STTCOMP QGL FA LONGAbout the company
Quantum Graphite Limited (QGL, formerly Valence Industries Limited) is an industrial manufacturing company producing flake graphite products for distribution and sale to global markets. Valence Industries is into exploration, mining, processing and manufacture of graphite and associated Products.
Market cap 156 Mio
SP 51 cts
SOI 306.14 MIO
On Friday we got this note from Qauantum Graphics and I have been waiting for this quite a while.
Completion of INEMET Test Work Program on Uley Flake
Based Energy Storage Media
Media Performance Tested at Temperatures Exceeding 2200°C
Results Announced by 25 November 2022
The Company announces today that the test work program undertaken at INEMET at TU Freiburg has
concluded. After a frustrating extended period of more than 12 months the extensive program prepared by
thermal process engineers ProTherm Systems (Pty) Ltd and QSP has been completed. INEMET has produced a
comprehensive data set which is presently the subject of detailed analysis.
The Company concluded its test work design with INEMET in the last quarter of the 2022 financial year after
several delays resulting from the impact of the pandemic. The program was then extended to cover flake product
range with lower purities. This led to the inclusion of an expanded range of Uley flake purity and flake size, i.e., 90%
to 97% and 75microns to 300microns respectively. After completion of the initial calibration test work in August
2022, essential maintenance of the INEMET high temperature equipment delayed resumption of the program until
mid-September 2022. Whilst the Company intends to continue other test work at INEMET, this program has now
been completed.
Subject to the results of the test work, its completion marks the achievement of the final milestone for the
determination of the unit contribution to the Company of every tonne of media sold by QSP to Sunlands Co.
and commencement of construction of the long duration energy storage Pilot Plant.
The Company expects to announce the results of the program by 25 November 2022.
QGL is the owner of the Uley flake graphite mineral deposits located south-west of Port Lincoln, South Australia.
Quarterly Activity Report and Appendix 5B
for 30 September 2022
Highlights
Capital Raising
In July 2022 the Company undertook an equity capital raising initiative to raise approximately $4 million by way of the issue
of ordinary shares at 38 cents per share. The Company raised $4,765,078 issuing:
(a) 11,703,200 ordinary shares at 38 cents per share on 28 July 2022; and
(b) A further 1,176,884 ordinary shares at 38 cents per share on 1 August 2022.
On 4 August 2022, the Company issued 17,865,000 ordinary shares as a result of Chimaera Capital Limited’s exercise of
17,865,000 unlisted restructure options (Nil exercise price, expiry 23 July 2023).
The funds raised ensure that the Company’s mine site preparations, product development activities and QSP pilot project
(see below) can continue at the accelerated rate set by the Board at the beginning of calendar 2022.
QGL is the owner of the Uley flake graphite mineral deposits located south-west of Port Lincoln, South Australia. The company’s Uley 2
project represents the next stage of development of the century old Uley mine, one of the largest high-grade natural flake deposits in the
world. For further information, qgraphite.com.
ABOUT QUANTUM GRAPHITE LIMITED
QSP is our joint venture with Sunlands Co. for the manufacture of coarse natural flake based thermal storage media. The flake will be
sourced exclusively from the QGL’s Uley mine. The manufactured media will be fitted within Sunlands Co.’s long duration energy storage
cells. https://www.sunlandsco.com/
ABOUT THE QUANTUM SUNLANDS PARTNERSHIP
QUANTUM SUNLANDS
PARTNERSHIP
QUANTUM GRAPHITE
PRIMARY LOGO
QUANTUM GRAPHITE
SECONDARY LOGO
Page 2 of 6
QUANTUM GRAPHITE
Board Changes
In August 2022 the Company announced two board changes, the retirement of Bob Osmetti and the appointment of
Michael Wyer.
The Company has thanked Bob for his significant contribution during his tenure. The Board makes special mention of Bob’s
integral part in the restructure of the Company and the development plans for Uley 2. Together with David Trimboli he
was instrumental in the strategic positioning of the Company’s relationship with Sunlands Co. and ultimately establishing the
Quantum Sunlands Partnership.
Michael Wyer accepted the Board’s invitation to join in August 2022. Michael is a highly credentialed professional with more
than 25 years’ experience in global banking including resources and commodities financing, holding senior executive roles in
finance and operations. This diversity of experience enhances the Board’s overall skill set and is an excellent strategic fit as
the Company moves to the next phase of its plans for Uley 2 and the Quantum Sunlands Partnership.
