QUANTUM GRAPHITE LIMITED — Investor Presentation 2014

May 15, 2014

ASX1:1VXL1 ASX1:1VXLO1

AUSTRALIA'S)ONLY)GRAPHITE)PRODUCER) EXPANDING)PRODUCTION)IN)2014)

Valence'(noun)'the'combining'power'of' an'element,'especially'as'measured'by' the'number'of'hydrogen'atoms'it'can' displace'or'combine'with:'carbon'always' has'a'valence'of'4.'

Graphite)for)) Global)Markets)

May120141

Disclaimer1

This1presentaEon1includes1certain1statements1that1may1be1deemed1forwardLlooking1statements.11All1statements1in1these1presentaEon1materials1(other1than1statements1of1historical1facts)1 which1address1future1producEon,1reserve1potenEal,1exploraEon1acEviEes1and1events1or1developments1that1the1Company1expects,1are1forwardLlooking1statements.11Such1forwardLlooking1 statements1 include,1 without1 limitaEon:1 (i)1 esEmates1 of1 future1 graphite1 prices,1 supply,1 demand1 and/or1 producEon;1 (ii)1 esEmates1 of1 future1 cash1 costs;1 (iii)1 esEmates1 of1 future1 capital1 expenditures;1 (iv)1esEmates1 regarding1Eming1of1 future1development,1construcEon,1producEon1or1closure1acEviEes;1 (v)1statements1 regarding1 future1exploraEon1 results;1 (vi)1statements1 regarding1cost1structure,1project1economics,1or1compeEEve1posiEon,1and;1(vii)1statements1comparing1the1Company's1properEes1to1other1mines,1projects1or1metals.1Although1the1Company1 believes1that1such1forwardLlooking1statements1are1based1on1reasonable1assumpEons,1such1statements1are1not1guarantees1of1future1performance1and1actual1results1or1developments1may1 differ1materially1from1those1in1the1forwardLlooking1statements.11Factors1that1could1cause1actual1results1to1differ1materially1from1those1in1forwardLlooking1statements1include1market1prices,1 exploitaEon1 and1 exploraEon1 successes,1 conEnued1 availability1 of1 capital1 and1 financing,1 and1 general1 economic,1 market1 or1 business1 condiEons.1 1 Investors1 are1 cauEoned1 that1 any1 such1 statements1are1not1guarantees1of1future1performance,1that1the1Company1expressly1disclaims1any1responsibility1for1revising1or1expanding1the1forwardLlooking1statements1to1reflect1actual1 results1or1developments,1and1that1actual1results1or1developments1may1differ1materially1from1those1projected,1in1the1forwardL1looking1statements.11

No1representaEon1or1warranty1is1given1by1the1Company1as1to1the1accuracy1or1completeness1of1the1informaEon1contained1in1this1presentaEon.1 1Neither1the1Company1nor1its1officers1or1 employees1accept1 responsibility1or1liability1 (to1 the1maximum1extent1permi]ed1by1law)1 for1any1loss1of1damage1suffered1or1incurred1by1any1other1person1or1enEty1however1caused1and1 relaEng1 in1any1way1 to1 these1 presentaEon1materials1 including,1without1 limitaEon,1 the1 informaEon1 contained1 in1 the1 presentaEon1material1and1 its1accuracy,1 completeness,1 currency1 or1 reliability.1 1This1 presentaEon1 does1 not1 consEtute1a1 recommendaEon1 regarding1 the1 securiEes1 of1 the1 Company,1and1 should1 not1 be1 construed1as1 legal1 or1 financial1advice.1 1It1 has1 been1 prepared1for1informaEon1purposes1only1and1contains1general1summary1informaEon1and1does1not1take1into1account1the1circumstances1of1any1individual1investor.11ProspecEve1investors1in1 the1Company1are1encouraged1to1obtain1separate1and1independent1advice1with1regard1to1any1investment1in1the1Company.11By1accepEng1the1presentaEon1materials,1the1recipient1agrees1to1 keep1permanently1confidenEal1the1informaEon1contained1herein.1

