Montepuez Graphite Project Mineral Resource and Ore ... · PDF fileMontepuez Graphite Project Mineral Resource and Ore ... @ 8.80% TGC for 3.64Mt of graphite reported at ... Leapfrog

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15 FEBRUARY 2017

Montepuez Graphite Project Mineral Resource and Ore Reserve Estimate Large high grade project defined, with long mine life and low strip ratio

Highlights:

100,000 tonnes per annum 96% TGC graphite concentrate,

30 year Life of Mine, 8.80% TGC average LOM head grade

0.6 waste to ore strip ratio

January 2017 Probable Ore Reserve Estimate for Buffalo and Elephant deposits is 41.4Mt

@ 8.80% TGC for 3.64Mt of graphite reported at a cut-off grade of 4% TGC

Total January 2017 Mineral Resource 105.9Mt @ 7.74% TGC for 8.2Mt of graphite reported

at a 2.5% TGC cut-off as defined below;

Elephant deposit Total Mineral Resource Estimate of 67.20Mt @ 7.50% TGC for 5.1Mt

of graphite reported at a 2.5% TGC cut-off including Indicated and Inferred Mineral

Resource classifications as defined below.

o Indicated Resource – 35.7Mt @ 8.20% TGC for 2.90Mt of graphite

o Inferred Resource – 31.50Mt @ 6.80% TGC for 2.20Mt of graphite

Buffalo Deposit Mineral Resource Estimate of 38.70Mt @ 7.93% TGC for 3.0Mt of

graphite reported at a 2.5% cut-off including Indicated and Inferred Mineral Resource

classifications as defined below.

o Indicated Resource – 18.50Mt @ 8.59% TGC for 1.60Mt of graphite

o Inferred Resource – 20.20Mt @ 7.33% TGC for 1.50Mt of graphite

Note: Footnotes in Mining Resources and Ore Reserves tables applies to the above Mineral Resource and Ore Reserve estimates.

Battery Minerals Limited (ASX: BAT) (“Battery Minerals” or the “Company”) is pleased to provide a Mineral Resource update, and announce the maiden Ore Reserve, for its Montepuez Graphite Project in Mozambique

Commenting on the Mineral Resource update and the maiden Ore Reserve, Battery Minerals Managing Director, Cherie Leeden, said, “We are delighted with the high conversion of Graphite Carbon from Indicated Mineral Resource to Ore Reserve at 81% contained graphite, low LOM strip ratio 0.6 (w:o) and the 30+ year project life.

"The resource grade remains robust after various resource and reserve modifying factors were applied proving a stable graphite mine.”

The Buffalo and Elephant Resource and Ore Reserve classifications and estimations are compliant with the guidelines of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves by the Joint Ore Reserves Committee (JORC).

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Montepuez Graphite Project Location

The Montepuez Graphite Project is located 60km north-west of the town of Montepuez, in the northern province of Cabo Delgado, Mozambique (figure 1 & 2).

Figure 1. Location map showing the Montepuez Graphite Project in the Province of Cabo Delgado in northern Mozambique.

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Figure 2. Location map of the Montepuez Graphite Project 60km northwest of Montepuez. The map also shows the priority transport route from the Montepuez Graphite Project site to Pemba Port via Montepuez township. Secondary preference route via Nacala Port is also shown. BAT’s other graphite project referred Balama Central Graphite Project is shown next to Syrah Resources Balama Project.

BAT have two graphite projects in the Cabo Delgado Province, the Montepuez Graphite Project and the Balama Central Graphite Project adjacent to Syrah Resources Balama Project (Figure 2). The Montepuez Graphite Project has been the focus of a Definitive Feasibility Study (DFS) that commenced in July 2016 and the results of which were announced on the same day (15 February 2017) as this Mineral Resource and Ore Reserve update.

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Mining Resources and Ore Reserves

The Montepuez Graphite Project comprises three graphite deposits Elephant, Buffalo and Lion, this report includes updates to the Mineral Resource Estimates for Elephant and Buffalo deposits as well as an Ore Reserve for Elephant and Buffalo as part of the Montepuez Graphite Project Definitive Feasibility Study (DFS).

This is the second Resource announcement for the Elephant and Buffalo deposits and is the maiden Ore Reserve announcement.

Battery Minerals (formerly Metals of Africa Ltd) published its maiden Resource Classification and Estimation for Elephant, Buffalo and Lion deposits 16th November 2015. Locations of the deposits with the DFS pit outlines, waste dump and other mine infrastructure is shown in figure 3.

Figure 3. Montepuez Graphite Project mine design showing Elephant and Buffalo classified resources, pit boundaries, waste dumps, ore stockpiles, plant, ROM as well as the tailings storage facility, water storage dam and mine camp.

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Buffalo and Elephant Resource Classification and Estimation

During the DFS further resource drilling and estimation work was undertaken to improve the Resource classification at Buffalo and Elephant deposits.

The updated Mineral Resource for the Buffalo deposit was estimated by Snowden Mining Industry Consultants (Snowden) and the Elephant Mineral Resource was estimated by RungePincockMinarco Limited (RPM). Only the Indicated Mineral Resources were used for the Probable Ore Reserve estimations.

The DFS resource estimation work was conducted to enhance the lithological domains within the resource model for the Ore Reserve estimate which in turn assisted lithological variation testwork for plant and mine design. It should be noted that no further resource estimation work was completed at Lion deposit and Lion was not included in the DFS or the Ore Reserve estimate.

The resource estimation and classification for the Buffalo and Elephant deposits were calculated with Total Graphite Content (TGC) cut-off of 6% which is the same cut-off used during the maiden Resource Classifications in 2015.

The reserve TGC cut-off was calculated at 4% which is lower than the resource cut-off. Resources were then further estimated utilizing a cut-off grade of 2.5% TGC as there are justifiable technical, economic and development considerations which support a lower Resource grade cut-off at 2.5% TGC. Therefore two resource cut-off grades are reported at 6% TGC and 2.5% TGC.

Elephant Resource Classification and Estimation

The Mineral Resource estimates have been constrained by the wireframed lithological envelopes, were undiluted by external waste and reported above a 2.5% TGC cut-off grade. The cut-off grade was estimated in reference to Flake Price, recoveries and 96% concentrate grade.

RPM applied the cut-off grade in order to report the Mineral Resources contained within the lithological domains. It is noted that the estimations used for the applied cut-off do not constitute a detailed Mining Study or Ore Reserve estimate and additional mining design and more detailed and accurate cost estimate mining studies and testwork were conducted to confirm viability of extraction at this cut-off Grade.

RPM has utilised a cut-off grade based on estimated operating costs and recoveries as well as a flake graphite price assumptions from the completed DFS.

Previously, the Buffalo and Elephant Mineral Resources were reported with a Total Graphite Content (TGC) cut-off of 6% in 2015. In order to compare changes between the current Mineral Resource estimates and the previously reported Mineral Resource, extra tables of the Mineral Resources, reported at a 6% TGC cut-off grade are shown below.

The January 2017 Elephant Resource estimations are summarized and tabulated below with 2.5% TGC cut-off and 6% TGC cut-off reported.

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Total Elephant January 2017 Mineral Resource: 67.20Mt @ 7.50% TGC for 5.1Mt of

graphite reported at a 2.5% TGC cut-off including Indicated and Inferred Mineral Resources

as stated below.

o Indicated: 35.7Mt @ 8.20% TGC for 2.90Mt of graphite

o Inferred: 31.50Mt @ 6.80% TGC for 2.20Mt of graphite

ELEPHANT MINERAL RESOURCE JANUARY 2017

(2.5% TGC cut-off)

Deposit Classification Type

Elephant Mineral Resource

Tonnes TGC Cont.

Graphite

Mt % Mt

Elephant

Measured

Indicated

Weathered 4.30 8.50 0.40

Fresh 31.40 8.10 2.50

Total 35.70 8.20 2.90

Inferred

Weathered 3.50 6.70 0.20

Fresh 28.00 6.90 1.90

Total 31.50 6.80 2.20

Indicated & Inferred

Weathered 7.80 7.70 0.60

Fresh 59.40 7.50 4.50

Total 67.20 7.50 5.10

Note:

1. The Mineral Resources has been compiled under the supervision of Mr. Robert Dennis who is an employee of RPM and a

Registered Member of the Australian Institute of Mining and Metallurgy and Australian Institute of Geoscientists. Mr. Dennis has

sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that

he has undertaken to qualify as a Competent Person as defined in the JORC Code.

2. All Mineral Resources figures reported in the table above represent estimates at 14th February, 2017. Mineral Resource

estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and

continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to

reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.

3. Mineral Resources will be reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral

Resources and Ore Reserves (The Joint Ore Reserves Committee Code – JORC 2012 Edition) within the report currently being

prepared.

4. TGC = total graphitic carbon.

Table 1. Elephant Deposit JORC compliant Mineral Resource Estimation January 2017 (2.5% TGC cut-off)

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Total Elephant January 2017 Mineral Resource: 47.8Mt @ 8.50% TGC for 4.1Mt of graphite

reported at a 6% TGC cut-off including Indicated and Inferred Mineral Resources as stated

below.



ELEPHANT MINERAL RESOURCE JANUARY 2017 (6% TGC cut off)


Elephant Mineral Resource

Tonnes TGC Cont.

Graphite

Mt % Mt

Elephant

Measured

Indicated

Weathered 3.40 9.30 0.30

Fresh 25.00 8.90 2.20

Total 28.40 8.90 2.50

Inferred

Weathered 2.10 7.80 0.20

Fresh 17.20 8.00 1.40

Total 19.40 8.00 1.50


Weathered 5.60 8.70 0.50

Fresh 42.20 8.50 3.60

Total 47.80 8.50 4.10

Notes 1-4 in table 1 above apply to this Mineral Resource Estimate

Table 2. Elephant Deposit JORC compliant Mineral Resource Estimation January 2017 (6% TGC cut-off)

Buffalo Resource Classification and Estimation

Grade estimation domains comprised modelled lithologies and were modelled initially in ARANZ Leapfrog TM Geo and then modelled in Datamine Studio 3TM. %TGC, CaO, LOI, S and V2O5 were estimated in their respective geological domains as parent cell estimates using ordinary kriging (OK). Density domains were based on lithology and weathering. These were also estimated using OK as parent cell estimates.

The model was classified into Indicated and Inferred Mineral Resources confidence categories based on data quality, drill spacing, geological and grade continuity and core recovery.

The Total Buffalo Mineral Resource estimate is less than the previous published Mineral Resource as material at depths greater than 150m below surface was not included in the January 2017 estimate due to insufficient confidence in drill spacing at those depths by the Competent Person.

The Indicated Mineral Resource classified by Snowden is less than previously reported due to only three drill hole sections having been included, compared to four in the previous estimate and the Indicated Resource estimate was limited to 100m depth below surface.

The January 2017 Buffalo Resource estimation is summarized and tabulated below with 2.5% TGC and 6% TGC cut-off reported.

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Total Buffalo January 2017 Mineral Resource: 38.70Mt @ 7.93% TGC for 3Mt of graphite

utilising a 2.5% TGC cut-off including Indicated and Inferred resources as stated below.



