QUANTUM GRAPHITE LIMITED — Regulatory Filings 2014

Mar 2, 2014

VALENCE INDUSTRIES

ASIA PACIFIC I EUROPE I NORTH AMERICA

ASX ANNOUNCEMENT

ASX : VXL

3 March 2014

LETTER TO HOLDERS OF LESS THAN MARKETABLE PARCELS

Valence Industries Limited (ASX: VXL) would like to advise that further to the announcement made on 21 February 2014, the letter to holders of less than a marketable parcel of VXL shares has now been despatched to eligible shareholders and a copy of both the letter and retention form are attached.

Below is an indicative timetable for the sale of the less that Marketable Parcels as announced on 21 February 2014:

Record date to determine less than marketableparcels	Thursday, 20 February 2014
Divestment notice mailing date	Monday, 3 March 2014
ClosingDate	Thursday,17 April 2014
Selling of less than marketable parcels commences	Tuesday, 22 April 2014
Remittance ofproceeds ofsales to participants	10 business days afterthelast sale

For further information, please contact:

Jaroslaw (Jarek) Kopias Company Secretary

w w w . v a l e n c e i n d u s t r i e s . c o m

60 Hindmarsh Square I Adelaide I South Australia I 5000 I Australia p: +61 8 8418 8564 I e: info@valenceindustries.com

ABN 41 008 101 979

ASIA PACIFIC I EUROPE I NORTH AMERICA

VALENCE INDUSTRIES

3 March 2014

Dear Shareholder,

SALE OF SMALL HOLDINGS

We acknowledge and thank you for participation in the Company.

As you may be aware, Valence Industries Limited (“the Company”) has announced that it proposes to implement a procedure to sell, on-market, holdings of 1,754 or less fully paid ordinary shares (‘small holdings’) on behalf of shareholders who do not wish to retain their shares in the Company.

The Company has a large percentage of shareholders holding less than marketable parcels. By divesting small holdings, the Company reduces its administration and share registry costs.

The Company has announced a record date of 7.00pm AEDT on 20 February 2014 (“Record Date”) to determine those shareholders who hold a ‘small holding’. As a shareholder within this category as at the Record Date, you are eligible to have your shares sold by the Company under this procedure. The advantage in authorising the Company to sell your shares in this way is that the Company will bear all transaction costs, including brokerage, associated with the sale of your shares. The proceeds of any sale of your ‘small holding’ will be paid to you within 10 business days of the settlement of these sales.

You have six (6) weeks from the date of this notice to elect whether to allow the Company to sell your shares. Please be aware that you are not obliged to sell your shares under this procedure; the choice is entirely up to you. However, if you DO NOT wish to sell you MUST notify the Company immediately and, in any event, by no later than 17 April 2014.

If you DO NOT wish your shares to be sold, please complete and return the enclosed Retention Slip (“Slip”) to the address noted on this Slip, so that it is received by the registry by no later than 17 April 2014. If you DO NOT return the completed Slip by this date your shares will be sold on your behalf.

THIS IS AN IMPORTANT DOCUMENT. IF YOU ARE IN ANY DOUBT AS TO HOW TO DEAL WITH IT THEN YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL OR OTHER PROFESSIONAL ADVISER.

Yours faithfully

Valence Industries Limited

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Jaroslaw (Jarek) Kopias Company Secretary

w w w . v a l e n c e i n d u s t r i e s . c o m

60 Hindmarsh Square I Adelaide I South Australia I 5000 I Australia p: +61 8 8418 8564 I e: info@valenceindustries.com

ABN 41 008 101 979

Valence Industries Limited

All Registry communications to: Link Market Services Limited Locked Bag A14

ABN 41 008 101 979

Sydney South NSW 1235 Australia Telephone (free call within Australia): 1800 426 150 From outside Australia: +61 1800 426 150 Facsimile: (02) 9287 0309 ASX Code: VXL Website: www.linkmarketservices.com.au

X99999999999

SRN/HIN:

Number of Shares held as at the Record Date, 7:00pm (AEDT) on 20 February 2014:

Dear Shareholder

IMPORTANT NOTICE – Sale of your Valence Industries Limited (“Valence Industries”) shares.

I am writing to advise you that Valence Industries is putting in place a share sale facility for holders of shares valued at less than $500 as at 20 February 2014.

