QUANTUM GRAPHITE LIMITED — Investor Presentation 2015

Apr 13, 2015

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Manufacturing"Our"Carbon"Future"[TM] presentaEon"by"Christopher"S."Darby"MD"&"CEO to"the" South"Australian"Resources"Energy"&"Investment"Conference""

14"April"2015 ASX":"VXL"&"VXLO"

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Disclaimer"
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This"presentaEon"includes"certain"statements"that"may"be"deemed"forwardQlooking"statements.""All"statements"in"these"presentaEon"materials"(other"than" statements"of"historical"facts)"which"address"future"producEon,"reserve"potenEal,"exploraEon"acEviEes"&"events"or"developments"that"the"Company"expects,"are" forwardQlooking"statements.""Such"forwardQlooking"statements"include,"without"limitaEon:"(i)"esEmates"of"future"graphite"prices,"supply,"demand"&/or"producEon;" (ii)"esEmates"of"future"cash"costs;"(iii)"esEmates"of"future"capital"expenditures;"(iv)"esEmates"regarding"Eming"of"future"development,"construcEon,"producEon"or" closure"acEviEes;"(v)"statements"regarding"future"exploraEon"results;"(vi)"statements"regarding"cost"structure,"project"economics,"or"compeEEve"posiEon,"&;"(vii)" statements"comparing"the"Company’s"properEes"to"other"mines,"projects"or"metals."Although"the"Company"believes"that"such"forwardQlooking"statements"are" based"on"reasonable"assumpEons,"such"statements"are"not"guarantees"of"future"performance"&"actual"results"or"developments"may"differ"materially"from"those"in" the"forwardQlooking"statements.""Factors"that"could"cause"actual"results"to"differ"materially"from"those"in"forwardQlooking"statements"include"market"prices," exploitaEon"&"exploraEon"successes,"conEnued"availability"of"capital"&"financing,"&"general"economic,"market"or"business"condiEons.""Investors"are"cauEoned"that" any"such"statements"are"not"guarantees"of"future"performance,"that"the"Company"expressly"disclaims"any"responsibility"for"revising"or"expanding"the"forwardQ looking"statements"to"reflect"actual"results"or"developments,"&"that"actual"results"or"developments"may"differ"materially"from"those"projected,"in"the"forwardQ" looking"statements.""

No"representaEon"or"warranty"is"given"by"the"Company"as"to"the"accuracy"or"completeness"of"the"informaEon"contained"in"this"presentaEon.""Neither"the" Company"nor"its"officers"or"employees"accept"responsibility"or"liability"(to"the"maximum"extent"permi_ed"by"law)"for"any"loss"of"damage"suffered"or"incurred"by" any"other"person"or"enEty"however"caused"&"relaEng"in"any"way"to"these"presentaEon"materials"including,"without"limitaEon,"the"informaEon"contained"in"the" presentaEon"material"&"its"accuracy,"completeness,"currency"or"reliability.""This"presentaEon"does"not"consEtute"a"recommendaEon"regarding"the"securiEes"of"the" Company,"&"should"not"be"construed"as"legal"or"financial"advice.""It"has"been"prepared"for"informaEon"purposes"only"&"contains"general"summary"informaEon"&" does"not"take"into"account"the"circumstances"of"any"individual"investor.""ProspecEve"investors"in"the"Company"are"encouraged"to"obtain"separate"&"independent" advice"with"regard"to"any"investment"in"the"Company.""By"accepEng"the"presentaEon"materials,"the"recipient"agrees"to"keep"permanently"confidenEal"the" informaEon"contained"herein."

material"assumpEons"and"technical"parameters"underpinning"the"esEmates"in"this"announcement"conEnue"to"apply"and"have"not"materially"changed.""The" announcements"previously"released"and"referenced"in"the"announcement"are:"“Valence"Doubles"ExisEng"ROM"Stockpiles”"(6/8/14),"“Discovery"of"High"Grade" Arterial"Flake"Graphite”"(9/10/14),"“Uley"Graphite"Grade"Increases"to"11.7%”"(17/11/2014),"“Maiden"High"Grade"Graphite"Ore"Reserve”"(17/12/14)"and"“VXL" Feasibility"Study"Expansion"and"Adv"Manufacturing”"(2/1/2015)."

Photographs,"maps,"charts,"diagrams"&"schemaEc"drawings"appearing"in"this"presentaEon"are"owned"by"&"have"been"prepared"by"or"commissioned"by"the" Company,"unless"otherwise"stated."Maps"&"diagrams"used"in"the"presentaEon"are"illustraEve"only"&"may"not"be"drawn"to"scale."Unless"otherwise"stated,"all"data" contained"in"charts,"graphs"&"tables"is"based"on"informaEon"available"at"the"date"of"this"presentaEon."By"accepEng"this"presentaEon"the"Recipient"agrees"to"be" bound"by"the"foregoing"statements.""""