BUFFALO MINERAL RESOURCE JANUARY 2017 (2.5% cut-off)


Buffalo Mineral Resource January 2017

Tonnes TGC Cont.

Graphite

Mt % Mt

Buffalo

Measured

Indicated

Weathered 4.10 8.75 0.40

Fresh 14.40 8.54 1.20

Total 18.50 8.59 1.60

Inferred

Weathered 1.10 5.78 0.10

Fresh 19.20 7.41 1.40

Total 20.20 7.33 1.50


Weathered 5.20 8.14 0.40

Fresh 33.50 7.90 2.60

Total 38.70 7.93 3

Notes:

1. Totals may differ due to rounding, Mineral Resource reported on a dry in-situ basis

2. The Statement of Estimates of Mineral Resources has been compiled under the supervision of Mr. Mark Jason Burnett who is a full time employee of Snowden and Registered with SACNASP, A Fellow of the GSSA and a Member of the SAIMM. Mr. Burnett has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined in the JORC Code (2012).

3. All Mineral Resource figures reported in the table above represent estimates reported as at 31 December 2016. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.

4. Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Resources Committee Code: JORC 2012 Edition).

5. TGC = total graphite content

Table 3. Buffalo Deposit JORC compliant Mineral Resource Estimation January 2017 (2.5% TGC cut-off)

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Total Buffalo January 2017 Mineral Resource: 25.02Mt @ 10.12% TGC for 2.50Mt of

graphite product utilising a 6% TGC cut-off including Indicated and Inferred resources as

stated below.



BUFFALO MINERAL RESOURCE JANUARY 2017 (6% TGC cut off)


Buffalo Mineral Resource

Tonnes TGC Cont. Graphite

Mt % Mt

Buffalo

Measured

Indicated

Weathered 3.28 9.90 0.30

Fresh 9.74 10.78 1.00

Total 13.0 10.56 1.40

Inferred

Weathered 0.39 9.31 0.00

Fresh 11.61 9.66 1.10

Total 12.0 9.64 1.20


Weathered 3.67 9.84 0.40

Fresh 21.35 10.17 2.20

Total 25.0 10.12

2.50

Notes 1-5 from above listed table 3 apply.

Table 4. Buffalo Deposit JORC compliant Mineral Resource Estimation January 2017 (6% TGC cut-off)

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Figure 4. Elephant Deposit Indicated and Inferred resource area with drill hole identifications, pit and waste dump design. Cross Section B-B’ is shown (figure 5).

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Figure 5. Elephant Cross section B-B’ (Cross Section C) defining the Indicated and Inferred Resource areas in section relative to the Ore Mine Reserve and final pit wall and floor design. The resource extends 180m below surface and remains open at depth.

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Figure 6. Buffalo Deposit Indicated and Inferred resource area with drill hole ID, pit and waste dump design with section A-A’ shown (figure 7).

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Figure 7. Buffalo Cross section A-A’ (Cross Section C - 1065) defining the Indicated and Inferred Resource areas in section relative to the Ore Mine Reserve and final pit wall design. The resource extends 150m below surface and remains open at depth.

Buffalo and Elephant Geology and Geological Interpretation

Project scale geology at the Montepuez Graphite Project comprises a rock package of dolerite meta-sediment, amphibolite, and psammite with graphitic meta-sediments and graphitic schist with minor intrusions of cross-cutting pegmatite veins.

The weathering profile across the project is relatively consistent with 2–4m of residual red brown soils and 13–15m of saprolite and oxidisation along joints (transition zone) extending to 20-30m below surface. This interface typically corresponds to the presence of fresh sulphides. Pyrrhotite is the most common sulphide observed in drill core.

From an academic perspective the weathering profile stretches a further 15m beyond the joint oxidation horizon to 45 – 50m from surface where fresh biotite, chlorite and garnet are observed within the rocks.

The graphite-bearing units comprise folded and unfolded graphite schist which comprise gradational variation of graphitic units of graphite schist (GS1, GS2) and graphite-schist-quartz-feldspar (GSQF). Graphite mineralisation is dominantly located within the graphite schist units (GS1, GS2, GSQF) and based on drill core observations graphite can also occur locally along the margins of pegmatite, psammite and amphibolite and small scale structures. The deposits are ductile to brittle ductile deformation with post depositional faulting particularly at Buffalo deposit which is more complex than

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Elephant. Folding and faulting was best observed at Buffalo in 3D leapfrog software by evaluating TGC%, LOI% and V2O5.

The graphite forms as a result of high grade metamorphism of organic carbonaceous matter, the protolith in which the graphite has formed may have been globular carbon, composite flakes, homogenous flakes or crystalline graphite.

The Buffalo and Elephant deposits are located 1.5km across stratigraphy and Lion deposit is located 4.5km south east of Elephant and 4.2km south of Buffalo.

Buffalo Geology

The Buffalo deposit general strike is 010° (same as Elephant) with a steep westerly dip 80° west, folding within the deposit provides much shallower angle graphite units which dip 25° west. The resource length measures >960m and 150-270m in width and depth extensions are open below 250mRL (bottom of inferred resource) in the central pit area measuring 150m vertical depth. The Buffalo resource is open along strike north and south and down dip of the current resource, further drilling is required to assess along strike and down dip potential. Drill lines are spaced 200m apart and 4x geotechnical holes were drilled to test pit wall stabilities and infilled two lines within the pit area to 100m line sections. Holes are drilled nominally 50m apart along each section at Buffalo.

Lithology and structure suggest intense alteration focused along a northerly plunging trend of isoclinal folds and possibly some imbrication. The deposit is transected by several interpreted anastomosing north-south trending structures which commonly terminate folded graphitic schist units in section. The central pit area (figure 7 section C (1065)) extends the thickest east-west direction of mineralization over the pit length and defines the central shear zone, graphite mineralization is associated with folded graphitic schist and graphitic schist and includes some amphibolites.

The Buffalo graphite lithologies defined between the footwall and hanging wall comprise folded graphitic schist and graphitic schist (GS1, GS2 and GSQF).

Elephant Geology

The Elephant deposit has the same general strike as Buffalo with 010° however the westerly dip is 60° west. The resource measures 2.4km in length with width varying 160-255m. The resource is open at depth in the central pit area below 250mRL and 200mRL measuring 180m vertical depth and further resources could be discovered with deeper drill holes and along strike drilling. Further deep drilling is required to evaluate the potential to convert the Inferred Resource to Indicated status.

The rocks at Elephant deposit are the same as Buffalo. All rocks are high metamorphic amphibolite grade with evidence of ductile and brittle-ductile deformation observed in drill core. The footwall of the Elephant deposit is well defined by an amphibolite to the east. The overlying units of variously mineralized and tectonised graphitic shales, psammite and pegmatite are interpreted to form an imbricate deformation zone ramped against highly competent amphibolite.

Sampling & sub-sampling techniques

1,909 samples were evaluated as part of the Buffalo and Elephant Resource estimation with 1,830 diamond core samples and 79 reverse circulation (RC) samples. 37 diamond holes and 3 RC holes.

Standard industry electric core saw was used to cut the core. Standard industry RC chip sampling techniques were used with 2m sample intervals.

Bulk density core samples were collected using standard industry water immersion techniques. Density measurements were taken in the weathered and fresh core horizons.

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Drilling techniques

Diamond drill core samples was preferable to RC method as it provides a greater level of geological understanding (lithology, bedding dip, fault angles etc) and a more representative sample for geochemical and physical mineral property assessment of the graphite. Angle holes needed to be drilled to intersect stratigraphy at a high angle and diamond holes stay open better than RC for shallow dipping drill holes.

Core holes were drilled between November 2014 and September 2016 by drilling contractors. Three diamond core holes were re-drilled after hole collaring due to ore contamination issues within the mineralised zone.

Diamond core holes were drilled with a combination of HQ and NQ3 sized core. Holes were nominally collared with HQ3 (63.5mm) core diameter and drilled while the core was competent, typically <25mdh and the holes were then drilled with NQ3 (47.6mm) to EOH depth. Since 2015 all diamond core has been completed with HQ3. Triple drill tube was used for the core drilling to obtain the best recoverable core sample for geotechnical and analytical analysis.

Resource Classification criteria

Buffalo

The model was classified into Indicated and Inferred based on data quality, drill spacing, geological and grade continuity and drilling recovery.

Areas within the shear zone, covered by the first three sections of drilling from the south, were classified as an Indicated Resource. The Indicated Resource is limited to approximately 100 m below the surface, which corresponds to a maximum depth for most of the holes. The fourth section to the north was classified as an Inferred Resource. Maximum depth for the Inferred Resource is approximately 150 m below surface due to lack of drilling data beyond that depth.

The Mineral Resource estimate appropriately reflects the view of the Competent Person.

Elephant

The Mineral Resource was classified as Indicated and Inferred Mineral Resource based on data quality, sample spacing, and lode continuity. The Indicated Mineral Resource was defined within areas of close spaced diamond and RC drilling of less than 200m by 50m, and where the continuity and predictability of the lode positions was good. In addition, the 200m spacing is approximately equivalent to the variogram range for TGC. The Inferred Mineral Resource was assigned to areas where drill hole spacing was greater than 200m by 50m, where small isolated pods of mineralisation occur outside the main mineralised zones, and to geologically complex zones.

The input data is comprehensive in its coverage of the mineralisation and does not favour or misrepresent in-situ mineralisation. The definition of mineralised zones is based on high level geological understanding producing a robust model of mineralised domains. Validation of the block model shows good correlation of the input data to the estimated grades.

The Mineral Resource estimate appropriately reflects the view of the Competent Person.

Sample Analysis and Estimation Methodology Buffalo

TGC%, CaO%, LOI%, S% and V2O5% were estimated using ordinary kriging (OK). Density domains were based on lithology and weathering, estimated on a domain by domain basis. qKNA was run to

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optimise the block size, number of samples and search ranges used for estimation purposes. The parent block dimensions used were 10 mE by 200 mN by 2.5 mRL.

Grade estimation was undertaken using a three pass process; the second and third passes were set at two and three times the original search radii respectively, to ensure that as many blocks as possible were estimated. Where blocks were not estimated, an average domain grade was assigned to the block.

Three drillholes, namely BF003R, BF015D and BF019D, located within the shear zone, were assigned the detection limit values for TGC%, based on the logging and assay data provided.

Due to limited data outside of the shear zone, detection limit values were assigned to the blocks except for GSQF, which was estimated using the parameters applied to the GSQF domain within the shear zone. Overburden was assigned the average grades from the overburden composites. No grade capping was required. Vanadium product recovery has not been completed. Flake size was not estimated in the block model due to insufficient quantitative data.

Sample Analysis and Estimation Methodology Elephant

Using parameters derived from modelled variograms, Ordinary Kriging (OK) was used to estimate average block grades in three passes using Surpac software. Linear grade estimation was deemed suitable for the Elephant Mineral Resource due to the geological control on mineralisation. Maximum extrapolation of wireframes from drilling was 200m along strike and 60m down-dip. This was half drill hole spacing in this region of the deposit. Maximum extrapolation was generally half to one drill hole spacing.

Reconciliation could not be conducted due to the absence of mining. No recovery of by-products is currently confirmed.

In addition to graphitic carbon (TGC), V2O5, S, LOI and CaO were interpolated into the block model. Flake Size was not estimated into the block model but was averaged for characterisation of the Mineral Resource.

