Somagra

A fully-permitted graphite project in Madagascar

2022

CONFIDENTIAL 1
Executive summary
 Project Somagra overview CONFIDENTIAL

 Based in Madagascar since 1978, Group Akesson is a diversified family-owned

Forecast global export group, engaged in agricultural (sisal, coffee, cocoa, rice and spices) and mining
revenues ~ US$230m
on a conservative
(mica, graphite) activities
sales’ price basis of
1,000US$/t1  Somagra – one of the Group Akesson’s eight companies – is dedicated to
graphite production and export since 1978. Because of falling graphite prices,
Low local operating exploitation was halted in 2003. Since 2018, the company is getting prepared to
costs resume production

 Strong profitability
and high returns  Somagra currently owns seven (07) exploitation permits, including Permit n°4
on investments
expected
 Project Somagra is a fully-permitted graphite production project, focused on
Permit n°4, located in eastern-central Madagascar, owned and developed by
Somagra, with estimated exportable resources between 230,000 and 280,000
tons2

Source: Company, 1Graphite buyers have already been identified, 2BRGM report, May 1999
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 Draft Key investment highlights CONFIDENTIAL

1
 Site exploited since 1964 with previous exportations indicating proven resources of high-
A quality site quality graphite (mainly large flakes of 91 to 94% carbon content) and easy to extract
with favorable  Available resources of c. 230-280,000 tons1 could be extracted over 10 years maximum
operating conditions  Water supply secured by a nearby river
 Export eased: paved road and access to Toamasina seaport

2
 Exploitation permit n°4 granted in 2001 for 40 years, alongside other exploitation permits
 An extensive area of 625 hectares
Secured rights  Exclusive rights to prospect and exploit resources
 Land secured (ownership or leasing)
 Certificate of Conformity issued by the Ministry of Environment (ONE)

3
Graphite, a large and  An estimated $15bn global market, expected to reach c. $19bn by 20222
expanding market  A demand driven by the steel sector and the increasing use of lithium-ion batteries

4  Based in Madagascar since 1978, engaged with local communities

Group Akesson, a best-  30-year experience in mining (graphite and mica) with scale-up opportunities
in class partner in  40 tons of graphite remaining in stock for export
Madagascar  Exploitation permits on promising sites with high-grade deposits and low operating costs
(friable rock)
5
Madagascar, a  A well-educated low-cost labor force
favorable environment  A stable regulatory framework (stable mining code since 2005, low export taxes)
enabling an attractive  A multi-party democracy guaranteeing political and social freedoms
risk-return profile  Member of the EITI3, certifying transparency and good governance mineral resources

Source: Company, 1BRGM report, May 1999, 2Allied Market Research, Graphite Market by Type and Application - Global Opportunity Analysis and Industry
eponyme partners Forecast, 2014-2022, 3Extractive Industries Transparency Initiative 4
Madagascar: a favorable environment
 Draft Madagascar: basic data & key developments CONFIDENTIAL

BASIC DATA A FAVORABLE GEOGRAPHIC LOCATION

 The fourth-largest island in the world (587,041 km²)  Southern Africa, island in the Indian
 25m inhabitants Ocean, strategic location along
Mozambique Channel
 Capital: Antananarivo
 Climate: tropical along coast,
A stable emerging  Official languages: Malagasy, French
temperate inland
country enabling a  Currency: Malagasy Ariary (MGA). 1US$ = 3,626 MGA1
 Natural resources: graphite, chromite,
highly attractive risk-  Religions: Christianity (52%) / Traditional religions (41%) coal, bauxite, rare earth elements,
return profile  Former President Mr. Andry Rajoelina was sworn in on nickel, cobalt, ilmenite, gold, etc.
January 29th, 2019, for a new 5-year mandate after a  Neighboring countries: Mozambique,
peaceful election process Tanzania, South Africa, France
 6 international airports, 11 seaports (Mayotte, Réunion), Mauritius,
 Independence since 1960 (former French colony) Comores

