QUANTUM GRAPHITE LIMITED — Regulatory Filings 2021

Nov 1, 2021

Uley 2 Extensional Drilling - Assay Results (MD704-MD706) Eastern Conductor is now Uley 3

Further to our recent update of the Eastern Conductor drilling program, the Company is pleased to announce details of the assay results of the first three drill holes, MD704, MD705 and MD706.

The assay results returned consistent total graphitic carbon (TGC) grades and intercept widths. The significant intercepts include:

• 3.9m @ 5.3% TGC from 42.4m (MD704, including 1.7m @ 10.6% TGC) Uley
• 14.2m @ 8.0% TGC from 62.8m (MD704)
• 7.9m @ 10.8% TGC from 36.9m (MD705)
• 17.9m @ 6.6% TGC from 34.7m (MD706, including 4.4m @ 15.7% TGC)

All of these intercepts are outside of the current Uley 2 resource, highlighting the significant potential for future resource growth. In future communications, the Company will refer to the Eastern Conductor as Uley 3, the historical name of this area of Uley mineralisation. Current drill hole status and relationship between the Uley 3 drill program and the 2019 Uley resource model is illustrated in Figure 1.

Uley 3 Drill Program Design and Objectives

As previously announced, the drill program targeted a geophysical anomaly, the Eastern Conductor anomaly, located directly east of the Uley 2 Reserve and within the Company's Mining Leases (ML5561 and ML5562). The main objectives of this program are:

• Completion of first pass drilling of the Uley 3 geophysical anomaly with a total of 8 holes on two 50m spaced E-W drill sections to confirm the presence of TGC (see drill lines 9,475mN and 9,525mN local grid above);
• Determine scope of variations, if any, in respect of the controls on TGC distribution, flake size and grade as between Uley 2 and Uley 3; and
• Continue to build our knowledge base of the local structural characteristics to enhance the Company's project-wide model and ensure ongoing integrity of TGC distribution and process plant future feed.

Hole	East	North	RL	Depth	Dip	Azimuth	Licence
MD704	10325	9475	480	76.3	-60	90	ML5562
MD705	10275	9475	485	80.1	-60	90	ML5562
MD706	10225	9475	490	80.8	-60	90	ML5562
MD707	10175	9475	495	66.0	-60	90	ML5562
MD708	10325	9525	485	62.7	-60	90	ML5562
MD709	10275	9525	490	76.8	-60	90	ML5562
MD710	10225	9525	495	68.2	-60	90	ML5562
MD711	10175	9525	500	72.6	-60	90	ML5562

A total of 8 HQ triple core diamond drillholes for 539m of drilling was completed at Uley 3 (see Table 1).

Table 1: Table 1 Uley 3 Stage 1 HQ3 diamond drill hole collar information.

Significant Intercepts

Assay results have been received for 3 out of the 8 completed drill holes. Intercepts were weighted based on length with a lower cut-off grade of 2% TGC, a minimum intercept length of 2m and a maximum internal dilution of 2m. Significant intercepts for results received as of 31st of October are presented in Table 2 and Figure 2 presents the intercepts in section.

	Hole Depth	Significant Intercepts
Hole	From (m)		To (m)	Length (m)	Grade (TGC %)
MD704	76.3	42.4	46.3	3.9	5.3
	including	42.4	44.1	1.7	10.6
MD704	76.3	51.9	58.1	6.2	4.0
	including	51.9	53.1	1.2	10.6
MD704	76.3	61.7	75.9	14.2	8.0
	including	62.8	70.8	8.0	11.6
MD705	80.1	36.9	44.8	7.9	10.8
MD705	80.1	51.2	58.5	7.3	4.9
MD705	80.1	68	70.6	2.6	4.2
MD706	80.8	29.3	33.3	4.0	4.5
MD706	80.8	34.7	52.6	17.9	6.6
	including	42	46.4	4.4	15.7

Table 2: Uley 3 Stage 1 current significant intercepts

Based on these results and in contrast to Uley 2, the mineralisation at Uley 3 appears within a thicker, lower grade main band of mineralisation demonstrating less structural disruption. Faulting is evident in localised zones within the core and is currently being modelled to determine impacts on orientation of the mineralisation, TGC grade and flake size.

Further details will be provided once assay results for the remaining 5 drillholes are available.