The parent block dimensions used were 50m NS by 10m EW by 2.5m vertical with sub-cells of 6.25m by 2.5m by 1.25m. The parent block size dimension was selected on the results obtained from Kriging Neighbourhood Analysis that suggested this was the optimal block size for the Elephant dataset.

An orientated ‘ellipsoid’ search was used to select data and adjusted to account for the variations in lode orientations, however all other parameters were taken from the variography. Three passes were used for each domain. The first pass had a range of 200m, with a minimum of eight samples. For the second pass, the range was extended to 400m, with a minimum of four samples. For the final pass, the range was extended to 600m, with a minimum of two samples. A maximum of 24 samples was used for all three passes.

No assumptions were made on selective mining units.

TGC had a strong positive correlation with V2O5 and LOI. V2O5 and LOI also had a strong positive correlation. Remaining pairs had no correlations or weak negative correlations.

The deposit mineralisation was constrained by geology outlines based on logged geology, with some consideration of TGC grade. The main mineralised unit (denoted ‘gs’ in the lithology attribute) consisted of logged GSQF, GS1 and GS2 lithologies. Internal, lower grade zones were also domained where psammite was logged (denoted ‘sam’ in the lithology attribute). The country rock is amphibolite and is commonly non mineralised. TGC, V2O5, S, LOI and CaO grades were estimated into the ‘gs’ and ‘sam’ blocks. The wireframes were applied as hard boundaries in the estimate.

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Statistical analysis was carried out on data from eight domains. After analysis, it was determined that no top-cuts were required.

Validation of the model included detailed comparison of composite grades and block grades by northing and elevation. Validation plots showed good correlation between the composite grades and the block model grades.

Buffalo and Elephant Ore Reserve Classification and Estimation

The Probable Ore Reserve for the Buffalo and Elephant deposits was estimated to be 41.4Mt @ 8.80% TGC for 3.64Mt of flake product using a cut-off grade of 4% TGC. The Ore Reserve comprises of the following mineral inventories;

Weathered ore: 8.0Mt @ 8.5% TGC for 0.68Mt contained graphite

Fresh ore: 33.5Mt @ 8.8% TGC for 2.96Mt contained graphite.

The Ore Reserve estimate is summarized in the table below.

MONTEPUEZ GRAPHITE PROJECT - ORE RESERVE ESTIMATE JANUARY 2017 (4% TGC cut-off)

Pit Ore Type Class Ore Reserve TGC

Contained

Graphite

Mt % Mt

Buffalo Pit

Weathered Proved 0 0 0

Probable 3.90 8.80 0.34

Fresh Proved 0 0 0

Probable 10.50 9.80 1.03

Total Proved 0 0 0

Probable 14.40 9.50 1.37

Elephant Pit


Probable 4.10 8.30 0.34

Fresh Proved 0 0 0

Probable 22.90 8.40 1.93

Total Proved 0 0 0

Probable 27.00 8.40 2.26

Buffalo & Elephant Pit


Probable 8.00 8.50 0.68

Fresh Proved 0 0 0

Probable 33.50 8.80 2.96

Total Proved 0 0 0

Probable 41.40 8.80 3.64

Notes: 1. The Ore Reserve estimate was compiled under the supervision of Mr. Geoff Davidson who is an associate of Snowden Mining Industry Consultants and a Fellow of the Australian Institute of Mining And Metallurgy. Mr. Davidson has sufficient experience relevant to the style

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of mineralisation and type of deposit under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined in the JORC Code. 2. The Ore Reserve was estimated above an elevated cut-off of 4.0% TGC. The economic cut-off ranged from 3.0% to 3.7% TGC. 3. All Ore Reserve tonnes have been rounded to the nearest one hundred thousand tonnes and grade to the nearest 1/10th 4. The Ore Reserve estimate includes Inferred and unclassified material in the form of mining dilution estimated to be approximately 1.5 Mt at 3.1% TGC. Approximately 65% of the diluting material was classified within the original Mineral Resource as Indicated, 10% was classified as Inferred and 25% was unclassified.

Table 4. Montepuez Graphite Project Ore Reserve Estimation for Buffalo and Elephant deposits

Mining Methods and Parameters

The mine plan was determined from economic mining limits for each deposit using Whittle optimization software. A mining schedule was developed based on practical mining of the Elephant and Buffalo pit designs. The mining rate was determined based on the processing plant target production of 100 ktpa of TGC concentrate of 96% TGC and practical mining constraints. An initial commissioning and ramp-up period of 9 months was included in the mine schedule to allow for overburden removal and mining infrastructure. Over the life of the project, the throughput rate is expected to vary between 1.5Mtpa when treating weathered ore and 1.4Mtpa when treating fresh ore. Long term stockpiles will be constructed to enable high grade ore to be treated early in lieu of low grade to enhance early cash flow.

The Resource to Reserve conversion is 86% for Buffalo and 77% for Elephant based on TGC content.

Mining will commence initially at the Buffalo pit for the first 4 years. A nine month pre-strip period is scheduled to provide sufficient waste to construct haul roads, ROM pad and other infrastructure. After mining the shallow ore from Buffalo, the mining fleet will move to Elephant to mine the shallow ore in year 5. For the first eight years of production the strip ratio will be low, approximately 0.2 (waste to ore), and the mining rate will be approximately 1.7Mtpa (including ore and waste). After eight years, an additional mining fleet will be mobilised to enable mining cutbacks at both Buffalo and Elephant pits simultaneously, whilst still maintaining production. At this time the mining rate will increase from 1.8Mtpa to approximately 3.4Mtpa. The current mine life is estimated to be 27 (including pre-strip) years, with a life of mine strip ratio of 0.6 (waste to ore ratio). Following the completion of mining, the remaining long-term stockpiles will be treated over a period of four years. Mining of Buffalo and Elephant deposits will be by conventional open pit bulk mining methods, using 90 t excavators and 40 t articulated dump trucks. The deposit will require blasting; however the upper saprolite layer is expect to be freely dug down to an estimated 5-15m at Buffalo and 10-20m at Elephant. The orebody is wide and continuous above the cut-off grade, leading to a reasonably low level of dilution and ore loss, which were estimated to be approximately 4% and 2% respectively. The cut-off grade was determined through the application of project unit operating costs and recoveries. The recoveries were determined by deposit scale geometallurgical assessment of samples representative of the variable lithology types, oxidation and TGC% grade ranges. The Ore Reserve cut-off grades were calculated to range between 3.0% TGC and 3.7% TGC depending on deposit and weathering classification. An elevated cut-off grade of 4% TGC was applied to diluted Mineral Resource and formed the basis of the Ore Reserve. Pit designs were based on Whittle pit optimisations for each deposit considering project specific unit costs, prices, recoveries and geotechnical inputs. The pit optimisations were constrained within the limits of the Indicated Resource for each deposit. The current design for the Buffalo pit extends to a

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depth of approximately 90m, whilst the current design for Elephant pit extends to a depth of approximately 150 m deep. Appendix 3 contains life of mine %TGC grade and tonnage graphs. Each pit will have a single waste dump, located to the east of each excavation. Pit ramps will be orientated to ensure that both ore and waste haulage distances are minimized. Long-term stockpiles will be located between each pit and the ROM pad. The ROM is located mid-way between the pits to balance haulage costs. Geochemical assessments of the waste rock indicated that the final landform will contain sufficient neutralizing capacity to be considered non-acid forming, therefore no specialized encapsulation methods of deleterious materials will be required. The project layout is shown in figure 3. Metallurgical Methods and Parameters Size Grain Distribution and Mineral Liberation Analysis (MLA) was completed for 30 Buffalo and 13 Elephant samples, each of these samples indicated more than half of the sample comprised large and jumbo flakes in both orebodies. BAT also completed geometallurgical assessment more suitable for DFS level of investigation and the recoveries and grades obtained in these detailed testwork were used in the Ore Reserve estimation. Variability flotation test work was conducted for Buffalo and Elephant deposit between September 2016 to January 2017. Work was managed by Minnovo (Australia) and laboratory test work completed at ALS Metallurgy facility in Perth. Samples were sourced from surface trenches and drill core and were selected based on weathering (fresh and oxidized samples), lithology type (variable graphite schist samples) and variable TGC% grades (low to moderate to high grade samples) as well as test work of composite lithologies and composite grades. The full range of lithologies and grades representative of Buffalo and Elephant deposits were assessed. Graphite products include flake graphite concentrate of 96% TGC +300um, -300+180um, -180+106um, -106+38um. The -38um fraction was removed as it was deemed too low grade for further treatment and would have resulted in increased plant cost and processing complexity. Sample concentrate recovery for Buffalo 96% TGC concentrate was estimated to be 76.9% for fresh ore and 73.1% for weathered ore. Recovery for Elephant 96% TGC concentrate was estimated to be 73.4% for fresh ore and 62.6% for weathered ore. Geometallurgical variability test work indicates lithology and TGC% grade (plant feed) have no effect on head concentrate grade or recovery, however lower recoveries were incurred for weathered ore compared to fresh. BAT believe the reported recovery is conservative and further geometallurgical assessment will be completed in 2017 to improve the recoveries for each deposit.

Source Weathered ore

recovery

Fresh ore

recovery

Concentrate

Grade % TGC

Buffalo 73.1% 76.9% 96

Elephant 62.6% 73.4% 96

Table 5. Summary table of Buffalo, Elephant and Fresh and Weathered samples with graphite % recovery and concentrate% TGC derived from the DFS geometallurgical assessment.

The Product Size Distribution (PSD) determined by test work on the Montepuez 96% concentrate sample at ALS

Metallurgical Laboratory in Perth (i.e. not the Particle Size Distribution produced by Actlabs on unprocessed graphite

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sample) varies within the deposits. This distribution for Buffalo and Elephant deposits is summarized in Table 6.

Actual PSD Results for Montepuez 96% Concentrate Sample

Buffalo Elephant

Source Weathered Fresh Weathered Fresh

Fine, 38-108µm 46.2% 39.9% 50.9% 34.5%

Med, 108-180µm 30.9% 30.7% 29.4% 31.7%

Large, 180-300µm 16.7% 20.1% 15.4% 24.2%

Jumbo, +300µm 6.2% 9.3% 4.3% 9.6%

Table 6. Summary of PSD for each graphite product size for Buffalo and Elephand deposits determined by BAT geometallurgical analysis

Material modifying factors Market Flake Size Pricing

BAT has considered various factors before carefully deciding on the product pricing to be used in order to assess the project economics as part of the DFS. The Flake Size pricing used has considered the size fractions, product quality and market acceptance. BAT considered various size fraction scenarios at the DFS level and analysed capital and operating cost, processing complexity and likely market pricing. The Flake Size fractions used in the DFS are summarized below including Flake Pricing in USD.

Flake Graphite Concentrate Sizing

Particle Size Range (descriptive)

Particle Size Range

(mesh)

Particle Size Range

(micron)

Flake Pricing FOB

Pemba USD

Fine -100 Mesh +38 -106 $539

Medium +100 Mesh +106 -180 $813

Large +80 Mesh +180 -300 $976

Jumbo +50 Mesh +300 $1440

Table 7. Flake graphite concentrate sizing and Flake Pricing used in the DFS

BAT have chosen a concentrate grade of 96% concentrate due to informal feedback from market indicating this product will be sought after and provide a more superior market product. A further product differentiator is the removal of -38um product in the recovery process.

