QUANTUM GRAPHITE LIMITED — Regulatory Filings 2021

Nov 17, 2021

MARKET RELEASE For Immediate Release 18 November 2021

QUANTUM GRAPHITE

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Quantum Graphite Limited (QGL) is pleased to announce the maiden Mineral Resource estimate (MRE) for Uley 3 following completion of the recent drilling program.

The program targeted the Uley 3 geophysical anomaly[1] , previously referred to as the Eastern Conductor. The MRE is reported under the JORC 2012 guidelines.

The maiden MRE confirms the continuation of graphitic mineralisation to the east of Uley 2 along strike to the north of drill holes previously targeting the Eastern Conductor/Uley 3 geophysical anomaly.

Importantly mineralisation remains open along strike to the south and north and at depth, well within the company’s Mining and Retention leases.

The Technical Report summarising the work undertaken in respect of the MRE is attached as Appendix 1 – November 2021 Uley Mineral Resource Estimate.

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The MRE comprises 0.9Mt @6.6 % TGC, for 59kt of TGC at a 3.5% TGC cut-off and reported exclusively of the Uley 2 MRE[2] . Significant drill intercepts that have not previously been reported and included in the MRE are listed at the end of Appendix 1. The respective classification and Resource tonnes for both Uley 3 and the Uley 2 Project are set out in the table below:

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Resource Classification Tonnes (kt) TGC (%) Density (t/m [3] ) TGC (kt)
Uley 3 Inferred 900 6.6 2.1 59
Uley 3 Total 900 6.6 2.1 59
Uley 2 Measured 800 15.6 2.1 125
Indicated 4,200 10.4 2.1 435
Inferred 1,300 10.5 2.2 137
Uley 2 Total 6,300 11.1 2.1 697
Uley Project Total TOTAL 7,200 10.5 2.1 757
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Note: Small discrepancies may occur due to rounding. Refer to attached JORC 2012 Code Table 1 attached as Appendix 2.

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The Uley 3 interpreted graphite mineralisation envelopes in relation to the Uley 2 mineralisation are shown below.

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1QGL ASX release dated 01/11/2021, “Uley 2 Extensional Drilling Assay Results, Eastern Conductor is now Uley 3” 2QGL ASX release dated 15/07/2019, “Substantial Increase In Uley 2 JORC 2012 Mineral Resources”

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QGL is the owner of the Uley flake graphite mineral deposits located south-west of Port Lincoln, South Australia. The company’s Uley 2 project represents the next stage of development of the century old Uley mine, one of the largest high-grade natural flake deposits in the world. For further information, qgraphite.com.

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Uley 3 sits at the northern end of the company’s mineral leases directly (east) adjacent to the Uley 2 pit and within the Uley “horseshoe” structure.

Uley is one of several mineralised lenses indicated by the known regional and local geology and key data including interpretation of surface SIROTEM (electromagnetic conductivity) and TMI (total magnetic intensity) data (see figure below).

As indicated in previous releases, stronger geophysical responses continue to be key indicators for higher-grade mineralised areas and a valid tool for designing drill programs aimed at confirming the presence of conductive graphitic layers.

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ML 5561
ML 5562
RL 66
RL 67
ULEY
560000 565000
ML 5561
ML 5562
RL 66
RL 67
ULEY
EL 6224
HOMESTEAD
SALT LAKE
KACEY
LEGEND
EM Target
Primary EM Target
Secondary EM Target
Exploration Lease
FISHERY Retention Lease
Mining Lease
Conservation and National Parks
Lincoln (CP)
Lincoln (NP)
N
Sleaford Mere (CP)
0 1,250 2,500 5,000 Railway line
Meters GDA94; MGA53 Road
560000 565000
6150000 6150000
6145000 6145000
6140000 6140000
6135000 6135000
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The information in this report that relates to the Uley 3 Exploration Results and Mineral Resource estimate is based on information compiled by Mrs Vanessa O’Toole who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mrs O’Toole is an external consultant to QGL and consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

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In accordance with Clause 49 of the JORC Code (2012), the likely product specifications and possible product marketability and overall potential for economic extraction are considered by the competent person to support the Mineral Resource estimate at Uley 2.

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Appendix 2 of the Technical Report includes sections 1, 2 and 3 of Table 1 of the JORC Code 2012.

FOR FURTHER INFORMATION CONTACT:

Company Secretary Quantum Graphite Limited T: +61 3 8614 8414

E: info@qgraphite.com

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Uley 3 has been drilled based on a nominal 50m spacing along and across strike, with the drill sections orientated E-W. All holes are HQ diamond drillholes, sampling moderately dipping strata bound graphite mineralised zones. As such, drilling was orientated at -60 degrees towards local grid E (bearing 090). Prior to 2014 all drill holes were drilled vertically.

A total of 12 diamond core (DD) drill holes totalling approximately 890m have been completed at Uley 3 as at November 2021. Drilling incorporates two E-W drill lines completed in September and October 2021 by QGL and a single line of vertical DD holes to the south completed in 2011. A total of 151 DD holes have been completed at the Uley 2 and Uley 3 combined resource areas totalling approximately 14. Drill collar locations are illustrated in Figure 2.

