Markets-First Strategy

Since discovering the Chilalo Graphite Project, the Company has adopted a ‘markets-first’ approach to its development. In such an opaque market for graphite, potential graphite suppliers have experienced a steep learning curve to address the knowledge asymmetry that exists between developers and existing market participants.

Graphex has always believed that sustained success in the graphite industry would be achieved through a detailed understanding of the graphite market and continued engagement with multiple diversified market participants.

Graphex is positioning itself as a vertically integrated manufacturer of high-value graphite products, as opposed to a graphite mining company

GRAPHEX VERTICALLY INTEGRATED MARKETS-FIRST GRAPHITE STRATEGY

Source: Graphex Corporate Presentation -Definitive Feasibility Study

VALUE-ADDED GRAPHITE STRATEGY

This ‘markets-first’ strategy has evolved to include the manufacturing of value-added graphite products in addition to the sale of Chilalo graphite concentrate. As outlined in ASX announcement 30 October 2019, a key development in the Company’s strategy has been the advancement of a low-risk, low capital-intensive, value-added products strategy to enhance the value of its concentrate sales.

EXPANDABLE GRAPHITE

Over the past four years, Graphex has engaged numerous end users as well as three independent laboratories to evaluate the use of Chilalo flake graphite (in various mesh sizes) for the production of expandable graphite. These evaluations have consistently concluded that Chilalo flake graphite meets the performance characteristics for graphite foils and fire-retardants.

THE CASE FOR EXPANDABLE GRAPHITE

Source: Graphex Corporate Presentation -Definitive Feasibility Study

Sales of flake graphite into value-added markets will achieve higher prices than selling the same graphite into applications such as refractories which generally don’t require any performance qualifications other than meeting minimum purity requirements.

This is another reason why reference to ‘graphite prices’ is irrelevant without further defining other characteristics, even if for example it is the same product (ie. a +895 product, which is +80 mesh, 95% loss on ignition (LOI), will sell for a higher price as a fire-retardant pre-cursor material than it would selling to a refractory manufacturer).

MICRONISED GRAPHITE

Micronised graphite is a processed form of flake graphite, produced by fine grinding flake graphite concentrate into micron particle sizes. This process allows smaller mesh sizes to be used as raw material, creating a high potential margin for producers. The key characteristic of micronised graphite is the physical size of the microns as increased surface area allows users to optimise lubricity and conductivity.

THE CASE FOR MICRONISED GRAPHITE

Source: Graphex Corporate Presentation -Definitive Feasibility Study

Read more about the Company’s Markets-First and value-added strategy