Lac Carheil Graphite Project, Quebec (MLS 100%)

The Company’s flagship Lac Carheil Graphite Project is located in a major graphite province in eastern Quebec, Canada (Figure 1).   The region is well accessed and local infrastructure includes hydroelectric power facilities, an under construction major highway re-route linking the project to Fermont and closely located rail facilities.  The iron-ore mining town of Fermont is situated 20km to the north of the current resources.

Lac Carheil Mineral Resources: The Company has embarked upon a major drilling program aimed at substantially increasing the current high-grade mineral resource. The existing Mineral Resources have been derived from less than 3% of the current 36 kms of mapped graphite trends within the project (Figure 1). The current Mineral Resources supported a Scoping Study Project for 15 years of production at 100,000 tonnes per annum of high-grade graphite concentrate. The new drilling program aims to extend the existing resource to support a multi decade project which is currently advancing through a Pre-Feasibility Study (PFS).

Metallurgical Testwork: has generated high-grade flotation concentrate results of up to 97% graphitic carbon (Cg). An initial concentrate sample despatched to Germany in 2023, produced battery grade purity spherical graphite (> 99.95% TGC).  Electrochemical (battery charging and durability) tests have confirmed Lac Carheil battery grade graphite is a premium-quality lithium-ion battery anode material with exceptional battery charging capacity and outstanding discharge performance and durability.

Pre-Feasibility Study: The drilling and development studies are all underway, including a Pre-Feasibility Study on flake-graphite production (conducted by Lycopodium Minerals, Canada) and an options study on premium spherical graphite production for lithium ion battery anodes (with Anzaplan in Germany).

PARIDM Grant Funding: The Company was recently awarded an R&D Grant from the Quebec Ministry of Natural Resources and Forests, for $600K CAD. The Grant will support the Company’s metallurgical test programs as it progresses from PFS  to feasibility level design. This metallurgical test program will utilise samples from the new drilling program to be completed during Q2 of 2025.

The Company is well progressed on its pathway to develop this critical mineral project in Canada at a time when North American markets are seeking secure long term supplies of domestic graphite.

Figure 1: Lac Carheil Graphite Project, key high-grade graphite trends, regional magnetics and planned drilling locations

Lac Carheil Mineral Resources and Upside Potential

Lac Carheil hosts a high-grade JORC-2012 Mineral Resource of 13.3Mt @ 11.5% graphitic carbon (Cg) which includes a high-grade Indicated Resource of 9.6Mt @ 13.1% Cg and an Inferred Resource of 3.7Mt @ 7.3% Cg (see location, Figure 1).

The Mineral Resource is on the Carheil trend, in the southeast part of the property and represents a zone of only 1.6km that has been trenched and drilled to date, with immediate potential to increase the resource through drilling.

The graphitic zone includes two main, steeply-dipping high-grade graphite horizons that remain open at depth and along strike (see Figure 2, below).

Figure 2: Cross section through the Carheil graphite Mineral Resource zone.

The Company has previously announced high-grade and widespread graphite sampling results from 80 samples on 10 identified graphitic trends on the property.  The exceptional results include one sample that contains 64.3% graphitic carbon (Cg) (Figure 1).  This sample is from a large electromagnetic (EM) anomaly to the west of the existing Mineral Resource, which continues for over 6km from the West Carheil trend and includes a large number of >20% Cg rock chip results.

The average grade of the 80 new samples is over 11% Cg and the combined strike-length of the identified high-grade graphitic zones is over 36km.

The drilling program plans to grow the existing Mineral Resource and test the regional prospectivity of additional graphite trends.

The key objectives of the new drilling program are:

1. To expand Lac Carheil’s Mineral Resource potential to support a much longer life of project (initially a doubling of life from 15-30 years).
2. To confirm prospectivity of nearby graphite trends to validate overall projects size potential.

Metallurgical Testwork

The Company is well advanced on an extensive PFS level metallurgy program with SGS Canada Inc at their Lakefield Laboratories in Ontario.