The basis of the product pricing was determined by mid-point pricing February 2019 to December 2020 from an independent forecast of graphite flake market prepared for BAT by Benchmark Mineral Intelligence (BMI), an independent publishing business focused on critical mineral supply chains particularly minerals applied to new technologies. The pricing was in CIF and BAT adjusted the Flake Size pricing to FOB Pemba by obtaining freight quotations to market geographies and calculating a cost per tonnage in $USD.

The DFS Ore Reserve and financial model is sensitive towards product pricing, for this reason BAT have chosen realistic future Flake Size pricing FOB Pemba which included discrimination for weathered and fresh product tonnages in the Ore Reserve calculations. These prices are

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calculated based on Flake Size within the 96% TGC concentrate grade. These are summarized below;

• Elephant weathered - $756/t TGC

• Elephant fresh - $852/t TGC

• Buffalo weathered - $784/t TGC

• Buffalo fresh - $828/t TGC

Project Opportunities Additional Montepuez Graphite Project opportunities include;

Deeper drilling at Buffalo and Elephant deposits to consider potential of converting more

Inferred Resources to Indicated classification with ultimate objective to increase the

Probable Ore Reserve and extend the mine life.

Close off mineralisation along strike of Buffalo and Elephant deposits

Inclusion of Lion deposit in the mine schedule

Additional geometallurgical studies to improve graphite ore recoveries

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JORC Code, 2012 Edition – Table 1 Appendix 1 to Announcement: Montepuez Graphite Project 6216L A Montepuez Graphite Project Maiden Mineral Resource was released to the ASX 16th November 2015 for the Buffalo, Elephant and Lion deposits. This report pertains a second Mineral Resource announcement exclusively for the Buffalo and Elephant deposits. The Buffalo and Elephant Mineral Resources were updated to include additional drill holes and lithological domains for Ore Reserve conversion as part of the Definitive Feasibility Study.

Ms Cherie Leeden, Managing Director of BAT compiled the information in Section 1 and Section 2 of the following JORC Table 1 and is the Competent Person for those sections. Two separate Section 3 tables are provided for each of the Buffalo and Elephant Resource estimations and classifications, one prepared by Mr Mark Burnett, an employee of Snowden Mining Industry Consultants (Pty) Limited (Snowden) and is the Competent Person for the Buffalo Resource estimation and one prepared by Mr Robert Dennis, an employee of RungePincockMinarco Limited (RPM) whom is the Competent Person for the Elephant Resource estimation. Mr Geoff Davidson compiled information in Section 4 for the combined Buffalo and Elephant Ore Reserve estimate, Mr Davidson is an associate of Snowden and a Fellow of the AusIMM and is the Competent Person for the combined Buffalo and Elephant Ore Reserve. In assessing the appropriateness of the Ore Reserve estimate, Mr Davidson has relied on various reports, from both internal and external sources, in either draft or final version, which form part of or contribute to the DFS. These reports are understood to be compiled by persons considered by BAT to be competent in the field on which they have reported..

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation BAT Commentary

Sampling techniques

· Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

· Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

· Aspects of the determination of mineralisation that are Material to the Public Report.

· In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

· 1,909 samples were evaluated as part of the Buffalo and Elephant Resource estimation with 1,830 diamond core samples and 79 reverse circulation (RC) samples. 37 diamond holes and 3 RC holes.

· Standard industry electric core saw was used to cut the core. Standard industry RC chip sampling techniques were used with 2m sample intervals.

· Bulk density core samples were collected using standard industry water immersion techniques. Density measurements were taken in the weathered and fresh core horizons.

Drilling techniques

· Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core

· Diamond drill core samples was preferable to RC method as it provides a greater level of geological understanding (lithology, bedding dip, fault angles etc.) and a more representative sample for geochemical and physical mineral property assessment of the graphite. Angle holes needed to be drilled to intersect stratigraphy at a high angle and

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is oriented and if so, by what method, etc.).

diamond holes stay open better than RC for shallow dipping drill holes.

· Core holes were drilled between November 2015 and September 2016 by drilling contractors.

· Three diamond core holes were re-drilled after hole collaring due to ore contamination issues within the mineralised zone.

· Diamond core holes were drilled with a combination of HQ and NQ3 sized core. Holes were nominally collared with HQ3 (63.5mm) core diameter and drilled while the core was competent, typically <25mdh and the holes were then drilled with NQ3 (47.6mm) to EOH depth. Since 2015 all diamond core has been completed with HQ3.

· Triple drill tube was used for the core drilling to obtain the best recoverable core sample for geotechnical and analytical analysis.

·

Drill sample recovery

· Method of recording and assessing core and chip sample recoveries and results assessed.

· Measures taken to maximise sample recovery and ensure representative nature of the samples.

· Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

· Diamond core was reconstructed into continuous runs on an iron angle cradle for orientation marking by trained field-technicians, with sample core recovery measured for each core run.

· Downhole depths were validated against core blocks and drillers run sheets.

· Average core recovery returned is 97% and there is no significant relationship with core recovery and graphite grade and no sample bias identified.

· Some core loss was encountered in the regolith zone however is not interpreted to be sufficiently significant to warrant hole re-drilling to recover further sample for laboratory re-analysis as collaring diamond rigs and getting full sample recovery near to surface is inherently difficult.

· After the maiden drill program comprising 5x RC drill holes drilled in March 2015, BAT switched to core sample for better sample representivity and also because core enables better visualisation and understanding of lithology and lithological contacts which enables capture of structural readings (alpha & beta) and bulk density measurements. The portion of RC samples represented in the resource is minimal and BAT have not observed a sample grade bias using RC sampling to warrant twinning RC and diamond drilling to further test the shallow 3x RC holes included in the resource.

·

Logging · Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

· Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

· The total length and percentage of the relevant intersections logged.

·

· Drill holes were logged by trained and experienced geologists at the level of detail that supports the resource estimation.

· Geological logging of all drill core included; weathering zone, lithology, colour, mineralogy, mineralisation and visual graphite estimates.

· Core was oriented with alpha and beta measurements converted to strike and dip for planar features such as bedding and structural measurements and projected onto cross sections and stereonets.

· Geotechnical logging was conducted on all drill core, verifying core % recovery and capture of RQD and fracture frequency on all core run intervals.

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· All data was initially captured on paper logging sheets, and transferred to locked excel format tables for validation and was then loaded into the parent access database.

· All diamond drill core has been photographed and archived, firstly after mark-up and secondly after sampling and when necessary re-sampling.

· The logging and reporting of visual graphite percentages on preliminary logs is semi-quantitative and not absolute. Visual graphite was used to select samples sent for mineralogical analysis.

· Parasitic folds noted in the drill core indicate the mineralisation is complexly folded and steeply dipping faults and shears have also been identified. The core logging system and reported cross sections provide the broad regional trend of the mineralised system for Buffalo and not the individual parasitically folded graphitic schist units. The mineralisation observed and modelled at Elephant is less complex compared to Buffalo.

Sub-sampling techniques and sample preparation

· If core, whether cut or sawn and whether quarter, half or all core taken.

· If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

· For all sample types, the nature, quality and appropriateness of the sample preparation technique.

· Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

· Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

· Whether sample sizes are appropriate to the grain size of the material being sampled.

· Core samples were cut using an industry standard core saw, with HQ3 and NQ3 samples initially cut to ⅟2 cored size and ¼ core. The change to ¼ core sampling technique was to enable sufficient core sample to conduct flake and metallurgical test work with the remaining core sample.

· For the 5x RC holes standard RC cone splitting techniques used over 2m sample intervals.

· Duplicate core intervals sampled in 2015 did not reveal any sampling bias.

Quality of assay data and laboratory tests

· The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

· For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

· Early program drilling November 2015 drill holes MN0007D, and MN0018D (0-50m) were submitted to Bureau Veritas laboratory in South Africa and samples were then submitted to ALS South Africa and Australia using the same techniques described below.

· Samples were submitted to ALS Johannesburg (South Africa) for sample preparation and geochemical analysis was completed by ALS in Brisbane (Australia).

· Samples were sorted, oven dried at 105°C, crushed to -2-3mm and a 300g subsample taken for pulverising in an LM5 with 85% passing -75um.

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· Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

· Loss on Ignition (LOI) has been determined between 105° and 1050° C. Results are reported on a dry sample basis.

· Analysis includes Total Carbon Total Sulphur analysis by LECO, LOI TGA and ICP-AES.

· The detection limits and precision for the Total Graphitic Carbon (TGC) and Total Sulphur (TS) analysis are considered adequate for resource estimation.

· QAQC protocols include the use of; a coarse blank to monitor contamination during the preparation process, Certified Reference Material (CRM) at an insertion ration of 1:20 and post drill program duplicate ¼ core sampling.

· All laboratory batch QC measures are checked for bias before final entry in the database, no bias has been identified in the results received. Duplicate samples returned good repeatability.

· The CRM TGC values range between 4-24%. The blank samples comprised 1-2kg sample of dolomitic marble quarried from a location 50km east of the project.

· Four CRM (GGC001, GGC004, GGC005 and GGC010) are used to monitor analysis of laboratory for graphitic carbon, carbon and sulphur.

· Two base metal CRM (AMIS 346 & 388) is being utilised to monitor vanadium.

Verification of sampling and assaying

· The verification of significant intersections by either independent or alternative company personnel.

· The use of twinned holes.

· Documentation of primary data, data entry procedures, data verification.

· Discuss any adjustment to assay data.

· Significant intersections were visually verified in the field by CP Mr Mark Burnett, Snowden Principal Consultant during a site visit 28th July to 1st August 2016 and by Shaun Searle of RPM in June to July 2015.

· No twinned drill holes are believed necessary due to drill core sampling method.

· Data entry procedures are described in the Logging section.

· Adjustments were made to the laboratory data analysed by the Bureau Veritas laboratory for holes MN0007D and MN0018D (0-50m), drilled in the early stage of the exploration program. Elemental concentrations were converted to oxide equivalents to be consistent with the ALS analytical methodologies (e.g. V% was converted to V2O5% by multiplying by the conversion factor of 1.7852). In addition, assays reporting below the detection limit were set to a value of half the detection limit prior to Mineral Resource estimation. F

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Location of data points

· Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

· Specification of the grid system used.

· Quality and adequacy of topographic control.

· All spatial data was collected in WGS84 UTM Zone 37 South datum.

· Planned drill holes were surveyed using Garmin 62s GPS devices which typically have a ±5m error in the project area.

· Final collar locations were picked up by GEOSURVEY utilising a differential GPS system with 0.02cm accuracy.

· Fresh satellite capture (30cm panchromatic standard 2A WorldView-3 stereo orthoimagery) was used to produce a 0.5m contour digital survey model. DGPS drill hole collar surveys were used as control points in producing the digital contours.

· Reflex ACTII orientation survey tools were used to orientate the drill core and Reflex Ezy shot tools were used to survey the diamond core holes. Due to shallow depth of RC holes and maiden program, no downhole surveying was conducted on the 5 RC holes drilled, with the deepest hole at 61m. Only two RC holes occur inside the final defined Mineral Resource.

