Ann: Production of Battery Specification Anode Precursor Material, page-96

DoctorFouad, Glad to read that you have been following Etablissements Gallois and all the new investments and expansion of capacity the new owners have been making. I do assume you and I and others are in agreement that the Graphite Mining industry has way too much extra capacity today? Thus it really does not matter what Etablissements Gallois current capacity is today since globe demand is much lower then capascity.

As for Syrah and the issue of experience graphite personnel I agree they produced over 200,000/mt and most of the quality was over 96% carbon. However in reading their reports they are only operating at 70% recovery. I believe the norm in the graphite mining industry is around 95 % recovery. Thus wouldn't experience graphite personnel have improved Syrah's recovers which will then result in reduced C1 costs?

Yes we both agree Syrah's issue is too high of C1 cost to compete with today's market price and especially today's market price in China which is the major consumer of fines(most of Syrah's production). Syrah management miss lead investors on what their true average cost would be to produce dried, screened and bagged graphite concentrate. Remember Syrah was reporting they expected average production cost to be below usd300/mt FOB the port. and they also reported to investors in past that they expected much higher % of jumbo and large flake which to date has not happened. However both these issues are now "water over the dam". Syrah and Investors now have to deal with the fact they are not as low cost producer and will be producing mostly Fines which net back the lowest market price especially when most of the globe demand for fines is within China

Thus what I believe we are both saying is Syrah and their investors have to hope some time soon demand increase and at same time supply/capacity does not increase thus resulting supply/capacity equaling demand which will then result in higher market prices for fines especially within China for Syrah Graphite mining business to be profitable. The concern however is will privately owned experienced graphite companies keep adding capacity fast then demand growth in that the CAPEX to add new capacity for experienced graphite companies is extremely low and at same time privately owned graphite companies can be cash flow positive operating at only 60 % of capacity. We will have to wait and see how the market plays out.

As for Syrah battery anode business we all know this business unit has a bright future if Syrah is able to produce high quality and be competitive to market prices and sell out this limited capacity so they can then expand capacity and start to become cash flow positive.However to make this happen it will take time and lots of additional capital. Hope AustralianSuper and investors are willing to keep providing Syrah the necessary capital to make this happen.

We all want Syrah to become successful someday.