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Figure 2 Uley 3 and Uley 2 diamond drilling programs

For the 2021 QGL drilling campaign, half core was sampled on a standard 1m interval unless lithological or visual grade estimates required longer or shorter sample lengths. Minimum and maximum lengths of 0.3m and 1.4m respectively were permitted. Samples were forwarded to ALS in Adelaide for sample preparation and ALS in Brisbane for analysis.

For drilling completed in 2011, whole core was selected on geological intervals of obviously highly graphitic material that were dispatched to ALS-Chemex in Adelaide. Sample lengths range from 0.2m to 4.0m, with an average length of 1m sampled. As for the 2021 drilling campaign, sample preparation was undertaken by ALS Adelaide. Samples were crushed and split to >70% passing -6mm and pulverized to >85% passing 75μm prior to assaying by ALS Brisbane.

All samples underwent assay process C-IR18, graphitic carbon by LECO analyser, and C-IR07 Total carbon by LECO analyser.

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QGL has established a comprehensive Quality Assurance/Quality Control (QAQC) scheme which is used for all drilling programs. This includes certified standards and blanks inserted at every 20th sample to assess the accuracy and methodology of the external laboratories and potential sources of contamination. Field duplicates (RC) were inserted every 20th sample to assess the repeatability and variability of the graphite mineralisation. Laboratory duplicates were also completed to assess the precision of the laboratory as well as the repeatability and variability of the graphite mineralisation as a prepared sample. QAQC results are routinely analysed by Quantum and are considered acceptable by the competent person for use as informing sources to Uley 3 MRE.

Bulk density test work was implemented by QGL in February 2019. Analysis of 58 samples from varying weathering profiles was completed externally to Australian Standards by ALS Adelaide and designed to support on-site bulk density measurements completed as part of previous campaigns. Statistical analysis of the bulk density data determined a likely correlation between TGC and bulk density, dependant on weathering profile. For the Uley 2 2019 MRE, bulk density values were calculated based on regression equations generated from statistical analysis between the TGC, total Carbon and bulk density.

Given there is significantly less informing data at Uley 3, bulk density was assigned to the model as an average from the testwork at Uley 2 based on weathering profile (1.9t/m3 for oxide, 2.1t/m3 for transitional and 2.2t/m3 fresh).

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The regional graphite mineralisation appears as conformable metamorphic segregations in Palaeoproterozoic schist and gneiss within the Gawler Craton. Mineralisation is hosted within the Hutchison Group metasediments that overlay the granitoid gneiss of the Sleaford Complex. The Hutchison Group is overlain by marine shelf sediments of the Wallaroo Group.

The project area is overlain by calc-arenites of the Tertiary age Bridgewater Formation. The calc-arenites are underlain by the Pliocene age Uley Formation or the Eocene age Wanilla Formation. Local laterally extensive ferricrete is developed over the Wanilla sediments.

Uley is a disseminated crystalline flake graphite deposit hosted within metasediments of the Hutchison Group, specifically confined within the Cook Gap Schist. Crystallisation of 0.1mm to 2 mm graphite flakes occurred during high-grade metamorphism of carbonaceous sediments. Strong deformation is displayed in the development of strained quartz veins and mylonite within the tightly folded graphitic gneiss and schist units.

The distribution of graphite at Uley was determined by airborne and ground electrical surveys, demonstrating elongate graphitic anomalies. The conductive graphite layers show broad north-north-easterly plunging anticline, consistent with known regional structures.

Mineralisation wireframes were constructed using cross-sectional interpretations based on mineralised envelopes with an approximate 2% TGC cut-off, a minimum downhole intercept of 2m and a maximum of 4m internal dilution applied for continuity. A total of 4 sub-parallel mineralisation lodes were set as solids after being validated using Gemcom’s Surpac software. Weathering surfaces were interpreted on cross section from weathering data logged by QGL geologists. Weathering codes for base of complete oxidation and top of fresh rock were included in the geology database and used to define the weathering surfaces.

A typical cross-section displaying the graphite mineralisation at Uley 3 is presented in Figure 4.

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Figure 4 Cross section 9,475mN Uley 3 drilling displaying graphite assays

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Surpac™ software was used to code the sample data and flag estimation domains within the 4 mineralisation wireframes and the oxidation surfaces. Compositing was completed within the domains based on a 1m downhole compositing interval. An assessment of the Coefficient of Variation (CoV – ratio of the standard deviation to the mean) showed a low CoV (<1.00) for TGC within each mineralisation domain and therefore a top-cut was not required to reduce grade outliers.

Given the limited number of informing composites for the mineralisation domains, variogram parameters were borrowed from the Uley 2 MRE where variograms were generated to assess the spatial continuity of TGC and derive inputs to the kriging algorithm used to interpolate grades. Snowden Supervisor™ software was used to generate and model the variograms within each estimation domain. The major direction (direction of maximum continuity) was oriented along strike with the intermediate (semi-major) direction oriented horizontally and the minor direction oriented orthogonal to the dip plane. All variograms standardised to a sill of one and applied spherical variograms with a nugget effect and two structures. The variograms were evaluated using normal scores variograms and the nugget and sill values back transformed to traditional variograms using the discrete Gaussian polynomials technique. Variogram parameters applied for the estimation of the graphite at Uley 3 are listed in Table 1.

