Ann: Operational Update, page-2

Operations Update
Personnel and procedural changes boost productivity early in 2017 First Graphite (ASX: FGR) provides an operational update on its mining and drilling activities in Sri Lanka.
In December changes were made to personnel engaged by the Company and new procedures were implemented. This has had a beneficial effect and resulted in significant progress being made in early 2017.
Highlights
• Shaft H makes significant progress to enter more competent ground conditions and stop mud inflows. • Shaft J shaft sinking commenced and is making excellent progress.
• Pandeniya uncovers further historical workings.
• Drilling continues at Pandeniya.

Aluketiya – Shaft H - RL 30.5 Since the personnel and procedural changes were implemented at Shaft H progress has been much more satisfactory with a further 6m being sunk, taking the workings into more competent ground. Instrumental in achieving this was the utilisation of better pressure grouting systems which enabled improved speed and efficiency in the installation of shaft liners. Once the shaft sinking extends through the final section of the transition zone the focus will be on driving to the first ore zone, expected to be only 10m from the shaft. Three zones are to be accessed initially, including the high grade intersection previously reported in ALK18. ALK18 intersected three zones of mineralisation comprising a total of 1.72metres of graphite within a 2.8m interval of core