Ann: Annual Report to shareholders, page-6

Hi Topo,

stage 1 was being built to allow for customer qualification samples to be provided to its end users, this is why EGR shareholders have suggested we wouldn't see binding offtakes until EGR builds stage 1, this would allow for EGR to then enter into binding offtake /sales agreements which would be one of the conditions precedent for the Australian Government loan to fund stage 2 expansion.

From what I can tell, EGR has been advised they don't need a 5ktpa capacity to prove the purification process, they can now build a smaller pilot plant. This will allow for EGR to obtain the binding offtake agreements required to build the full production facility at 25ktpa capacity using the Australian Government loan.

You should be aware, EGR's PSG plant capacity of 20ktpa was based on 50% conversion i.e it would need 40ktpa of flake graphite tp produce 20ktpa of spherical graphite. EGR completed commercial testing which showed they could achieve and additional 20%+ increase in spherical graphite recovery = 60%+ yield, i.e 40ktpa could produce 24ktpa of spherical graphite.

To achieve the 25ktpa EGR will only need to achieve 62.5% recovery which is more than likely the amount EGR achieved from its commercial tests last year based on the comment, "Overall product yield in excess of 60%"

As you would be aware, another ASX listed company achieved in excess of 65% recovery, if EGR uses the same commercial equipment as them, the annual output will be 26k tpa.

https://www.ecograf.com.au/wp-content/uploads/2021/07/EGR-Commercial-Scale-Program-Delivers-20-Product-Yield-Increase-Final.pdf