Table 1 Variogram parameters applied for grade estimation

Major Direction	Co	Structure 1	Structure 2
		C1 X1 Y2 Z3	C2 X2 Y2 X2
-05-->350	0.28	0.56 60 20 5	0.34 105 75 15

The Uley 2 MRE was extended to to encompass the full extent of the deposit including Uley 3. Block sizes were retained as a block size of 12.5m NS by 12.5m EW by 4m vertical with sub-blocks of 3.125m by 3.125m by 1m. The parent block size was selected on the basis of 50% of the average drill hole spacing across Uley 2 and the results of kriging neighbourhood analysis (KNA). The model cell dimensions in other directions were selected to provide sufficient resolution to the block model in the across-strike and down-dip direction.

For all domains in the Uley 3 deposit, the wireframe interpretations were used as hard boundaries in the interpolation. That is, only grades inside each domain were used to interpolate the blocks inside. The ordinary kriging (OK) algorithm was selected for grade interpolation.

Orientated ‘ellipsoid’ search ellipses were used to select data for interpolation. The ellipse was oriented to the average strike, dip and plunge of the mineralised zones, and varied accordingly for each domain. The search ellipse axis lengths were derived based on drill hole spacing.

The maximum first-pass search radius was set at 75m and increased for each estimation pass as required to ensure all blocks were estimated in the final kriging pass. The major to semi-major, and the major to minor ratios were determined from the geometry and orientation of the mineralisation domains. A minimum number of 8 and maximum number of 16 samples were used for the first and second estimation pass, with the minimum reduced to 4 for the third pass. A maximum of 3 samples were used from each drill hole.

A three-step process was used to validate the grade estimate, including visually slicing sections through the block model in positions coincident with drilling. Quantitative assessment was then completed by comparing the average grades of the sample file input against the block model output for each lode. For each lode, variations between the average grade for the input files and the block model estimated averages were between 3 to 8%, which is a good result. Comparisons were also made between the interpolated blocks to the sample composite data for northing and elevation as trend plots. The validation plots show good correlation between the sample grades and the block model grades for the comparison by northing and elevation.

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The November 2021 Uley 3 Mineral Resource estimate has been classified and reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012) guidelines. The Mineral Resource has been classified as an Inferred Resource due to the relatively wide drill spacing along and across strike. Based on optimisation studies at Uley 2, the Mineral Resource has been limited to 80m below surface which contains all the currently modelled graphite mineralisation at Uley 3 and considered an appropriate methodology by the competent person for an Inferred resource. These optimisation studies also support a cut-off grade for resource reporting of 3.5% TGC.

Extrapolation beyond the drilling along strike is limited to approximately 25m (i.e. half the drill section spacing). The Inferred Resource is extrapolated approximately 25m below the drilling in some sections.

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The JORC Code Clause 49 requires that industrial minerals must be reported “in terms of the mineral or minerals on which the project is to be based and must include the specification of those minerals”. Clause 49 also states that it “may be necessary prior to the reporting of a Mineral Resource or Ore Reserve to take particular account of key characteristics or qualities such as likely product specifications, proximity to markets and general product marketability.”

Petrographic studies by Pontifex Pty Ltd demonstrated a range of graphite flake sizes within a gneissic quartz-feldspar matrix at Uley. Minor amounts of mafic gangue minerals such as biotite, amphiboles and pyroxenes are also present. Biotite is shown to be intergrown with the graphite in some samples. Graphite liberation test work completed during 2014 and 2015 by QGL delivered promising results. The subsequent 2019 metallurgical campaign was designed to ensure necessary sample representivity across all geodomains. The 2019 program exceeded the previous test work and was achieved utilising limited crushing and grinding to 0.6 mm followed by conventional froth flotation concentration with multiple stages of polishing. The resultant flake size distribution is presented in Table 2.

Table 2 Uley metallurgical testwork – flake size distribution and purity

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Size fraction Size fraction Approx. weight Graphitic C LOI
µm (Mesh) Distribution % Purity % %
+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
-75 -200 27.0 90.7 0.73
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In accordance with Clause 49 of the JORC Code (2012) guidelines, the likely product specifications and possible product marketability and overall potential for economic extraction are considered by the competent person to support the Inferred Mineral Resource at Uley 3.

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Significant drill intercepts that have not previously been reported and are included in the November 2021 MRE are listed in Table 3 below.

