Ann: Investor Presentation - September 2017, page-8

It appears from presentation that the focus is on Nam 1 now the Northern project.In the PFS this area delivered the lower basket price but takes all the economics into consideration. This area must be elected for a reason whether it is preferred for a discrete area or infrastructure are indifferent.

Nam 1 Northern project

RC0037 looks like most likely area IMO with your 1500 mt infill drill program to locate best discrete area
for a 20,000 TPA operation.

• 10Mt@ 4%TGC
• 12mt@ 5.2% TGC
• 12mt@ 6% TGC
• This area has around 15-20 mt of overburden and could possibly be stripped and moved aside but this changes your cut off
• Not all material will be ran thru the plant as you are searching for economics not just ore dirt to be moved and ran thru plant (selective)
• The higher the grade and less material required thru plant will reduce your start up cost overall and run cost per tonne will increase per tonne mined as apposed to economy of scale
• Infill Drilling spacing from peers to establish a proven resource where 50 mt spacing were used
• In some case a diamond core was done adjacent to RC holes for more certainty of results (infill drilling)

The PFS used a basket price assumption from BMI,IMR, Macquarie research and end user discussions.

Currently these prices are not being achieved but it is noted that graphite prices are on the up.

A competitor recently used current market prices for DFS so will funders use current prices for stage 1 or the PFS value that is not currently being realized?






a



Stage 1 being viable will be a major win and if management can find a way to make this work all speculation with doubt subside.

Croc