©"Valence"Industries"Limited""

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• Graphite"producEon"underway"from" exisEng"ROM"Stockpiles""

• Strong"customer"sales"exceeding" current"producEon"capacity"

• First"export"scheduled"for"shipping" overseas TODAY "14"April"2015"

• Feasibility"Study"for"expansion" program"completed"for:"

• New"mining"from"Uley"Pit"2"

• Expanded"tradiEonal"producEon" up"to"64,000tpa""

• New"advanced"materials"handling" faciliEes""

• New"advanced"processing"and" refining"faciliEes"

• NegoEaEons"for"expansion"program" finance"currently"being"concluded"

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VALENCE+TEAM+LOADING+ FIRST+NEW+EXPORT+ March"2015"

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• Commissioning"rampQup" program"conEnuing"as"planned" in"Q2"CY"2015"

• Processing"of"Run"of"Mine"(ROM)" Ore"Stockpiles"as"part"of" commissioning"program"

• Low"impact"liberaEon"from"clay" hosted"soils"maximises"recovery" of"large"flake"sizes"

• LogisEcs"in"place"from"exisEng" Uley"Graphite[TM] "processing"site" to"Port"Adelaide"for"export"

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GRAPHITE+FLOTATION+IN+ EXISTING+PROCESS+PLANT+

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• ExisEng"plant"nameplate"capacity" is"14,000"tpa"of"processed"flake" graphite"

• Full"runQrate"capacity"from" exisEng"plant"by"Q3"CY"2015"

• ProducEon"increasing" progressively"in"line"with" commissioning"program"

• Output"increases"as"move"from" ROM"Stockpiles"to"higher"grade" from"new"Uley"Pit"2"@12.9%gC"""

• Mining"from"new"Uley"Pit"2"is" expected"to"commence"in"Q4"CY" 2015"as"ROM"Stockpiles"deplete"

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ULEY+GRAPHITE[TM] EXISTING+PROCESS+PLANT+

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segmented+into+industry+sectors+across+branded+product+lines:+

• Thermal+Management+O+ Refractories,"Crucibles,"Foundry,"Forging,"HMF,"Mould" Release"Agents,"Descalents,"Billet"CoaEngs"

• Engineered+Products+O+ Lubricants,"FricEon,"Ceramics,"Carbon"Brush,"Powder" Metallurgy,"Foils,"Pencils,"Ceramics,"Dispersions,"Geothermal"

• Plas:cs+&+Polymers+O+ PTFE,"PEEK,"Power"Cables,"Rubbers,"CoaEngs"&"Paints,"Fire" Retardants"

• Energy+Storage+O+ Alkaline"Ba_ery,"Fuel"Cells,"Lead"Acid"Ba_ery,"Super"Capacitors," Primary"Lithium"Ba_ery,"LiQIon"Ba_ery"

• High+Tech+Industrial+&+Consumer+Goods+O+ ConstrucEon"Materials,"Electronics," Aerospace,"Nuclear,"Defence,"Colloidal"Graphite,"Agriculture"and"GRAPHENE"

• Medical+Device+&+Medical+Treatments+O+ Medical"Consumables,"Pathology,"Medical" Research,"ScienEfic"/"Medical"Glass,"Hematology,"Oncology"

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Sales"QualificaEon"Process"
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• Product qualification is an essential step in graphite marketing for all uses of graphite

• Qualification involves customers taking sample product to confirm its suitability for their specific industrial, chemical or electronic processes:

• Qualification can take 3, 6, 9 or 12+ months depending on the application

• Higher value applications tend to have longer qualification lead times

• Samples start small initially and progress to industrial scale through grams, kgs, tonnes & sometimes 20+ tonnes

• Qualification must be from actual plant output not just lab-scale or testscale

• Valence Industries has provided qualification samples to 15 customers:

• Final rounds in current qualifications typically lead to multi-tonne trial orders

• Full qualification completed with 6 customer in Q1 CY 2015

• No adverse issues raised by customer qualification of Uley Graphite

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ExisEng"Sales"Contracts"
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• Valence"Industries’"sales"strategy"focuses"iniEally"on" rapid"qualificaEon"industries"while"compleEng"longer" qualificaEon"customers"

• Sales"Contracts"signed"with"6"new"customers"

• These"6"new"customers"are"located"in"Europe"&"