Table 3 Uley 3 additional significant intercepts

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Significant Intercepts
Hole Hole Depth
From (m) To (m) Length (m) Grade (TGC %)
MD707 66.0 3.6 19.1 14.9 4.3
MD707 66.0 29.1 40.1 11.0 5.1
MD707 66.0 47.0 52.8 5.5 6.1
MD708 62.7 39.6 49.7 7.5 10.0
including 39.6 41.7 2.1 11.3
MD708 62.7 56.1 59.1 2.6 6.7
MD709 76.8 48.9 74.1 24.8 8.0
including 50.2 60.9 10.7 12.8
MD710 68.2 31.5 36.3 4.4 4.6
MD710 68.2 44.7 51.7 7.0 9.2
including 44.7 49.2 4.5 12.4
MD711 72.6 1.2 24.6 22.2 4.4
MD711 72.6 31.6 39.0 7.4 4.1
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(Criteria in this section apply to all succeeding sections)

Criteria	JORC Code Explanation	Commentary
Sampling techniques	• Nature and quality of sampling (eg cut channels, random chips, or specifc specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. • Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. • Aspects of the determination of mineralisation that are Material to the Public Report.	• All drill holes were HQ triple-core diamond drillholes completed by Hagstrom drilling, targeting moderately dipping graphitic mineralised zones within metamorphosed schists. • The 8 drillholes were drilled at -60° towards 090 local grid. • Half cores samples were obtained based on geological observations, are typically 1m in length but range from 0.3m to 2.0m. • Elevated graphitic mineralisation is typically visible during geological logging and sampling. • Visibly mineralised intervals were crushed and pulverised to at least 85% passing 75μm at ALS in Adelaide, then sent to ALS Brisbane for analysis by LECO method. • The sample preparation and assaying techniques are industry standard and appropriate for this type of mineralisation.
Drilling techniques	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	• Diamond drillholes are drilled using HQ triple tube with rod lengths dependent on drilling conditions. In general drill runs were less than 3 metres to assist maximum recovery. • Downhole surveys were obtained using a Single Shot Refex Sprint downhole tool. • Drillholes were orientated using the Refex ACT II RD core orientation tool and marked using a chinagraph pencil on the bottom of the core showing downhole direction.
Drill sample recovery	• Method of recording and assessing core and chip sample recoveries and results assessed. • Measures taken to maximise sample recovery and ensure representative nature of the samples. • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fne/ coarse material.	• Core recoveries are recorded for each drill run, which range in length from 1.5m to 3m runs. • Core recoveries are measured by the driller using a tape measure and recorded on wooden core blocks inserted in the core trays at the end of each core run. • Core recoveries are also measured by the QGL feld staf. • Industry standard procedures/techniques including the use of shorter runs and adjusting water fow were employed by the drilling team to ensure maximum downhole recovery. • There has been no identifed relationship between sample recovery and grade so far.

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Criteria JORC Code Explanation Commentary
Logging • Whether core and chip samples have been • Drill core was transported from the drill location
geologically and geotechnically logged to a level of to the Uley core processing facility on site.
detail to support appropriate Mineral Resource •
Qualitative descriptions of mineralogy,
estimation, mining studies and metallurgical studies.
mineralisation, weathering, lithology, colour and
• Whether logging is qualitative or quantitative in other features are recorded and photographed for
nature. Core (or costean, channel, etc) photography. each sample.
• The total length and percentage of the relevant • All drill holes are logged in their entirety and
intersections logged. approximately 85% of the core sampled.
Sub-sampling • If core, whether cut or sawn and whether quarter, • Drill core was cut lengthways for half samples
techniques and half or all core taken. using a diamond saw or manually sampled using a
sample preparation • If non-core, whether riffled, tube sampled, rotary spatula in clay/soft horizons.
split, etc and whether sampled wet or dry. • Sample intervals range in size from 0.3 to 2m and
• are mostly 1m in length. Intervals were chosen
For all sample types, the nature, quality and
based on changes in lithological type, graphitic
appropriateness of the sample preparation technique.
characteristics and weathering intensity.
• Quality control procedures adopted for all sub-
• QGL QAQC procedures include the insertion of
sampling stages to maximise representivity of samples.
1 CRM standard, 1 blank and 1 field duplicate
• Measures taken to ensure that the sampling is
within every 20 samples (17 interval samples)
representative of the in situ material collected,
including for instance results for field duplicate/ • Duplicate samples are chosen within graphitic
mineralisation and sampled as quarter core.
second-half sampling.
