Ann: Terms agreed for joint venture and offtake transaction, page-44

Analyst Comment: This is an excellent achievement for Graphex, and ground breaking for a junior ASX listed company given the terms of the proposed transaction and the stature of the parties involved in the Chinese Syndicate. The syndicate is led by CN Docking, a subsidiary of CNBM (China National Building Materials) a global fortune 500 company who are responsible for producing more than 50% of China's building materials.

Essentially, this transaction will see Graphex fully funded through to the commencement of production at the Chilalo Graphite project (TSI estimate - 1Q19), through the project level equity investment (US$18 to US$20m) by the syndicate as well as their commitment for a debt guarantee of up to 65% of the capital development costs (likely to decrease).

Just as important as the project's funding, is that 50% of the project's production has guaranteed offtake through the syndicate. We understand that the syndicate was prepared to take a greater amount of the project's offtake however, by selling to third-parties outside the syndicate, there is greater transparency as well as increased pricing tension ensuring maximum revenues for Graphex.




Valuation: We have increased our valuation to $1.61 / share (share price $0.43). The change in our valuation is due to lowering our discount rate (current 11%; previous 12%) as well as adjusting our project financing terms in line with the Term Sheet.
DYOR.
Champee