• Refractory"&"foundry"customers"targeted"in"line" with"growth"strategy"

• Shipment"on"orders"to"these"6"customers"set"for" next"3"months"

• Orders"set"to"reach"8,000"tonnes"equivalent"to" 100%"Year"1"producEon"

• Valence"Industries"has"also:"

• Signed"MoUs"with"4"other"customers"for"volumes" exceeding"29,000"tpa"over"periods"ranging"from"2" to"3"years"

• NegoEaEons"conEnue"4"MoUs"to"move"to"sales" contracts"Emed"to"match"ramp"up"of"output"

LOADING+GRAPHITE+ FOR+EXPORT+SHIPMENT+

• graphite"products"will"be"AUD$1,669/t""

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Part"1:"" New"Open"Pit" Uley"Pit"2"

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Part"2:"" Increased"TradiEonal" ProducEon"Capacity" up"to"64,000tpa" Part"3:" Advanced"Materials" Handling"FaciliEes"

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Part"4:"" Advanced" Manufacturing" FaciliEes"

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Part"1:"New"Open"Pit"
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• Open"pit"mining"from"Uley"Pit"2"set"to"commence"Q4"CY"2015"

• Uley"Pit"2"contains"JORC"Ore"Reserve"of"261,305"tonnes"of"contained"graphite"

• Very"high"average"grade"for"Ore"Reserve"of"12.9%gC"

• JORC"2012"ExploraEon"Target"9MtQ12Mt"@"9%Q12%gC"adjacent"to"Uley"Pit"2"

• Free"dig"quarry"operaEons"with"very"short"haulage"~180m"to"stockpiles"

• Uley"Pit"2"Southern"Extension"resource"assessment"due"2015"

• Land,"Mining"Leases"and"PEPR"owned"100%"by"Valence"Industries"

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Port"Lincoln"23km"
NEW+OPEN+PIT+–+ULEY+PIT+2+
(Looking"South"–"April"2015)"
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• ExisEng"Plant"

• » Commissioning" » 14,000"tpa" » Q3"CY"2015"

• 1[st] "Increase"to

• » 39,000"tpa"

• » 2016"

• 2[nd"] Increase"to

• » 64,000"tpa"

• » 2018–2019""

• producEon"

• graphite"grades"

• Automated"systems"and" increasingly"flexible"processing" opEons"

EXISTING+PLANT+FEED+

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• ConstrucEon"and"commissioning"of"Advanced" Materials"Handling"faciliEes"located"in" Adelaide"

• Advanced"Blending,"Packaging"and"LogisEcs"of" flake"graphite"products"for"export"

• concentrate"from"Uley"Graphite[TM] "faciliEes"

• Close"proximity"to"export"port"faciliEes"

• • Delivery"of"rapid"response"to"customer" specificaEons"

• graphite"product"inventory"

• Flexibility"to"produce"and"manage"specialist" product"range"up"to"200SKUs"(Stock"Keeping" Units)"

• Scheduled"for"operaEon"during"2016"

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• ConstrucEon"of"Advanced"Manufacturing" Facility"during"2016"

• intended"range"from"99.5%"to"99.95%"

• • Reprocessing"and"resizing"of"graphite"to" mulEple"classified"micron"sizes"

• Designed"for"delivery"of"increasingly" advanced"and"manufactured"end" products"to"meet"customer"demand"

• • Significant"value"adding"processing" moving"average"price"from"US$1,400/t" range"to"average"of"US$3,800/t"

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Expansion"Feasibility"Study"completed"December"2014"

Capex"cost" Over"3"years" • Uley"Pit"2"&" AUD$37M" • Expanded"TradiEonal"Plant" • Advanced"Product"Handling"&" AUD$13M" • Advanced"Manufacturing"Plant" Globally"compeEEve"allQin" AUD$750QAUD$950" Opex"cost"(FOB"Adelaide)" per"tonne" Average"selling"price"" AUD$1,669QAUD$4,774" (FOB"Adelaide)" per"tonne"

Finance"program"for"expansion"due"for"compleEon"with" mulEple"financiers"proposing"faciliEes"

and"construcEon"program"for"expansion"

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ProducEon"and"Revenues"
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Note:"ConservaEve"esEmate"at"<5%"of"volume"contributed"by"advanced"processing."" Margin"&"revenue"increases"for"each"addiEonal"tonne"of"advanced"processing."""" 15 W W W . V A L E N C E I N D U S T R I E S . C O M

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• Graphite"producEon"underway"with"volumes" ramping"up"in"planned"commissioning"stages"

• Export"shipments"commenced"at"end"of"Q1"CY"2015" on"schedule"to"global"customers"