Data spacing and distribution

· Data spacing for reporting of Exploration Results.

· Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

· Whether sample compositing has been applied.

· Diamond drill holes were drilled at shallow angles (nominally 50°-60° towards 100-110° UTM grid east) in an attempt to drill across stratigraphy, however mineralised intercepts are not perpendicular to strike however as close as could be obtained.

· The drill hole details for the Mineral Resource are tabulated in Appendix 2.

Orientation of data in relation to geological structure

· Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

· If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

· Reconnaissance geological mapping was conducted however outcrop is sparse with 5-10%. Geological data points were mapped and were also recorded during bulk sample trenching. Most of the drill holes were planned with reference to VTEM conductors. The mapping and strike of the VTEM conductors identified the regional stratigraphic trend where the graphitic schists, amphibolite and psammite dip moderately steep westwards with core alpha and beta orientations confirming the regional dip.

Sample security

· The measures taken to ensure sample security.

· The samples are stored in the company’s field base until laboratory dispatch, at which point the samples were transport to Pemba and air freighted by courier to ALS – Johannesburg, South Africa for sample preparation and then pulp couriered to ALS Brisbane Australia for geochemical analysis.

· Any visible signs of tampering are reported by the laboratory and none have been reported to date.

Audits or reviews

· The results of any audits or reviews of sampling techniques and data.

· CP Mr Mark Burnett, Snowden Principal Consultant visited site in July 2016 and Shaun Searle of RPM (representative of Robert Dennis, CP) visited June to July 2015. No issues with the field procedures or geological data gathering was identified by both CP’s.

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Criteria in this section applies to the Buffalo and Elephant January 2017 Resource estimations and classifications.

Section 2 Reporting of Exploration Results

Criteria JORC Code explanation Commentary

Mineral tenement and land tenure status

· Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

· The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

· The Montepuez Project 6216L Prospecting License comprises an area covering 125.6km² and is held 100% by Battery Minerals Limited (Metals of Africa Limited prior to December 2016) via a locally owned subsidiary Suni Resources SA.

· The Montepuez Project contains the Elephant, Buffalo and Lion deposits however resource and reserve estimations were limited to Elephant and Buffalo during the DFS.

· All statutory approvals have been acquired to conduct exploration activity and the Company has established a good working relationship with the government departments of Mozambique and continues to build its relationship with the local community.

· The company is not aware of any impediments relating to the licenses or area.

· The Company has completed its field investigations as part of the Environmental Impact Assessment and is presently preparing documentation for submission.

Exploration done by other parties

· Acknowledgment and appraisal of exploration by other parties.

· The project area has been mapped at 1:250,000 scale as part of a nation-wide geological study prepared by a consortium funded by the Nordic Development Fund. The project area has also been flown with regionally spaced airborne geophysics (magnetics and radiometrics) as part of a post war government investment initiative.

· There is no record of past direct exploration activities on the license that BAT has knowledge of.

· A portion of the Montepuez Project was flown with VTEM by a neighbouring license holder and BAT flew its own survey in 2015.

Geology · Deposit type, geological setting and style of mineralisation.

· The deposits were discovered after drill testing a series of coincident VTEM conductors and prospective stratigraphy with mapped graphitic outcrop occurrences.

· The 6216 license occurs on the Xixano Complex and traverse the tectonic contacts between the Nairoto, Xixano and Montepuez Complexes. The Xixano Complex includes a variety of metasupracrustal rocks enveloping predominantly mafic igneous rocks and granulites that form the core of a regional north-northeast to south-southwest-trending synform. The paragneisses include mica gneiss and schist, quartz feldspar gneiss, metasandstone, quartzite and marble.

· The metamorphic grade in the paragneiss is dominantly amphibolite facies, although granulite facies rocks occur locally in the region. The oldest dated rock in the Xixano Complex is a weakly deformed meta-rhyolite which is interlayered in the meta-supracrustal rocks and which gives a reliable extrusion age of 818 +/- 10 Ma.

· Graphite-bearing mica schist and gneiss are found in different tectonic complexes in the Cabo Delgado Province of Mozambique.

· Local geology comprises dolerite, meta-sediments, amphibolites, psammite with graphitic metasediments and graphitic schists.

· The Montepuez deposits are disseminated with graphite dispersed within variable schists referred GS1, GS2 and GSQF.

· The graphite forms as a result of high grade metamorphism of organic carbonaceous matter, the protolith in which the graphite has formed may have been globular carbon, composite flakes, homogenous flakes or crystalline graphite.

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Drill hole Information

· A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

· easting and northing of the drillhole collar,

· elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar,

· dip and azimuth of the hole,

· down hole length and interception depth,

· hole length.

· If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

· Exploration results are not being reported. A table of drill hole summaries are listed in the Appendix 2.

· Laboratory graphite samples were selected from core according to visual graphite identified, non-mineralised intervals were no assayed.

Data aggregation methods

· In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.

· Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

· The assumptions used for any reporting of metal equivalent values should be clearly stated.

· Exploration results are not being reported.

· Metal equivalent values have not been used.

Relationship between mineralisation widths and intercept lengths

· These relationships are particularly important in the reporting of Exploration Results.

· If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

· If it is not known and only the down hole lengths are reported,

· The geology at the Buffalo deposit is relatively well constrained with infill drilling, however further drilling is required close off mineralisation along strike north and south of the pits and the orebody is open down dip. The dip of the orebody is steeply west and holes have been drilled eastward -50-60° to intersect the graphite mineralisation at the highest angle possible. A northerly plunge was observed during the resource evaluation process.

· The geology at Elephant is less structurally complex than Buffalo and comprises a moderately steep westerly graphitic schist package bound

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there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).

by amphibolite and notable psammite in the southern portion of the orebody.

Diagrams · Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations.

· Relevant diagrams have been included within the ASX release main body of text.

Balanced reporting

· Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to

· The report is believed to include all representative and relevant information pertaining the Buffalo and Elephant Resource and is believed to be comprehensive.

Other substantive exploration data

· Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

· Regional airborne geophysical (magnetics, radiometrics), DEM and regional geological mapping was used to assist mapping interpretation and drill hole targeting.

· Subsequent to mapping, VTEM data was acquired and contributed to the surface geology interpretation.

· Metallurgical sample was sourced from surface trenches as well as drill core sample selected from fresh and oxidised horizons dispersed over the Elephant and Buffalo orebodies. Metallurgical samples were selected by weathering state, lithology and TGC%. The samples are considered representative of the orebody.

Further work · The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

· Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

· Further drilling was conducted in November and December 2016 and assay results are pending.

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Section 3 - Part A - Estimation and Report of Mineral Resource for Buffalo Deposit

Criteria JORC Code explanation Commentary Buffalo - Snowden

Database integrity

· Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

· Data validation procedures used.

· Geological and sampling data is stored in a MS Access database, which is validated by staff on site.

· Snowden undertook a high level database review and identified minor errors, which, following consultation with BAT were fixed

· No significant issues were identified.

Site Visits · Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· A site visit was undertaken 28th July – 1st August 2016 by Mr Mark Burnett, Snowden Principal Consultant and CP for the Buffalo Resource estimate.

· During the site visit Mr Burnett reviewed the core, drilling and logging procedures as well as density measuring methods.

Geological Interpretation

· Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

· Nature of the data used and of any assumptions made.

· The effect, if any, of alternative interpretations on Mineral Resource estimation.

· The use of geology in guiding and controlling Mineral Resource estimation.

· The factors affecting continuity both of grade and geology.

· The confidence in the geological model is relatively good, being based on surface mapping and drillhole data, however additional drilling is required to further understand the structural controls on the deposit.

· BAT provided Snowden with manual geological interpretations on printed sections. Snowden emulated these interpretations using ARANZ LeapfrogTM Geo, and exported the models to Datamine Studio 3TM for resource estimation.

· The geological interpretation included grouping graphitic schists (GS), the amphibolite (AMP) group, graphitic schist-quartz-feldspar (GSQF), GLT (granulite) and the remainder of the minor logged lithologies were grouped together and coded as UNKN. The GS group included GS, GS1 and GS2 and the AMP group included AMP1 and AMP2.

· Generally the GS group, AMP group and the remaining lithologies were interpreted as being sub-horizontal, having a north-north-eastern strike direction, dipping to the west at about 25°. Meanwhile, GSQF was interpreted to be sub-vertical with a northerly strike direction, dipping at approximately 80° to the west.

· The modelled lithologies did not always correlate between sections. To assist with the model interpretation; faults were added to account for the apparent discontinuity observed.

· The majority of the graphite occurs in association with graphite schist units (GS1, GS2, GSQF).

· Weathering surfaces were modelled in Datamine Studio 3TM in accordance with the weathering codes provided in BTA’s database, which are derived from core logging and sampling.

Dimensions · The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan

· The Buffalo Mineral Resource extends over 960 m along strike in a north-northeast orientation; reaching a maximum thickness of 270 m across strike. It has been

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width, and depth below surface to the upper and lower limits of the Mineral Resource.

confirmed, by diamond core drilling, to extend to a depth of 150 m below surface

Estimation and modelling techniques

· The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

· The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

· The assumptions made regarding recovery of by-products.

· Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).

· In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

· Any assumptions behind modelling of selective mining units.

· Any assumptions about correlation between variables.

· Description of how the geological interpretation was used to control the resource estimates.

· Discussion of basis for using or not using grade cutting or capping.

· The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

· TGC%, CaO%, LOI%, S% and V2O5% were estimated using ordinary kriging (OK).

· Density domains were based on lithology and weathering, estimated on a domain by domain basis.

· qKNA was run to optimise the block size, number of samples and search ranges used for estimation purposes. The parent block dimensions used were 10 mE by 200 mN by 2.5 mRL.

· Grade estimation was undertaken using a three pass process; the second and third passes were set at two and three times the original search radii respectively, to ensure that as many blocks as possible were estimated. Where blocks were not estimated, an average domain grade was assigned to the block.

· Three drill holes, namely BF003R, BF015D and BF019D, located within the shear zone, were assigned the detection limit values for TGC%, based on the logging and assay data provided.

· Due to limited data outside of the shear zone, detection limit values were assigned to the blocks except for GSQF, which was estimated using the parameters applied to the GSQF domain within the shear zone.

· Overburden was assigned the average grades from the overburden composites.

· No grade capping was required.

· Vanadium product recovery has not been completed.

· Flake size was not estimated in the block model due to insufficient quantitative data.

Moisture · Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

· The resource is reported on a dry tonnage basis.

Cut-off parameters

· The basis of the adopted cut-off grade(s) or quality parameters applied.

· A cut-off of 6% TGC% was applied based on other similar, known, economically viable deposits.

· A further 2.5% TGC is also reported.

Mining factors and assumptions

· Assumptions made regarding possible mining methods, minimum mining

· Open pit mining is planned to be used at Buffalo.

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dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

· No assumptions have been made regarding mining dilution to the resource.

· It is assumed that the Buffalo deposit can be mined using conventional, open cut techniques.

· It is assumed that dilution and ore losses will be incorporated into any Ore reserve estimation that may be declared.

Metallurgical factors or assumptions

· The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

· The Project has had MLA analysis completed to

determine flake size and liberation. More than half of

the project is composed of large and jumbo flake size

which indicates reasonable prospects for eventual

economic extraction.

