EcoGraf : Quarterly Activities and Cashflow Report June 2022

E N G I N E E R I N G C L E A N E N E R G Y

29 JULY 2022

ASX: EGR

QUARTERLY ACTIVITIES REPORT

ECOGRAF HFFREE™ BATTERY ANODE MATERIAL DEVELOPMENTS

POSITIONING FOR INCREASED DEMAND

EcoGraf Limited ("EcoGraf" or "the Company") (ASX: EGR) is pleased to release its activities and cash flow reports for the three months ended 30 June 2022.

HIGHLIGHTS

• EcoGraf™ Battery Anode Material
• • West Australian HFfree Battery Anode Material Facility regulatory approvals process well advanced and expected to be finalised during the current quarter
  • Positive meetings with lithium-ion cell manufacturers in South Korea and Japan with increased focus on natural battery anode graphite due to environmental advantages oversynthetic graphite
  • Export Finance Australia completing credit approval processes for US$40m expansion loan under Australian Government Critical Minerals Facility
  • GR Engineering undertaking detailed design works for procurement of long-lead equipment
  • GreenRECARB and HPA-doped coatings programs delivering encouraging results
  • Cradle-to-gateEcoGraf CO2 study commissioned to quantify environmental benefits of EcoGraf HFfree™ process technology
  • Discussions continuing with overseas battery industry participants and Government agencies in relation to developing EcoGraf HFfree™ Battery Anode Material Facilities in Asia, Europe and North America, as the sector builds regionalised battery mineral supply chains
• EcoGraf™ Battery Recycling
• • Collaboration with European anode recycling expert Anna Vanderbruggen to evaluate EcoGraf HFfree™ purification processes for a range of lithium-ion battery anode materials
  • German Research Institute confirms electrochemical performance of EcoGraf HFfree™ recycled graphite matches industry benchmarks
  • Testwork continuing with battery and lithium-ion cell manufacturers in Europe and Asia
• EcoGraf™ Natural Flake Graphite
• • Meetings with Government of Tanzania on Epanko Framework Agreement, Epanko expansion program and Merelani-Arusha Graphite Project
  • GR Engineering appointed to evaluate expansion options for Epanko
  • Merelani-ArushaGraphite Project expected to provide an additional operation and diversification of supply in Tanzania
  • Evaluation of in-country mechanical shaping facility to create East African supply chain hub
  • Vermeer mining study completed showing a 24.6% reduction in fuel cost and carbon emissions
• Corporate
• • Cash at end of quarter $46.7 million
  • Appointment of Dale Harris as Chief Operating Officer and Christer Mhingo as Director of TanzGraphite
  • Innogy Limited nickel exploration advancing and IPO preparations completed

EcoGraf Limited	ABN: 15 117 330 757	Managing Director
18 Richardson Street	E: [e-mail]	Andrew Spinks
West Perth WA 6005	www.ecograf.com.au	T: [phone]

BUSINESS SUMMARY

EcoGraf is building an integrated battery anode material business to produce high purity graphite products for the lithium-ion battery and advanced manufacturing markets. Over US$30 million has been invested to date to create two highly attractive, development ready graphite businesses.

The first new state-of-the-artEcoGraf processing facility in Western Australia will manufacture spherical graphite products for export to Asia, Europe and North America using a superior, environmentally responsible HFfree purification technology to provide customers with sustainably produced high performance battery anode material. Additional battery graphite processing facilities are in planning for Europe, Asia and North America to support the global transition to clean, renewable energy and the rapid growth in demand for battery materials.

In addition, the Company's breakthrough recovery of carbon anode material from recycled batteries using its EcoGraf™ HFfree process assists electric vehicle and lithium-ion battery manufacturers to reduce waste and use recycled carbon anode material to achieve closed-loop operating efficiencies.

To support these battery graphite operations, the Company is arranging project funding for the development ready TanzGraphite natural flake graphite business in Tanzania to provide additional feedstock for the battery anode material facilities and supply industrial customers in Europe and Asia with high quality graphite products for refractories, recarburisers and lubricants.

Vertically Integrated Battery

Anode Material Business

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QUARTERLY ACTIVITY UPDATE

ECOGRAF™ BATTERY ANODE MATERIAL BUSINESS

The Company's is developing a HFfree Battery Anode Material Facility in Western Australia that will be the first of its kind to be constructed outside of China, providing a new supply of sustainably produced, high quality purified spherical graphite for the high growth lithium-ion battery market.

Significant endorsement and support for the new facility has been received from Australian Federal and State Governments through conditional loan funding under the A$2 billion Critical Minerals Facility, the granting of Australian Major Project Status and award of Lead Agency status by the Western Australian Government.

EcoGraf is actively working with the Australian Critical Minerals Facilitation Office, the Major Projects Facilitation Agency, Austrade, Export Finance Australia and the Western Australian Department of Jobs, Tourism, Science and Innovation to develop the new facility and support Australia's role in the global lithium-ion battery industry.

Development and Construction

Assessment of the Development and Works Approvals by the City of Rockingham (CoR) and Department of Water & Environmental Regulation (DWER) is well advanced, with presentations given to the CoR and Rockingham Kwinana Chamber of Commerce.

