24-04-2017: Letter to Option Holders

18 April 2017

Dear Option Holder

EXPIRY OF LISTED OPTIONS (ASX CODE: FGROB)

This letter is to notify you of the impending expiry of your FGROB Options in First Graphite Limited (FGR) at 5:00pm AEST on Sunday 21 May 2017 (Expiry Date).

The number of Options you hold is included in the enclosed option exercise notification.

In accordance with ASX Listing Rules, FGR provides you with the following information:

1. each Option entitles you to apply for one fully paid ordinary share in the capital of FGR;

2. the exercise price payable to exercise your Options by the Expiry Date is $0.10 per Option;

3. if you fail to exercise your Options prior to the Expiry Date, those Options will lapse and you shall have no further right or entitlement to those Options;

4. quotation of the Options on the Australian Securities Exchange (ASX) will end at close of trading on Tuesday, 16 May 2017;

5. the last available closing price of the listed shares in FGR prior to the date of this letter was $0.093;

(f) the last available closing price of the Options prior to the date of this letter was $0.006;

1. the highest and lowest market sale price of FGR shares on ASX during the 3 months immediately preceding the date of this letter and the respective dates of those sales were:

   Highest: $0.14 on 27 January 2017;

   Lowest: $0.09 on 4 April 2017;

2. the highest and lowest market sale price of Options on ASX during the 3 months immediately preceding the date of this letter and the respective dates of those sales were:

Highest: $0.045 on23 January 2017;

Lowest: $0.003 on 12 April 2017;

(i) you can exercise all or part of your Options prior to the Expiry Date by providing to the Company your completed written exercise notice specifying the number of Options being exercised (Exercise Notice) (as attached to this letter) and a payment of funds for the total exercise price for the number of Options being exercised. The Exercise Notice will only be effective when the Company has received the full amount of the exercise price.

Instructions regarding the methods of payment are included in the enclosed option exercise notification.

If you have any questions in relation to any of the above, please contact Peter Youd on [phone].

Regards

Peter R. Youd Executive Director, Chief Financial Officer & Company Secretary FIRST GRAPHITE LIMITED

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NOTICE OF EXERCISE OF OPTIONS EXPIRES AT 5.00PM (AEST) 21 MAY 2017

Biller Code: 879478

Ref:

All Registry Communications to:

PO Box 2226, Strawberry Hills, NSW 2012 1300 288 664 (within Australia)

[phone] (outside Australia)

[e-mail] www.automic.com.au

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SCHEDULE 1- TERMS AND CONDITIONS OF NEW OPTIONS AND DIRECTOR OPTIONS

The- New Options willbe granted on the terms set out below:

1. Each Option entitles the holder to subscribe for one Shore in the ComponhJ at on exercise price of 10 cents (Exercise Price).

2. The Options willexpire at 5:00 pm (AEST) on 21 MahJ 2017 (Expiry Date). Any Option not exercised before the Expir!d. Dote willoutomaticoll!d lapse an the Expiry Date.

3. The Company willapply for quotation of Options on ASX within 7 dohJS ofter the dote of the prospectus. If ASX does not grant official quotation of the Shores and Options within 3 months ofter the date of the Prospectus, the Company will not issue onhJ Options.

4. There is no obligation to exercise the Options.

5. The Options may be exercised in whole or in port, and it exercised in part. multiples at 500 Options must be exercised on e-ach occasion. Where Less than 500 Options are held. allOptions must be exercised together.

   (D A holder of Options may exercise its Options bhJ lodging with the CompanhJ SecretarhJ at the Company's registered office, before the Expiry Date:

6. A written notice of exercise of Options specifhjing the number of Options being exercised (Exercise Notice); and

7. A cheque or electronic funds transfer for the total Exercise Price for the number of Options being exercised.

9. An Exercise Notice is onl!d effective when the Company hos received the full amount of the Exercise Price in cleared funds.

10. Within 10 Business DahJS of receipt of the Exercise Notice accompanied bhJ the appropriate Exercise Price, the Compan!d will al ot the number of Shares required under these terms in respect of the number of Options specified in the Exercise Notice.

11. The Options are treel!d transferable.

U) AllShores issued upon the exercise of Options willbe fullhJ paid and will rank pori possu in allrespects with other issued Shores. The rights and Liabilities attaching to the Shores issued upon exercise of the Options ore set out above.

1. The CompanhJ will apply for Official Quotation by ASX of the Shores issued upon exercise of Options within 10 Business Dai!JS of issue of the Sha res.

2. If the Companl-J offers Shores bl-) way of a pro rota issue (except a bonus issue) to the holders of Shares (whether renounceable or nan-renounceable). the exercise price of a Options may be reduced in accordance with the formula set out in Listing Rule 6.22.2.

3. If there is a bonus issue to the holders of Shares in the CompanhJ then the number of Shares over which each Option is exercisable willbe increased by the number of Shares which the holder would hove received under the bonus issue if the Option had been exercised before the record dote for the bonus issue.

4. In the event of anhJ reorganisation (including a consolidation, sub-division, reduction, cancellation or return) of the issued capital of the CompanhJ, the rights of the Option holder willbe changed to the extent necessorhJ to complhJ with the Listing Rule-s applying to a reorganisation of capitol at the time of the reorganisation.

5. Options do not entitle the holder to:

6. participate in a new issue of Shores or other Securities;

7. receive dividends; or

8. attend, or vote at, meetings of the ComponbJ, without first exercising the Option.

9. Other than as set out above, an Option does not confer the right to a change in the Exercise Price or a change in the number of underll-Jing Securities over which the Option can be exercised.