•
• Intralab QAQC procedures are reported to QGL
Whether sample sizes are appropriate to the grain
and include the insertion of standards, blanks and
size of the material being sampled.
duplicates and repeat analyses.
• The remaining half of the core is retained as a
reference and for check sampling.
• Sample preparation was undertaken by ALS
Adelaide. Samples were crushed and split to >70%
passing -6mm and pulverized to >85% passing
75μm prior to assaying by ALS Brisbane.
• Sample sizes (half core samples) are deemed
appropriate for the material that is being sampled.
Quality of assay data • The nature, quality and appropriateness of the Techniques used for assaying are:
and laboratory tests assaying and laboratory procedures used and •
C-IR18 (Graphitic carbon by LECO analyser).
whether the technique is considered partial or total.
• C-IR07 Total Carbon by LECO analyser).
• For geophysical tools, spectrometers, handheld
• Quarter core duplicate samples were taken
XRF instruments, etc, the parameters used in
at a frequency of 1 in 20 samples (5% rate of
determining the analysis including instrument make
insertion). Certified reference standards and blanks
and model, reading times, calibrations factors applied
and their derivation, etc. were also inserted at a rate of 1 in 20 samples
(5% rate of insertion).
• Nature of quality control procedures adopted (eg
• Internal laboratory QAQC for all sampling has
standards, blanks, duplicates, external laboratory
been reviewed with no identified issues with
checks) and whether acceptable levels of accuracy
respect to sampling bias or precision.
(ie lack of bias) and precision have been established.
Verification of • The verification of significant intersections by either • Quantum Graphite geologists and consultants
sampling and assaying independent or alternative company personnel. have reviewed and validated the core, logging and
• The use of twinned holes. available assay results.
•
• Logging data was entered digitally and
Documentation of primary data, data entry
procedures, data verification, data storage (physical incorporated in to the Uley Project Access
database.
and electronic) protocols.
•
• There have been no adjustments to the assay data.
Discuss any adjustment to assay data.
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Criteria JORC Code Explanation Commentary
Location of data • Accuracy and quality of surveys used to locate • Drill location co-ordinates are reported in Uley
points drillholes (collar and down-hole surveys), trenches, Mine Grid (transformed to truncated AMG). The
mine workings and other locations used in Mineral reported truncation was:
Resource estimation.
Easting = -554,216.866m
•
Specification of the grid system used. Northing = -6,139,092.867m
• Quality and adequacy of topographic control. ADH = RL + 404.252m
• Drillhole collars are recorded using handheld
GPS. Elevation values are in AHD RL and values
recorded within the database.
Data spacing and • Data spacing for reporting of Exploration Results. • Drilling for this program was completed on 50m
distribution • by 50m spacing, which has been shown at Uley 2
Whether the data spacing and distribution is
(as part of the same stratigraphy) to be sufficient
sufficient to establish the degree of geological
for geological modelling and understanding of
and grade continuity appropriate for the Mineral
the mineralisation style and distribution, also the
Resource and Ore Reserve estimation procedure(s)
and classifications applied. potential for an Inferred Mineral Resource.
•
• Diamond drill core samples are not composited.
Whether sample compositing has been applied.
Orientation of data in • Whether the orientation of sampling achieves • Drilling orientation is considered appropriate
relation to geological unbiased sampling of possible structures and the considering the deposit type and orientation of
structure extent to which this is known, considering the moderately East dipping mineralisation.
deposit type. •
Sampling bias related to the orientation of sampling
• If the relationship between the drilling orientation is considered to be minimal.
and the orientation of key mineralised structures is
considered to have introduced a sampling bias, this
should be assessed and reported if material.
Sample security • The measures taken to ensure sample security. • All reasonable measures are and will be taken
to ensure sample security along the value chain.
These measures included the recording of sample
dispatch and receipt reports, secure storage of
samples, and a locked and gated core shed.
Audits or reviews • The results of any audits or reviews of sampling • The sampling methods being used are industry
techniques and data. standard practice.
• QAQC standard samples used are supplied by
OREAS for TGC.
• Samples are submitted to ISO accredited
laboratories (ALS Adelaide and ALS Brisbane)
• The lab is subject to routine and random inspections.
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(Criteria in this section apply to all succeeding sections)

