VOLT RESOURCES LIMITED — Investor Presentation 2017

Sep 4, 2017

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Fast-tracking a globally significant graphite project

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Disclaimer

The information contained in this confidential document (“Presentation”) has been prepared by Volt Resources Limited (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment.

While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have the authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as “Information”) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgement, analysis and assumptions and each recipient should satisfy itself in relation to such matters.

Neither this presentation nor any copy of it may be (a) taken or transmitted into the United Kingdom, Canada, Japan or the United States of America, their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside Australia, Canada or Japan who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

Competent Person’s Statement

The information in this report that relates to Exploration Targets, Exploration Results is based on information compiled by Mr Matt Bull, a Competent Person who is a member of Australian Institute of Geoscientists. Mr Bull is a Director of Volt Resources. Mr Bull has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity 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’. Matt Bull consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on information compiled by Mark Biggs, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mark Biggs is a Director of ROM Resources Pty Ltd. Mark Biggs has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity 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’. Mark Biggs consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Ore Reserves is based on information compiled by Mr Andrew Law, a Competent Person who is a Fellow and Chartered Professional of the Australian Institute of Mining and Metallurgy. Mr Law is a Director of Optiro. Mr Law has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Mineral Resources and Ore Reserves’. Mr Law consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Investment Highlights

• Volt Resources Limited (ASX:VRC) is a flake graphite exploration and development company focused on fast-tracking the development of its 100% owned world-class Namangale Graphite Project in Tanzania

• Prime Location – Situated in the highly endowed East Africa graphite belt and only 140km by sealed road from the Port of Mtwara

• Globally Significant Resource – The Namangale Project is the largest JORC Mineral Resource in Tanzania with 461Mt at 4.9% Total Graphite Carbon (TGC)

• Near-term Production Potential – Volt is executing a plan to commence production and generate cash-flows late 2018 by expediting a smaller Stage 1 Development to generate 20,000tpa of graphite products with a low development cost estimated at circa US$30m

• Exceptional Product Characteristics – Good flake distribution and exceptional metallurgy makes Volt’s graphite suitable for all high growth graphite markets including expandable, battery anode and graphene

• Binding and Indicative commitments for 100% of Stage 1 Capacity – 5 agreements signed with strategic partners for total indicative and binding commitments for a minimum 36,000tpa of graphite product

• Good liquidity relative to market capitalisation – Capitalised at $17m Volt has had more than $40m worth of shares change hands over the last 12 months

• Large Shareholder Base and Aligned Board – Volt has more than 3,310 shareholders with its largest shareholder being Kabunga Holdings Pty Ltd (circa 14.92%), an entity associated with Volt’s Chairman, who has extensive in-country experience

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Corporate Snapshot

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12 Month Share Price Performance and Volume
60,000 12 Month Share Price Performance and Volume 0.10
60,000 0.10
0.08
0.08
40,00040,000
0.06 0.06
0.04 0.04
20,00020,000
0.02
0.02
0 0.00
Aug0 -16 Nov-16 Feb-17 May-17 Aug-17 0.00
Aug-16 Nov-16 Feb-17 May-17
Price ($)
Volume ('000)
Price ($)
Volume ('000)
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Top Shareholders	%
Kabunga Holdings Pty L	td 14.9
Board and Management	2.6
HSBC Custody Nominee	s 2.0
CS Fourth Nominees	1.3
Citicorp Nominees	1.9
Total	22.9

Capital Structure	Capital Structure
Shares on Issue	976,784,189
Listed Options	236,314,931
Share Price (31 August 2017)	1.7¢
52 week high / low	9.5¢ / 1.5¢
Undiluted Market Cap (31 August 2017)	$16.6m

Board and Management	Board and Management
Trevor Matthews	Chief Executive Officer
Asimwe Kabunga	Non-Executive Chairman
Stephen Hunt	Non-Executive Director
Alwyn Vorster	Non-Executive Director
Matt Bull	Non-Executive Director

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The Namangale Project

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• 100% owned by Volt

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• Flake distribution skewed towards jumbo, large and medium size

• Largest ore reserve amongst ASX listed peers of 127 Mt @ 4.4% TGC

• Largest mineral resource in Tanzania of 461Mt @ 4.9% TGC

• Huge exploration upside with only 6% of Volt’s tenement area having been effectively explored

