Quantum Graphite : Uley 3 Drill Program results in Mineral Resource Estimate

QUANTUM	MARKET RELEASE
For Immediate Release
GRAPHITE	18 November 2021

For personal use only

Uley 3 Drill Program Results in a Maiden

Mineral Resource Estimate

Quantum Graphite Limited (QGL) is pleased to announce the maiden Mineral Resource estimate (MRE) for Uley 3 following completion of the recent drilling program.

The program targeted the Uley 3 geophysical anomaly1, previously referred to as the Eastern Conductor. The MRE is reported under the JORC 2012 guidelines.

The maiden MRE confirms the continuation of graphitic mineralisation to the east of Uley 2 along strike to the north of drill holes previously targeting the Eastern Conductor/Uley 3 geophysical anomaly.

Importantly mineralisation remains open along strike to the south and north and at depth, well within the company's Mining and Retention leases.

The Technical Report summarising the work undertaken in respect of the MRE is attached as Appendix 1 - November 2021 Uley Mineral Resource Estimate.

Mineral Resource Estimate - Uley 3 and Uley 2 Project

The MRE comprises 0.9Mt @6.6 % TGC, for 59kt of TGC at a 3.5% TGC cut-off and reported exclusively of the Uley 2 MRE2. Significant drill intercepts that have not previously been reported and included in the MRE are listed at the end of Appendix 1. The respective classification and Resource tonnes for both Uley 3 and the Uley 2 Project are set out in the table below:

Resource	Classification	Tonnes (kt)	TGC (%)	Density (t/m3)	TGC (kt)
Uley 3	Inferred	900	6.6	2.1	59
	Uley 3 Total	900	6.6	2.1	59
Uley 2	Measured	800	15.6	2.1	125
	Indicated	4,200	10.4	2.1	435
	Inferred	1,300	10.5	2.2	137
	Uley 2 Total	6,300	11.1	2.1	697
Uley Project Total	TOTAL	7,200	10.5	2.1	757

Note: Small discrepancies may occur due to rounding. Refer to attached JORC 2012 Code Table 1 attached as Appendix 2.

Relationship between Uley 2 and Uley 3

The Uley 3 interpreted graphite mineralisation envelopes in relation to the Uley 2 mineralisation are shown below.

1QGL ASX release dated 01/11/2021, "Uley 2 Extensional Drilling Assay Results, Eastern Conductor is now Uley 3" 2QGL ASX release dated 15/07/2019, "Substantial Increase In Uley 2 JORC 2012 Mineral Resources"

ABOUT QUANTUM GRAPHITE LIMITED

QGL is the owner of the Uley flake graphite mineral deposits located south-west of Port Lincoln, South Australia. The company's Uley 2 project represents the next stage of development of the century old Uley mine, one of the largest high-grade natural flake deposits in the world. For further information, qgraphite.com.

QUANTUM GRAPHITE

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QGL mineral titles and location of Uley and other Mineralised Lenses

Uley 3 sits at the northern end of the company's mineral leases directly (east) adjacent to the Uley 2 pit and within the Uley "horseshoe" structure.

Uley is one of several mineralised lenses indicated by the known regional and local geology and key data including interpretation of surface SIROTEM (electromagnetic conductivity) and TMI (total magnetic intensity) data (see figure below).

As indicated in previous releases, stronger geophysical responses continue to be key indicators for higher-grade mineralised areas and a valid tool for designing drill programs aimed at confirming the presence of conductive graphitic layers.

	ML 5561
	ML 5562
		RL 66
	ULEY	RL 67
560000	565000

6150000		ML 5561		6150000
		ML 5562
			RL 66
		ULEY	RL 67
EL 6224
6145000		HOMESTEAD		6145000
SALT LAKE
6140000		KACEY		6140000
			LEGEND
			EM Target
			Primary EM Target
			Secondary EM Target
6135000	FISHERY	Exploration Lease	6135000
Retention Lease
			Mining Lease
			Conservation and National Parks
			Lincoln (CP)
		N	Lincoln (NP)
		Sleaford Mere (CP)
0	1,250 2,500	5,000
Railway line
Meters		GDA94; MGA53	Road
	560000		565000

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Competent Person Statement

The information in this report that relates to the Uley 3 Exploration Results and Mineral Resource estimate is based on information compiled by Mrs Vanessa O'Toole who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mrs O'Toole is an external consultant to QGL and consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Competent Person Statement - Industrial Minerals statement (Clause 49 JORC Code (2012))

In accordance with Clause 49 of the JORC Code (2012), the likely product specifications and possible product marketability and overall potential for economic extraction are considered by the competent person to support the Mineral Resource estimate at Uley 2.

JORC Code (2012) Table 1 Compliance

Appendix 2 of the Technical Report includes sections 1, 2 and 3 of Table 1 of the JORC Code 2012.

