Gratomic Inc. announced that it has entered into a non-binding Letter of Intent with Graphex Group Limited and Graphex Technologies LLC. The intent of the LOI is to combine Gratomic's raw material supply capabilities with Graphex's proven downstream processing expertise to solve an industry wide supply-demand gap by delivering an end-to-end supply of graphite from mine to battery with facilities to be located in North America. Pursuant to the LOI, Gratomic and Graphex intend to diligently and in good faith negotiate the terms of a Joint Venture, including management and ownership structures, to jointly produce coated spherical graphite anode material for the EV/battery market.

Graphex will license and/or contribute its technology and expertise to the Joint Venture and Gratomic will provide security of raw mineral supply (graphite concentrate). It is contemplated that Graphex will provide all the technology, plans and expertise for building and operating the plant(s). Graphex has existing processing facilities in Asia and has also secured and is developing a site in Warren Michigan that is being designed to produce 15,000 tonnes per annum (tpa) of battery anode material.

Gratomic is the holder of 100% interests in the Aukam property located in southern Namibia and the Buckingham property in Quebec, Canada as well as mineral claims in Capim Grosso in Brazil, from which property rights and claims Gratomic intends to develop operating graphite concentrating facilities. Gratomic shall remain entitled to enter into supply agreements with third parties for raw material not committed to the Joint Venture. Graphite is the primary anode material in electrical vehicle (EV) batteries.

Typically, graphite is mined and concentrated to ~95% purity by companies such as Gratomic. The mine concentrate is then shaped, purified, and coated to create the critical EV battery anode material in a downstream process by operations like Graphex. The supply picture for natural graphite in North America is marked both by a significant shortfall in the availability of the necessary volume of graphite raw material from regions outside of China that is needed to meet projected demand, and the complete absence of experienced commercial-scale downstream processing capability to transform that raw material into battery-grade anode material.

The collaboration between Gratomic and Graphex seeks to solve both issues on an industry-wide level by providing OEMs and battery makers with a transparent, ESG compliant supply of quality product needed to meet current and future demand. Graphex has a long history of processing mine concentrate and produces 10,000 tpa of high yield, high quality battery anode material. Graphex is currently the only experienced downstream processor of natural graphite that intends to develop an anode material processing plant in North America.

The collaboration with Gratomic would allow Graphex to accelerate the expansion of its experienced mid- stream processing capabilities into North America and Europe. Given the emphasis placed on creating domestic U.S. supply chains as promoted through the Inflation Reduction Act, the Bipartisan Infrastructure Law, and the Defense Production Act, the Graphex-Gratomic collaboration represents a significant advancement toward making a domestic supply chain for graphite anode material a reality. Gratomic wishes to emphasize that no Preliminary Economic Analysis, Preliminary Feasibility Study or Feasibility Study has been completed to support any level of production.

In fact, no mineral resources let alone mineral reserves demonstrating economic viability and technical feasibility, have been delineated on the Aukam property. The Company is working towards completing a Feasibility Study (FS) on the Aukam Processing plant. The study, its recommendations, and their subsequent implementation, will provide conclusions and recommendation at a FS level of comfort relating to the scale up of the existing processing plant to a commercial scale processing facility capable of producing the desired concentrate grades and production rates.