Quantum Sunlands Partnership - INEMET Testwork and Long Duration Energy
Storage Pilot Project
In July 2022, Uley flake product was shipped to INEMET’s (tu-freiberg.de/en/fakult5/inemet) facility at The Technische
Universität Bergakademie Freiberg to undertake the ultra-high temperature testwork. Additional samples were shipped in
September 2022.
QSP completed design of the testwork methodologies in May 2022. These methodologies were further refined by INEMET
extending the thermal treatment cycles of Uley flake to temperatures exceeding 2,200°C.
Testwork program results were expected to be released during the quarter but have been delayed by an expansion of the
program and the service and maintenance schedule of INEMET’s vacuum furnace.
The testwork will provide the essential data required by QSP to manufacture the thermal energy storage media to be fitted
within the Sunlands Co. long duration energy storage cells. Further, the results deliver a valuable data set that will provide
QSP with the capability of optimising the scalability of media including its configuration for very large scale deployment such
as the retrofitting of coal fire power stations.
One of the significant benefits of the results of this test work is the potential application of this data to the advanced
processing of Uley 2 flake. This process would include ultra-high temperature treatment of Uley flake increasing purity in an
environmentally sustainable process that does not require the use of harmful chemical processes such as acid leaching with
hydrofluoric acid.
During the quarter detailed engineering of the long duration thermal energy storage pilot plant was completed and planning
for the procurement of key items commenced.
A detailed update on both the INEMET testwork program and the pilot project will be provided by mid-November 2022.
Page 3 of 6
QUANTUM GRAPHITE
Off-Market Takeover Bid for Lincoln Minerals Limited (Lincoln)
During the quarter, the Company lodged a Takeover Offer to acquire all of the shares in Lincoln. Details of the Takeover
Offer are contained in the Company’s bidder’s statement lodged with the ASX and despatched to Lincoln shareholders in
August 2022.
The Company considers Lincoln’s Kookaburra Gully flake graphite assets (Kookaburra Gully). to be an extension of its
greater Mikkira flake graphite deposit. The joint development of the Uley 2 and Kookaburra Gully assets delivers a major
opportunity to derive significant economic and environmental efficiencies. As summarised in the bidder’s statement these
efficiencies include:
(a) Kookaburra Gully’s minneralisation exhibits similar features and bears many of the same characteristics as that of the
broader Uley geology. Importantly, the mineral resources of Kookaburra Gully contain an orebody whose metallurgical
properties are similar to those of Uley 2;
(b) The preferred mining method and the processing path for each of Uley 2 and Kookaburra Gully are indistinguishable.
Production from Kookaburra Gully would be marketed under the same commercialisation and marketing strategy
planned for Uley 2.
(c) The Company has established a detailed intermodal framework for the transport of its material to the Port Adelaide
Outer Harbour. This same logistics framework could be used for Kookaburra Gully which is en route to the Uley
production’s ultimate destination at Port Adelaide. Combining logistics would generate significant economies of scale
especially in relation to container handling and trucking schedules.
A strategic advantage of the combination of Kookaburra Gully and Uley 2 is the optionality in the processing of ore. This
optionality delivers synergies that are not otherwise available to Lincoln if it developed Kookaburra Gully on a standalone
basis. For example, one of the synergies is the development of separate specialised processing paths at each site for
certain products thereby increasing the efficiency (e.g., economies of scale) of each of the projects' mine operations by
concentrating fewer products at each plant site.
At the end of the quarter, the Company had received acceptances from Lincoln shareholders of approximately 1.4 million
Lincoln shares.
Page 4 of 6
QUANTUM GRAPHITE
Schedule of JORC 2012 Minerals Reserves and Resources
JORC 2102 Mining Study and Reserve Statement, November 2019
Reserve Classification Tonnes (kt) Total Graphitic Carbon (%)
Uley 2 Proved 811 11.66
Uley 2 Probable 3,191 11.95
Total 4,003 11.89
JORC 2012 Mineral Resource Estimate, November 2021
Resource Classification Tonnes
(kt)
TGC
(%)
Density
(t/m3
)
TGC
(kt)
Uley 3 Inferred 900 6.6 2.1 59
Uley 3 Total 900 6.6 2.1 59
Uley 2 Measured 800 15.6 2.1 125
Indicated 4,200 10.4 2.1 435
Inferred 1,300 10.5 2.2 137
Uley 2 Total 6,300 11.1 2.1 697
Uley Project Total TOTAL 7,200 10.5 2.1 757
Schedule of Tenements (ASX Listing Rule 5.3.3)
Tenement Tenement Type Interest1 Changes during the Quarter
ML5561 Mining Licence 100% Nil
ML5562 Mining Licence 100% Nil
RL66 Retention Licence 100% Nil
RL67 Retention Licence 100% Nil
EL62242 Exploration Licence 100% Nil
1.All interests are registered in the name of the company’s subsidiary, Quantum Graphite Operations Pty Ltd and held as at the end of the quarter.
