EVION GROUP GENERAL DISCUSSION, page-19

Hi @rylou86, thanks for sharing the article. Did you notice the wee tidbit Tom threw in: "Evion's product would also be available for use in hydrogen fuel cells and vanadium flow batteries." Of course, that's assuming that our graphite has been tested and validated for those applications. Hmmm.... wonder whether we will be leaving our options open or signing on offtake in that space very soon...?

You prompted me to take a look at Buxton's recent anns given the SP action over the last 6 mths. What really piqued my interest (or rather caught my attention) is why the company had to revive the graphite project when they had done a PFS a few years ago. My intention here is not to denigrate the project but rather highlight the basis upon which they are able to consider the revival. It really speaks bucket loads for Evion's history of due diligence and the future that sets us up for in the broader graphite space, which I will try to unravel.

It appears that Buxton (and perhaps even some other companies with Aust-based graphite projects) are sacrificing flake-size in order to increase purity of output to suit the EV space. Apparently, this particular project could not achieve benchmark >94% purity for its concentrate (which is required for other product applications). Essentially, with the increase in EV battery demand, those graphite projects that couldn't make the cut before are now seeing an opportunity whereby they can hop aboard the graphite hype because of the EV revolution. However, they are sacrificing their large and jumbo flake by obviously increasing the aggressivenes of the purification process and foregoing higher-priced flake retention. Why? Because they see greater demand for the fines and small flakes... but also because they can't seem to achieve large flake with high purity such as the likes of EVG can.

This scenario has me question: What does this mean for us and the industry demand moving forward? More and more graphite producers will turn to the easier processing option/s and target the increasing demand of EV. Will that then open the doors wider for companies like Evion? Do we see opportunities that others don't or can't supply? Whilst my initial reaction was that our avenue to sell fines and small flake may narrow because of their approach... but that's not likely because demand is only going to increase exponentially and so long as we secure our offtakes and build our own BAM facilities, then that area is sown up for us.

What is encouraging is that the other downstream applications are far more lucrative than what the EV market will demand. I don't see EVG, though, locking in all our proposed output with offtakers... but keeping the door ajar to maximise opportunities in the future. I reckon its great that we are not throwing the baby out in the bath water like some other companies seem to be doing. Whilst OPEX may be reduced by not having to optimize the floatation process to preserve flake size, at what cost is it to slam the door on other application demands and end up with a lot of graphite powder too (no doubt) which comands even lower prices than fines.

I don't know, I think Tom has been thorough and prudent in his approach in proving up Maniry's quality and it should pay off IF we can pull off both the BAM development and Expanded Graphite plant in the nearterm and develop other high-margin downstream manufacturing in years to come. Should the supply/demand equilibrium shift that far in favour of producing graphite for BAM, then either EVG will comply too, saving in OPEX and gaining in BAM prices... OR it will stick with its other downstream aspirations because the demand will always be there but supply may not. I think we are in a great position for longevity in the broader graphite industry. Who knows how EVs will be powered in say 15 yrs time. The long yards have been put in already and it will pay off in the LT.

Apologies for the rant... obviously in the mood for it today! Good to see the SP action in EVG boogie today as Cranium predicted! Spooky really!