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Strategic Location and Excellent Infrastructure

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• Located in south-east Tanzania 140km from Mtwara Port

• Sealed road from Project to Port

• Deep water port at Mtwara

• Port land available for product storage

• Safe to export concentrate product

• Situated in highly endowed East African graphite belt

• Support of local villagers and their leadership

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Fast-Tracking Smaller Stage 1 Production

• PFS Completed in December 2016 confirmed robust project economics (refer to Appendix 1)

• Strategic plan recently implemented to fast-track smaller Stage 1 Development and generate cash-flows by 2018 by concentrating on smaller initial development:

• 20,000tpa of graphite concentrate

• Low anticipated development capital requirements of US$30m based on preliminary work

• Indicative and binding commitments for 100% Stage 1 offtake in place

• Mine plan based on a higher grading, near surface zone

• First cash-flows anticipated Q4 2018

• Low strip ratio

• Open pit with depth of 100 metres

• Simple mining using conventional drill and blast, load and haul method

• Flotation testwork has demonstrated that high grade graphite concentrates, at coarse flake sizes, can be produced using a relatively simple flotation process

• Initial 5 year LOM with potential to expand to 20+ year LOM via Stage 2 Development

• Stage 1 DFS to define final scope and project economics

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Outline of ore processing to produce final graphite product

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Fast-Tracking Smaller Stage 1 Production

Namangale North Project Layout

• Expedite Stage 1 DFS by completing:

• 1,500 metres of infill reverse circulation drilling and 400 metres of wide diameter diamond cord drilling to facilitate further flow sheet refinements

• Water bore programme to assist in hydrogeological studies

• Geotechnical study to define Stage 1 pit wall angles

• Hydrogeological study to assist in providing data for the site’s water mass balance and potential pit dewatering requirements

• Mine plan studies to assist project commissioning and scheduling

• Further metallurgical testwork to complete processing flow sheet design

• Finalise Stage 1 development funding

• Negotiate Stage 1 Engineering, Procurement and Construction contract and other material contracts

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Considerable Expansion Potential

• Stage 2 Development:

• Strategic plan will see capacity expand in tandem with the anticipated increase in global demand for graphite with the enlarged facility planned for completion by 2020

• PFS based on 170,000tpa of graphite products with very strong economics

• PFS economics - 1.4 year payback, post tax NPV of US$890m, average annual EBITDA US$195m

• Feasibility Study for expansion to be completed in 2018

• Plan to be commissioned and in production by 2020

► Exploration Upside:

• Only approximately 65km[2] of Volt’s 1,113km[2] has been effectively explored representing 6% of Volt’s tenement area

• Free cash flow generated from Stage 1 Development to be allocated to a comprehensive drill program as part of the expansion of the Namangale Project

Outline of ore movement from pit to market

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• By June 2020, Volt will be one of the top three global suppliers of natural graphite

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Exceptional Product Characteristics

• Flake distribution skewed towards jumbo, large and medium flake size making Namangale graphite suitable for expandable, battery anode and graphene application

• Independent German metallurgical lab has confirmed excellent metallurgy

• Good product quality with no deleterious elements or quartz veins within graphite flakes

• Namangale graphite can be readily upgraded to 99.99% TGC which exceeds the general spherical graphite feed requirement of 99.95% TGC purity representing a major step in end-user qualification, specifically, for prospective end-users in the lithium-ion market

• No calcium carbonate detected which is crucially important for many applications but especially in the refractory industry

• Excellent expansion results from testwork program. Compared with rival samples from China, the expandability results for Volt’s flake are superior

• Testwork demonstrated that flake graphite from Namangale can produce high quality expandable graphite for multiple downstream applications

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Graphite Peer Comparison

Largest Ore Reserve

2nd Largest Mineral Resource

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Probable Proved Measured Indicated Inferred
GPX GPX
KNL
KNL
BKT
MNS
MNS
SYR
VRC
VRC
SYR
0 20 40 60 80 100 120 140 0 200 400 600 800 1,000 1,200
(Mt) (Mt)
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Graphite Market 2017 and Beyond

• Current indicative prices of US$700-US$1,700 per tonne for Volt’s graphite concentrate (average 95% TGC) is forecast to materially increase due to lack of new supply and demand growth in two distinct markets

