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TALGA GROUP LTD Investor Presentation 2018

Mar 26, 2018

65925_rns_2018-03-26_4e57e5ee-339e-4f3a-a9cb-a06b5192b9d3.pdf

Investor Presentation

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ASX:TLG

http://www.talgaresources.com/irm/PDF/1455/KiskamaIOCGProjectDrillingResults

27 March 2018

Talga Presentation at Goldman Sachs Batter Da y y

Talga Resources Ltd ABN 32 138 405 419

1st Floor, 2 Richardson St, West Perth WA 6005 Australia

T: +61 8 9481 6667 F: +61 8 9322 1935 www.talgaresources.com

Advanced materials technology company, Talga Resources Ltd (“Talga” or “the Company”), is pleased to provide a copy of the presentation to be delivered today, 27th March 2018, by Managing Director Mark Thompson at the Goldman Sachs Battery Day in Sydney, New South Wales, Australia.

The presentation is available on the Company’s website via the link below:

http://www.talgaresources.com/irm/content/presentations.aspx?RID=301

Corporate Information

ASX Codes TLG, TLGOA Shares on issue 202.9m Options (listed) 44.8m Options (unlisted) 33.0m

For further information, visit www.talgaresources.com or contact:

Mark Thompson Managing Director Talga Resources Ltd T: + 61 (08) 9481 6667

Company Directors Terry Stinson

Non-Executive Chairman

Mark Thompson Managing Director

Grant Mooney Non-Executive Director

Stephen Lowe

Non-Executive Director

Ola Mørkved Rinnan

Non-Executive Director

http://www.talgaresources.com/irm/PDF/1455/KiskamaIOCGProjectDrillingResults

Page 1

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TALGA RESOURCES Advanced Graphite and Graphene for High Performance Batteries Mark Thompson Managing Director Goldman Sachs Battery Day 27 March 2018

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FORWARD LOOKING STATEMENTS & DISCLAIMER

This presentation has been prepared by Talga Resources Limited (ACN 138 405 419) (“Issuer”) for the sole purpose of providing an overview of its current prospects and proposed exploration and development strategy to recipients (“Recipient”). This presentation and its contents are provided to the Recipient in confidence and may not be reproduced or disclosed in whole or in part to any other person, without the written consent of the Issuer.

The presentation is based on information available to the Issuer as at the date of the presentation. The information contained in this presentation has not been verified by the Issuer nor has the Issuer conducted any due diligence in relation to that information. The presentation contains selected information and does not purport to be all inclusive or to contain all information that may be relevant to the Recipient. The Recipient acknowledges that circumstances may change and this presentation may become outdated as a result. The Issuer accepts no obligation to update or correct this presentation.

This document includes forward-looking statements. When used in this document, the words such as "could," “plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although the Issuer believes that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of the Issuer, its directors, employees or agents, advisers, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including, without limitation, any liability arising from fault or negligence on the part of the Issuer or its directors, employees or agents. Nothing in this Presentation is a promise or representation as to the future. Statements or assumptions in this presentation as to future matters may prove to be incorrect and differences may be material. The Issuer does not make any representation or warranty as to the accuracy of such statements or assumptions.

The information in this presentation does not take into account the investment objectives, financial situation and particular needs of any Recipient. The Recipient should not make an investment decision on the basis of this presentation alone and the Recipient should conduct its own independent investigation and assessment of the content of this presentation. Nothing in this presentation constitute financial product, investment, legal, tax or other advice. Nothing in this presentation should be construed as a solicitation to buy or sell any security or to engage or refrain from engaging in any dealing in any security. Photographs, maps, charts, diagrams and schematic drawings appearing in this presentation are owned by and have been prepared by or commissioned by the Issuer, unless otherwise stated. Maps and diagrams used in the presentation are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the date of this presentation. By accepting this presentation the Recipient agrees to be bound by the foregoing statements.

Talga Resources Vertically integrated advanced material technology company focusing on graphite and graphene products

CORPORATE SNAPSHOT

FINANCIAL INFORMATION

FINANCIAL INFORMATION
Share price (ASX code TLG) (21-March-18) A$0.77
52 week low / high A$0.365 / A$0.92
Shares outstanding1,2 202.95m
Market Capitalisation A$156.3m
Cash (31-Dec-17) A$14.0m
Debt (31-Dec-17) Nil
Enterprise value A$142.3m

SHARE PRICE PERFORMANCE

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Share price (A$) 12 months
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Volume (m)

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MAJOR SHAREHOLDERS

Source: IRESS, company filings. As at 21 March 2018.

