EcoGraf : Quarterly Activities and Cashflow Report September 2020

E N G I N E E R I N G C L E A N E N E R G Y

30 OCTOBER 2020

ASX: EGR

SEPTEMBER 2020 QUARTERLY REPORT

WA Manufacturing Facility Site Secured

Agreement with leading lithium-ion battery recycler located in South Korea demonstrates support to commercialise opportunity

EcoGraf Limited ("EcoGraf" or "the Company") (ASX: EGR) is pleased to release its activities

and cash flow report for the three months ended 30 September 2020.

HIGHLIGHTS

The Company made significant progress during quarter on all key business areas.

• Western Australia (WA) battery graphite manufacturing facility
• • Preparation of a development report and updated financial model for the new facility as part of funding and project implementation programs, with final peer review in progress and key outcomes expected to be released shortly
  • EPC and early works program progressing with GR Engineering
  • 6.7ha site secured and announced on site by Western Australian Premier Mark McGowan and Minister Bill Johnston
  • EcoGraf featured in Australian Federal Government's recently established Critical Minerals
    Facilitation Office inaugural report, Department of Industry, Science, Energy & Resources case study series and CSIRO latest report which provides the foundation for new battery industries in Australia
  • Further lithium-ion battery electrochemical results demonstrate the importance of battery graphite crystallinity, which has a direct effect on battery performance factors
• Battery recycling programs continued with a range of battery industry participants in Australia, Asia and Europe
• • Testwork programs focussed on recovery of carbon anode material:

1. Production anode waste generated during the manufacture of lithium-ion batteries

o Black mass material remaining from recycled lithium-ion batteries after hydrometallurgical process have recovered the cathode metals

• • Significant results achieved for both production anode waste and black mass materials
  • Reuse of the recovered carbon anode material has significant potential to assist EV and battery manufacturers lower battery costs and carbon emissions
  • Agreement with a leading lithium-ion battery recycler located in South Korea to evaluate the EcoGrafTM proprietary process
  • World Bank report highlights importance of recycling to support the transition to renewable energy, with Bloomberg forecasting recycling market to be worth US$18 billion by 2030
• Epanko debt financing
• • Further meetings held with Tanzanian Government to advance the US$60 million debt financing proposal submitted to the Government of Tanzania for the construction of the new Epanko Graphite Mine
  • Tanzanian Presidential election was held on the 28th October

EcoGraf Limited	ABN: 15 117 330 757	Managing Director
Level 1/18 Richardson Street	E: [e-mail]	Andrew Spinks
West Perth WA 6005	www.ecograf.com.au	T: [phone]

BUSINESS STRATEGY

EcoGraf is building a vertically integrated business to produce high purity graphite for the lithium-ion battery and advanced manufacturing markets. Over US$25 million has been invested to date to create two highly attractive, development ready graphite businesses.

The first new state-of-the-artEcoGraf processing facility in Western Australia will manufacture spherical graphite products for export to Asia, Europe and North America using a superior, environmentally responsible purification technology to provide customers with sustainably produced, high performance battery anode graphite. Subsequently, the battery graphite production base will be expanded to include additional processing facilities in Europe and North America to support the global transition to clean, renewable energy in the coming decade.

In addition, the Company's breakthrough recovery of carbon anode material from recycled batteries using its EcoGrafTM process will enable the recycling industry to reduce battery waste and use recycled carbon anode material to improve battery lifecycle efficiency.

To complement these battery graphite operations, the Company is also developing the TanzGraphite natural flake graphite business, commencing with the Epanko Graphite Project, which will supply additional feedstock for the spherical graphite processing facilities and provide customers with a long term supply of high quality graphite products for industrial applications such as refractories, recarburisers and lubricants.

QUARTERLY ACTIVITY UPDATE

KWINANA BATTERY GRAPHITE DEVELOPMENT

The Company has made significant progress during the quarter on the development of the new 20,000tpa battery graphite facility in Western Australia.

PLAY MOVIE

The Kwinana facility will be the first of its kind to be constructed outside of China and will provide a new supply of high quality and cost competitive purified spherical graphite for the lithium-ion battery market.

2

The new state-of-the-art processing plant will incorporate the Company's proprietary processing EcoGraf™ technology to manufacture purified spherical graphite for the lithium-ion battery market.

The Company is assisting Export Finance Australia with commercial and technical due diligence processes in relation to debt financing arrangements for the new development.

A summary of the key activities for the Kwinana development carried out during the quarter is provided below.

Development Report

A development report has been prepared to support the Kwinana funding and project implementation programs, with a peer review currently in progress and key outcomes to be released during November.

EPC Construction Arrangements and Pre-Development Activities

The Company continued to work with its engineering partner GR Engineering on the EPC construction arrangements and pre-development activities.

WA Industrial Site and Government Support

On 28 September the Company announced (refer ASX announcement EcoGraf Secures WA Government Support with 6.7ha Site) it had secured an option for the lease of a 6.7ha site in the highly sought-afterKwinana-Rockingham Industrial Area, located 30km south of Perth.

The agreement with the Western Australian Government was announced at the site by Western Australian Premier Mark McGowan and Minister Bill Johnston.

Photo (R-L) - WA Premier Mr Mark McGowan, Minister Mr Bill Johnston and

DevelopmentWA Chief Executive Mr Frank Marra with EcoGraf's Robert Pett, Andrew Spinks and Howard Rae

3

The large industrial site was selected to provide significant area for future plant expansion to meet the expected demand. The proposed 20,000tpa plant requires ~2ha.

PLAY VIDEO - ECOGRAF BATTERY GRAPHITE MANUFACTURING FACILITY SITE LOCATION https://youtu.be/Jb0xIhFSdsU

Location of 6.7ha site, main road extension on Alumina road for improved road transport, water treatment plant and proposed Westport harbour development

The Australian Government Department of Industry, Science, Energy and Resources launched its case study on new developments, which includes EcoGraf's WA Manufacturing facility.

The video also coincides the Federal Government's $1.5 billion Modern Manufacturing Strategy and the Company is pleased to advise that the Minister for Industry, Science and Technology Karen Andrews released a video case study that includes EcoGraf's WA Manufacturing facility.

The video is part of the 'make it happen' modern manufacturing strategy.

View the EcoGraf case study video on the following link: https://youtu.be/1fiWmYrd3WM

≈

4