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Flash Note – Ardiden Limited (ASX: ADV)  Excellent Metallurgical Test Results – High Proportion of High Purity  Jumbo and Large Flake Graphite Confirmed at Manitouwadge  July 2, 2015
EVENT  Metallurgical beneficiation testwork completed on samples from the recent drilling campaign at the 100% owned Manitouwadge Graphite Project: o Up to 80% of graphite classified as premium jumbo and large flake; o Total Graphitic Carbon (“TGC”) grades of up to 95.6% for jumbo flake and 93.7% for large flake from simple, low cost gravity and flotation concentration; o Subsequent caustic bake purification testwork on jumbo flake has returned grades of > 99.95% TGC,  comparable to high purity, high value synthetic graphite;  o Bulk sample being prepared to provide representative samples to prospective customers and for  further testwork samples;  o Potentially ideally placed to take advantage of the anticipated increasing demand (and prices) for the  premium larger flake and higher purity products.
BREAKAWAY COMMENTS   Ardiden has completed an initial 10 hole, 833m diamond drilling and metallurgical testwork programme on  their Manitouwadge Graphite Project, located in Ontario, Canada. The Project covers 17 staked claims for  3,400ha located 30km NE of the town of Manitouwadge, and was acquired earlier this year for a total  consideration of C$159,000 and a 2% gross production royalty.  The Project is readily accessible along logging roads and is within 50km of both the Trans‐Canada Highway  and Railway in a historic mining district. A number of other graphite projects are located in the region,  including Zenyatta Venture’s Albany deposit, ~100km from the Manitouwadge Project.  Previous work has included airborne and ground electromagnetic (“EM”) surveying by Noranda, which  identified six conductors up to 1.6km in strike length during exploration for massive sulphide base metal  mineralisation. Ardiden and the vendor carried out trenching over some zones and preliminary metallurgical  testwork on the trench samples as part of the due diligence.  The recent drilling intersected downhole intervals of up to 9.7m (~5m true width), containing up to 4.06%  TGC, and averaging around 2% TGC in the limited strike length tested. These results confirm the presence of  mineralisation at depth, and although these grades are relatively low compared to most companies in our  universe of ASX and TSX listed graphite explorers and developers, they are comparable with other Canadian  projects, including Zenyatta Ventures’ Albany (45.2Mt @ 3.14% TGC, A$87m capitalisation) and Northern  Graphite’s Bissett Creek projects (93.8Mt @ 1.72% TGC, A$27m capitalisation).  We  do  see,  given  the  limited  strike  tested  to  date  at  Manitouwadge,  the  potential  for  higher  grade  mineralisation in the identified graphitic horizons. In addition the overall drill intercepts contain individual 1  metre assay intervals up 10.8% TGC.


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A key attribute are the excellent results from metallurgical testwork carried out on the drill core. These indicate that up to 80% of the graphite is in the premium large to jumbo flake size ranges, with simple gravity and flotation beneficiation producing concentrate grades of up to 95.6% for jumbo flake and 93.7% for large flake. Preliminary purification testwork on the jumbo flake fraction using a caustic soda bake process has returned grades of >99.95% TGC comparable to ultra‐high purity synthetic graphite, making  this a potentially very high value premium product.  Flotation results are presented below.  Flotation testwork results

Source: Ardiden Limited  The flotation results rank near the top when compared with our dataset of metallurgical results from 16  projects (which range from 0% to 84% large flake or larger), and are comparable to figures from Northern  Graphite’s Bissett Creek project.  Graphite market analysts forecast a shortage of jumbo size flake going forward (largely driven by forecast  growing demand for batteries), with concomitant significant price increases, with some forecasts indicating a  jumbo  flake  price  as  high  as  US$6,175/tonne  in  2020  (compared  to  the  current  price  of  around  US$2,300/tonne). High purity products, including synthetic graphite, attract a significant premium, and can  trade for over US$10,000/tonne.  As an example of the battery demand, Tesla took US$800m worth of orders for its Powerpack and Powerwall  home and office storage devices in the first week after they were announced in April 2014. Tesla, which is  building its US$5bn battery giga‐factory in Reno, Nevada, some 3,000km by rail from the project, has stated  that it will be looking to source as much of its raw materials as possible from North America.  Although it is early days, the exploration and metallurgical results to date are very encouraging, and we do  see the potential for Manitouwadge to host a “boutique” operation producing a high purity concentrate to  feed the forecast growing demand for premium products.  Given the above we continue to rate ADV as a Speculative Buy.  Company Information  ASX Code:   ADV  Share Price:   A$0.008  MCAP:   A$3.5m  Cash:  ~A$0.2m  Debt:   A$0.0m  EV:   A$3.3m http://www.breakawayresearch.com
Size
% Mass  Recovery
Graphite Grade  (% TGC)
% Mass  Recovery
Graphite Grade  (% TGC) Jumbo (+300µm) 30.35% 95.6% 41.92% 94.9% Large (+180µm) 50.41% 93.6% 16.55% 93.7% Medium (+150µm) 5.92% 92.6% 9.51% 90.7% Fine (‐150µm) 13.32% 92.4% 32.02% 88.8% Sample 1390492 ‐ 3.69% TGC Sample 1390037 ‐ 7.81% TGC


Breakaway Research Pty Ltd is a member of Breakaway Investment Group Suite 505, 35 Lime Street Sydney NSW 2000 Australia,   PO Box H116 Australia Square NSW 1215 Australia, t. + 61 2 9392 8032 f. + 61 2 9279 2727 ABN 64 103 587 702
  Analyst Verification  We,  Grant  Craighead  and  Mark Gordon,  as  the  Research  Analysts,  hereby  certify  that  the  views  expressed  in  this  research  accurately  reflect  our  personal  views  about  the  subject  securities  or  issuers and no part of analyst compensation is directly or indirectly related to the inclusion of specific  recommendations or views in this research.

Disclosure  Breakaway Investment Group (AFSL 290093) may receive corporate advisory fees, consultancy fees and  commissions on sale and purchase of the shares of Ardiden Limited and may hold direct and indirect  shares in the company. It has also received a commission on the preparation of this research note.

Disclaimer  Any observations, conclusions, deductions, or estimates of figures that have been made by Breakaway  Research and the Breakaway Investment Group in this report should not be relied upon for investment  purposes and the reader should make his or her own investigations. This publication has been issued on  the basis that it is only for the information and exclusive use of the particular  person to whom it is  provided. Any recommendations contained herein are based on a consideration of the securities alone. In  preparing such general advice no account was taken of the investment  objectives, financial situation  and particular needs of a particular person. Before making an investment decision on the basis of this  advice,  investors  and  prospective  investors  need  to  consider,  with  or  without  the  assistance  of  a  securities  adviser,  whether  the  advice  is  appropriate  in  light  of  the  particular  investment  needs,  objectives  and  financial  circumstances  of  the  investor  or  the  prospective  investor.  Although  the  information contained in this publication has been obtained from  sources considered and believed to be  both reliable and accurate, no responsibility is accepted for  any opinion expressed or for any error or  omission that may have occurred therein.

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