· Variability flotation test work was conducted for Buffalo deposit between September 2016 to January 2017. Work was managed by Minnovo (Australia) and laboratory test work completed at ALS Metallurgy facility in Perth.

· Geometallurgical assessment was completed to test 96%

TGC concentrate grade, recoveries and sample/grade

variability assessment.

· Metallurgical samples were sourced from surface

trenches and drill core and were selected based on

weathering (fresh and oxidised), lithology type and

variable TGC% grades as well as composite lithologies and

composite grades. The full range of lithologies and grades

representative of Buffalo deposit were assessed.

· Products are flake graphite in the following size fractions:

· +300 µm

· -300+180 µm

· -180+106 µm

· -106+38 µm

· Concentrate recovery for Buffalo 96% TGC concentrate

was estimated to be 76.9% for fresh ore and 73.1% for

weathered ore recovery.

· A mixture of bulk composites (weathered and primary) as

well as variability composite samples for the various GS,

GSQF and GS2 lithologies were included in the sample

test work.

· The -38 µm fraction is removed by desliming and discarded to tails because it is (relatively) low grade at about 90% TGC. As such it was not considered worth treating further (filtration, drying, screening) in the Feasibility Study and thus not economic.

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Environmental factors or assumptions

· Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

· BAT are well advanced in their Environmental Impact Assessments with specialist field studies completed and final reports are currently under compilation. No extreme risks have been identified during the field studies. Mitigation measures for minor and major risks are currently under investigation.

Bulk density · Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

· The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc.), moisture and differences between rock and alteration zones within the deposit.

· Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

· 1,345 samples were measured for bulk density at Buffalo, by BAT personnel. These were undertaken using a water displacement method. Three readings were taken at different time intervals, and averaged to determine the bulk density. The CP considers this appropriate.

Classification · The basis for the classification of the Mineral Resources into varying confidence categories.

· Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

· Whether the result appropriately reflects the Competent Person’s view of the deposit.

· The model was classified into Indicated and Inferred based on data quality, drill spacing, geological and grade continuity and drilling recovery.

· Areas within the shear zone, covered by the first three sections of drilling from the south, were classified as an Indicated Resource. The Indicated Resource is limited to approximately 100 m below the surface, which corresponds to a maximum depth for most of the holes. The fourth section to the north was classified as an Inferred Resource. Maximum depth for the Inferred Resource is approximately 150 m below surface due to lack of drilling data beyond that depth.

Audits or reviews · The results of any audits or reviews of Mineral Resource estimates.

· Snowden and BAT have undertaken internal reviews of the data and associated models and resource estimates. The Snowden Buffalo Resource model was peer reviewed by RPM.

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Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

· The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

· These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· The geometry and continuity of graphite mineralisation has been adequately interpreted to reflect the applied level of Indicated Mineral Resource and Inferred Mineral Resource.

· The data quality is good and the drill holes have detailed geological logs produced by qualified geologists.

· A recognised laboratory has been used for all analyses.

· The Mineral Resource statement relates to global estimates of tonnes and grade.

· There is no historical mining or production from the Project; as a result, reconciliation cannot be completed.

Section 3 - Part B - Estimation and Report of Mineral Resources for Elephant Deposit

Criteria JORC Code explanation Commentary Elephant - RPM

Database integrity

· Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

· Data validation procedures used.

· Geological and field data is collected using customised Excel logging sheets on tablet computers. The data is verified by company geologists before the data is imported into an Access database

· RPM performed initial data audits in Surpac. RPM checked collar coordinates, hole depths, hole dips, assay data overlaps and duplicate records. Minor errors were found, documented and amended.

Site Visits · Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

· If no site visits have been undertaken indicate why this is the case.

· A site visit was conducted by Shaun Searle of RPM during June and July 2015. Shaun conducted the site visit on behalf of the Competent Person, Robert Dennis of RPM. Shaun inspected the deposit area, drill core, outcrop and the core logging and sampling facility. During this time, notes and photos were taken. Discussions were held with site personnel regarding drilling and sampling procedures. No major issues were encountered.

Geological Interpretation

· Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

· Nature of the data used and of any assumptions made.

· The confidence in the geological interpretation is considered to be good and is based on visual confirmation in core and outcrop.

· Geochemistry and geological logging has been used to assist identification of lithology and mineralisation.

· The deposit consists of steeply west dipping units. Infill drilling has supported and refined the model and the current interpretation is considered robust.

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· The effect, if any, of alternative interpretations on Mineral Resource estimation.

· The use of geology in guiding and controlling Mineral Resource estimation.

· The factors affecting continuity both of grade and geology.

· Outcrops of mineralisation and host rocks confirm the geometry of the mineralisation, including trench outcrop.

· Infill drilling has confirmed geological and grade continuity.

Dimensions · The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

· The Elephant Mineral Resource area extends over a south southwest-north northeast strike length of 2.4km (from 8,583,970mN – 8,586,330mN), has a maximum width of 255m (469,055mE – 469,310mE) and includes the 180m vertical interval from 400mRL to 220mRL.

Estimation and modelling techniques

· The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

· The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

· The assumptions made regarding recovery of by-products.

· Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).

· In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

· Any assumptions behind modelling of selective mining units.

· Any assumptions about correlation between variables.

· Description of how the geological interpretation was used to control the resource estimates.

· Discussion of basis for using or not using grade cutting or capping.

· The process of validation, the checking process used, the comparison of model data to drill

· Using parameters derived from modelled variograms, Ordinary Kriging (OK) was used to estimate average block grades in three passes using Surpac software. Linear grade estimation was deemed suitable for the Elephant Mineral Resource due to the geological control on mineralisation. Maximum extrapolation of wireframes from drilling was 200m along strike and 60m down-dip. This was half drill hole spacing in this region of the deposit. Maximum extrapolation was generally half to one drill hole spacing.

· Reconciliation could not be conducted due to the absence of mining.

· No recovery of by-products is currently confirmed.

· In addition to graphitic carbon (TGC), V2O5, S, LOI and CaO were interpolated into the block model. Flake size was not estimated into the block model but was averaged for characterisation of the Mineral Resource.

· The parent block dimensions used were 50m NS by 10m EW by 2.5m vertical with sub-cells of 6.25m by 2.5m by 1.25m. The parent block size dimension was selected on the results obtained from Kriging Neighbourhood Analysis that suggested this was the optimal block size for the Elephant dataset.

· An orientated ‘ellipsoid’ search was used to select data and adjusted to account for the variations in lode orientations, however all other parameters were taken from the variography derived from Object 1. Three passes were used for each domain. The first pass had a range of 200m, with a minimum of eight samples. For the second pass, the range was extended to 400m, with a minimum of four samples. For the final pass, the range was extended to 600m, with a minimum of two samples. A maximum of 24 samples was used for all three passes.

· No assumptions were made on selective mining units.

· TGC had a strong positive correlation with V2O5 and LOI. V2O5 and LOI also had a strong positive correlation. Remaining pairs had no correlations or weak negative correlations.

· The deposit mineralisation was constrained by geology outlines based on logged geology, with some consideration of TGC grade. The main mineralised unit (denoted ‘gs’ in the

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hole data, and use of reconciliation data if available.

lithology attribute) consisted of logged GSQF, GS1 and GS2 lithologies. Internal, lower grade zones were also domained where psammite was logged (denoted ‘sam’ in the lithology attribute). The country rock is amphibolite and is waste material. TGC, V2O5, S, LOI and CaO grades were estimated into the ‘gs’ and ‘sam’ blocks. The wireframes were applied as hard boundaries in the estimate.

· Statistical analysis was carried out on data from eight domains. After analysis, it was determined that no top-cuts were required.

· Validation of the model included detailed comparison of composite grades and block grades by northing and elevation. Validation plots showed good correlation between the composite grades and the block model grades.

Moisture · Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

· Tonnages and grades were estimated on a dry in situ basis.

Cut-off parameters

· The basis of the adopted cut-off grade(s) or quality parameters applied.

· The Mineral Resource estimate has been constrained by the wireframed lithological envelopes, is undiluted by external waste and reported above a 2.5% TGC cut-off grade. The cut-off grade was estimated in reference to Flake Size product pricing defined in the Ore Reserve Section of this report for weathered and fresh, recovery and %TGC concentrate.

· To compare the current Elephant Mineral Resource with the November 2015 Mineral Resource, the Resource estimate has also been reported at a 6% TGC cut-off grade for comparative purpose.

Mining factors and assumptions

· Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

· Snowden has calculated an Ore Reserve for the Montepuez Graphite Project Definitive Feasibility Study, and has assessed the Project for an open cut mining method. No assumptions have been made for mining dilution or mining widths in the Resource classification, however mineralisation is generally broad. It is assumed that mining dilution and ore loss will be incorporated into Snowden’s Ore Reserve estimated from this Mineral Resource with higher levels of confidence.

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Metallurgical factors or assumptions

· The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

· The Project has had MLA analysis completed to determine

flake size and liberation. More than half of the project is

composed of large and jumbo flake size which indicates

reasonable prospects for eventual economic extraction.

· Variability flotation test work was conducted for Buffalo

deposit between September 2016 to January 2017. Work

was managed by Minnovo (Australia) and laboratory test

work completed at ALS Metallurgy facility in Perth.

· Geometallurgical assessment was completed to test 96%

TGC concentrate grade, recoveries and sample/grade

variability assessment.

· Metallurgical samples were sourced from surface trenches

and drill core and were selected based on weathering (fresh

and oxidised), lithology type and variable TGC% grades as

well as composite lithologies and composite grades. The full

range of lithologies and grades representative of Buffalo

deposit were assessed.

· Products are flake graphite in the following size fractions:

· +300 µm

· -300+180 µm

· -180+106 µm

· -106+38 µm

· Recovery for Elephant 96% TGC concentrate was estimated

to be 73.4% for fresh ore and 62.6% for weathered ore

recovery

· The overall Elephant concentrate is 96% TGC. There is a

slight variation in grade across these fractions, the coarser

fractions tend to be slightly higher grade (96-97%) while

the -106+38 µm fraction is typically slightly below 96%

TGC.

· A mixture of bulk composites (weathered and fresh) as well as variability composites of the various GS, GSQF and GS2 lithologies were included in the sample test work.

· The -38 µm fraction is removed by desliming and discarded to tails because it is (relatively) low grade at about 90% TGC. As such it was not considered worth treating further (filtration, drying, screening) in the Feasibility Study and thus not economic.

Environmental factors or assumptions

· Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential

· BAT are well advanced in their Environmental Impact Assessments with specialist field studies completed and final reports are currently under compilation. No extreme risks have been identified during the studies. Mitigation measures for minor and major risks are currently under investigation.

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environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

Bulk density · Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

· The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc.), moisture and differences between rock and alteration zones within the deposit.

· Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

· Various bulk densities have been assigned or estimated in the block model based on weathering and mineralization classification. These densities were determined after averaging the density measurements obtained from diamond core.

· Bulk density was measured using the water immersion technique. Moisture is accounted for in the measuring process. A total of 1,676 bulk density measurements were obtained from core drilled at the deposit.

