The Montepuez Graphite Project is located within the Xixano Complex and traverses 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. Graphite-bearing mica schist and gneiss are found in the Xixano Complex. Locally, graphitic schists occur with dolerites, meta-sediments, amphibolites and minor intrusions of cross-cutting pegmatite veins. Graphite forms as a result of high-grade metamorphism of organic carbonaceous matter and vanadiumbearing minerals such as roscoelite occur as secondary minerals.

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

The 8770C 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, quartzfeldspar gneiss, metasandstone, quartzite and marble.

The metamorphic grade in the paragneiss is dominantly amphibolite facies, although granulitefacies rocks occur locally in the region. The oldest dated rock in the Xixano Complex is a weakly deformed meta-rhyolite which is interlayed 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.

At Elephant deposit the metamorphic banding and foliation strike about 005° and the GSQF dips moderately steep west.

At Buffalo the deformation strained zone of GSQF, psammite and amphibolite exhibit brittle and brittle-ductile structures that intersect eachother, the deformation zone is where graphite mineralisation is located and part of a regional metamorphic and deformation event.

The Montepuez deposits are disseminated with graphite dispersed within gneiss. 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 geology at Buffalo is complex and comprises a syncline, with the majority of the graphitic schist package occurring on the eastern limb; bound by amphibolite. The drilling is angled toward the east and is likely to be 70 to 90% of true width.

The geology at Elephant is less structurally complex than Buffalo and comprises a moderately steep westerly graphitic schist package bound by amphibolite and notable psammite in the southern portion of the orebody.

A mining schedule was developed based on mining of the pit designs for the Elephant and Buffalo deposits. The mining rate was determined based on the processing plant target production of 100 ktpa at 96% TGC. A commissioning and ramp-up period of 12 months is included in the mine schedule. Over the life of the project, the throughput rate is expected to vary between 1.5Mtpa (weathered) and 1.34Mtpa (fresh). Ore Resource to Reserve conversion is 86% for Buffalo and 77% for Elephant calculated by contained graphite.

Mining will commence at the Buffalo pit for the first 4 years. A nine month pre-strip period is scheduled to provide sufficient waste to construct the ROM pad. After mining the shallow ore from Buffalo, the mining fleet will move to Elephant to mine the shallow ore in year 5. Over the first 7 years of production the strip ratio will be extremely low, approximately 0.2 (waste to ore ratio), and the mining rate will be approximately 1.7Mtpa (including ore and waste). After 7 years, an additional mining fleet will need to be mobilised to enable mining cutbacks at both Buffalo and Elephant pits simultaneously. At this time the mining rate will increase to approximately 3.2Mtpa. Overall, the strip ratio for the life of mine is estimated to be 0.6 (waste to ore ratio) and the life of mining (including pre-strip) is 27 years of the current Ore Reserve, which remains open along strike. Following the cessation of mining the remaining long-term stockpiles will be treated over a period of 4 years.

Mining of Buffalo and Elephant deposits will be by conventional open pit mining methods, using 90t excavators and 40t articulated dump trucks. The upper Saprolite layer is expected to be freely dug down to an estimated 5-15m for Buffalo and 10-20m for Elephant. The fresh deposit will require blasting. 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% TGC 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, weathering and TGC% grade ranges. The Ore Reserve cut-off grades were calculated to range between 2.9% TGC and 3.6% TGC depending on deposit and weathering classification. An elevated cut-off grade of 4% TGC was applied to the Ore Reserve for various technical and economic reasons.

Pit designs were based on Whittle pit optimisations for each deposit considering final project unit costs, prices, recoveries and geotechnical inputs. The pit optimisations were constrained within the
limits of the Indicated Resource for each deposit. The final Buffalo pit will be approximately 90m deep, and the designed Elephant pit will be approximately 150m deep.

Each pit will have a single waste dump, located to the east of each pit. Pit ramps will be orientated to ensure that both ore and waste haulage distances are minimised. Long-term stockpiles will be located between each deposit and the ROM pad. The ROM is located mid-way between the pits to balance haulage costs.

The Montepuez process flowsheet comprises:
• ROM pad, with designated stockpile areas and ability to blend ore on pad or in ROM bin.
• Primary jaw crusher and crushed ore stockpile (COS)
• Primary closed circuit SAG mill.
• Rougher flotation.
• Three stages of concentrate regrinding and four stages of concentrate cleaning.
• Concentrate filtration.
• Concentrate drying, screening, and bagging.
• Tails thickening and disposal.
• Water and Air services.
• Reagents