For most small caps in the resource sector, CR's are the main...

For most small caps in the resource sector, CR's are the main funding mechanism until they become producers or sell the asset/business. This is just how it works, but the point is to be doing these at higher levels off the back of strength in the price, which comes from delivering progress and general strength in the sector overall. Ideally, they find a cornerstone investor (e.g. a larger well-established company in the related industry to partner with Volt).

So, what to expect for 2024 that will generate this value?

• Bunyu funding: The 113 tonne of graphite ore sent for processing and sampling by a large “customer” is the strongest indication to date that there is a genuine intent in financing the project. Bunyu economics are strong, Stage 1 NPV=$U58.9m, IRR 31.5% and CAPEX is relatively low at U$33.1m. Stage 2 NPV=US$1.13B as per 2018 Feasibility Study. Graphite restrictions from China are accelerating the investment of USA and Europe (declared graphite a critical mineral) to secure their long-term supply chains. Tanzania is welcoming and supporting Western and private investment through their new government policy. Stage 1 product fully committed with binding offtakes.

• Downstream (Battery Anode Graphite): As announcedon 29/11 there are 3 parties in the mix for an offtake:

1) 4000tpa with a US based battery manufacturer (NASDAQ listed) - in final offtake negotiation as at date of announcement, expect this in Q1 2024.

2+ 3) An additional 2 customers expected to provide LOI for the remaining capacity (3500t).

Volt has a graphitesupply agreement with 24M Technologies, and hence their key partner in Freyr Battery which is accelerating their Gigafactory development in the USA is a very likely choice for one of the above.

Offtakes in downstream would strengthen case for Bunyu funding.

• Feasibility Study (Battery Anode Plant) Furthermore, expecting the completion of the Feasibility Study by Worley for the downstream Battery Anode plant in Q1, the announcement of the site selection (expecting this will be in Georgia). Also anticipating that the initial 7500tpa capacity planned will be increased, given forecast demand projections for graphite anode are 980kTPA by 2030 (roughly

• USA DOE grant funding : concept paper submission deadline on 9/1, Full application submission 19/3. Potential prize USD $50- 100million. Result expected in ~Aug 24. Consortium with USA based AETC which is one of 3 US graphite developers in the country. Offtake for downstream product with a USA based battery maker(s) and supply to DOD strengthens case, as now VEM becomes part of the USA integrated supply chain. USA DOE handing out USA$3.5B for battery anode projects. PC has previously won USD$60m through same channels when working for BASF. Has the experience, contacts and knowledge on how to get this done.

• US Department of Defense (DOD) supplycontract via M2i Global: on 11/10 initial LOI signed with M2i Global to supply 20,000tpa of graphite from ZG. Interestingly the President & CEO of M2i is exUS military Lieutenant Jeffrey Talley, expect this relationship will prove to be key and proably lead to a formal supply agreement by Volt. DOD defense budget for 2024 is US$842B, with significant $$$ to be invested on securing their critical minerals supply chain for US army battery requirements.

https://www.defense.gov/News/Releases/Release/Article/3459556/dod-enters-agreement-to-expand-capabilities-for-domestic-graphite-mining-and-pr/

https://theoregongroup.com/commodities/us-military-and-critical-minerals-the-new-arms-race/

• Zavalievsky Graphite operation expecting will continue along similar lines as it did in 2023 with modest production outputs, given there's been no resolution of Russia/Ukraine in sight. Expect second payment for $US3.5m will be fully waived, especially given Volt has funded ZG (via loans) for the last 2 years. An offtake for the garnet stockpile and commence selling/generating revenue should be a high priority. Potentially some small scale funding/investment into ZG via European channels (ERMA, Gr3phite3 etc..) might be on the cards. Nothing significant expected until conflict is over.

• Graphite pricing: in line with the supply restrictions from China and the additional demand coming from USA, Europe & other Asian countries such as Japan and Korea to secure graphite supply chains should see natural graphite prices increase in 2024, after a year of decline. Seeking Alpha provides some general commentary here which is worth a read -> https://seekingalpha.com/article/4659921-graphite-miners-news-for-the-month-of-december-2023

It's been over 12 months of downtrend for the graphite sector and majority of small caps with very few exceptions. Prolonged periods of downtrend are typically followed by a reversal. The fed is talking about rate cuts in 2024 which should be positive for growth equities. The thematic for explosive growth in graphite has been publicized for the last few years but has not yet transpired, will 2024 be the turning point? There are strong signs to suggest it may be. With the USA and Europe mandating supply of critical minerals and graphite be sourced from non-China (non FOEC) sources, the case for investment is strong. VRC is now trading at a measly market cap of 26.8m, yet holds 2 proven large scale, long-life graphite deposits and also in the process of establishing a downstream footprint and supply contracts in the US.

GLTAH in 2024