FOR FURTHER INFORMATION CONTACT:

Company Secretary

Quantum Graphite Limited

1. [phone]

1. [e-mail]

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Appendix 1 - November 2021 Uley

Mineral Resource Estimate

Informing Data

Uley 3 has been drilled based on a nominal 50m spacing along and across strike, with the drill sections orientated E-W. All holes are HQ diamond drillholes, sampling moderately dipping strata bound graphite mineralised zones. As such, drilling was orientated at -60 degrees towards local grid E (bearing 090). Prior to 2014 all drill holes were drilled vertically.

A total of 12 diamond core (DD) drill holes totalling approximately 890m have been completed at Uley 3 as at November 2021. Drilling incorporates two E-W drill lines completed in September and October 2021 by QGL and a single line of vertical DD holes to the south completed in 2011. A total of 151 DD holes have been completed at the Uley 2 and Uley 3 combined resource areas totalling approximately 14. Drill collar locations are illustrated in Figure 2.

Figure 2 Uley 3 and Uley 2 diamond drilling programs

For the 2021 QGL drilling campaign, half core was sampled on a standard 1m interval unless lithological or visual grade estimates required longer or shorter sample lengths. Minimum and maximum lengths of 0.3m and 1.4m respectively were permitted. Samples were forwarded to ALS in Adelaide for sample preparation and ALS in Brisbane for analysis.

For drilling completed in 2011, whole core was selected on geological intervals of obviously highly graphitic material that were dispatched to ALS-Chemex in Adelaide. Sample lengths range from 0.2m to 4.0m, with an average length of 1m sampled. As for the 2021 drilling campaign, sample preparation was undertaken by ALS Adelaide. Samples were crushed and split to >70% passing -6mm and pulverized to >85% passing 75μm prior to assaying by ALS Brisbane.

All samples underwent assay process C-IR18, graphitic carbon by LECO analyser, and C-IR07 Total carbon by LECO analyser.

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QGL has established a comprehensive Quality Assurance/Quality Control (QAQC) scheme which is used for all drilling programs. This includes certified standards and blanks inserted at every 20th sample to assess the accuracy and methodology of the external laboratories and potential sources of contamination. Field duplicates (RC) were inserted every 20th sample to assess the repeatability and variability of the graphite mineralisation. Laboratory duplicates were also completed to assess the precision of the laboratory as well as the repeatability and variability of the graphite mineralisation as a prepared sample. QAQC results are routinely analysed by Quantum and are considered acceptable by the competent person for use as informing sources to Uley 3 MRE.

Bulk density test work was implemented by QGL in February 2019. Analysis of 58 samples from varying weathering profiles was completed externally to Australian Standards by ALS Adelaide and designed to support on-site bulk density measurements completed as part of previous campaigns. Statistical analysis of the bulk density data determined a likely correlation between TGC and bulk density, dependant on weathering profile. For the Uley 2 2019 MRE, bulk density values were calculated based on regression equations generated from statistical analysis between the TGC, total Carbon and bulk density.

Given there is significantly less informing data at Uley 3, bulk density was assigned to the model as an average from the testwork at Uley 2 based on weathering profile (1.9t/m3 for oxide, 2.1t/m3 for transitional and 2.2t/m3 fresh).

Geology and Mineralisation Interpretation

The regional graphite mineralisation appears as conformable metamorphic segregations in Palaeoproterozoic schist and gneiss within the Gawler Craton. Mineralisation is hosted within the Hutchison Group metasediments that overlay the granitoid gneiss of the Sleaford Complex. The Hutchison Group is overlain by marine shelf sediments of the Wallaroo Group.

The project area is overlain by calc-arenites of the Tertiary age Bridgewater Formation. The calc-arenites are underlain by the Pliocene age Uley Formation or the Eocene age Wanilla Formation. Local laterally extensive ferricrete is developed over the Wanilla sediments.

Uley is a disseminated crystalline flake graphite deposit hosted within metasediments of the Hutchison Group, specifically confined within the Cook Gap Schist. Crystallisation of 0.1mm to 2 mm graphite flakes occurred during high-grade metamorphism of carbonaceous sediments. Strong deformation is displayed in the development of strained quartz veins and mylonite within the tightly folded graphitic gneiss and schist units.

The distribution of graphite at Uley was determined by airborne and ground electrical surveys, demonstrating elongate graphitic anomalies. The conductive graphite layers show broad north-north-easterly plunging anticline, consistent with known regional structures.

Mineralisation wireframes were constructed using cross-sectional interpretations based on mineralised envelopes with an approximate 2% TGC cut-off, a minimum downhole intercept of 2m and a maximum of 4m internal dilution applied for continuity. A total of 4 sub-parallel mineralisation lodes were set as solids after being validated using Gemcom's Surpac software. Weathering surfaces were interpreted on cross section from weathering data logged by QGL geologists. Weathering codes for base of complete oxidation and top of fresh rock were included in the geology database and used to define the weathering surfaces.

A typical cross-section displaying the graphite mineralisation at Uley 3 is presented in Figure 4.

Figure 4 Cross section 9,475mN Uley 3 drilling displaying graphite assays

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