The1informaEon1in1this1presentaEon1which1relates1to1Indicated1and1Inferred1Mineral1Resources1compiled1in1accordance1with1the1JORC1Code120121is1based1on1informaEon1supplied1by1Ms.1 Karen1Lloyd,1Mr.1Ingvar1Kirchner1and1Ms.1Ellen1Maidens1as1detailed1in1the1Company's1Replacement1Prospectus1released1as1an1ASX1announcement1on1181November12013.11The1Company1 confirms1that1it1is1not1aware1of1any1new1informaEon1included1in1this1presentaEon.11Valence1confirms1that1all1material1assumpEons1underpinning1the1esEmates1in1this1report1conEnue1to1 apply1and1have1not1materially1changed.11The1Company1confirms1that1the1form1and1content1in1which1the1Competent1Person's1findings1are1presented1have1not1been1materially1modified.1

Photographs,1 maps,1 charts,1 diagrams1 and1 schemaEc1 drawings1 appearing1 in1 this1 presentaEon1 are1 owned1 by1 and1 have1 been1 prepared1 by1 or1 commissioned1 by1 the1 Company,1 unless1 otherwise1stated.1Maps1and1diagrams1used1in1the1presentaEon1are1illustraEve1only1and1may1not1be1drawn1to1scale.1Unless1otherwise1stated,1all1data1contained1in1charts,1graphs1and1tables1 is1based1on1informaEon1available1at1the1date1of1this1presentaEon.1By1accepEng1this1presentaEon1the1Recipient1agrees1to1be1bound1by1the1foregoing1statements.11

©1Valence1Industries1Limited11

Investment1Highlights1

• ExisGng)Graphite)Resource,)Mine)&)Processing) infrastructure
• 6.4)Mt)JORC)2012)Indicated)and)Inferred)Resource)@7.1%) TGC)with)significant)exploraGon)upside
• Proven)past)producGon)of)high)quality)Flake)Graphite
• IniGal)sales)of)reprocessed)large)flake)>95%)purity)graphite) commenced)in)April)
• Processing)of)stockpiles)from)exisGng)14,000)tpa)plant)
• New)60,000)tpa)Phase)II)plant)planned)to)be)in)producGon) in)early)2015)
• Scoping)Study)indicates)graphite)producGon)costs)of)) <$600/t)with)average)product)pricing)of)US$1,400/t)
• Strong)expressions)of)interest)from)major)global)customers) for)direct)sales)contracts)

Corporate1Overview1

ASX)Code:)VXL)&)VXLO)

Ordinary1Shares1on1issue1	167.1m1
OpEons1on1issue1	70.0m1
Market1cap1(@421cents)1	$70.2m1
Cash1(End1Q112014)1	~$8.1m1
Debt1	Nil1

Major)Shareholders)
Strategic1Energy1Resources1Ltd1(Restricted)1	13.04%1
Avatar1Energy1Pty1Ltd11	4.60%1
EERC1Australasia1Pty1Ltd11	3.97%1
HSBC1Custody1Nominees1(Australia)1Ltd11	3.20%1
Chimaera1Capital1Ltd11	2.79%1
Top1201shareholders1hold145.40%1

Directors)&)Senior)Management)

Graham1Spurling1AM,1Chairman1

Christopher1S.1Darby,1Managing1Director1&1CEO1

Glenister1Lamont,1NonLexecuEve1Director1

Ian1Schache,1NonLexecuEve1Director1

Jarek Kopias,1Chief1Financial1Officer1&1Co.1Sec.1

Karen1Lloyd,1General1Manager1Technical1Delivery1

David1J.1Salari1(P.Eng),1Chief1Development1Officer1

Graphite Facts

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Graphite1Facts1

Valence1Industries1has1Graphite1for1**MulGple)ApplicaGons)in1Diverse)Industries)**in1New1&1TradiEonal1ApplicaEons1

WWW.VALENCEINDUSTRIES.COM

71

Graphite1Sales1&1Pricing1

VXL)Product)Pricing)Range)is)US$890)to)US$2500)per)tonne IllustraGve)of)selected)VXL)95%)Graphite)Products

Global1ApplicaEons1&1Uses1for1VXL1Graphite1

World Graphite Production 2014 1,573,000 tonnes

Steelmaking

• Refractories
• Automotive Parts
• New Materials
• Other applications
• Batteries

Uley Graphite Project

VALENCEINDUSTRIES.COM W W W .