1 Excludes 44.8m listed options (TLGOA) with exercise price A$0.45 and expiring 31 Dec 2018

2 Excludes 33.0m unlisted options (mostly employees and directors) with exercise price range up to A$1.02 and expiry date range 4 Oct 2018 to 17 Dec 2020

MAJOR SHAREHOLDERS
Smedvig –Scandinavian based family office 12.6%
Mark Thompson –Managing Director 7.1%
J P Morgan Nominees (Australia) 4.2%
HSBC Custody Nominees (Australia) 3.9%
Pelmer Securities 3.8%
Citicorp Nominees 3.6%
Kamberg Investments 3.1%

4

VERTICALLY INTEGRATED ADVANCED MATERIAL SUPPLY CHAIN

European operations and business units

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Talga Mining Sweden 100%-owned high grade graphite deposits – Largest resources in Europe

Graphite Mineral Resources

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Talga Advanced Materials Germany 100%-owned test process facility located in Rudolstadt, Germany

Graphite & Graphene Processing

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Talga Technologies UK Product Product development and Development marketing team located in and Marketing Cambridge, UK

GLOBAL LEADER IN RESOURCE GRADE

Multiple high grade graphite JORC resources and largest in Europe

Average Grade of In-situ Graphite

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Nunasvaara
Yalbra
Balama West Ativa
Balama West Mualia
Lac Guéret
Balama East
Kookaburra Gully
Jalkunen
Lac Knife
Koppio
Campoona
Uley
Raitajärvi
Balama North Nicanda Hill
Kringel
Epanko
Geumam
Wilclo South
Duwi
Kambale
Taehwa
Balama West Other
Merelani East
Mousseau West
Molo
Graphite Creek
Balama North Cobra Plains
Nachu
Samcheok
McIntosh Target 1
Loharano
Lochaber
Albany
Coosa
Kearney
Bissett Creek
0 5 10 15 20 25
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Graphitic carbon as a fraction of total mineral resources (wt%)

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30
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Source: Source: http://www.techmetalsresearch.com/metrics-indices/tmr-advanced-graphite-projects-index/ September 2015.

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LOW IMPACT BULK GRAPHENE PROCESS TECHNOLOGY

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View full video here: https://www.youtube.com/watch?v=xrp4NzIe-B8&t=8s

TALGA ADVANCED MATERIALS GMBH - GERMANY Scaling Up Proprietary Bulk Graphene Processing Technology

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100% owned proprietary test facility scaling up process for production of graphene and micrographite Output of testwork available for product development collaborations with industrial partners & customers Commissioning of next scale up (phase 3) underway

TALGA TECHNOLOGIES LTD - UK

Product Development with R&D Partnerships and Formal Industry Agreements

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Some current collaborations include:

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PROVEN INTEGRATED SUPPLY CHAIN

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View full video here: https://www.youtube.com/watch?v=G7dndP7NGco

TALGA TECHNOLOGIES - FORWARDLY INTEGRATING GRAPHENE

Using Functionalisation and Polymerisation/Compounding techniques to enter current markets

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Mining of Graphite Exfoliation Functionalisation Polymerisation
Application
Concentrating Graphene Production Coupling and Dispersion Compounding
Talga Products
Natural
Bulk Graphene Lithium Ion battery
Graphite Ore Electrode Energy Storage Sodium battery
Alkaline batteries
Powders Conductors Flexible batteries
Micrographite
Nano-enhanced Conductive & Construction
Admixtures HS Concretes Infrastructure
Siliceous Conductive Aggregates
For Concrete and Road Applications Lithium Ion Anodes
Marine Coating
Functionalised Polymer Industrial Coating
CFRP Composites
Polymers Thermosets
Conductive Agents
Chemically Metal Surface Coating
Polymers Textiles - Wearables
Coupled Adhesives Conductive Inks
Dispersions Packaging
Conductive Plastics
Graphene Thermoplastic Membranes
Loaded Plastics Moulding Packaging
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*Note: Functionalisation is the adding of chemical bonds to the graphene to enable it to impart its performance characteristics into the bulk material it is blended. It is a value-adding process required for integration into products.

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OUR PRODUCTS

We make added value and enhanced Products used across four key sectors, with batteries being one in energy.