Following feedback from the CoR review and public consultation process, EcoGraf has submitted additional information to the CoR and the evaluation process is ongoing. In parallel, DWER is completing it assessment of the proposed development under the Western Australian Environmental Protection Act 1986.

Subject to final considerations, CoR and DWER are expected to issue the approvals during the current quarter. The proposed facility is located in an established industrial precinct that's designated as a priority zone for the development of a globally leading battery minerals processing centre and is being leased to EcoGraf by State Government land agency DevelopmentWA.

Key development and construction activities during the quarter included:

• Planning and resourcing (project implementation, scheduling and recruitment);
• Optimisation of the process flowsheet, equipment testing and waste stream management;
• Commencement of detailed engineering design works for procurement of long-lead equipment; and
• Preparation for initial site works (access, earthworks, drainage, underground services).

EcoGraf Managing Director Andrew Spinks and Chief

Operating Officer Dale Harris brief Hon. Bill Johnston

Minister for Mines and Petroleum, Energy, Corrective

Services and Industrial Relations on the new HFfree

Battery Anode Material Facility.

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Development Funding

A loan of US$40 million has been conditionally approved by the Australian Government to support the planned expansion of the HFfree Battery Anode Material Facility to 20,000tpa, as part of the A$2 billion Australian Critical Minerals Facility, which is managed by Export Finance Australia.

Export Finance Australia is undertaking due diligence processes for the loan, which include obtaining independent market, technical, environmental, social, legal, insurance and commercial reports, finalising the base case financial model and preparing loan documentation.

During the quarter, EcoGraf submitted an application under the West Australian Government A$180 million Investment Attraction Fund to encourage new investment that will create local jobs and contribute to a more diversified economy.

The Company has also submitted an application for funding under the Manufacturing Translation Stream - Resources Technology and Critical Minerals Processing Priority component of the Australian Government A$1.3 billion Modern Manufacturing Initiative to assist Australian manufacturers scale-up, collaborate and increase their competitiveness.

EcoGraf held cash resources of $46.7 million at 30 June 2022.

Product Development and Sales

Fly-through of the Stage 1 new EcoGraf HFfree™ BAM Facility in Western Australia

Managing Director Andrew Spinks completed a successful product marketing trip to Korea and Japan for discussions with anode and cell manufacturers. The visit was supported by Australian State and Federal trade agencies, with strong interest in the Company's HFfree purification process and anode recycling capabilities.

EcoGraf has entered into a non-binding Memorandum of Understanding with POSCO, a leading South Korean manufacturer of lithium-ion battery cathodes and anodes. The parties are undertaking on-going product evaluation programs and discussing potential collaboration on sales, product development, battery anode recycling and the development of EcoGraf's battery anode material business.

Discussions are also on-going with battery industry participants in Asia, North America and Europe that are looking to secure battery mineral supplies and establish regionalised battery production facilities. Market conditions continue to strengthen in spite of COVID-19 impacts, with anode production volumes in China forecast to increase ~50% in 2022 and battery graphite prices expected to continue rising over coming months.

Product development during the quarter was focussed on GreenRECARB by-products and the use of HPA doping techniques in coating processes for EcoGraf HFfree™ battery anode material.

EcoGraf™ GreenRECARB is a low emission recarburiser additive for the steel manufacturing industry, which is looking for sustainably produced additive materials to replace energy intensive, fossil fuel based calcined petroleum coke products used by the electric arc and induction furnace steel industry.

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After completing an initial bench scale program to formulate the binding, granulation and pelletisation process, EcoGraf is assessing engineering options for the GreenRECARB production flowsheet and product qualification program.

In collaboration with FYI Resources Limited, the Company is developing HPA coating techniques to improve battery performance. Testing is being undertaken in the USA, combining EcoGraf™ HFfree spherical graphite and FYI's innovative, ultrafine 4N HPA to generate HPA-doped coated spherical graphite.

Following positive initial testing (refer ASX announcement Outstanding Result for Enhanced HPA Anode Coatings 9 February 2022), additional testing has confirmed that electrochemical performance improves as the concentration of HPA dopant increases.

International Expansion

Discussions are continuing with overseas battery industry participants and Government agencies in relation to developing EcoGraf HFfree™ Battery Anode Material Facilities in Asia, Europe and North America, as the sector builds regionalised battery mineral supply chains.

Establishment of regionalised battery anode supply chains is supported by an increased focus on natural battery anode graphite as an environmentally superior alternative to displace hydrocarbon (fossil fuel) generated synthetic graphite.

The Company has commissioned an independent cradle-to-gate study to assess the CO2 advantages of its EcoGraf HFfree™ process technology. The ISO standard study will show the carbon emissions footprint for multiple production locations compared to the existing anode material supplies from China and synthetic graphite.

Due to recent customer interest in alternative locations, the Company has deferred its exclusivity commitment on a potential site it had reserved at Skellefteå in northern Sweden. In this regard, the Skelleftea Municipality will continue to work with EcoGraf on the site on a non-exclusive basis. In the event the site is taken up, there is availability of industrial land within the Skellefteå region, a ready supply of low cost, renewable energy, a skilled labour force and a nearby port for access to key European battery and industrial markets.

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