· Bulk densities ranging between 2.02t/m3 and 2.85t/m3 were assigned in the block model for waste, dependant on weathering. The mineralised units were assigned average densities based on weathering where there were insufficient measurements to estimate. Densities were estimated using OK interpolation using the mineralisation and weathering wireframes as hard boundaries.

Classification · The basis for the classification of the Mineral Resources into varying confidence categories.

· Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

· Whether the result appropriately reflects the Competent Person’s view of the deposit.

· The Mineral Resource estimate is reported here in compliance with the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ by the Joint Ore Reserves Committee (JORC). The Mineral Resource was classified as Indicated and Inferred Mineral Resource based on data quality, sample spacing, and lode continuity. The Indicated Mineral Resource was defined within areas of close spaced diamond and RC drilling of less than 200m by 50m, and where the continuity and predictability of the lode positions was good. In addition, the 200m spacing is approximately equivalent to the variogram range for TGC. The Inferred Mineral Resource was assigned to areas where drill hole spacing was greater than 200m by 50m, where small isolated pods of mineralisation occur outside the main mineralised zones, and to geologically complex zones.

· The input data is comprehensive in its coverage of the mineralisation and does not favour or misrepresent in-situ mineralisation. The definition of mineralised zones is based on high level geological understanding producing a robust model of mineralised domains. Validation of the block model shows good correlation of the input data to the estimated grades.

· The Mineral Resource estimate appropriately reflects the view of the Competent Person.

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Audits or reviews · The results of any audits or reviews of Mineral Resource estimates.

· Internal audits have been completed by RPM which verified the technical inputs, methodology, parameters and results of the estimate.

Discussion of relative accuracy/ confidence

· Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

· The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

· These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

· The lode geometry and continuity has been adequately interpreted to reflect the applied level of Indicated and Inferred Mineral Resource. The data quality is good and the drill holes have detailed logs produced by qualified geologists. A recognised laboratory has been used for all analyses.

· The Mineral Resource statement relates to global estimates of tonnes and grade.

· Reconciliation could not be conducted as no mining has occurred at the deposit.

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Section 4 Estimation and Reporting of Ore Reserves for Buffalo and Elephant Deposits

Criteria JORC Code explanation Commentary Elephant - RPM

Mineral Resource estimate for conversion to Ore Reserves.

Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

The January 2017 Mineral Resource estimate for Buffalo on which this Ore Reserve was based was prepared by Snowden Mining Industry Consultants. The January 2017 Mineral Resource estimate for Elephant on which this Ore Reserve was based was prepared by RungePincockMinarco (RPM). Mineral Resource estimates for Buffalo and Elephant were created using Ordinary Kriging for Total Graphitic Carbon TGC%, CaO%, LOI%, S and V2O5.. Density domains were based on lithology and weathering, which was estimated on a domain by domain basis. The Lion Deposit was not included in this Ore Reserve estimate. Mr Davidson has relied on the integrity and accuracy of the Mineral Resource for this Ore Reserve estimate.

Site visit Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

No site visit was undertaken by Mr Davidson who is the CP for the Buffalo and Elephant Ore Reserve estimate; however, Ms Lucette Hugo, a Snowden Senior Mining Engineer, visited the project site for the purposes of Ore Reserve estimation in September of 2016 and conveyed sufficient information to Mr Davidson on the nature of location and the potential operating environment. In addition, relevant data reviews and detailed discussions have been undertaken by Mr Davidson to his satisfaction.

Study status.

The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves.

The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

This Ore Reserve was based on designs and estimates consistent with a detailed feasibility study. Mining envelopes were determined from dilution models derived from the Mineral Resource models. Whittle pit optimisation techniques were applied to the model to determine an economic mining envelope, from which a practical mine plan and schedule was created. Costs were derived from Contractor and Vendor estimates specific to the project. The designs, schedules and cost estimates are considered to be at approximately a +/- 15% order of accuracy.

Cut-off parameters.

The basis of the cut-off grade(s) or quality parameters applied.

The Ore Reserve was estimated by applying an elevated cut-off grade of 4% TGC. The marginal economic cut-offs were estimated to be between 3.0% TGC to 3.7% TGC depending on deposit and weathering classification. The cut-off grade contemplates all pre-tax costs associated with the processing and selling of a composite graphitic product containing 96% TGC. Provision was made in the cut-off grade estimate for the following cost centres:

Stockpile re-handle

Processing

Road transport

Ship loading

Royalties

General & Administration The revenue was determined using a combined Flake Size price for the varying flake classifications. The revenue from the Flake Size price was estimated to be between USD$750 and $800 per tonne of carbon for product generated from weathered ore, and between USD$820 and $860 per tonne of carbon for product generated from fresh ore. Process recoveries were applied as outlined below under “Metallurgical Factors or Assumptions”.

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Mining factors or assumptions.

The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

The assumptions made regarding geotechnical parameters (egg pit slopes, stope sizes, etc.), grade control and pre-production drilling.

The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

The mining dilution factors used.

The mining recovery factors used.

Any minimum mining widths used.

The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

The infrastructure requirements of the selected mining methods.

A feasibility level mining study was carried out by Snowden Mining Industry Consultants.

Mining method

Conventional open pit bulk mining methods are proposed for the project. This will comprise drilling, blasting, loading and hauling Ore to the RoM pad or Long Term Stockpiles or Waste material to permanent Waste rock storage landform located adjacent to each pit. Some of the softer material in the weathering zone is expected to be freely diggable and therefore will not require drilling and blasting.

Grade control will be carried out either through trench and blast hole sampling.

The mining operations will be supported by typical onsite infrastructure for a project of this scale.

The pit will be dewatered in advance of mining via a series of dewatering bores surrounding the proposed excavation.

Geotechnical

A geotechnical assessment of the pit slopes was conducted to a standard consistent with a Detailed Feasibility study. The pit slope angles applied in the optimisation are shown in the table below. They include a 4O adjustment to allow for pit ramps on all walls.

Pit Slope Angles

Rock type Buffalo Elephant

Saprolite 38O 42O

Weathered 45-48O 42-45O

Fresh 45-48O 45-48O

Dilution and mining recovery

Given the bulk nature of the mineralisation, mining dilution and recovery were determined by reblocking the Mineral Resource model from 2.5 mX by 50 mY by 2.5 mZ to an SMU size of 5.0 mX by 5.0 mY by 5.0 mZ. Mineral Resource classifications were assigned on the basis of majority representation within the SMU block..

Within the mining envelope, the ore loss was estimated to be 2% and allows for both planned an unplanned events and the dilution from surrounding waste, low grade material or lower classified Mineral Resource. The diliution was estimated to be 4% at 3.1% TGC Approximately 65% of the diluting material was classified within the original Mineral Resource as Indicated, 10% was classified as Inferred and 25% was unclassified.

Mining Envelope

The economic mining envelope was determined using Whittle optimisation software. Only the Indicated Mineral Resource category was used in the optimisation process. There is no Measured Mineral Resource. Inferred and unclassified material were only included as diluents within the SMU. Sensitivity analysis was completed on the optimisation which demonstrated the project was insensitive to pit slope and mining costs but showed sensitivity to processing costs and typical hypersensitivity to product price, recovery and selling costs.

Practical pit designs were created based on the envelopes produced in the optimisation. The life of mine strip ratio was estimated to be 0.6:1 (W:O) A minimum mining width of 25m was allowed for in the designs based on the proposed mining fleet of 90 t excavator and 40 t articulated dump trucks.

Production

A nine month pre-strip was allowed for to prepare the mining operation for production. No other technical issues were identified to restrict accessing the Ore.

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The mining rate is based on the production of 100 ktpa of graphite product from the onsite process plant and practical mining constraints.

Mine designs

The mine designs were prepared by Snowden and reviewed by the Competent Person. They include pit designs, dump and stockpile designs, consideration was given to topography and infrastructure constraints.

Metallurgical factors or assumptions.

The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

Whether the metallurgical process is well-tested technology or novel in nature.

The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.

Any assumptions or allowances made for deleterious elements.

The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

Metallurgical testwork and process and infrastructure design was conducted by Minnovo Pty Ltd.

Battery Minerals propose to process the ore by crushing, grinding, flotation and screening to produce graphite concentrate of various flake sizes. The ore process is conventional and uses well tested technology. Significant metallurgical testwork has been undertaken to support the process recovery assumptions

The process plant will have varying recoveries based on source and weathering classification. The recoveries applied in this Ore Reserve estimate to produce a concentrate grade of 96% TGC are as follows

Source Weathered Fresh

Buffalo 73.1% 76.9%

Elephant 62.6% 73.4%

Product characteristics were supplied to a potential graphite trader who has deemed the relevant deleterious elements to be within acceptable limits. No allowance was made for penalties associated with exceeding product specification limits.

No bulk samples or pilot scale testing have been conducted.

The Product Size Distribution (PSD) estimated by geometallurgical testwork for Montepuez 96% concentrate varies within the deposits. This distribution is as follows

Buffalo Elephant

Source Weathered Fresh Weathered Fresh

Fine, 38-108µm 46.2% 39.9% 50.9% 34.5%

Med, 108-180µm 30.9% 30.7% 29.4% 31.7%

Large, 180-300µm 16.7% 20.1% 15.4% 24.2%

Jumbo, +300µm 6.2% 9.3% 4.3% 9.6%

The PSD was incorporated into the Flake Size price used to determine the marginal cut-off grade.

Environmental

The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

The Environmental Impact Assessment (EIA) process has been lead by Coastal Environmental Services (CES) and is well advanced. Specialist Reports are currently being finalized for final EIA submission in April 2017. Environmental and Social specialist studies were completed in the field in early December 2016 and January 2017. Post site visit Specialists’ debriefs have indicated no project risks have been identified to date that would have a material impact on developing the project, however recommendations and mitigation measures are still being finalized and documented.

Work completed to date on the EIA includes; pre-assessment and EIA application, draft Environmental & Pre-Feasibility scope study and terms of reference, disclosure of study to impacted and affected parties (Public Participation Process), compilation of feedback from Project Affected Parties, and the specialists are currently finalizing their reports for Battery Minerals review and then the final EIA submission.

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Preliminary geochemical modelling of waste rock dumps, ore stockpiles and the tailings storage facility has been completed with individual sample laboratory analysis and mineralogical assessments to determine the risk of acid mine leachate. Studies have predicted that sufficient buffering capacity will be present within waste rock landforms such that they can be considered non-acid generating. The low grade stockpiles were predicted to be mildly acidic however these will not be permanent and will be retreated at the end of the project life. No containment strategies are required for the rock waste dumps, low grade stockpiles and tailings storage facility. In addition, Phytoremediation methods have been allowed for to surround and cover waste rock dumps and tailings landforms during the post-closure phase, this includes rock and soil cover material in which plants are planted in addition to the phytoremediation at the base of the tailings facility with the purpose of limiting water ingress into deeper parts of the tailings post-closure. Water monitoring boreholes are proposed to monitor ground water quality down flow of the proposed structures. A post closure monitoring program will be undertaken to ensure the efficacy of the rehabilitation program.

Infrastructure

The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

There is sufficient land within the lease boundary for the proposed development. The site raw water supply will require the construction of a 120 Ha raw water dam and a 240 Ha tailings management facility. BAT intends to construct a diesel fired power station to supply power for the plant and the accommodation village.

