Quantum Graphite : Quarterly Activities/Appendix 5B Cash Flow Report

CONDARY LOGO

QUANTUM

GRAPHITE

MARKET RELEASE For Immediate Release

29 April 2022

Quarterly Activity Report and Appendix 5B for 31 March 2022

Highlights

Uley 2 - Corporate including Uley 2 Financing and Offtake

Since the requotation of the Company's securities on 14 December 2021, the Company's shareholder base has increased by approximately 35%. Further, this has resulted in the top 20 shareholders dropping below 60% for the first time since the Company's reconstruction in 2018.

The Board is very pleased with the continued significant interest in the Company.

The Company also issued shares to the value of $196,800 in satisfaction of professional fees payable to consultants in connection with technical work.

During the quarter the Company resumed work on the bond financing proposal with visits scheduled with key European investors in Q4 2022.

As part of the bond financing, the Company continues to progress supply agreements that meet key conditions of the financing. As advised in the Company's half yearly statement, negotiations are at an advanced stage and will now be further progressed with face-to-face visits scheduled for Q4 2022.

Sunlands Co. Patent Update

During the quarter Sunlands Co. advised the Company that its first patent grant for its long duration energy storage technology had been issued by the South African Patents Office. The Deed of Letters Patent was granted specifically for the Sunlands Co. THERMAL BATTERY AND ELECTRICITY GENERATION. The balance of Sunlands Co.'s international patent filings are progressing and it expects to advise the Company of further progress on the key European jurisdictions by the end of Calendar 2022.

Formation of Quantum Sunlands Co. Partnership (QSP)

Following the formation of QSP in the previous quarter, the Company and Sunlands Co. commenced preparation of operating plans for QSP. The parties expect to conclude the operating agreement by the end of Q4 2022. The operating agreement will govern the operating plan for the manufacture of the thermal storage media for Sunlands Co's thermal energy storage cells.

ABOUT QUANTUM GRAPHITE LIMITED

QGL is the owner of the Uley flake graphite mineral deposits located south-west of Port Lincoln, South Australia. The company's Uley 2 project represents the next stage of development of the century old Uley mine, one of the largest high-grade natural flake deposits in the world. For further information, qgraphite.com.

QSP Technical and Market Studies

During the quarter the Company received the Summary of Fundings from independent economics consultants, Macroeconomics Advisory. The study concluded that Sunlands Co.'s long duration thermal energy storage (LDES) technology offers a feasible path to support the Australian National Electricity Market's (NEM) Net Zero Emissions by 2050 Plan.

Macroeconomics Advisory found that an essential feature of the technology's feasibility is its capability to drive large scale steam turbines and consequently, potentially be deployed as a retrofitting option for existing coal fired power stations.

Adopting the results of Sunlands Co.'s techno commercial feasibility, Macroeconomics Advisory concluded that based on the thermal process data within this feasibility, 100,.000 tonnes of Uley 2 coarse flake would be required for energy storage cells to replace every 1 GW of coal fired generation.

The Company also announced the completion of the detailed design of the test work program and the selection of the high temperature laboratory to perform the program. The laboratory selected was the Institute for Non-Ferrous Metallurgy and High Purity Materials of the Technische Universität Bergakademie Freiberg (https://tu-freiberg.de/en/fakult5/inemet).

Long Duration Energy Storage Submission to Energy Ministers' Meeting

During the period the Company made a submission to the Australian Energy Ministers' Meeting outlining QSP's recommendations to the National Electricity Markets Rules to support the installation of LDES within the NEM. LDES is critical to increasing the penetration of renewables. Without LDES material increases in renewables installations will result in significantly higher system risks.

Further, the submission included specific reference to the type of LDES, referred to as Reserve Storage, a form of deep mass storage offered by Sunlands Co, that would enable the acceleration of the penetration of renewables within the NEM.

The combination of Reserve Storage and the retrofitting of coal fired power stations provide the building blocks needed to achieve the AEMO Net Zero by 2050 plan.

Uley 2 Pit Location and Resource Extension Priorities

560000

565000

6145000 6150000

6140000

6135000

Priority 1 Short Term Ore Reserve extensioCno:nsUervleatyion2anSdoNautitohnal5P0arkms , blue dotted line).