KEY ECONOMIC INDICATORS (2017) A PROPITIOUS MACROECONOMIC ENVIRONMENT

 Breakdown of Gross Domestic Product (GDP):  Democracy and political stability guaranteed by a
 Agriculture (incl. fishing and forestry): 24% constitutional continuity since 1992: multi-party
 Industry: 20% democracy, separation of powers, significant control of
the National Assembly, emphasize on human rights,
 Services: 56%
social and political freedoms, free trade
 2018 estimated GDP growth: +5%
 A favorable regulatory framework:
 Labor force: 13.4m
 A stable mining code since 14 years
 Exports – partners: France (25%), US (17%), China (7%)  Low custom duties, no VAT on export
 Public debt: 36% of GDP  Ongoing IMF program to strengthen financial and
 Inflation rate: 7.8% investment management capacity
 Annual flow of direct foreign investment (DFI): $389m  Ongoing Initiative for emerging Madagsacar (IEM2) to
 Stock of DFI: $6.5bn (63% of GDP) foster public and private-sector investments
Sources: CIA Factbook, Findex data, World Bank, http://www.theiguides.org, Ministère de l’Economie et des Finances, CNUCED, 1On January 23rd, 2019,
eponyme partners 2Initative pour l’Émergence de Madagascar
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 Draft Political outlook: on the crossroads to sustainable stability CONFIDENTIAL

1892  French colony

1960

 First Republic
 Head of State: Philibert Tsiranana, French-appointed (1960 – 1972). Single-party rule
1960  Continuation of strong economic and political ties to France; finally overturned in favor of Major General Gabriel
1975 Ramanantsoa (1972 – 1975)

 Second Republic
1975  Head of State: Didier Ratsiraka. Single-party rule
1992  Break with France, Malgachisation of education

 Third Republic, established by the first free elections

 New constitution: multi-party democracy, separation of powers, significant control of the National Assembly,
1992 emphasize on human rights, social and political freedoms, and free trade
2009  Main Heads of State: Albert Zafy (1993 – 1996), Didier Ratsiraka (1997 – 2001), Marc Ravalomanana (2002 –
2009)

Democracy &
Political stability  Fourth Republic
 New constitution: continuation of the democratic, multi-party structure established in the previous one
 Head of State: Andry Rajoelina
2010  2013: Hery Rajaonarimampianina was declared the winner of the 2013 presidential election, which the
Today international community deemed fair and transparent
 2018: Andry Rajoelina re-elected as Head of State

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 Draft Recent graphite projects in Madagascar CONFIDENTIAL

GRAPHMADA PROJECT, BASS METALS MOLO PROJECT, NEXTSOURCE MATERIALS

 Ownership of the mine: Bass Metals (BSM),  Ownership of the mine: NextSource
Australian listed company Materials, Canadian listed company
 Status: Feasibility-stage project
 Status: ongoing operation
 Location: Tulear region of south-western
Over the past 5 years  Location: Open pit mine in 4 contiguous sites: Madagascar
an estimated $9bn Loharano, Mahefedok, Mahela, Ambatofafana,
been invested in  Mains technical features:
c. 100 km away from Toamasina  Graphite resource of 141.28 Mt
Madagascar by major
mining companies like  Mineral Resource: at 6.13% TGC
Sherritt, Kores,  Loharano: 5.7 mt at 4.1% TGC  Expected CAPEX < 20 M$
Sumitomo and Rio  Mahefedok: 3.5mt at 4.2% TGC  Baseline production scenario: 17,000 tpa
Tinto
 Combined resource of 382 kt of TGC  Expected average selling price: US$1,014$/t
 Mahela & Ambatofafana: still to be explored  Calendar: 2019: construction; 2020: operations

 Types of flakes:
 Jumbo (+50 mesh): 30% VOHITSARA PROJECT, DNI METALS
 Large flake (+80-50 mesh): 35%  Ownership of the mine: DNI Metals,
 Medium Flake: (-80 mesh): 35% Canadian listed company
 Historical background:  Status: permitted – Environmental permit
within weeks
 2013: start of operations
 2015 & 2016 annual production: 1,500 & 1,274 tpa  Location: between Toamasina
and Graphmada projects
 Late 2016: BSM acquires the Graphmada Project
from StratMin Global over a number of stages  Mains technical features:
 August 2018: First BSM’s graphite sales  High-grade deposits
 Saprolite – Friable rocks
 Target production: BSM plans to increase the graphite
concentrate from a notional capacity of 1,500-6,000 tpa
to 20,000 tpa in 2019
Source: Corporate websites, Baillieu Holst, Bass Metals, 6 February, 2018, BCP Equities, Bass Metals Limited, turn up the bass, 21 September, 2016, DNI
eponyme partners Metals Investor presentation, NextSource Materials, Molo Graphite Project, the ony project with SuperFlake graphite 8
 Draft Mining industry in Madagascar: regulatory framework CONFIDENTIAL