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BUILDING MATERIALS

ENERGY

COATINGS

COMPOSITES & RESINS

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  • Micro-graphite for current lithium-ion high power batteries Next generation anodes with higher energy performance

  • Combined graphite and graphene mixtures for high strength building materials

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Conductive screeds for anodes with higher de-icing systems energy performance Conductive flooring, Conductive additives wall panel systems for lithium-ion combined with heating batteries and flexible, or cooling systems printable batteries for ‘Internet of Things’ and ‘Wearable’ devices

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Eco-friendly chromefree based pretreatment coatings

  • High strength carbon fibre resins

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Engineered plastics and polymer composites

  • Pre-fabrication and polymer composites post fabrication antiLightning strike

  • corrosion coatings protection and EM

  • Marine anti-fouling shielding coating systems

Thermal sink polymer resins

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Conducting inks and pastes

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TECHNICAL MANAGEMENT – ENERGY PRODUCTS Talga staff in-house expertise of leading battery developments

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Sai Shivareddy Ph.D.

Manager - Product Development

Heads up Talga’s development of advanced carbon products for energy storage. 7 years industrial experience focusing on early stage commercialisation of novel materials and energy technologies.

  • Previous positions include leading graphene research and commercialisation efforts at Tata Group in collaboration with the Cambridge Graphene Centre.

  • Founder of multiple energy harvesting and storage technologies.

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Claudio Capiglia Ph.D.

Director of Battery Technologies

Over 20 years experience in the battery industry in Japan. Exclusive know-how of the research, development and industrialisation of advanced materials and electrodes for Li-ion battery manufacturing.

  • Previous Professor and head of Battery Group/ Italian Institute Technology - Cofounder and Director of the original Li-ion cell manufacturers in Europe - Former Senior Scientist for solid state battery technologies for Hybrid Electric Vehicles (HEVs) at Toyota.

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UNIQUELY PLACED For the fast growing Li-ion battery supply chain

14

EUROPEAN BATTERY GIGAFACTORIES

Location advantage to supply fast growing Li-ion battery supply chain

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TALGA PROJECTS, SWEDEN
NORTHVOLT, SWEDEN 32GWhr
JOHNSON MATTHEY, POLAND
TESLA GIGAFACTORY, EUROPE (PROPOSED)
DAIMLER, GERMANY
NISSAN, UK
BMZ, GERMANY 3GWhr TERRA E, GERMANY 38GWhr
SAFT, FRANCE 0.6GWhr
LG CHEM, POLAND 5GWhr
KREISEL ELECTRIC AND ACCUPOWER, AUSTRIA
GS YUASA, HUNGARY
SAMSUNG SDI, AUSTRIA
SAMSUNG SDI, HUNGARY, 2.5GWhr
CELL MAKERS
BATTERY PACK MAKERS ONLY
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  • Multiple Li-ion “Gigafactories” underway or planned in EU

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  • Majority of raw materials are currently imported into Europe from Africa (cobalt and graphite) or China (graphite)

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  • Talga’s graphite and cobalt-related deposits in Sweden represent an important potential non-Africa, non-China supply

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  • Rocketing growth in EV’s underwritten by many EU governments

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Direct rail-links to multiple ‘Gigafactories’ creates different supply-demand dynamic to standard China supply story

15

Source: Benchmark, Roskills, Recruit.

EUROPE GIGAFACTORY STARTUPS

Global Li-ion cell production set to more than double by 2020, with Europe near quadrupling from 2020-25

0
50
100
150
200
250
300
350
400
450
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Capacity
(GWhr)
Asia
ROW
Europe
Global Lithium Ion Battery Manufacturing Capacity (Giga Wh)
10yr CAGR
20%
Country
Company/JV
Installed Capacity
GWhr
2020
2025
Germany
Terra E Consortium
1.0
34.0
Sweden
Northvolt
8.0
32.0
Poland
LG Chem
5.0
5.0
Germany
LeClanche
3.4
3.4
Germany
BMZ/Bosch
0.0
3.0
Hungary
Samsung
2.5
2.5
UK
WMG/Coventry
1.0
1.0
France
Saft
0.6
0.6
TOTAL
21.5
81.5

Note: Daimler and VW have not declared if making cells in Europe Source: Bloomberg, Benchmark*2023, Avicienne, UBS

16

GRAPHITE PRICING

Batteries are a disruptive driver demand to natural graphite, which historically consumed only <5% for anodes.

