Ann: Update on Epanko Graphite Project and Pilot Plant Strategy, page-58

DC1234:

You have asked the most important question in the graphite space today, how to fund a new graphite start up with no tangible assets except a resource, commercial production, documented sales history, and / or take or pay contracts?

The analogy of the chicken or the egg has been used in many graphite new start board, senior management, and investor discussions; all focused on ways to achieve funding with most focusing on debt facilities as their current cash position and market cap makes it near impossible to achieve.

I have been part of many of those very discussions, and the most truthful answer is a new start needs a private cornerstone investor or as one new start successfully achieved through significant equity raise. Yet, if funded through equity, then comes the true test if the new start can meet it commitments to the market, investors, and develop a position as a supplier in an ultra competitive industry.

The current debt climate, private lender sentiment, bank loan requirements, high coupon rates, exorbitant royalty schedules, accelerated pay back time frames, put available funds into an unachievable state.

Almost all new starts believe they can come into the market unabated, all focusing on battery or fire retardants as examples as their mainstay of success, when those very markets are in the top most difficult to supply.

Focusing on graphite fundamentals first, expanding from there as experience develops, and if lucky to be funded, then building, commissioning and producing commercial concentrate...that is when the real challenge begin.