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Criteria JORC Code Explanation Commentary
Mineral tenement and • Type, reference name/number, location and • The Uley Graphite Project consists of five
land tenure status ownership including agreements or material contiguous tenements on the Eyre Peninsula of
issues with third parties such as joint ventures, South Australia, of which two are retention leases,
partnerships, overriding royalties, native title two are mining leases and one is an exploration
interests, historical sites, wilderness or national licence. Tenement identification numbers are:
park and environmental settings. RL66, RL67, ML5561, ML5562 and EL4778.
• The security of the tenure held at the time of • Mining development is subject to the approved
reporting along with any known impediments to Program for Environmental Protection and
obtaining a licence to operate in the area. Rehabilitation (PEPR) and an Environmental
Licence which is mandated under South Australian
State legislation.
• QGL has a 100% interest in these tenements
and no royalty, joint venture or other material
agreements are in place other than a royalty of
1.5% with its former parent company, SER.
• Tenement ownership is secure, there are no
known impediments to obtaining a license to
operate in the area.
Exploration done by • Acknowledgment and appraisal of exploration by • Historically a number of parties have undertaken
other parties other parties. exploration on the leases.
Geology • Deposit type, geological setting and style • Graphite is developed as a constituent mineral in
of mineralisation. coarse prograde metamorphic assemblages as well
as in the fabric and foliation of micaceous schists.
These are interpreted to be the folded, thrusted
and metamorphosed equivalents of the Cook Gap
Schist. Folding of stratigraphy on various local
scales is obvious from the core logging.
Drillhole Information • A summary of all information material to the Hole East North RL Depth Dip Azimuth Licence
understanding of the exploration results including MD704 10325 9475 480 76.3 -60 90 ML5562
a tabulation of the following information for all
Material drillholes: MD705 10275 9475 485 80.1 -60 90 ML5562
MD706 10225 9475 490 80.8 -60 90 ML5562
-
easting and northing of the drillhole collar
MD707 10175 9475 495 66 -60 90 ML5562
-
elevation or RL (Reduced Level – elevation
MD708 10325 9525 485 62.7 -60 90 ML5562
above sea level in metres) of the drillhole collar
MD709 10275 9525 490 76.8 -60 90 ML5562
-
dip and azimuth of the hole
MD710 10225 9525 495 68.2 -60 90 ML5562
-
down hole length and interception depth MD711 10175 9525 500 72.6 -60 90 ML5562
-
hole length
•
If the exclusion of this information is justified
on the basis that the information is not Material
and this exclusion does not detract from the
understanding of the report, the Competent
Person should clearly explain why this is the case.
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Criteria JORC Code Explanation Commentary
Data aggregation • In reporting Exploration Results, weighting averaging • Reported assay intersections are length and
methods techniques, maximum and/or minimum grade density weighted
truncations (eg cutting of high grades) and cut-off •
For graphitic intersections the mean grade was
grades are usually Material and should be stated. calculated using a nominal lower cut-off of 2%
• Where aggregate intercepts incorporate short for TGC for a minimum intercept of 2m and
lengths of high grade results and longer lengths maximum internal dilution (<2%) of less than 2m.
of low grade results, the procedure used for such •
No metal equivalent values are used for reporting
aggregation should be stated and some typical
exploration results.
examples of such aggregations should be shown
in detail.
• The assumptions used for any reporting of metal
equivalent values should be clearly stated.
Relationship between • These relationships are particularly important in • The orientation of the mineralisation is well known
mineralisation widths the reporting of Exploration Results. given the presence of a complete section to the
and intercept lengths • south of the current drilling and the local geology
If the geometry of the mineralisation with respect to
known from previous drilling at the Uley Project.
the drillhole angle is known, its nature should
be reported. • Drill holes have been designed to intercept
• mineralisation at optimum angles, bedding contacts
If it is not known and only the down hole lengths are
displayed in the current drilling are confirming the
reported, there should be a clear statement to this
effect (eg ‘down hole length, true width not known’). appropriate orientation of the drill holes.
• The reported downhole length is therefore close if
not equal to the true width of mineralisation.
Diagrams • Appropriate maps and sections (with scales) and • Refer to Figures in the body of the text.
tabulations of intercepts should be included for any
significant discovery being reported These should
include, but not be limited to a plan view of drillhole
collar locations and appropriate sectional views.
Balanced reporting • Where comprehensive reporting of all Exploration • All available exploration results related to this
Results is not practicable, representative reporting program have been reported.
of both low and high grades and/or widths should
be practiced to avoid misleading reporting of
Exploration Results.
Other substantive • Other exploration data, if meaningful and material, • Outstanding assays for the 5 drill holes will provide
exploration data should be reported including (but not limited further information relating to the mineralisation to
to): geological observations; geophysical survey the north of Uley 3.
results; geochemical survey results; bulk samples •
All available and material exploration information
– size and method of treatment; metallurgical test
has been considered in the planning and modelling
results; bulk density, groundwater, geotechnical
of this drill program. This comprised a drilling
and rock characteristics; potential deleterious or
database, previous estimates and reports, academic
contaminating substances.
literature, petrological reports, metallurgical test
work reports, dry rock density determinations, and
site visit photography and communication.
Further work • The nature and scale of planned further work (eg • Exploration work to quantify the extent and
tests for lateral extensions or depth extensions or continuity of mineralisation within the QGL-held
large-scale step-out drilling). tenure is ongoing. This work includes further
• diamond drilling, further geophysical surveys and
Diagrams clearly highlighting the areas of
geological mapping. Details of this exploration
possible extensions, including the main geological
effort are deemed commercially sensitive.
interpretations and future drilling areas, provided
this information is not commercially sensitive.
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(Criteria listed in the preceding sections where relevant, also apply to this section)

