Typical Share Price Behaviour (Batty!), page-15

Let’s put this in context.

The company had an original plan to achieve the mining license in H2 2017. The 4 binding offtakes would have then followed. Intent would have been then to finalise funding in January timeframe.

Unfortunately the Mining Minister was sacked towards the end of last year. To try and head off delays, BAT Management had advanced meetings with the incoming minister at the same time but the delays in their appointment meant the award of the Mining License was delayed until March (just after the Dow crash). That put us in a much more difficult funding environment. Sentiment in the market was also shot.

We are very much a victim of circumstance. BAT have a solid and low-risk plan for growth. The first 3 years are all covered by Binding Offtakes with major graphite traders in the Chinese market (anode producers and key suppliers into the battery industry), plus a US technology/ip-based offtake that provides scope for Spherical Graphite upside for us.

Several other very important points:

• I’m anticipating 10% to 20% further upside from improvement in economics at Balama ( we wait for the DFS to confirm ). DF indicates up to 50% increase in mine output.
• With Montepuez + Balama we have 200kt of production in the growth pipeline. Initial ramp-up to 50ktpa and then 200ktpa buy 2023.
• The grade increase at Balama could take us to 250kt ( up to 20% upside as mentioned above )
• There are 300 Mt to 400 Mt of exploration targets – just at Montepuez
• This compared with existing 105 Mt Mineral resource at Montepuez and 32 Mt Mineral resource at Balama ( = 137 Mt )
• Targets provide 2-3 times the scope for growth of production targets ( resource grows from 137mt to 337Mt->437mt range )
• This resource upside underpins growth potential from a 200ktpa company to a 600ktpa plus company ( as EV and battery demand scales )
• We have 0.28Mt of contained Vanadium ( testwork is underway ). Will significantly improve economics ( and assume Vanadium also in the resource growth above )
• We may see similar grade improvements at Montepuez ( we are waiting for the resource update ).
• We also have a sophisticated Binding Offtake with Urbix, spherical graphite testwork is underway ( and the agreement provides potential for BAT to produce / sell Spherical Graphite using toll treatment ).

So much potential upside way beyond published economics. We’ll have some of this confirmed in the next 6 months. All this in a company with a mine already under construction, mining license approved, 4 binding offtakes, further Montepuez offtakes to come

We have a 10-20 bagger now. Upside above can easily take us well beyond that. Be patient!