Ann: Syrah Sales and Marketing Update, page-46

Mason Graphite is requiring ~ US$ 156 million to build and in todays climate, not likely to happen unless they can complete a CR as debt financing is a fantasy. Their metallurgical report shows heavy fines content and the mesh size analysis will change with commercial production and not lab results. I don't believe Syrah or Mason have published their metallurgical assay reports including FUSED ICP or 45 Element ICP, which would provide IP information on both resources. Keep in mind the FUSED ICP is based on an average of several test points throughout the mine signature.

And in the powder graphite industry, there are coarse, medium and fine flake, not jumbo, super jumbo, colossal jumbo or in some reporting the ancient flakasaurus. In the years I have been in graphite, all the new name changes came about once all the new graphite starts were introduced managed by bulk industrial mineral / financial background management teams.

Coarse = +35, +50, +80
Medium = +100, -100
Fines = +150,-150, +200, -200

Also, the prices you quoted in your post are average sales prices, with each grade at different price points, with various pricing for a wide variety of applications. One price does not cover all applications are there are a number of factors that dictate application pricing:

There is average sales pricing (ASP), not weighted average price.

1. Mesh / Purity
2. Fused ICP analysis
3. Quantity / Volume
4. Packaging
5. INCOTERMS
6. Payment / Credit Terms
7. Take or Pay (If applicable)
8. Inventory Management (Consignment or Safety Stock)

Pricing reported by BM, Roskill, or IM are based on refractory grades at the highest volumes all packaged in bulka bags. Not every customer is equipped to handle bulks bags. Must handle paper bags or cardboard drums.

Coarse grades including +50 and, in some cases +35 mesh grades, vary widely in pricing...I recently obtained pricing for +597 and +595 with an EXW pricing ranging from US$1,927 to US$ 2,103...20 MT FCL.

There is no basket pricing in graphite as all products in the average sales pricing of products are homogenous...the term basket pricing is used in commodities, consumer pricing, financial instruments, or unlike products...when basket pricing is used, shows that the senior management comes from a finance background in most cases.

Finally in addition to Graphite's comments, the current supply / demand equilibrium for natural flake graphite is ~ 460,000 MT per annum and for Syrah to introduce ~35% more volume to a market in equilibrium will create downward pressure on the supply curve, thus driving down prices. ECO 101.

Syrah is under intense self induced pressure to produce large volumes to meet investor expectations, and in the short term will force the Chinese (and other suppliers) to reduce pricing to maintain their current market share to price levels not seen since 2001 - 2005. In 2005, +595 was selling on average US$ 795 MT CIF and +195 was selling on average to refractories at US$ 325 MT CIF.