Ann: Excellent Technical Outcomes Underpin Downstream Business, page-2

Excellent Technical Outcomes to Underpin a Standalone Downstream Graphite Processing Business

HIGHLIGHTS

Testwork Outcomes

• Update on further major testwork programs focussed on particle milling and micronisation technologies and the production of ultra-fine materials, as well as the assessment of those milled products to be utilised in batteries.

• Milling trials show rapid particle size reductions to nominated median (D50) size specification inferring industry sector’s leading milling costs.

• Milling cost advantages of McIntosh flake compared to typical African or Chinese sourced flakes demonstrated to be 2-3 times lower for hammer milling and approximately 2 times lower for air milling

. • The various size classifications of the micronised products have wide application in a wide range of battery chemistries as conductivity enhancement materials and the ultra-fine, high purity materials at sub 5 μm sizings as coatings and dispersions in battery and industrial applications which is a very high-value market, served by a very limited number of manufacturers.

• Test outcomes include ability to produce synthetic diamonds from McIntosh flake – currently technical grade, potentially also gem-stone quality, subject to the highest purity precursor material. There is a significant market for quality synthetic diamond precursor to underpin industrial applications for technical grade diamonds.

Downstream Scoping Study

• The above testwork outcomes feed into a scoping level study examining the viability of a stand-alone downstream graphite products manufacturing business. The scoping study is in progress.

• Market investigations were undertaken for the various planned graphite products focussing on specifications, utilisation, market depth and pricing. A conservative pricing matrix has been compiled for the purposes of the scoping study.

• The scoping level assessment of the downstream business assumed is regarded as a fully autonomous, long-term industrial business. Hexagon plans to utilise its current reported graphite concentrate feedstock price of US$1,504/t highlighting the Company’s goal that this would be a standalone business, securing feedstock at arm’s length commercial rates – notwithstanding that is not Hexagon’s primary objective

• The Company expects to release the outcomes of the downstream scoping study shortly and subject to completion of ASX review.