FOR FURTHER INFORMATION CONTACT: Company Secretary Quantum Graphite Limited T: +61 3 8614 8414 E: info@qgraphite.com

JORC Code, 2012 – Table 1

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)

Criteria	JORC Code Explanation	Commentary
Samplingtechniques	▪Nature and quality ofsampling (eg cut channels,random chips, or specificspecialised industry standardmeasurement toolsappropriate to the mineralsunder investigation, such asdown hole gamma sondes,or handheld XRFinstruments, etc). Theseexamples should not betaken as limiting the broadmeaning of sampling.▪Include reference tomeasures taken to ensuresample representivity andthe appropriate calibrationof any measurement tools orsystems used.▪Aspects of the determinationof mineralisation that areMaterial to the PublicReport.	▪All drill holes were HQ triple-core diamond drillholescompleted by Hagstrom drilling, targeting moderatelydipping graphitic mineralised zones withinmetamorphosed schists.▪The 8 drillholes were drilled at -60° towards 090 localgrid.▪Half cores samples were obtained based on geologicalobservations, are typically 1m in length but range from0.3m to 2.0m.▪Elevated graphitic mineralisation is typically visibleduring geological logging and sampling.▪Visibly mineralised intervals were crushed andpulverised to at least 85% passing 75μm at ALS inAdelaide, then sent to ALS Brisbane for analysis by LECOmethod.▪The sample preparation and assaying techniques areindustry standard and appropriate for this type ofmineralisation.
Drillingtechniques	▪Drill type (eg core, reversecirculation, open-holehammer, rotary air blast,auger, Bangka, sonic, etc)and details (eg corediameter, triple or standardtube, depth of diamond tails,face-sampling bit or othertype, whether core isoriented and if so, by whatmethod, etc).	▪Diamond drillholes are drilled using HQ triple tube withrod lengths dependent on drilling conditions. In generaldrill runs were less than 3 metres to assist maximumrecovery.▪Downhole surveys were obtained using a Single ShotReflex Sprint downhole tool.▪Drillholes were orientated using the Reflex ACT II RDcore orientation tool and marked using a chinagraphpencil on the bottom of the core showing downholedirection.
Drill samplerecovery	▪Method of recording andassessing core and chipsample recoveries andresults assessed.▪Measures taken to maximisesample recovery and ensurerepresentative nature of thesamples.▪Whether a relationship existsbetween sample recoveryand grade and whethersample bias may haveoccurred due to preferentialloss/gain of fine/coarsematerial.	▪Core recoveries are recorded for each drill run, whichrange in length from 1.5m to 3m runs.▪Core recoveries are measured by the driller using a tapemeasure and recorded on wooden core blocks insertedin the core trays at the end of each core run.▪Core recoveries are also measured by the QGL fieldstaff.▪Industry standard procedures/techniques including theuse of shorter runs and adjusting water flow wereemployed by the drilling team to ensure maximumdownhole recovery.▪There has been no identified relationship betweensample recovery and grade so far.
Logging	▪Whether core and chipsamples have been	▪Drill core was transported from the drill location to theUley core processing facility on site.

Criteria	JORC Code Explanation	Commentary
	geologically andgeotechnically logged to alevel of detail to supportappropriate MineralResource estimation, miningstudies and metallurgicalstudies.▪Whether logging isqualitative or quantitative innature. Core (or costean,channel, etc) photography.▪The total length andpercentage of the relevantintersections logged.	▪Qualitative descriptions of mineralogy, mineralisation,weathering, lithology, colour and other features arerecorded and photographed for each sample.▪All drill holes are logged in their entirety andapproximately 85% of the core sampled.
Subsamplingtechniquesand samplepreparation	▪If core, whether cut or sawnand whether quarter, half orall core taken.▪If non-core, whether riffled,tube sampled, rotary split,etc and whether sampledwet or dry.▪For all sample types, thenature, quality andappropriateness of thesample preparationtechnique.▪Quality control proceduresadopted for all sub-samplingstages to maximiserepresentivity of samples.▪Measures taken to ensurethat the sampling isrepresentative of the in situmaterial collected, includingfor instance results for fieldduplicate/second-halfsampling.▪Whether sample sizes areappropriate to the grain sizeof the material beingsampled.	▪Drill core was cut lengthways for half samples using adiamond saw or manually sampled using a spatula inclay/soft horizons.▪Sample intervals range in size from 0.3 to 2m and aremostly 1m in length. Intervals were chosen based onchanges in lithological type, graphitic characteristics andweathering intensity.▪QGL QAQC procedures include the insertion of 1 CRMstandard, 1 blank and 1 field duplicate within every 20samples (17 interval samples)▪Duplicate samples are chosen within graphiticmineralisation and sampled as quarter core.▪Intralab QAQC procedures are reported to QGL andinclude the insertion of standards, blanks and duplicatesand repeat analyses.▪The remaining half of the core is retained as a referenceand for check sampling.▪Sample preparation was undertaken by ALS Adelaide.Samples were crushed and split to >70% passing -6mmand pulverized to >85% passing 75μm prior to assayingby ALS Brisbane.▪Sample sizes (half core samples) are deemedappropriate for the material that is being sampled.
Quality ofassay dataandlaboratorytests	▪The nature, quality andappropriateness of theassaying and laboratoryprocedures used andwhether the technique isconsidered partial or total.▪For geophysical tools,spectrometers, handheldXRF instruments, etc, theparameters used indetermining the analysisincluding instrument makeand model, reading times,	Techniques used for assaying are:▪C-IR18 (Graphitic carbon by LECO analyser).▪C-IR07 Total Carbon by LECO analyser).▪Quarter core duplicate samples were taken at afrequency of 1 in 20 samples (5% rate of insertion).Certified reference standards and blanks were alsoinserted at a rate of 1 in 20 samples (5% rate ofinsertion).▪Internal laboratory QAQC for all sampling has beenreviewed with no identified issues with respect tosampling bias or precision.