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Criteria JORC Code Explanation Commentary
Database integrity • Measures taken to ensure that data has not been • Data has been provided by QGL in the form of an
corrupted by, for example, transcription or keying Access database.
errors, between its initial collection and its use for • A total of 18 1993 era diamond drill holes drilled
Mineral Resource estimation purposes.
by Graphite Mines of Australia, 12 SER diamond
• Data validation procedures used. drillholes drilled in 2011, and 112 Valence angled
diamond drillholes in the Uley area. QGL completed
an 8 hole drill program, the informant to this MRE
along with 4 drill holes from the 2011 drill campaign.
The database used for resource estimation consists
solely of diamond drilling and has been reviewed
and re-validated for obvious errors prior to
commencing the resource estimation study. The
assay data has been cross-checked against assay
certificates provided by ALS Chemex.
• The following checks were completed prior to
uploading the drilling data into a Surpac database:
-
Check and correct overlapping intervals.
-
Ensure downhole surveys existed at a 0m depth.
-
Ensure consistency of depths between different
data tables, for example survey, collar and assays.
-
Check gaps in the assay data were replaced by
-1 as a code for missing data. Non-sampled
intervals were assigned a value of 0.01%
Graphitic C.
Site visits • Comment on any site visits undertaken by the • Numerous site visits have been completed by the
Competent Person and the outcome of those visits. Competent Person, including drilling supervision
• during September and October 2021.
If no site visits have been undertaken indicate why
this is the case.
Geological • Confidence in (or conversely, the uncertainty of) • The current geological interpretation is based on a
interpretation the geological interpretation of the mineral deposit. review of previous estimates and reports and has
• Nature of the data used and of any assumptions been augmented by the geological and structural
made. information provided by the additional drillholes
drilled at the Uley 3 deposit.
•
The effect, if any, of alternative interpretations on Mineral Resource estimation. • Information from site visits and geological reports
suggests the graphite lenses occurs within an
• The use of geology in guiding and controlling anticlinorium i.e. a fold with parasitic folds on its limbs,
Mineral Resource estimation.
as occurred in the now depleted Uley mine to the
• The factors affecting continuity both of grade north. The current model of the Uley 2 deposit is of a
and geology. recumbent antiform plunging very shallowly to the ENE,
with HW lodes dipping shallowly to the WNW and
FW lodes dipping moderately (~33°) to the WNW. The
Uley 3 deposit is considered to be a related limb of the
antiform, moderately dipping to the east.
Dimensions • The extent and variability of the Mineral Resource • The drilling relevant to the Mineral Resource estimate
expressed as length (along strike or otherwise), at Uley 3 extends over a distance of 150 m (from
plan width, and depth below surface to the upper 9,425 m grid N to 9,575 m grid N) and includes a
and lower limits of the Mineral Resource. 80 m vertical interval from approximately 410 m to
490 m. The graphitic mineralisation is interpreted to
extend along the full strike distance
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Criteria JORC Code Explanation Commentary
Estimation and • The nature and appropriateness of the estimation • Based on the dominant sample length, 1 m
modelling techniques technique(s) applied and key assumptions, including composites for TGC were extracted within the
treatment of extreme grade values, domaining, coded mineralisation by mineralisatjon domain.
interpolation parameters and maximum distance of Variable length compositing was used to ensure
extrapolation from data points. If a computer assisted that no residuals were created.
estimation method was chosen include a description • An assessment of the Coefficient of Variation
of computer software and parameters used.
(CV – ratio of the standard deviation to the mean)
• The availability of check estimates, previous parameter showed the CV was low for TGC within
estimates and/or mine production records and each mineralisation domain and therefore a top-cut
whether the Mineral Resource estimate takes was not required.
appropriate account of such data. •
TGC (%) was estimated into the block model
• The assumptions made regarding recovery using Ordinary Kriging (OK) utilising the cut
of by-products. 1m composites in Surpac mining software.
• Estimation of deleterious elements or other Grade estimation was constrained to blocks
non-grade variables of economic significance (e.g. inside individual mineralisation wireframes and
geodomains with hard boundaries applied. Results
sulphur for acid mine drainage characterisation).
below the detection limit were assigned a value of
• In the case of block model interpolation, the block 0.01 % for TGC.
size in relation to the average sample spacing and
• Variograms were borrowed from the densely drilled
the search employed.
Uley 2 MRE, where variograms were generated to
• Any assumptions behind modelling of selective
assess the spatial continuity of TGC and as inputs
mining units. to the kriging algorithm used to interpolate grades.
• Any assumptions about correlation between variables. Snowden Supervisor software was used to generate
• Description of how the geological interpretation and model the variograms. The major direction
was used to control the resource estimates. (direction of maximum continuity) was oriented
along strike with the intermediate (semi-major)
• Discussion of basis for using or not using grade direction oriented horizontally and the minor
cutting or capping. direction oriented orthogonal to the dip plane.
• The process of validation, the checking process • A Surpac block model was used for the estimate
used, the comparison of model data to drillhole with a block size of 12.5 m NS by 12.5 m EW by
data, and use of reconciliation data if available. 4m vertical with sub-cells of 6.275 m by 6.275
m by 1 m. The chosen parent block size is to
maintain consistency with the Uley 2 MRE.
• OK grade interpolation used an oriented ‘ellipsoid’
search to select data for interpolation. Estimation
parameters were developed specifically within each
mineralised geodomain.
• A three-step qualitative and quantitative process
was applied to validate the grade estimate. This
included visual comparison of block grades and the
input drill hole composites and global comparisons
of these grades. The grade trends shown by the
composite data are honoured by the block model
within each domain. Trend plots comparing the
model and composite grades along and across strike
and with depth were generated. The plots displayed
good correlation between the sample grades and
the block model grades in each direction.
• No other elements, deleterious or not, were
estimated to date. No assumptions were made
concerning mining selectivity beyond small to
medium scale open pit mining.
Moisture • Whether the tonnages are estimated on a dry • Tonnes are estimated based on an average dry insitu
basis or with natural moisture, and the method of bulk density values.
determination of the moisture content.
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Criteria JORC Code Explanation Commentary
