Ann: Quarterly Activities Report, page-39

Good Morning Okavongo,

I was being simplistic when I said mining. The full story is a little more complicated.

Skaland (underground mining) its processing facility doesn't use kerosene or diesel during the floating of the graphite. Instead, they are required to use a finer grind to liberate the graphite. The reason they don't use kerosene, is due to the mine not having a tailings dam, the waste material (tailings) has low contaminates (clean enough) to be disposed of in the Fjord (sea). MRC continues to make improvements to its environmental policies at Skaland and is looking at options to lower the environmental impacts of the tailings.

MRC's did a variation to its Munglinup's EPA application, which shows the company has already changed from using kerosene to a liquid hydrocarbon and has made changes to the processing circuit. IMO the experience and policies they are developing at Skaland will assist the company with its EPA approvals in Australia.