Criteria	JORC Code Explanation	Commentary
	calibrations factors appliedand their derivation, etc.▪Nature of quality controlprocedures adopted (egstandards, blanks, duplicates,external laboratory checks)and whether acceptablelevels of accuracy (ie lack ofbias) and precision havebeen established.
Verificationof samplingand assaying	▪The verification of significantintersections by eitherindependent or alternativecompany personnel.▪The use of twinned holes.▪Documentation of primarydata, data entry procedures,data verification, datastorage (physical andelectronic) protocols.▪Discuss any adjustment toassay data.	▪Quantum Graphite geologists and consultants havereviewed and validated the core, logging and availableassay results.▪Logging data was entered digitally and incorporated into the Uley Project Access database.▪There have been no adjustments to the assay data.
Location ofdata points	▪Accuracy and quality ofsurveys used to locatedrillholes (collar and downhole surveys), trenches, mineworkings and other locationsused in Mineral Resourceestimation.▪Specification of the gridsystem used.▪Quality and adequacy oftopographic control.	▪Drill location co-ordinates are reported in Uley MineGrid (transformed to truncated AMG). The reportedtruncation was:Easting= -554,216.866mNorthing = -6,139,092.867mADH= RL + 404.252m▪Drillhole collars are recorded using handheld GPS.Elevation values are in AHD RL and values recordedwithin the database.
Data spacinganddistribution	▪Data spacing for reporting ofExploration Results.▪Whether the data spacingand distribution is sufficientto establish the degree ofgeological and gradecontinuity appropriate forthe Mineral Resource andOre Reserve estimationprocedure(s) andclassifications applied.▪Whether samplecompositing has beenapplied.	▪Drilling for this program was completed on 50m by 50mspacing, which has been shown at Uley 2 (as part of thesame stratigraphy) to be sufficient for geologicalmodelling and understanding of the mineralisation styleand distribution, also the potential for an InferredMineral Resource.▪Diamond drill core samples are not composited.
Orientationof data inrelation togeologicalstructure	▪Whether the orientation ofsampling achieves unbiasedsampling of possiblestructures and the extent towhich this is known,considering the deposit type.▪If the relationship between	▪Drilling orientation is considered appropriate consideringthe deposit type and orientation of moderately Eastdipping mineralisation.▪Sampling bias related to the orientation of sampling isconsidered to be minimal.

Criteria	JORC Code Explanation	Commentary
	the drilling orientation andthe orientation of keymineralised structures isconsidered to haveintroduced a sampling bias,this should be assessed andreported if material.
Samplesecurity	▪The measures taken toensure sample security.	▪All reasonable measures are and will be taken to ensuresample security along the value chain. These measuresincluded the recording of sample dispatch and receiptreports, secure storage of samples, and a locked andgated core shed.
Audits orreviews	▪The results of any audits orreviews of samplingtechniques and data.	▪The sampling methods being used are industry standardpractice.▪QAQC standard samples used are supplied by OREAS forTGC.▪Samples are submitted to ISO accredited laboratories(ALS Adelaide and ALS Brisbane)▪The lab is subject to routine and random inspections.

Section 2 Reporting of Exploration Results

(Criteria in this section apply to all succeeding sections)

Criteria	JORC Code Explanation	Commentary
Mineraltenement andland tenurestatus	▪Type, referencename/number, location andownership includingagreements or materialissues with third partiessuch as joint ventures,partnerships, overridingroyalties, native titleinterests, historical sites,wilderness or national parkand environmental settings.▪The security of the tenureheld at the time ofreporting along with anyknown impediments toobtaining a licence tooperate in the area.	▪The Uley Graphite Project consists of five contiguoustenements on the Eyre Peninsula of South Australia, ofwhich two are retention leases, two are mining leasesand one is an exploration licence. Tenementidentification numbers are: RL66, RL67, ML5561,ML5562 and EL4778.▪Mining development is subject to the approved Programfor Environmental Protection and Rehabilitation (PEPR)and an Environmental Licence which is mandated underSouth Australian State legislation.▪QGL has a 100% interest in these tenements and noroyalty, joint venture or other material agreements arein place other than a royalty of 1.5% with its formerparent company, SER.▪Tenement ownership is secure, there are no knownimpediments to obtaining a license to operate in thearea.
Explorationdone by otherparties	▪Acknowledgment andappraisal of exploration byother parties.	▪Historically a number of parties have undertakenexploration on the leases.
Geology	▪Deposit type, geologicalsetting and style ofmineralisation.	▪Graphite is developed as a constituent mineral in coarseprograde metamorphic assemblages as well as in thefabric and foliation of micaceous schists. These areinterpreted to be the folded, thrusted andmetamorphosed equivalents of the Cook Gap Schist.Folding of stratigraphy on various local scales is obviousfrom the core logging.