Valence Industries is offering this facility to assist holders of unmarketable parcels of shares to sell them without brokerage costs and to reduce the expense to the company of maintaining in excess of 1,600 shareholders with unmarketable parcels.

Unless you advise Valence Industries that you want to retain your shares as set out below, your shares will be sold and you will be sent the sale proceeds.

The share sale facility is being established in accordance with Valence Industries’ constitution and the ASX Listing Rules.

If you want to sell your shares under the facility – you need take no action.

Your shares will be sold on your behalf after 22 April 2014. You will not need to appoint a broker nor pay the brokerage and handling costs associated with the sale of shares under the facility. Any tax consequences from the sale of your shares will be your responsibility.

If you wish to retain your shareholding in Valence Industries you must detach this retention slip and return it to Valence Industries’ Registry, so that it is received no later than 5:00pm (AEST), on 17 April 2014.

If you require further information, please contact the Valence Industries Limited Information Line on 1800 426 150 (within Australia) or +61 1800 426 150 (from outside Australia) between 8:30am and 5:30pm (AEST) Monday to Friday.

If you are in any doubt, or if you require information regarding possible taxation implications from participating in the facility, please consult your legal, financial or taxation adviser.

Yours sincerely

Company Secretary

RETENTION SLIP

If you wish to retain your shareholding in Valence Industries you must detach this retention slip and return it to Valence Industries’ Registry, so that it is received no later than 5:00pm (AEST), on 17 April 2014.

The slip can be returned using any of the methods set out on the reverse of this slip.

SRN/HIN:

X99999999999

 DO NOT SELL MY SHARES

VXL RSS001

MORE INFORMATION ON THE FACILITY

1. When will my shares be sold?

It is intended that any shares sold under the facility will be sold as soon as practicable after 22 April 2014.

2. What is an unmarketable parcel of shares?

A parcel of shares valued at less than $500.

3. What price will I receive for shares sold under the facility?

The price that you receive for your shares under the facility will be the volume weighted average price of all Valence Industries shares sold in the ordinary course of trading on the Australian Securities Exchange on the day (or over the days) of sale. This price will depend on a number of factors, including market conditions at the time, and you will not have control over the time at which your shares are sold. The price you receive may be different from the price appearing in the newspaper or quoted by ASX on any day, and may not be the best price on the day that your shares are sold.

4. What is the price of Valence Industries shares?

The last sale price of Valence Industries shares on 20 February 2014 was A$0.285. The share price changes frequently and more recent prices are available in newspapers and from the ASX website (www.asx.com.au) under the ASX code “VXL”.

5. When will the proceeds from the sale of shares be sent to me?

6. If I buy more shares, will I retain my holding?

Yes, we will treat any movement in your shareholding as an indication that you do not want your shares to be sold under the facility. For a purchase to be an effective notification that you wish to retain your shares, any additional shares must be registered by 5:00pm (AEST), on 17 April 2014 under the same name and address and with the same holder number (SRN or HIN) as set out in this letter.

7. Where can I get further information?

If you require further information, please contact the Valence Industries Limited Information Line on 1800 426 150 (within Australia) or +61 1800 426 150 (from outside Australia) between 8:30am and 5:30pm (AEST) Monday to Friday.

8. Important notes

Valence Industries reserves the right to change any of the dates referred to in this letter by notice to the ASX.

This letter does not constitute advice nor a recommendation to buy, sell or hold shares nor that the facility is the best way to sell Valence Industries shares.

If you are in any doubt about what to do, you should consult your legal, financial or taxation adviser.

Payment will be sent to you within 10 business days after the last sale under the facility. Payment will be made in Australian dollars by direct credit to your nominated account or by cheque if you do not have a direct credit authority recorded on the Share register. Link Market Services Limited will notify you, by way of a transaction confirmation statement, of the number of your shares sold and the price and total sale proceeds you have received. The transaction confirmation statement (and cheque if applicable) will be sent by post, at your risk, to your address as shown on the register.

RETENTION SLIP

Mailing Address or Hand Delivery Valence Industries Limited Valence Industries Limited C/- Link Market Services Limited C/- Link Market Services Limited Locked Bag A14 1A Homebush Bay Drive SYDNEY SOUTH NSW 1235 RHODES NSW 2138 (Do not use this address for mailing purposes)

This form must be received by Valence Industries’ Registry no later than 5:00pm (AEST), on 17 April 2014, or your shares will be sold.