12.3 Mt @ 25.5% Cg

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Graphite products are diverse and supply chain is fragmented across hundreds of suppliers & re-processors (purifiers, shapers and coaters) Pricing is opaque and under private contracts Smaller sizes take more milling energy so attain higher prices Benchmark Minerals now quote battery base 99.95%C <10 micron spheronised uncoated at US$3,800 tonne

17

LITHIUM-ION PERFORMANCE Graphite and graphene materials for current and next-gen batteries

18

LITHIUM-ION BATTERIES

Created in 1970’s and first commercialised in 1980’s, Lithium-ion still has impediments to mass take up in demanding applications like transport

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Weak – limited capacity which limits range of mobility Slow to charge (safely)

Expensive – economically on per unit basis and environmentally in production of materials. Flammable

Heavy when include thermal and impact safety management structures (~70% of battery pack weight) Poor recyclability

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SOLUTIONS THROUGH BETTER MATERIALS

Automotive sector pushing hard for next gen battery materials to increase safety/performance and lower cost

CURRENT LI-ION CELL COMPONENTS

TRENDING LI-ION TECHNOLOGIES

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Where graphite is used

Where graphene can be used

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Silicon additives and solid silicon electrodes (potential 3,579mAh/g)

All-solid state with no electrolyte or liquid (potential low cost and safe) Next generation under advanced R&D: Li-sulfur (very high energy and eco friendly) Li-air (petrol power potential) Sodium-ion (abundant and low cost)

Graphene tends to be used in more next gen batteries than graphite due to higher conductivity, surface area and physiochemical potential, and can be used across more parts of battery than just anode.

20

Source: Johnson Matthey

SILICON ELECTRODES ENABLED BY GRAPHENE

Talga is developing materials for current additive silicon and next gen solid silicon electrodes

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Industry needs higher capacity batteries (longer range) but not bigger/heavier. Addition of silicon up to 30% will double reversible capacity to >750 mAh/g = >50% $$ vs Standard Graphite

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Many new battery technologies require graphene more than graphite e.g. Samsung silicon battery[1] Goldman Sachs estimate an Rmb6.3bn (US$0.9bn) addressable market by 2025 for graphene in batteries[2]

TALGA GRAPHENE

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FLG
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SAMSUNG GRAPHENE COATED SILICON

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1 Source “Graphene balls for lithium rechargeable batteries with fast charging and high volumetric energy densities”, Nature Communications 8:1561. Samsung

2 Source “Chinas Battery Challenge; A New Solution”, Goldman Sachs Feb 2017

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TALGA MATERIAL ADVANTAGE

Talga’s patent pending technology liberates graphite as well as graphene from raw ore, enabling use in Li-ion anodes with less processing steps than peers

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Talga anode graphite has natural unique morphology and unmilled small size, with graphene-like structures increasing Lithiation sites Tests at WMG confirm Talga anode capacity of 420 mAh/g vs pure graphite limit 372 mAh/g and average ASX graphite co’s 360 mAh/g

Excellent stability: 99.9% coulombic efficiency and >99.5% reversible capacity over 1,200 hours cycling

Cost effective process but needs optimising to improve surface area/first charge to commercial levels , then watch this space!

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higher performance with less manufacturing steps = lower eco-impact

22

TALGA PARTNERS THROUGH ‘FARADAY CHALLENGE’

UK Government funding through Innovate UK’s £246 million ‘Faraday’ initiative to create new battery technologies and local supply chains

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TWI WMG CAMBRIDGE UNIVERSITY
Manufacturing Research Battery R&D Institution R & D Institution
PV3 FARADION JAGUAR LAND ROVER
Energy Materials Sodium Cell Developer Auto Company
CRODA JOHNSON MATTHEY TALGA RESOURCES LTD
Chemicals Company Battery Materials Graphene Advanced
Material Technologies
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  • Talga wins 70% rebate against eligible costs (~A$1.5m budget) over 1-2 year period for 3 programs:

  • Scale up of Li-ion electrode materials; higher

  • performance current

  • Graphene-silicon and alloy anodes (Safevolt);

    • Sodium-ion batteries for automotive power
  • applications.

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  • Binding collaboration agreements signed with partners including Jaguar-Land Rover, Johnson Matthey, Croda, Faradion, PV3, Cambridge University and Warwick Manufacturing Group.