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Uley1Established1Resource1

• Current)JORC)2012)Resource)
• Extensive)ExisGng)Stockpiles)
• Graphite)mined)since)early) 1900s))
• Export)Sales)recommenced)in) April)
• Mining)Scheduled)to) recommence)in)H2)2014)
• Licences)Held)&)Work) Approvals)Underway)
• Significant)ExploraGon) Acreage)

Valence)Industries)Uley)Graphite)FaciliGes) Main)Road)Open)Pit)#)1)(JORC)2012))

Resource)ClassificaGon)	Lower)Cutoff)Grade))(%1GraphiEc1Carbon)1	Tonnage)(Mt)1	Average)Grade*)(%1GraphiEc1Carbon)1
Indicated1	3.51	1.91	10.7%1
Inferred1	3.51	4.51	5.5%1
Total)		6.4)	7.1%)

Valence)Industries)Uley)Graphite)FaciliGes) ExisGng)Mined)Materials)Stockpiles))

	Tonnage)	%)GraphiGc)Carbon)
Stockpile111	800t1	Up1to153%1
Stockpile121	74,000t1	11%1Average1
Stockpile131&141	TBC1	TBC1
Total1	74,800t1

Uley1Processing1FaciliEes1

• Relcommissioning)of)Processing)Facility) is)highly)advanced)
• ExisGng)FaciliGes)to)produce)14,000) tonnes)of)graphite)p.a.)
• Fully)Funded)for)Phase)I)ProducGon)
• Sales)to)commence)in)April)2014)
• Extensive)74,000t)Stockpiles)permit) early)restart)of)graphite)processing)
• Approx.)9)months)Manufacturing)from) stockpiles)
• ExisGng)FaciliGes)can)conGnue)to) produce)@)14,000)tpa)using)mined) feedstock)

Industrial1Manufacturing1of1Graphite1

Open)Pit) Low)Cost) SelecGve)&) Campaign) Mining) Run)of) Mine) Stockpiles) Primary) SeparaGon) &)Grinding) Washing) &) LiberaGon) Secondary) Grinding)&) SeparaGon) Sized)Slurry) Readied)for) Secondary) Processing) Plant) Sized) Slurry) Stockpile) Screening) &) SeparaGon) FlotaGon) &) LiberaGon) Dewatering) &)Drying)of) Graphite) Size) Screening) Bagging)to) Warehouse) Container) &)Ship)to) Customer) ULEY)PRIMARY)CIRCUIT)(OUTSIDE)PLANT) ULEY)SECONDARY)CIRCUIT)(INSIDE)PLANT)

Phase1I1:1Manufacturing1Timeline

Graphite)Sales)to)Customers

Phase I First Sales of Graphite

Graphite Sales Commence

• Valence Industries commenced flake graphite sales of 30 tonnes in April 2014
• Graphite was reprocessed to customer specification from existing materials
• The sale includes a range of large flake graphite products with purity levels above 95%
• The products will be used by a range of industrial customers in Japan for uses including battery grade, lubricant and refractory applications
• The initial shipments will also be used for advanced testing and qualification for long term direct sales agreements

Customer Marketing & Engagement

• Active marketing to graphite customers has intensified over the last two months
• Meetings held with multiple customers in Australia, Europe, North America and Asia
• Customer engagement across the full range of demand from traditional industrial users, to major Asian and European technology leaders
• Very positive responses received across the board with strong interest in securing access to the quality and properties of the Valence's Uley Graphite

