Webinar, page-2

Some interesting things to come out of the presentation...

• On track for the completion of the scoping study by Christmas 2018.
• Offtake. Tom has been approached by developers but serious discussions will only start after the met test work is completed in Nov 2018
• 2019 goals. 1) Bankable feasibility - note the plan is to skip the PFS step (fast track to cash flow strategy) by proving a large part of the resource (i.e. not inferred), creating a significant database of costs etc. 2) Finalise offtake agreements
• 2020 goals. 1) Project finance to be arranged over a period of 4-6 months (Tom is speaking with debt financiers already, the equity will follow). 2) Project construction.
• 2021 goals. Production by end of the first half 2021. This is half the time taken by peers (typically 6-7 years)
• Tom is aware of the factors that result in some graphite explorers having a high market cap pre-production relative to others and that is being built into BEM's strategy
• Capital cost for the construction is approx MUSD 50-55. Capital required for the feasibility study will be close to 10% of that, which means approx MUSD 5 cap raise in 2019
• Pricing for 96-97%C + 50 mesh + 300 microns has increased from USD 1,800/t to USD 2,000/t over the past 12 months. The other grades relatively flat but the market is changing (e.g. Tom believes China will be a net importer within 2 years, US/China trade war likely to result in Chinese and US developers looking elsewhere for graphite etc, overall demand increasing at a rapid rate). BEM are being conservative with their pricing for the project economics - the risk is to the upside rather than the downside
• BEMs graphite will be "battery grade"
• Lots of discussion on the market opportunity in graphite (EVs, battery storage, fire retardants and thermal shields, expandables such as foil in mobile phones), the trend for substitution of synthetic graphite with natural graphite etc
• Huge support given to the project by the local community
• Stated aim is to minimise shareholder dilution and maximise enterprise value

GLTAH