2014

Capital Structure

COMPANY

**GRAPHITE

**Phase

**Phase

**DISCOVERY

**Potential

**Relationship:

**Geophysics

**INSTITUTIONAL

**Purpose

**80,000+

**PHASE

**PHASE

CORPORATE

**TENEMENT

**APPENDIX

Forward-­‐Looking

Competent

Cautionary

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

**Payments

**Non-­‐cash

**Appendix

**Estimated

**Changes

**Issued

**Compliance

Notes

More from QUANTUM GRAPHITE LIMITED

QUANTUM GRAPHITE LIMITED Interim / Quarterly Report 2014

Forward-‐Looking

**Non-‐cash