QUANTUM GRAPHITE LIMITED — Regulatory Filings 2014

May 15, 2014

ASIA PACIFIC I EUROPE I NORTH AMERICA

ASX ANNOUNCEMENT

ASX: VXL ASX: VXLO

16 May 2014

SALE OF UNMARKETABLE PARCELS - COMPLETED

Valence Industries Limited (ASX: VXL & VXLO) (“Valence” or “the Company”) announces that the sale of unmarketable parcels of shares has been completed.

A total of 530,263 sale shares from 1,495 individual shareholders became available for sale on 22 April 2014. The sale process has been completed and proceeds will be disbursed to shareholders shortly.

A total of 1,622 shareholdings were classified as holding less than a marketable parcel under the Company’s constitution at the record date of 20 February 2014. Of this, 127 shareholders notified the Company of the intention to retain their shareholding with the remaining 1,495 shareholdings to be sold.

After the sale of Unmarketable Parcels, Valence had 2,794 shareholders.

	The distribution of shareholdersis as follows: Distribution ofHolders before the sale ofunmarketableparcels	Distribution of Holders afterconsolidation of unmarketableparcels for sale as at 23 April
1 - 1,000	1,360	78
1,001 - 5,000	1,160	944
5,001 - 10,000	487	489
10,001 - 100,000	1,069	1,067
100,001 and above	216	216
TOTAL	4,292	2,794

For further information, please contact:

Jaroslaw (Jarek) Kopias CFO & Company Secretary Valence Industries info@valenceindustries.com +61 8 8418 8564

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**About

Valence Industries**

Valence Industries (ASX:VXL) is the owner and operator of the only graphite manufacturing facilities in Australia located at Uley in South Australia near the regional centre of Port Lincoln. The Company is bringing existing infrastructure into production with a focus on global markets across multiple graphite product ranges. Graphite production will commence in early 2014, with plans for expanded production by the end of 2014.

Located only 23 kilometres from Port Lincoln, the regional centre for the Lower Eyre Peninsula in South Australia, Valence Industries’ Uley Graphite project is recognised as a significant area of graphite mineralisation, and one of the largest coarse flake graphite deposits in the world. The deposit contains disseminated, high-­‐grade flake graphite and the mineralisation is near surface, with the final manufactured graphite products recognised and purchased by many customers for its high quality.

The company holds two existing Mining Licences and two associated Retention Licences, along with an extensive Exploration Licence, for the conduct of its operations. In addition Valence Industries is in the fortunate position of owning the land on which its current and proposed expanded operations are conducted along with the extensive existing infrastructure.

**Manufacturing

A New Carbon Future**

The Company operates as an industrial manufacturer of high-­‐grade flake graphite products for distribution and sale to global markets. Valence Industries owns established processing facilities and infrastructure to manufacture a wide range of graphite product lines for multiple applications and multiple industries. The Company produces and sells its graphite products from its Uley Graphite facilities in regional South Australia for delivery to diversified markets for graphite in the Asia Pacific, Europe and North America.

As a vertically integrated manufacturer of specialist graphite product ranges Valence Industries’ branded products are designed to meet current and future customer demand. This program includes development of a significant VXL High Purity Graphite Facility program and a range of future Graphene applications.

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