• Broad"customer"engagement"with"product" qualificaEon"and"more"sales"negoEaEons"underway""

• • Mineral"Resource"expansion"drilling"program"results" and"first"part"of"updated"resource"from"Q2"CY"2015"

• • Finance"for"Four"Part"Expansion"Program"due"for" compleEon"with"financiers"

• Australian"Graphene"Research"Centre"program" conEnuing"for"further"value"adding"

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Contact"
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Christopher"S."Darby" CEO"&"Managing"Director"" Valence"Industries"Limited"

i n f o @ v a l e n c e i n d u s t r i e s . c o m " " I " " + 6 1 " 8 " 8 2 1 5 " 6 4 0 0 "

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Appendix"&"Supplementary"InformaEon" VALENCE+INDUSTRIES+

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Corporate"	Corporate"
CapitalStructure		MajorShareholders
(ASX:VXL&VXLO)
Ordinaryshares	186.7m	StrategicEnergyResourcesLtd**	11.67%
OpEons	71.9m
(@25c$18.0m31.7.16)		HSBCCustodyNominees(Aust)Ltd	5.08%
OpEons	5.5m
(@$1.10$6.05m31.7.17)		AvatarEnergyPtyLtd	4.11%
MarketCap	$71m
(@38c)		EERCAustralasiaPtyLtd**	3.55%
Cash	$8.3m
(@31/12/14)
NoDebt	$0	Top20shareholdersown43.9%
12monthsh.pricerange	87c–27c	**restrictedsecuriEesto6/1/2016
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Board"

Senior"ExecuEves"

Graham"Spurling"AM"" (Chairman)"

Christopher"S."Darby" (Managing"Director"&"CEO)"

Christopher"S."Darby" (Managing"Director"&"CEO)"

Jarek"Kopias" (Chief"Financial"Officer"&"Co."Sec.)"

Glenister"Lamont" (NonQexecuEve"Director)"

Christopher"S."Whiteley" (Chief"MarkeEng"Officer)"

Ian"Schache" (NonQexecuEve"Director)"

Chris"Hall" (AcEng"Chief"OperaEng"Officer)"

Greg"Sando" (Chief"InformaEon"Officer)"

Ian"Pazson" (NonQexecuEve"Director)"

Jarek"Kopias" (CFO"&"Company"Secretary)"

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OperaEng"locaEons"
PORT"ADELAIDE"
FACILITIES"
PORT"LINCOLN"
FACILITIES"
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Land,"tenements"&"resources"
JORC"2012"
ExploraEon"Target"
9MtO12Mt+ @"
9%gCQ12%gC"
(ALL"PINK"AREAS)"
__"
Extension"drilling"
underway"
on"
9900m+@++
25M+grid
&"
Results"due""
Q2"CY"2015"
__
Major"expansion"
75km [2] "EL"
South"&"West"of"
Uley"Pit"2."
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Ore"reserve"&"mineral"resource"

MINERAL+RESOURCE+&++

ORE+RESERVE+–+ULEY+PIT+2+ (JORC+2012)**

	(JORC2012)		EXPLORATIONTARGET (JORC2012)	EXPLORATIONTARGET (JORC2012)	EXPLORATIONTARGET (JORC2012)
Classifca(on	Tonnage	AverageGrade %C	Classifca(on	Tonnage	AverageGrade %C
Proved	319,000	17.9	Measured	340,000	17.92
Probable	1,716,000	11.9	Indicated	1,850,000	11.84
OreReserve Total	2,035,000	12.9	Indicated (Stockpiles)	174,000	6.23
			Inferred (UleyPit2)	850,000	8.89
**ThisistheonlygraphiteorereserveontheASX			Mineral
			Resource	3,214,000	11.54
			Total
			Immediate
			ExploraEon	9Mtto12Mt	9%gCto12%gC
			Target

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Tenements"

VALENCE+INDUSTRIES+MINING+TENEMENTS+

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Type!&!Number Status Area
Mining"Licence"
Current 44"ha
ML5561
Mining"Licence"
Current 22"ha
ML5562
RetenEon"Lease"
Current 225"ha
RL"66
RetenEon"Lease"
Current 187.5"ha
RL"67
ExploraEon"Licence"
Current 75km [2]
EL"4778
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(**Renewal1and1extension1of1tenements1is1an(cipated1to1be1granted1in1the1normal1course)1

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Contact"
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Christopher"S."Darby" CEO"&"Managing"Director"" Valence"Industries"Limited"

i n f o @ v a l e n c e i n d u s t r i e s . c o m " " I " " + 6 1 " 8 " 8 2 1 5 " 6 4 0 0 "

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