QUANTUM GRAPHITE LIMITED — Regulatory Filings 2021

Oct 21, 2021

Uley 2 Extensional Drilling (Eastern Conductor) Completion of Drilling Program

The Company is pleased to announce that it has successfully completed its Eastern Conductor drilling program including the rehabilitation of all drill holes. This program represents extensional drilling immediately to the east of the proposed Uley 2 pit.

Consistent with the earlier announcements, drilling encountered significant graphitic intersections (see Figures 1-4) including:

• • MD705 from 76.3 to 76.9m estimated visually as +20% TGC.
• • MD706 from 36.8 to 38.2 estimated visually as +15% TGC.
• • MD707 from 35.4 to 38.1 estimated visually as +20% TGC.
• • MD708 from 39.9 to 41.4 estimated visually as +20% TGC.
• • MD709 from 42.8 to 61.1m estimated visually as 10 to +20% TGC.

Figure 1: Drill hole MD706 illustrating significant intersections graphitic gneiss and schist and association with pegmatites.

As announced in the current Quarterly Activity Report, the first set of results (MD704, MD705, MD706) of the drilling program are expected next week.

The Company's Managing Director, Sal Catalano, commented that the Board was very pleased with the QGL team's efforts and accomplishments, "Managing personnel and equipment originating from four different States was quite a challenge but performed professionally without compromising the achievement of key technical objectives. We're delighted with what we've seen and look forward to the laboratory results."

Results from this program will have a significant impact on the Uley 2 expansion strategy. The option of extending Uley 2 to the east has a number of advantages including the speedy pathway to a very low-cost extension of the Uley 2 pit.

ABOUT QUANTUM GRAPHITE LIMITED

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.

Figure 2: MD705, visually estimated as 0.6m at +20% TGC

Figure 4: MD708 (left) zones of elevated graphite, 39.9 to 41.4m estimated visually as +20% TGC MD709 (right) graphitic schist with pegmatite, 42.8 to 61.1m estimated visually as 10 to +20% TGC

Figure 3: MD707, close-up of mineralisation and alteration. 35.4 to 38.1m estimated visually as +20% TGC

Work to date strongly suggests that the Eastern Conductor geological model is closely related to that of Uley 1 (see Figure 5) in which graphite mineralisation is hosted within a series of tightly folded graphitic gneiss and schist sections disrupted by steep faulting and sheet zones.

Figure 5: Uley 1 structure illustrating graphite mineralisation hosted within a series of tightly folded graphitic gneiss and schist sections disrupted by steep faulting and sheet zones.

The QGL team continues to assess and interpret the geological and structural model of the Eastern Conductor and its relationship to the known mineralisation characteristics of the Uley 2 Reserves and Resource and the previously mined Uley 1.

Consistent with the team's working model, large flake appears to be concentrated at contacts with pegmatites (Figure 6).

Figure 6: Example of Coarser flake graphite associated with pegmatite from drill hole MD708 at a depth of 56.9m.

The Company is encouraged with the visual display of coarse flake size and expects to make further announcements as it progresses the Eastern Conductor geological model.

Figure 7: Typical presentation of coarse flake from drill hole MD705 at a depth of 54m.

FOR FURTHER INFORMATION CONTACT:

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

Cautionary statement for visual estimates of total graphitic carbon

In relation to the disclosure of visual mineralisation, the Company cautions that visual estimates of total graphitic carbon (TGC) abundance should never be considered a proxy or substitute for a laboratory analysis. Assay results are required to determine the widths and grade of the visible mineralisation reported in preliminary geological logging. The Company will update the market when laboratory analytical results become available.

Competent Person Statement

The information in this announcement is based on, and fairly represents, information and supporting documentation prepared by Mrs Vanessa O'Toole, a competent person who is a member of the Australasian Institute of Mining and Metallurgy. Mrs O'Toole is a consultant to Quantum Graphite Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are 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 consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

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
Sampling techniques	 Nature and quality of sampling (eg cut channels, random chips, or specific 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.	 Samples are yet to be analysed by laboratory analysis.
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. Downhole surveys were obtained using a Reflex Sprint gyroscope. The angled drillholes were orientated using the Reflex ACT II RD core orientation tool.
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 fine/coarse material.	 Core recoveries are recorded for each drill run, which ranges from 1.5m runs to 3m runs.  Industry standard procedures/techniques are employed to ensure maximum downhole recovery.  There has been no identified relationship between sample recovery and grade so far.
Logging	 Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.  Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.  The total length and percentage of the relevant intersections logged.	 All drill holes are logged in their entirety. Qualitative descriptions of mineralogy, mineralisation, weathering, lithology, colour and other features are recorded and photographed for each sample.
Sub-sampling techniques and sample preparation	 If core, whether cut or sawn and whether quarter, half or all core taken.  If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.	 The core is yet to be cut for laboratory sampling. Diamond core will be cut in half and sampled over mineralised intervals.  Duplicates, blanks and standards will be submitted for analysis for quality assurance and control.