W W W . V A L E N C E I N D U S T R I E S . C O M

Program for Growth

W W W . V A L E N C E I N D U S T R I E S . C O M

Phase1II1Expand1&1Sustain1Capacity1

New1Open1Pit1	•JORC)2012)6.4Mt)@)7.1%)TGC)•InlFill)Drilling)for)Pit)Design,)Mine)Planning)&)Advanced)Metallurgy)•Low)Cost)Open)Pit)Free)Dig)OperaGon)•Inside)area)of)exisGng)Mining)Licences)
ExisEng1Plant1ConEnues1to1Operate1	•14,000)tonnes)of)graphite)per)annum)•Processing)and)value)adding)to)new)material)from)new)Open)Pit)•Ongoing)revenue)stream)from)proven)producGon)and)sales)base)•TesGng)of)plant)design)and)equipment)for)Phase)II)New)Plant)
New150,000L60,0001Plant1ConstrucEon1	•Bankable)Feasibility)Study)underway)and)due)August)2014)•Program)to)finance)$34M)construcGon)underway)•Product)qualificaGon)program)for)new)producGon)underway)•Financial)modeling)and)forecasGng)for)development)case)on)track)))
CommercialisaEon1&1Sales1Program1	•ExisGng)Sales)Contract)in)place)for)iniGal)commitments)•Advanced)discussions)for)further)sales)of)ROM)Stockpile)producGon)•New)product)development)and)design)for)value)adding)•Long)term)cornerstone)sales)targeted)to)coincide)with)increasing)producGon)capacity)
Phase1III1High1Purity1&1Graphene1Programs1	•Phase)III)IniGal)Design)completed)•Graphene)already)produced)from)Valence)Industries)processed)graphite)•High)Purity)facility)design)to)be)advanced)during)Phase)I)&)Phase)II)•Associated)graphene)research)&)new)industrial)product)applicaGon)program)with)University)of)Adelaide)

Phase1II11Expand1Graphite1Manufacturing1

Phase1III1New1High1Purity1Facility1

Completed1preliminary1designs1for1new1High1Purity1Graphite1Facility1and1Micronised1Graphite**1

This1will1be1the1**Only)New)High)Purity)Facility)**in1Southern1Hemisphere1

Planned1capacity1is1up1to130,000)tonnes of1Graphite1per1year1at1Purity1Levels1at199.99%+1

Significant)Value)Add)Process1taking1expected1prices1to1US$5,5001to1US$10,000/tonne

**Direct)Entry)**to1New1Technology,1Ba]ery1and1Medical1Markets1

**Raw)Material)**to1be1supplied1from1Valence1Industries'1Uley1Graphite1Facility1

Capex1is1being1defined1with1iniEal1stages1expected1to1be1funded1progressively1from1cash1reserves1 and1cash1flows1but1esEmated1at1~AUD$25M.1

**Subject1to1compleEon1of1Scoping1&1Feasibility1Studies1

Phase III Industrial Graphene Production

Valence has a major R & D and Commercialisation Agreement with the University of Adelaide led by Prof Dusan Losic

Agreement includes proposed development of a Graphene Research Centre with University of Adelaide The Graphene Research Centre will focus on commercialisation of products including for Industrial Applications

Initial processing has confirmed the ability to produce Graphene Directly from Uley Graphite

Environmentally friendly process with minimal chemical processing

Existing Facilities and High Purity Facility can provide Feed Stock for Graphene manufacturing

Initial Sales of Graphene can Commence in H2 2014

Development of Proposed Joint Research Facilities for Scaling Up Graphene Production

Funding for program will come from existing cash reserves and cash flows

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• ExisGng)Graphite)Resource,)Mine)&)14,000)tpa)Processing)infrastructure • 6.4)Mt)JORC)2012)Indicated)and)Inferred)Resource)@7.1%)TGC)with)significant) exploraGon)upside • Proven)past)producGon)of)high)quality)Flake)Graphite ExisGng)Facility • IniGal)sales)of)large)flake)>95%)purity)graphite)commenced)in)April) • Processing)of)stockpiles)to)commence)in)July)2014) • Strong)expressions)of)interest)from)major)global)customers) ProducGon)and) Sales)Commenced • New)60,000)tpa)Phase)II)plant)planned)to)be)in)producGon)in)early)2015 • Scoping)Study)indicates)graphite)producGon)costs)of)<$600/t)with)average) product)pricing)of)US$1,400/t • Financed)from)exisGng)Capital)+)Phase)I)Cash)Flows)+)Debt)Finance Rapid)Growth) Program •Phase)III)High)Purity)program)and)Graphene)programs)ahead)of)schedule •Increase)purity)to)>99.99%)at)esGmated)value)of)$5,500)to)$10,000)/tonne •Graphene)producGon)confirmed)with)sales)to)commence)in)H2)2014 High)Purity)&) Graphene

Contact1 Valence1Industries1