There is a sealed road from the port town of Pemba to Montepuez. There is a 60 km dirt road that leads from Montepuez to the project area. BAT propose to upgrade the dirt road to a safe operating standard and maintain it for the duration of the project. The standard of the proposed construction and ongoing maintenance will enable the road to cater for most weather conditions. Sufficient supplies will be maintained on site to ensure continuity of the project.

Equipment and materials unavailable within Mozambique will be imported via the port of Pemba or transported by road from South Africa. Logistical assessments have not identified any major hindrances or obstacles along the transport route from site to Pemba.

Costs. The derivation of, or assumptions made, regarding projected capital costs in the study.

The methodology used to estimate operating costs.

Allowances made for the content of deleterious elements.

The source of exchange rates used in the study.

Derivation of transportation charges.

The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

The allowances made for royalties payable, both Government and private.

Capital costs

Capital cost estimates for plant and infrastructure were estimated by Minnovo. Pre-production mining costs were estimated by Snowden. BAT also contributed from an owner’s perspective. Other sources were provided by niche specialists for areas such as recruitment and accommodation. Each estimate was developed based on the data and technical design parameters submitted by internal and external resources specialised in the relevant disciplines.

The initial capital costs were estimated to be as follows:

Item Estimated Cost

(USD Millions)

Process plant and

infrastructure 120

Pre-production mining 6

Working capital and

other provisions 10

Total Capital Cost 136

The average annual sustaining capital expenditure is estimated to be approximately US$1.3 million per annum over life of mine.

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A mine closure costs were estimated to be of $9.0M and will be incurred at the end of the project life. Progressive rehabilitation of waste rock landforms will be undertaken during operations.

Operating costs

Mine operating costs were estimated from in-country contractor budget quotations based on a project specific scope of work for Buffalo. Given the similar operating environment, these costs were adjusted, where appropriate and applied to Elephant. Additional provisions were made for the BAT mining team required for technical input to the mine excavations and contract management and supervision. Process plant costs were estimated on a bottom up basis and were based on metallurgical test work with labour requirements based on typical African operations. General and Administration costs (G&A) were estimated on a bottom-up basis for a typical African operation.

The life of mine average operating costs were estimated to be as follows:

Item Estimated Cost (USD /

t.product)

Mining $105

Processing $160

Product Logistics $90

General and administration $68

Total Cost $422

Deleterious elements

The waste land forms were deemed by Geochemist Mr Robert Hansen to contain sufficient acid neutralizing capacity to be considered non-acid forming and will not discharge soluble metals.

No specific provision was made for the management of deleterious elements reporting to the product.

Currency and exchange rate

The basis currency is US Dollars. Foreign currency exchange rates were established by BAT. The key foreign currency exchange rates are summarised below:

Code Rate

AUD 1.31

USD 1

EUR 0.89

CNY 6.67

MZN 78

ZAR 13.8

Transport

Product will be bagged on site and transported to the port of Pemba. The product will be containerised before loading onto ship. All sales will be FOB Pemba. Provision is made within the costs for road transport, handling and loading of product.

Treatment and refining

Treatment charges and refining costs do not apply to the proposed products. No provision was made for penalties associated with failure to meet specification.

Government charges on production

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The product sales will be subject to a royalty of 3% with concessions for transport and handling to the point of sale. In addition, the project may be subject to a resource rent tax of 20% on net cash flow in excess of 18%. Taxes and duties were not modelled for this study.

Revenue Factors

The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

Price forecasts by Benchmark Mineral Intelligence (BMI) for various natural flake products were used as the basis for determining an overall flat forward price for 96% TGC product. The forecasts were derived from an analysis of market supply and demand for flake graphite. The revenue from the Flake Size price was estimated to be between $750 and $800 per tonne of carbon for product generated from weathered ore and between $820 to $860 per tonne of carbon for product generated from fresh ore. The prices used were on the basis of FOB at the port of Pemba.

No downstream charges are applicable beyond the point of sale. There are no co-products which will contribute to revenue.

Market assessment.

The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

A customer and competitor analysis along with the identification of likely market windows for the product.

Price and volume forecasts and the basis for these forecasts.

For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.

Analysis by BMI shows an expectation that the market demand for large flake and spherical graphite will continue to increase until at least 2020. This is primarily due to an increase in demand for spherical graphite, a derivative of flake graphite, used by lithium-ion battery anode producers.

Other key producers of flake graphite within the region include Syrah Resources (Mozambique) Bass Metals (Madagascar) and Gecko (Namibia). BMI have identified approximately 20 graphite projects, excluding Montepuez, that are currently in development worldwide.

Customer acceptance of 96% TGC concentrate Flake Size has been received from an independent trading house in Japan, this includes consideration of impurities within the concentrate material.

Economics The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

NPV ranges and sensitivity to variations in the significant assumptions and inputs.

A detailed cash flow model was created using the pricing described above. The cash flow included a detailed schedule of Capital and Operating cost expenditures. Revenue from product sales were modelled by shipment with 100% payable within 60 days of production and paid FOB from the port of Pemba. No allowance was made for penalties associated with out of specification production or exceeding limits on deleterious elements. The cash flow was modelled in real terms, hence no price or cost escalation was applied. A discount rate of 10% was applied to determine a Net Present Value (NPV) from the project cash flow.

The cash flow analysis demonstrated a positive return for the project with a pre-tax internal rate of return of 21%.

Input costs were considered to be accurate to within +/- 15%. Costs were sourced either directly from vendor quotes specific to the project or consultant estimates for specific scopes of work. Mining costs were estimated using contract mining budget quotations for a scope of work issued to contractors for mining the Buffalo pit (the initial mining area) and adjust for use on the Elephant pit.

Various sensitivity analyses were carried out on the cash flow model. Key parameters were varied by +/- 20%. These parameters included product price,, capital cost, processing cost, mining cost, general and administration costs, and logistics cost. The results were evaluated on the basis of pre-tax NPV. All parameters tested returned a positive NPV over the range. The most sensitive factor was determined to be the product price which, based on the modeling, showed the project will be hypersensitive to changes in both positive and negative directions.

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Social The status of agreements with key stakeholders and matters leading to social licence to operate.

BAT have advised the CP there are no dwellings or agriculture within the proposed mining infrastructure areas, therefore relocation of infrastructure (including homes) will not be not required. Under Mozambique regulations, farmers are entitled to compensation for loss of agricultural land as per decree Regulation of Resettlement Process Resulting from Economic Activities (Decree 31/2012 of August 8). There are some small agriculture holdings in the southern license area away from the proposed infrastructure, BAT plan to work with local consultants in 2017 to determine the most appropriate management practices for these small farm holdings to ensure household incomes are not negatively impacted by the development of the mine should re-establishment be deemed necessary by the investigation.

Other Social Impacts which will need careful management include population growth of nearby townships, large number of job seekers, community high expectations and harvesting of natural resources on the license area.

Community engagement has been initiated and is ongoing at this time. Communities’ consultation extends to those settlements proximal to the project area that will be affected by the mining operation and the associated transport routes.

Other. To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

Any identified material naturally occurring risks.

The status of material legal agreements and marketing arrangements.

The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

The lease is currently held by Suni Resources a wholely owned subsidiary of Battery Minerals.

National ownership of an estimate 5% is anticipated to be agreed within the parameters of the mining contract.

The mining lease application is still to be lodged for the project.

The following government agreements and approvals are outstanding at this time and are material to the project execution

Mining Concession

Water License

Environmental License

Land Holding (DUAT) License No material impediments to reaching agreement or granting approvals have been identified by BAT.

A formal and comprehensive project risk assessment is still to be undertaken by BAT as part of the feasibility study process.

Classification.

The basis for the classification of the Ore Reserves into varying confidence categories.

Whether the result appropriately reflects the Competent Person’s view of the deposit.

The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

The Ore Reserve was classified in accordance with the guidelines in the JORC Code (2012). Standard modifying factors and conversions were applied as described above. The combined Buffalo and Elephant deposit Ore Reserve comprised approximately 99% Indicated Mineral Resource with the balance comprising dilution from Inferred and unclassified material. Given these proportions and the manner in which the modifying factors were applied, the entire estimate was classified as a Probable Ore Reserve. No known conditions or issues existed that warranted downgrading any portion the material considered within the mining envelope for the Ore Reserve.

The Ore Reserve estimation and classification methods used were considered by the Competent Person to be appropriate for the style and nature of the deposit.

Audits or reviews.

The results of any audits or reviews of The Ore Reserve estimate was subject to internal reviews by the consultancy engaged. Review of the consultant reports were also conducted by Battery

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Ore Reserve estimates. Minerals. All identified issues were addressed progressively through the study.

It is anticipated that independent technical review will be undertaken by a third party at the conclusion of the feasibility study.

Discussion of relative accuracy/confidence.

Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

A detailed cash flow model was created using the pricing described above. The cash flow analysis demonstrated a positive return for the project.

Various sensitivity analyses were carried out on the cash flow model. Key parameters were varied by 20% each way. These parameters included product pricing, foreign exchange rate, capital and operating costs. The results were evaluated on the basis of pre-tax operating cash flow less capital. All parameters tested returned a positive cash flow. Product price risk has been mitigated to some extent by adopting a Flake Price forecast this is considered conservative compared to peers and believed realistic by BAT.

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APPENDIX 2

Buffalo and Elephant Drill Hole Summary

Hole ID Deposit UTM Grid UTM

East UTM North Elevation

Hole

Type

Hole

diameter

Hole

Depth

Hole

Dip

Hole UTM

Azimuth

BF001R Buffalo WGS84_37S 471327.33 8585543.68 399.52 RC RC5_75 47.00 -60 100





BF006D Buffalo WGS84_37S 470349.95 8585289.63 394.44 DD HQ3 80.00 -60 110



















MN0004D Buffalo WGS84_37S 470757.66 8585606.80 405.21 DD HQ3-NQ 190.59 -60 110




MN0017D Buffalo WGS84_37S 471038.49 8585599.04 403.91 DD HQ3 38.37 -60 100


EL001D Elephant WGS84_37S 469658.47 8585781.31 391.00 DD HQ3 116.80 -60 280






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EL010D Elephant WGS84_37S 469205.53 8584626.76 382.05 DD HQ3-NQ 169.79 -50 101







EL017D Elephant WGS84_37S 469241.07 8584424.99 386.74 DD HQ3 128.60 -50 108.9







ELGT01 Elephant WGS84_37S 469236.73 8584795.01 379.10 DD HQ3 122.55 -60 297




WB004 Elephant WGS84_37S 469117.81 8585097.82 372.26 RC

WBH RC5_75 85.00 -90 100

WB005 Elephant WGS84_37S 469067.25 8582803.66 369.33 RC

WBH RC5_75 64.00 -90 100

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APPENDIX 3

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

TG

C (

%)

Yrs

Ore Grade %TGC Mined per Year

Plant Feed TGC (%)

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

To

nn

es

mo

ve

d (

kd

t)

Yrs

Total Mine Tonnage Movement

Buffalo ElephantFor

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Montepuez Graphite Project Mineral Resource and Ore ... · PDF fileMontepuez Graphite Project Mineral Resource and Ore ... @ 8.80% TGC for 3.64Mt of graphite reported at ... Leapfrog