Criteria	JORC Code Explanation	Commentary
	 For all sample types, the nature, quality and appropriateness of the sample preparation technique.  Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.  Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.  Whether sample sizes are appropriate to the grain size of the material being sampled.
Quality of assay data and laboratory tests	 The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.  For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.  Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	 Samples are yet to be prepared or assayed.  Duplicates, blanks and standards will be submitted for analysis as part of a full QAQC system in place to determine the accuracy and precision of assays.  The sample sizes are considered to be appropriate to correctly represent the mineralisation style.
Verification of sampling and assaying	 The verification of significant intersections by either independent or alternative company personnel.  The use of twinned holes.  Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.  Discuss any adjustment to assay data.	 Quantum Graphite geologists and consultants have reviewed the core.  No assay data is reported.
Location of data points	 Accuracy and quality of surveys used to locate drillholes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.  Specification of the grid system used.  Quality and adequacy of topographic control.	 Drill location co-ordinates are reported in Uley Mine Grid (transformed to truncated AMG). The reported truncation was: Easting = -554,216.866m Northing = -6,139,092.867m 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 distribution	 Data spacing for reporting of Exploration Results.  Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.  Whether sample compositing has	 Drilling at the Eastern Conductor is completed on 50m by 50m spacing, which has been shown at Uley 2 (as part of the same stratigraphy) to be sufficient for geological modelling and understanding of the mineralisation style and distribution, also the potential for an Inferred Mineral Resource.

Criteria	JORC Code Explanation	Commentary
	been applied.
Orientation of data in relation to geological structure	 Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.  If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	 Drilling orientation is considered appropriate considering the deposit type and orientation of moderately WNW dipping mineralisation. Sampling bias related to the orientation of sampling is considered to be minimal.
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 techniques and data.	 No formal third-party audits have been undertaken to date.

Section 2 Reporting of Exploration Results

(Criteria in this section apply to all succeeding sections)

Criteria	JORC Code Explanation Commentary
Mineral tenement and land tenure status	 Type, reference name/number,  location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties,  native title interests, historical sites, wilderness or national park and environmental settings. legislation.  The security of the tenure held at the  time of reporting along with any known impediments to obtaining a licence to operate in the area. 	The Uley Graphite Project consists of five contiguous tenements on the Eyre Peninsula of South Australia, of which two are retention leases, two are mining leases and one is an exploration licence. Tenement identification numbers are: RL66, RL67, ML5561, ML5562 and EL4778. Mining development is subject to the approved Program for Environmental Protection and Rehabilitation (PEPR) and an Environmental Licence which is mandated under South Australian State 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 other parties	 Acknowledgment and appraisal of  exploration by other parties. leases.	Historically a number of parties have undertaken exploration on the
Geology	 Deposit type, geological setting and  style of mineralisation.	Graphite is developed as a constituent mineral in 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 understanding of the	Planned drill holes are listed below:
	exploration results including a Hole ID	Azimuth Inclination X Y Z length
	tabulation of the following information MD704	90 -60 10,175 9,475 500 80
	for all Material drillholes: MD705	90 -60 10,225 9,475 500 100
	 easting and northing of the MD706	90 -60 10,275 9,475 490 100
	drillhole collar MD707	90 -60 10,325 9,475 480 50
	MD708  elevation or RL (Reduced Level –	90 -60 10,175 9,525 480 80
	MD709 elevation above sea level in MD710	90 -60 10,225 9,525 500 80 90 -60 10,275 9,525 500 80
	metres) of the drillhole collar MD711	90 -60 10,325 9,525 490 50
	 dip and azimuth of the hole TOTAL (m)	620
	 down hole length and interception depth
	 hole length
	 If the exclusion of this information is justified on the basis that the information is not Material and this

Criteria	JORC Code Explanation	Commentary
	exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.
Data aggregation methods	 In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.  Where aggregate intercepts incorporate 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 such aggregations should be shown in detail.  The assumptions used for any reporting of metal equivalent values should be clearly stated.	 No assay results are reported.
Relationship between mineralisation widths and intercept lengths	 These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation  with respect to the drillhole angle is known, its nature should be reported.  If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').	 The orientation of the mineralisation is well known given the presence of a complete section to the south of the current drilling.  Drill holes have been designed to intercept mineralisation at optimum angles, bedding contacts displayed in the current drilling are confirming the appropriate orientation of the drill holes.  The reported down hole length is therefore close if not equal to the true width of mineralisation.
Diagrams	 Appropriate maps and sections (with scales) and 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.	 Refer to Figures in the body of the text.
Balanced reporting	 Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	 All results considered significant are reported by QGL.
Other substantive exploration data	 Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	 All available and material exploration information has been considered. This comprised a drilling database, previous estimates and reports, academic 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 tests for lateral extensions or depth extensions or large-scale step-out drilling).  Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	 Exploration work to quantify the extent and continuity of mineralisation within the QGL-held tenure is ongoing. This work includes further diamond drilling, further geophysical surveys and geological mapping. Details of this exploration effort are deemed commercially sensitive.