Cut-of parameters • The basis of the adopted cut-off grade(s) or quality • Numerous optimisation studies completed by QGL
parameters applied. on the Uley 2 MRE support the use of a 3.5% cut-
off grade for Resource reporting, this is considered
appropriate for an Inferred Resource given the
relatability of the mineralisation.
Mining factors or • Assumptions made regarding possible mining • The Uley graphite deposit has been historically
assumptions methods, minimum mining dimensions and internal mined by open cut mining methods and it is assumed
(or, if applicable, external) mining dilution. It is always that this will still be the case for any future mining
necessary as part of the process of determining operation in the area.
reasonable prospects for eventual economic •
No assumptions have been made about mining
extraction to consider potential mining methods, but selectivity for specific material types or quality.
the assumptions made regarding mining methods and
• No external mining dilution or other factors have
parameters when estimating Mineral Resources may
been applied to the resource estimate.
not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis
of the mining assumptions made.
Metallurgical factors • The basis for assumptions or predictions regarding • Petrographic studies by Pontifex Pty Ltd
or assumptions metallurgical amenability. It is always necessary demonstrated a range of graphite flake sizes within
as part of the process of determining reasonable a gneissic quartz-feldspar matrix. Minor amounts of
prospects for eventual economic extraction to mafic gangue minerals such as biotite, amphiboles
consider potential metallurgical methods, but the and pyroxenes are also present. Biotite is shown to
assumptions regarding metallurgical treatment be intergrown with the graphite in some samples.
processes and parameters made when reporting Graphite liberation test work completed during 2014
Mineral Resources may not always be rigorous. and 2015 by QGL delivered promising results. The
Where this is the case, this should be reported subsequent 2019 metallurgical campaign was designed
with an explanation of the basis of the metallurgical to ensure the necessary sample representivity
assumptions made. across all geodomains. The 2019 program exceeded
the previous test work and was achieved utilising
limited crushing and grinding to 0.6 mm followed
by conventional froth flotation concentration with
multiple stages of polishing.
Environmental factors • Assumptions made regarding possible waste • Mining development is subject to the approved
or assumptions and process residue disposal options. It is always Program for Environmental Protection and
necessary as part of the process of determining Rehabilitation (PEPR).
reasonable prospects for eventual economic
extraction to consider the potential environmental
impacts of the mining and processing operation.
While at this stage the determination of potential
environmental impacts, particularly for a greenfields
project, may not always be well advanced, the
status of early consideration of these potential
environmental impacts should be reported. Where
these aspects have not been considered this
should be reported with an explanation of the
environmental assumptions made.
Bulk density • Whether assumed or determined. If assumed, • Bulk density test work was implemented by QGL
the basis for the assumptions. If determined, the in February 2019. The analysis was completed
method used, whether wet or dry, the frequency externally to Australian Standards by ALS Adelaide
of the measurements, the nature, size and and designed to support on-site bulk density
representativeness of the samples. measurements completed as part of previous
• The bulk density for bulk material must have been campaigns. Average bulk densities were assigned to
the Uley 3 model as an average of calculated values at
measured by methods that adequately account
Uley 3 for each weathering type.
for void spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones
within the deposit.
• Discuss assumptions for bulk density estimates used
in the evaluation process of the different materials.
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Criteria JORC Code Explanation Commentary
Classifcation • The basis for the classification of the Mineral • The Mineral Resource classification criteria
Resources into varying confidence categories. were developed based on an assessment of the
• following items:
Whether appropriate account has been taken
-
of all relevant factors (ie relative confidence in Nature and quality of the drilling and sampling
tonnage/grade estimations, reliability of input data, including QAQC review.
confidence in continuity of geology and metal -
Drilling density.
values, quality, quantity and distribution of the data).
-
• Confidence in the understanding of the
Whether the result appropriately reflects the
underlying geological and grade continuity and
Competent Person’s view of the deposit. the structural characteristics.
-
Confidence in the estimate of the mineralised
volume.
-
Bulk density data.
- Model validation results.
- The criteria listed in Table 1 Section 1 and
Section 3 of the JORC Code.
•
The Mineral Resource has been classified as an
Inferred Resource due to the relatively wide
drill spacing along and across strike. Based on
optimisation studies at Uley 2, the Mineral
Resource has been limited to 80m below
surface which contains all the currently modelled
graphite mineralisation at Uley 3 and considered
an appropriate methodology by the competent
person for an Inferred resource. than half of the
drill density (approximately 12.5 m), the Resource
was classified as Inferred Resource. There is no
extrapolation outside of an appropriate range
for Inferred classification. Material outside of the
mineralisation envelopes was not classified.
•
The classification scheme as applied is considered to
adequately reflect the sample density and geological
interpretation based on all available drillhole data.
Audits or reviews • The results of any audits or reviews of Mineral • No third party reviews have been undertaken on the
Resource estimates. Mineral Resource estimation process to date.
Discussion of relative • Where appropriate a statement of the relative • The grade estimate is based on the assumption that
accuracy/confdence accuracy and confidence level in the Mineral open cut mining methods will be applied and that
Resource estimate using an approach or procedure a form of high confidence grade control sampling,
deemed appropriate by the Competent Person. for example based on RC grade control drilling or
For example, the application of statistical or ditch-witch bench top sampling, will be available for
geostatistical procedures to quantify the relative final ore/waste demarcation. As such the resource
accuracy of the resource within stated confidence estimate should be considered to represent a global
limits, or, if such an approach is not deemed resource estimate.
appropriate, a qualitative discussion of the
factors that could affect the relative accuracy and
confidence of the estimate.
• The statement should specify whether it relates
to global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation
should include assumptions made and the
procedures used.
• These statements of relative accuracy and
confidence of the estimate should be compared
with production data, where available.
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