23

DEVELOPING SIGNIFICANT PART OF SUPPLY CHAIN Talga integrated supply and product technology captures more of supply chain

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Electrode,
Materials & Cell Module, Pack Vehicle
Raw Materials Separator,
Electrochemistry Manufacturer & BMS Application
Electrolyte etc.
LISTED COMPANY X
TALGA RESOURCES LTD
WARWICK MANUFACTURING GROUP
CRODA
PV3
JOHNSON MATTHEY
JAGUAR LAND ROVER
FARADION
Industrial Chemists (e.g. 3M) Tier 1 Low Vol OEM
Mining/refining (e.g Imerys) Cell Supplier (e.g. Panasonic)
Materials supplier (e.g. JM) High Volume OEM
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24

WHY TALGA?

100% control of the biggest graphite resources in Europe where massive new demand for Li-ion batteries is located Graphene on track to take market share in future from currently MATERIAL ENERGY used graphite types MOBILITY SOLUTIONS

Formal collaboration agreements with major supply chain industries

Unique ore type that provides higher performance via patent pending processing technology Significant in house technical capability with vertically integrated strategy capturing more of downstream market opportunity

Positioned to profit from the shift to stronger, lighter, safer and more economic batteries that is now well underway

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COMPANY DIRECTORY

Talga Resources Ltd | Perth, Australia First Floor, 2 Richardson Street, West Perth WA 6005, Australia P| +61 8 9481 6667 E| [email protected]

______ Talga Technologies Limited | Cambridge, UK Unit 15-17 Cambridge Science Park, Milton Road, Cambridge CB4 0FQ, UK ______ Talga Mining Pty Ltd Filial | Stockholm, Sweden Storgatan 7, 972 38 Luleå, Sweden


Talga Advanced Materials GmbH | Rudolstadt, Germany Prof.-Hermann-Klare-Str. 25, 07407 Rudolstadt, Germany

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APPENDIX AND STATEMENTS

Competent Person’s Statements

The information in this document that relates to exploration results is based on information compiled by Amanda Scott, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy (Membership No.990895). Amanda Scott is a full-time employee of Scott Geological AB. Amanda Scott has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken 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 (JORC Code). Amanda Scott consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

The information in this report that relates to Graphite Resource Estimation for the Vittangi Project is based on information compiled by Oliver Mapeto and reviewed by Albert Thamm. Both Mr Mapeto and Mr Thamm are consultants to the Company. Mr Mapeto is a Member of both the Australian Institute of Mining and Metallurgy (Membership No.306582) and Australian Institute of Geoscientists (Member No 5057) and MR Thamm (Member No 203217) is a Fellow Member of the AusIMM.

Both Mr Mapeto and Mr Thamm have sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this document and to the activity which both 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” (“JORC Code”). Mr Mapeto and Mr Thamm consent to the inclusion in this report of the Matters based on this information in the form and context in which it appears.

The information in this report that relates to Exploration Targets is based on information compiled and reviewed by Mr Simon Coxhell, a consultant to the Company and a member of the Australian Institute of Mining and Metallurgy and Mr Mark Thompson, who is an employee of the Company and a member of the Australian Institute of Geoscientists. Mr Thompson and Mr Coxhell have sufficient experience which is relevant to the activity which is being undertaken 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” (“JORC Code”). Mr Thompson and Mr Coxhell consent to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this report that relates to Iron Ore Resource Estimation and Graphite Resource Estimation for the Jalkunen and Raitajärvi Projects is based on information compiled and reviewed by Mr Simon Coxhell. Mr Coxhell is a consultant to the Company and a member of the Australian Institute of Mining and Metallurgy. Mr Coxhell has sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this document and to the activity which he 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” (“JORC Code”). Mr Coxhell consents to the inclusion in this report of the Matters based on this information in the form and context in which it appears.

Cautionary Statement

Any data on the scoping study referred to in this report is based on low level technical and economic assessments, and is insufficient to support estimation and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusion of the scoping study will be realised. The Company confirms that all material assumptions and technical parameters underpinning the scoping study results and projections in this release continue to apply and have not materially changed. The use of the word "ore" in the context of this report does not support the definition of 'Ore Reserves' as defined by the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. The word 'ore' is used in this report to give an indication of quality and quantity of mineralised material that would be fed to the processing plant and is not to assumed that 'ore' will provide assurance of an economic development case at this stage, or to provide certainty that the conclusion of the scoping study will be realised.

GRAHITE JORC RESOURCES AND EXPLORATION TARGETS

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