Results are being used to inform the design for a flake-graphite concentrate plant and overall PFS Study.

The PFS Study builds upon the company’s Scoping Study on a flake-graphite concentrate plant in 2020 which demonstrated strong cashflow potential at an operating cost estimate of US$433/t and over 100% cashflow margin at an average flake graphite concentrate price of US$885/t.  This is based on production of nearly 100kt per annum of 96.7% Cg flake graphite concentrate over a 14-year period and capital payback within four years.

An outcome of the Metallurgy Program with SGS is to produce a large concentrate sample for further down stream purification and battery anode test work to be conducted by Anzaplan in Germany.  This test program will be compared to the test work previously completed by ProGraphite in 2023 which demonstrated:

• Exceptional Yield of 65% into battery quality spherical graphite (compared to industry average of ~40%) – potential to substantially enhance the economics of spherical graphite production.
• Excellent Tap Density of 0.97 kg/litre (packing qualities of spheroids in lithium-ion battery). Well above acceptable standard of 0.90 kg/litre which results in higher battery capacity.
• Premium Battery-Grade spherical graphite carbon (Cg) purity of 99.96% Cg achieved using the environmentally-sustainable, low-temperature alkaline purification method to reach battery grade with a final acid wash to reach premium battery grade.

It was these results that provided the company the confidence to embark on its current PFS level studies.

Pre-Feasibility Study Advancing for High-Grade Critical Mineral Project

The Lac Carheil graphite project is strategically located in Quebec, Canada, close to the rapidly expanding electric vehicle (EV) and renewable energy battery markets North America.  Both the US and Canadian Governments have declared a number of minerals ‘critical’, including graphite. Both countries are seeking long term secure supplies of domestic resourced critical minerals for their downstream manufacturing facilities.

The current PFS for Lac Carheil is running at the same time as the drilling programs testing the greater resource potential and demonstrating to customers the potential long-life of the project. The PFS is investigating flake-graphite concentrate production potential as well as downstream processing to produce value added products, including premium spherical graphite to supply directly to the North-American lithium-ion battery market where demand for battery-grade graphite is growing rapidly.  The close proximity to these markets provides a strategic advantage over other projects globally.

Figure 3: Lac Carheil flake-graphite to battery anode flow sheet.

Mining Research and Innovation (PARIDM) Grant

Metals Australia’s wholly owned Canadian subsidiary, Lac Rainy Graphite Inc. (LRG Inc.) has been awarded a PARIDM grant – specifically aimed at supporting projects progressing research and innovation as part of their progress towards development.
The program will assist the company as it progresses future metallurgical design phases for the Flake graphite concentrate plant – from PFS level flow sheet design to Bankable Feasibility Level.

The award includes a contribution of up to $600 K CAD (approximately $660 K AUD) to cover work outlined in the grant application. The contribution can cover up to 40% of total applicable costs.

A program has been mapped out by LRG Inc, in conjunction with MetPro Management and SGS R&D. A precursor to the work is the winter drilling program at Lac Carheil which aims to potentially significantly upgrade and expand upon the existing Mineral Resource. A large representative sample is planned to be produced from the winter drilling. This bulk sample will then be used to conduct more detailed investigation work aimed at firming up the flow sheet to bankable feasibility study level.

Key components of the proposed program are summarised and are planned to be phased based on success at each stage:
• Sample collection – Representative sampling of revised resource from new drilling program
• Characterisation of sample
• Comminution tests – aimed at optimising product size recovery for definitive equipment selection
• Concentration test program – including screening and separation efficiency
• Flotation test program – to enhance and optimise the integrated process, including tailings treatment
• Pilot Plant program – for optimised equipment selection [Utilising proposed bulk sample]
• Economic evaluation
• Production, through pilot plant, of a bulk concentrate sample that will be used in further downstream programs beyond current studies. The bulk concentrate will also be used to support offtake parties and potential customer evaluations of products from the project.

