QUANTUM GRAPHITE LIMITED — Investor Presentation 2019

Dec 17, 2019

MARKET RELEASE For Immediate Release 18 December 2019

European Investor Briefing December 2019

Quantum Graphite Limited provides the attached corporate presentation to be delivered to European Investors this week.

For further information contact: Company Secretary Quantum Graphite Limited e: info@qgraphite.com

European Investor Briefing December 2019

This presentation includes certain statements that may be deemed forward-looking statements. All statements ln these presentation materials (other than statements of historical facts) which address future production, reserve potential, exploration activities and events or developments that the Company expects, are forwardlooking statements. Such forward-looking statements may include, without limitation: (i) estimates of future graphite prices, supply, demand and/or production; (ii) estimates of future cash costs; (iii) estimates of future capital expenditures; (iv) estimates regarding timing of future development, construction, production or closure activities; (v) statements regarding future exploration results; (vi) statements regarding cost structure, project economics, or competitive position, and; (vii) statements comparing the Company's properties to other mines, projects or metals. expressly disclaims any responsibility for revising or expanding the forward looking statements to reflect actual results or developments, and that actual results or developments may differ materially from those projected, in the forward looking statements. Photographs, maps, charts, diagrams and schematic drawings appearing in this presentation are owned by and have been prepared by or commissioned by the

Although the Company believes that such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance, that the Company

This presentation does not constitute a recommendation regarding the securities of the Company, and should not be construed as legal or financial advice. It has been prepared for information purposes only and contains general summary information and does not take into account the circumstances of any Individual investor. Prospective investors in the Company are encouraged to obtain separate and independent advice with regard to any investment in the Company. By accepting the presentation materials, the recipient agrees to keep permanently confidential the information contained herein.

The Company confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning the estimates in this announcement continue to apply and have not materially changed.

Company, unless otherwise stated. Maps and diagrams used in the presentation are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the date of this presentation. By accepting this presentation, the Recipient agrees to be bound by the foregoing statements.

For further information contact: Company Secretary Quantum Graphite Limited T: +61 3 8614 8414 e: info@qgraphite.com

At a Glance…

Structure Key Assets and Uley 2 Permitting

• Shares on Issue (on a fully diluted basis post consolidation) approx. 218.875million
• Top 50 Shareholders 89%
• Board Representation represents >40% shareholding
• No debt, rehab liability of $558,369 matched by security bond of $1.07 million with Sout Australia Department of Energy and Mining (DEM)

• 4.0 million tonnes @ 11.89% constitutes JORC 2012 Ore Reserves
• Uley 2: Only permitted graphite mine in Australia (PEPR issued by DEM on 24 December 2014)
• producer of high value product and next major producer to enter high grade, large flake natural graphite market

Mining Leases 5561 and 5562	100%
Retention Leases 66 and 67	100%

Overall approach – conservative fiscal management with strong technicals able to respond to rapidly changing market conditions.

Achieved to date, start with the numbers…

• DFS fully funded and now complete.
• Exploration commitments fully funded.
• Major efforts now directed at securing offtake arrangements and the funding of Uley 2.

Establish internal structures to deliver key commercial outcomes…

• Mining, processing, marketing build technical capabilities across the whole value chain. maintains readiness for medium to longer term opportunities.
• High calibre marketing function expertise/coverage meets needs of today's customers and Governance and stakeholder engagement – senior roles empowered to maintain strong and accountable relationships.

Production and Process

Know your process, understand the limits of the resource and maintain production standards and versatility. Market ready – responsive to existing customer demands and

• Principle focus is sustainable quality production.
• Production Quality not Quantity emerging technologies and industries.