Priority 2 0Medium Term Resource extension:Priority 3 Long Term Resource extension: Uley 2 West geophysical anomaly target, Uley 2 South beyond

565000

FISHERY

Primary EM Target Secondary EM Target Exploration Lease Retention Lease Mining LeaseLincoln (CP)

Lincoln (NP)

N

Sleaford Mere (CP)

1,250

2,500

5,000

Uley 3 South, Extension drilling to 50m-by-50m intervals.

Railway line

Meters

Road

GDA94; MGA53

560000

Priority 1 along strike of the geophysical anomaly.

Infill drilling at Uley 3 (area bordered by

Uley 2 Phase 1 Mining Study and Feasibility Summary Financial Metrics

Total undiscounted cash flow

Crusher feed Graphitic carbon grade Graphitic carbon recovery Concentrate purity Capital expenditure Processing cost (PCAF) Mining cost (MCAF)

Production

Product Cost (Av LOM) Product Price (Ex-works)

500,000 tonnes per annum 11.89% 84% >97% graphitic carbon A$79.98 million A$55.3 per tonne

A$310.5million*

A$2.5/t milled at surface plus 5c for every 4m

55,000 tonnes per annum US$368 dmt

US$919 dmt

*Includes JORC 2012 Reserves and Resources

Schedule of JORC 2012 Minerals Reserves and Resources

JORC 2102 Mining Study Reserve Statement, November 2019

Reserve	Classification	Tonnes (kt)	Total Graphitic Carbon (%)
Uley 2	Proved	811	11.66
Uley 2	Probable	3,191	11.95
Total	4,003	11.89

JORC 2012 Mineral Resource Estimate (MRE), November 2021

Resource	Classification	Tonnes	TGC	Density	TGC
(kt)	(%)	(t/m3)	(kt)
Uley 3	Inferred	900	6.6	2.1	59
Uley 3 Total	900	6.6	2.1	59
Uley 2	Measured	800	15.6	2.1	125
Indicated	4,200	10.4	2.1	435
Inferred	1,300	10.5	2.2	137
Uley 2 Total	6,300	11.1	2.1	697
Uley Project Total	TOTAL	7,200	10.5	2.1	757

Schedule of Tenements (ASX Listing Rule 5.3.3)

Tenement	Tenement Type	Interest1	Changes during the Quarter
ML5561	Mining Licence	100%	Nil
ML5562	Mining Licence	100%	Nil
RL66	Retention Licence	100%	Nil
RL67	Retention Licence	100%	Nil
EL62242	Exploration Licence	100%	Nil

1.All interests are registered in the name of the company's subsidiary, Quantum Graphite Operations Pty Ltd and held as at the end of the quarter. 2.An application has been lodged for the renewal of EL6224.

Corporate Information and Announcements

As at 31 March 2022 the company had 294,171,800 ordinary shares and 28,571,429 unlisted options on issue and 1,396 shareholders. The top 20 shareholders held 59.78% of the issued ordinary shares in the company.

As at 31 March 2022 the company held cash at bank of $1,305,789

As at 28 April 2022 the company held cash at bank of $1,237,603. This report should be read in conjunction with all prior announcements made by the Company and available athttp://quantumgraphite.com/investors.

The pro forma Appendix 5B (Mining exploration entity and oil and gas exploration entity quarterly report) is attached to this report.

Competent Persons Statement

The Company confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters relating to Mineral Resources is based on, and fairly represent, the Mineral Resources and information and supporting documentation extracted from the reports prepared by a competent person in compliance with the JORC Code (2012 edition) and released to the ASX (including under the company's previous code, VXL on 17 December 2014, 5 May 2015 and 15 May 2015 respectively).

Forward Looking Statements

All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as 'may', 'could', 'believes', 'estimates', 'targets', 'expects' or 'intends' and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this announcement, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the company, its directors and management of QGL, that could cause QGL' actual results to differ materially from the results expressed or anticipated in these statements.

QGL cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. QGL does not undertake to update or revise forward- looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this announcement, except where required by applicable law.

FOR FURTHER INFORMATION CONTACT:

Company Secretary

Quantum Graphite Limited E:[e-mail]