Criteria	JORC Code Explanation	Commentary
Drillhole	▪A summary of all
Information	information material to the
	understanding of the
	exploration results including
	a tabulation of the following
	information for all Material
	drillholes:
	easting and northing ofthe drillhole collar
	elevation or RL
	(Reduced Level –
	elevation above sea
	level in metres) of the
	drillhole collar
	dip and azimuth of the
	hole
	down hole length andinterception depth
	hole length
	▪If the exclusion of this
	information is justified on
	the basis that the
	information is not Materialand this exclusion does not
	detract from the
	understanding of the
	report, the Competent
	Person should clearly
	explain why this is the case.
Data	▪In reporting Exploration		▪						Reported assay intersections are length and density
aggregation	Results, weightingaveraging techniques,		weighted
methods	maximum and/or minimum		▪						For graphitic intersections the mean grade wascalculated using a nominal lower cut-off of 2% for TGC
	grade truncations (eg								for a minimum intercept of 2m and maximum internal
	cutting of high grades) and			dilution (<2%) of less than 3m.
	cut-off grades are usually		▪						No metal equivalent values are used for reporting
	Material and should be			exploration results.
	stated.▪
	Where aggregate interceptsincorporate short lengths of
	high grade results and
	longer lengths of low grade
	results, the procedure used
	for such aggregation should
	be stated and some typical
	examples of suchaggregations should be
	shown in detail.
	▪The assumptions used for
	any reporting of metal
	equivalent values should be
	clearly stated.

Criteria	JORC Code Explanation	Commentary
Relationshipbetweenmineralisationwidths andinterceptlengths	▪These relationships areparticularly important in thereporting of ExplorationResults.▪If the geometry of themineralisation with respectto the drillhole angle isknown, its nature should bereported.▪If it is not known and onlythe down hole lengths arereported, there should be aclear statement to thiseffect (eg 'down holelength, true width notknown').	▪The orientation of the mineralisation is well known giventhe presence of a complete section to the south of thecurrent drilling and the local geology known fromprevious drilling at the Uley Project.▪Drill holes have been designed to interceptmineralisation at optimum angles, bedding contactsdisplayed in the current drilling are confirming theappropriate orientation of the drill holes.▪The reported downhole length is therefore close if notequal to the true width of mineralisation.
Diagrams	▪Appropriate maps andsections (with scales) andtabulations of interceptsshould be included for anysignificant discovery beingreported These shouldinclude, but not be limitedto a plan view of drillholecollar locations andappropriate sectional views.	▪Refer to Figures in the body of the text.
Balancedreporting	▪Where comprehensivereporting of all ExplorationResults is not practicable,representative reporting ofboth low and high gradesand/or widths should bepracticed to avoidmisleading reporting ofExploration Results.	▪All available exploration results related to this programhave been reported.
Othersubstantiveexplorationdata	▪Other exploration data, ifmeaningful and material,should be reportedincluding (but not limitedto): geological observations;geophysical survey results;geochemical survey results;bulk samples – size andmethod of treatment;metallurgical test results;bulk density, groundwater,geotechnical and rockcharacteristics; potentialdeleterious orcontaminating substances.	▪Outstanding assays for the 5 drill holes will providefurther information relating to the mineralisation to thenorth of Uley 3.▪All available and material exploration information hasbeen considered in the planning and modelling of thisdrill program. This comprised a drilling database,previous estimates and reports, academic literature,petrological reports, metallurgical test work reports, dryrock density determinations, and site visit photographyand communication.
Further work	▪The nature and scale ofplanned further work (egtests for lateral extensionsor depth extensions or	▪Exploration work to quantify the extent and continuity ofmineralisation within the QGL-held tenure is ongoing.This work includes further diamond drilling, furthergeophysical surveys and geological mapping. Details of

Criteria	JORC Code Explanation	Commentary
	large-scale step-outdrilling).▪Diagrams clearlyhighlighting the areas ofpossible extensions,including the maingeological interpretationsand future drilling areas,provided this information isnot commercially sensitive.	this exploration effort are deemed commerciallysensitive.