Process Plant Optionality

• New process plant optionality ensures the company is prepared for the likely transformation of the graphite market within the next 2 to 5 years including
  • expected high growth for anode material to service the Li-ion battery market for Evs
  • new technologies in thermal management and storage including super capacitors, large scale thermal storage
• Value add likely to be delivered by continuous enhancements delivering incremental improvements rather than radical changes to process

Partners

Graphite Market – Complex, multi faceted and opaque. Regardless of the target market segment the customer is your critical Partner Customer Targets – Dual strategy, early focus on the old/bankable and prepare for the new/high growth opportunities

The Bankable: Refractories/Thermal Applications, exploit previous customer relationships

• Target early sales to established/major Western European refractory manufacturers previously supplied by the company
• Identify other major refractory manufacturers (principally Japan, Korea) requiring high grade flake graphite

Growth: Identify, develop and ensure market readiness for new/alternative markets

• Expected acceleration in growth of Li-ion batteries to service the EV market
• Thermal battery initiative with The Sunlands Co.

Proven Superior Flake Product Mix

Comprehensive met results confirm historical high quality production mix

• Medium to Extra-Large Flake 73% of overall production of gC • Large and Extra-Large Flake purities - 97.2%gC and 97.8%gC respectively • Process Recoveries - > 89% gC

		Comprehensive met results confirm historical high quality production mix
Size Fraction (μm)	Size Fraction (Mesh)	Approx. Weight Dist.(%)	Graphitic C Purity(%)	LOI (%)
+300	+50	10.5	97.8	0.26
-300+150	-50+100	35.4	97.2	0.34
-150+75	-100+200	27.1	96.6	0.36
	-200	27.0	90.7	0.73

Uley 2 Reserves and Resource

Uley 2 first stage mine life of 8 years built entirely on Proved and Probable reserves

•	Ore Reserves (inclusive of mineral resources)4.0 million tonnes of Proved and Probable resources
Classification	Tonnes(1) (kt)	Total Graphitic Carbon (%)
ProvedProbable	8113,191	11.6611.95

Subsequent stages of Uley 2 will draw on the total available Mineral Resources and Central and Eastern Conductors

Mineral Resources Estimate

Mineral Resources Estimate
Indicated			79% or 5.0 million tonnes of Total Resources are classified in Measured &
Classification	Tonnes (k)	TGC (%)	Density (t/m3)	TGC (kt)
Measured	800	15.6	2.1	125
Indicated	4,200	10.4	2.1	435
Inferred	1,300	10.5	2.2	137

Multi-generation mine potential

Beyond Uley 2, graphite's extraordinary conductivity means Electromagnetic Survey points the way to ongoing expansion of mine life

• Eastern Conductor is the logical immediate extension to the Uley 2 pit
• Central Conductor provides the longer term expansion of Uley 2
• Western Conductor delivers next generation Uley 3 expansion

Definitive Feasibility Update

Key Financial Metrics

Uley 2 Mining Study based on Ore Reserve Estimate delivers strong financial metrics

Total undiscounted cash flow A$207million at a LOM TGC of 11.89% Crusher feed 500,000 tonnes per annum Graphitic carbon grade 11.89% Graphitic carbon recovery 84% Concentrate purity >95% graphitic carbon Capital expenditure A$79.98 million Processing cost (PCAF) A$55.3 per tonne Mining cost (MCAF) A$2.5/t milled at surface plus 5c for every 4m Product Cost (Av LOM) US$368 Product Price (Ex-works) US$919 dmt

Market Sensitivities

Uley 2 is robust, capable of withstanding significant cost and market pressures. A 20% increase in all costs and 20% reduction in revenues continues to deliver a positive project NPV.

Costs and Revenue Sensitivity

FX Sensitivity

Impact of changes in FX rates is limited to revenues as substantially all costs associated with the project are denominated in Australian dollars.

Cost and Revenue Sensitivity to FX Movements

December 2019 Mining Study and Ore Reserves have delivered

• High value flake product profile
• Long term mine expansion potential
• Sustainable, robust project economics

Final DFS will deliver

• complete Uley 2 base case scope, schedule and budget
• identify production and process opportunities beyond base case
• identify further/potential market opportunities

The new Uley 2 Process Plant layout