2.An application has been lodged for the renewal of EL6224.
Uley 2 Phase 1 Mining Study and Feasibility Summary Financial Metrics
Total undiscounted
cash flow
A$310.5million*
Crusher feed 500,000 tonnes per annum
Graphitic carbon grade 11.89%
Graphitic carbon recovery 84%
Concentrate purity >97% graphitic carbon
Capital expenditure A$79.98 million
Processing cost (PCAF) A$55.3 per tonne
Mining cost (MCAF) A$2.5/t milled at surface
plus 5c for every 4m
Production 55,000 tonnes per annum
Product Cost (Av LOM) US$368 dmt
Product Price (Ex-works) US$919 dmt
*Includes JORC 2012 Reserves and Resources
Page 5 of 6
QUANTUM GRAPHITE
Uley 2 Location and Resource
Extension Priorities
Priority 1 Short Term Ore Reserve extension
• Uley 2 South 50m
• Infill drilling at Uley 3
Priority 2 Medium Term Resource extension
• Uley 3 South
• Extension drilling to 50m-by-50m intervals
Priority 3 Long Term Resource extension
• Uley 2 West geophysical anomaly target
• Uley 2 South beyond Priority 1 along strike of
the geophysical anomaly.
Uley 2 Ore Reserve and near-mine extension target priorities
N ML 5562
3000
1250
1750
1750
1750
500
1750
1750
500
3000
4250
3000
4250
5500
1750
4250
6750
3000
4250 0 500
METRES
Bridgewater Formation calcarenite
dune crest line SIROTEM conductivity response (μV/A)
ML Mineral lease
RL Retention lease
Thin sandy soil with ironstone gravel
over weathered Proterozoic bedrock
1750
5 170
500
3000
5500
4250
Uley 2
West
5500
4250
300
Uley 2 0
South 30000 30
05 5 0
57 60
Uley 3
South
ML 5561HD ULEY
HD ULEY
HD SLEAFORD
HD LINCOLN RL 67 RL 66
RL 65
Plant
Site
oce
Core
shed
Tailings Storage Facility
Uley 1
(Original
Mine)
Uley 2
0
175 Uley 3
560000 565000
560000
6135000 6140000 6145000 6150000
6135000 6140000 6145000 6150000
ULEY
HOMESTEAD
SALT LAKE
KACEY
FISHERY
565000
1,250 2,500 5,000
Meters GDA94; MGA53
0
N
ML 5562
ML 5561
EL 6224
RL 67
RL 66
LEGEND
EM Target
Primary EM Target
Secondary EM Target
Exploration Lease
Retention Lease
Mining Lease
Conservation and National Parks
Lincoln (CP)
Lincoln (NP)
Sleaford Mere (CP)
Railway line
Road
560000 565000
560000
6135000 6140000 6145000 6150000
6135000 6140000 6145000 6150000
ULEY
HOMESTEAD
SALT LAKE
KACEY
FISHERY
565000
1,250 2,500 5,000
Meters GDA94; MGA53
0
N
ML 5562
ML 5561
EL 6224
RL 67
RL 66
LEGEND
EM Target
Primary EM Target
Secondary EM Target
Exploration Lease
Retention Lease
Mining Lease
Conservation and National Parks
Lincoln (CP)
Lincoln (NP)
Sleaford Mere (CP)
Railway line
Road
560000
6140000 6145000 6150000
6140000 6145000 6150000
ULEY
HOMESTEAD
SALT LAKE
KACEY
565000
ML 5562
ML 5561
EL 6224
RL 67
RL 66
High Grade
Mineralisation
Page 6 of 6
QUANTUM GRAPHITE
Corporate Information and Announcements
As at 30 September 2022 the company had 324,000,000 ordinary shares and 13,706,429 unlisted options on issue and
1,705 shareholders. The top 20 shareholders held 58.96% of the issued ordinary shares in the company.
As at 30 September 2022 the company held cash at bank of $4,462,519.
As at 28 October 2022 the company held cash at bank of $3,940,055. This report should be read in conjunction with all
prior announcements made by the Company and available at http://quantumgraphite.com/investors.
The pro forma Appendix 5B (Mining exploration entity and oil and gas exploration entity quarterly report) is attached to
this report.
Short Term Trading Week Starting: 21 Nov, page-31
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