The grant funding does not preclude additional funding being sourced, including further grants, to offset all or some of the portion of costs that LRG Inc. would contribute as the program advances.

The current PFS level flow sheet, which has been developed from laboratory scale metallurgical testing at SGS’s Lakefield laboratory in Ontario, is set out in Figure 4. The program has been overseen by MetPro Management – a metallurgical consultancy with significant experience in the design and development of natural flake graphite projects.

Figure 4: Lac Carheil Graphite Project – PFS Process Flowsheet for Flake Graphite Concentrate Plant designed to produce 100,000 tonnes per annum of > 94% Total Graphitic Carbon (TGC) Concentrate & dry tailings product suitable for co-deposition with overburden. Flow sheet is now in active design with Lycopodium Minerals Canada Ltd.

Key aspects of the PFS flow sheet design include a feed system comprising crushing, initial milling, followed by SkimAir flotation, rougher flotation, sulphide flotation – with tailings processed via Magnetic Separation, thickening, filtering and disposal stockpiles. Graphite is progressed through successive steps involving polishing mills and cleaning stages – initially to scalp off + 100 Mesh (0.149 mm) screening, followed by dewatering (screen undersize only), separate stirred media milling and cleaner flotation of the screen oversize and undersize fractions. The combined concentrate is filtered and then dried prior to entering the bulk concentrate feed bin which feeds the screening and product bagging plant. Key products will be coarse Flake (+48 Mesh), Medium Flake (+100 Mesh) and Fine (-100 Mesh).

The current test-work has resulted in a flow sheet design that has been optimised, at laboratory scale, for Lac Carheil flake graphite. In addition to optimising size recovery for flake graphite, the flow sheet also features a design to produce a relatively dry, inert tailings waste product that can be co-disposed with run of mine waste rock from the mining operation. The benefit of this approach is to ensure that potential acid generative material, from high sulphide waste products, is removed during the process. This approach substantially reduces environmental impacts related to long term waste storage – as well as eliminating the need for a conventional Tailings Storage Facility (TSF). This would be a significant point of difference for the operation, when compared to mining operations in proximity to Lac Carheil – as well as being a key criterion considered during the review of our grant application from a sustainability perspective (environmental, economic and social).

The further work planned between PFS and Bankable Feasibility Study (FS) – utilising a fresh, representative sample from the revised and potentially upgraded Mineral Resource, will enable additional pilot scale test work on key pieces of processing equipment which is aimed at improving confidence in the design. This additional step will also enhance confidence by potential offtake parties and investors who will conduct due diligence on the rigour of the design proposed to be taken into construction.

It is intended that work streams related to this project would commence later in 2025 – with the grant to cover a support period of up to 30 months.

Quebec Minister of Natural Resources and Forests and the Minister responsible for the Bas-SaintLaurent and Gaspésie−Îles-de-la-Madeleine regions, Maïté Blanchette Vézina

“In a complex geopolitical context and strong global demand for minerals, it is becoming more strategic than ever to support companies that want to optimize their practices with a view to sustainable development. Innovation and the development of our great mineral potential are essential keys to ensuring the sustainable future of our mining sector, maintaining our competitiveness on the international scene and decarbonizing the economy.” Projects funded through PARIDM, such as Lac Rainy Graphite Inc.’s [Lac Carheil project] contribute to the socioeconomic development of Quebec and its regions.”

[Translated from French to English]

Quebec Minister of Employment, Minister responsible for the Côte-Nord region and MNAs for Duplessis
Kateri Champagne Jourdain

“The benefits of this project and Lac Rainy Graphite’s activities could significantly stimulate the Côte-Nord economy and ultimately make it a major hub for graphite extraction and concentration in Quebec. Our mineral resources and innovation in this field are a powerful driver of regional development. I applaud this initiative by the company and wish it every success.”

[Translated from French to English]