• Strong demand underpinned by:

• Graphite anodes for use in lithium-ion batteries as governments and corporations mandate use of EV’s (e.g. UK and France 100% EV by 2040, Volvo 100% EV or Hybrid by 2019)

Forecast growth in natural flake concentrate demand for spherical and expandable graphite

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(tonnes)
1,600,000 Spherical graphite Expandable graphite
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2015 2016E 2017E 2018E 2019E 2020E
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Source: Lithium-ion manufacturers, Industry publications & Volt Resources estimates

• Expandable graphite for use in flame retardant building materials driven by government regulation requiring the use of flame retardant materials in building codes and/or banning brominated and asbestos based fire retardants

• Constrained supply of flake graphite in China due to environmental concerns resulting in mine closures combined with reducing grades, higher costs and declining flake size

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Projected China Natural Graphite Production

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Indicative Commitments for all Stage 1 Capacity

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GEM
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Agreement One of China’s China’s largest Fixed price leading graphite building materials binding 5 year groups group. Net assets offtake US$79bn. agreement

Two of China’s largest graphite processors and distributors

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Product Battery anode Expandable focused material processing product offtake, and product offtake construction support and financing

Graphene: Value add graphite flake graphite products, mainly product offtake expandable graphite

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Quantity 10,000-20,000tpa 10,000 -15,000tpa 1,000tpa (average)

GEM: 5,000tpa TSD: 10,000tpa

Refer to Volt’s ASX announcements titled “Binding Off-take Agreement with US Group” dated 3 March 2017; “Cooperation Agreement with Leading Chinese Graphite Group” dated 22 May 2017; “Cooperation Agreement with CNBM” dated 16 June 2017; “Offtake Agreement with Major Graphite Distributor” dated 23 June 2017; “Offtake Agreement Fills Stage 1 Capacity” dated 17 July 2017.

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Tanzanian Legislation Changes are Manageable

Recent Changes	Impact for Volt
Increased non-dilutable free carried interest	16% in Volt's Tanzanian subsidiary
Reporting and compliance provisions	Negligible
Royalty rate of 3%	Nil
Introduction of Beneficiation of minerals, metallic and precious minerals warehouses, concentrate liens and related provisions	Nil
Review and Re-negotiation of Unconscionable Terms Act	Nil

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Development Timeline

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Why Volt?

• Largest JORC compliant graphite resource in Tanzania

• Clear strategy to become a near term graphite producer leading to a globally significant natural flake graphite supplier

• Potential to be generating cash-flows in 2018 with low CAPEX of US$30m to produce 20,000tpa of graphite concentrate

• Indicative and binding commitments for 100% of Stage 1 capacity

• Scalable project through expansion to 170,000tpa graphite products with excellent economics

• Located only 140km by sealed road from Port of Mtwara

• Aligned Board with in-country experience

• Significant activity and news flow expected

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Appendix 1 PFS Demonstrated Project Economics

• PFS concluded Namangale project is financially attractive to progress – US$1.3B pre-tax NPV and 1.4 year Payback

• Average annual EBITDA of US$195m

• Based on 3.8Mt ore processed annually @ 4.7% TGC with LOM 1.4:1 strip ratio

• PFS average graphite production rate is 170,000tpa

• Good graphite recovery performance at 93% with 95% TGC graphite product

Parameter	Units	Metric
IRR - before tax	(%, real)	86.9%
IRR - after tax	(%, real)	66.5%
NPV @ 10.0% - before tax	(US$ M, real)	1,310
NPV @ 10.0% - after tax	(US$ M, real)	890
Payback period	(years)	1.4
Mine life	y	22
Nominal ore feed tonnes	Mt	83.4
Average grade TGC	%	4.7
Oxide ore	%	40
Fresh and transition ore	%	60
Nominal strip ratio	Waste : Ore	1.4
Process throughput	Mt/y	3.8
Recovery	%	93
Concentrate grade TGC (average)	%	95
Average graphite production	Kt/y	170

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** Refer to Volt’s ASX announcement titled “Pre-feasibility Study Completed” dated 15 December 2016. The Company confirms that it is not aware of any new information or data that materially affects the information included in this document and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

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Appendix 2 Strategic Location and Excellent Infrastructure

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