MINING CODE – MAIN LEGAL RULES TAX AND ECONOMIC PROVISIONS

 The exploitation permits are granted for a period of 40  The SFE, “Service of Foreign Exchange” is the Malagasy
years renewable for a period of 20 years. organization that regulates the inflow/outflow of foreign
 The mining license n ° 4 was sold by Société Agricole exchange in the country that is governed by Decree
Minière et Industrielle (SLAMI) to SOMAGRA. N°2009-048 on Foreign Exchange. Article 3 of the said
To be completed with decree provides that; “The following capital transactions
Lexel study  The said mining license transfer was filed with the BCMM
and financial transactions are free but must be submitted
on February 20, 2006;
to a prior declaration to the Ministry of Finance: transfers
 The holder of a mining permit should pay the mining of shares or assets, liquidation bonus shares,expropriation
administration fees by the 31st March of each year and indemnities for foreign investors.
upon the first sale a royalty and a duty totalling 2%.
 Foreign Direct investment (FDI) benefits from favorable
 The payment order dated 30th March 2018 and the provisions. Payments relating to current operations,
registration certificates dated 22 January 2019 indicate including after-tax profits, dividends, wage income,
that the mining administration fees have been duly paid allowances and employee savings for expatriates, and
every year since their granting, up to and including 2018. contributions to share capital in Madagascar are free
Therefore, there is no potential risk of cancellation of the provided they are carried out through authorized
said mining licenses; the mining administration fees for intermediaries (commercial banks).
2019 must be paid by the 31st March 2019 at latest.
 Bilateral treaties provide various rigths and protections to
 The transfer of the mining licences to another entity is investors such as fair and equitable treatment, national
made by a deed of transfer. For its opposability vis-à-vis and most favoured nation treatment, restriction on
the Mining Administration, the act of transfer must be expropriation and compensation rights.
registered with the BCMM.
 Special regime for investors over $50 billion (about
 Most applications submitted to the BCMM are awaiting a $14million) in the mining sector are in place regarding for
decision from the Authorities since 2010. The fact that a example exemption on VAT, income tax, etc).
contract for transfer cannot be registered at the BCMM
 For the transfer of mining permits, this transaction is
does not invalidate the contract between the parties to it.
considered an assignment of movable property, which
 Therefore rights can pass between a transferor and a must be registered for tax purposes within a period of 2
transferee notwithstanding the absence of or pending of months from the date of the deed of assignment and is
the formal registration of the transfer. subject to registration fees at the rate of 5%.

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Project Somagra
 Draft Focus on the Ambatomitamba site and Group Akesson CONFIDENTIAL

PERMIT N°4: LOCATION & BACKGROUND PERMIT N°4: MAIN FEATURES & DEVELOPMENT PROCESS
 Permit n°4 is located  Issuance authority: Ministry of Mines and Oil
in Ambatomitamba,  Duration: 40 years, starting from October 11th, 2001
in the
 Perimeter: 625 ha (16 squares of 625m a side)
Toamasina/Tamatave
A fully-secured district  Estimated available reserves: 230,000-280,000 tons
graphite project,  Certificate of Conformity issued by the Ministry of
backed by an Environment (ONE)
Permit n°4 area
experienced steering  Drilling campaign: January-March 2019
committee, with  The location is:
proven resources easy  First results (size of flakes, graphite content): between
 c. 30 km from the national road end of February and mid-March
to extract and export
 Plus c. 40 km southwest of the Toamasina seaport,  CPR2 (JORC and NI 43-101 standards): end of July 2019
from where graphite is exported globally  Due diligence operated by a top-tier international firm
 Optimal location for export

 The area covered by Permit n°4 has been exploited GROUP AKESSON’S PRESENTATION
during the colonial period until 1977 and then by a  1978: Creation of Groupe Akesson by Carl Gustaf Bertil
related company of the Group until 2003: 72,000 tons Akesson through the acquisition of former large French
out of between 300,000 and 350,0001 have been companies based in Madagascar (e.g. “Les Grands
extracted and exported at a c. 1k US$2019 /ton price Domaines de Madagascar”)
 Group’s presidency since 2013: Karl Bertil Akesson
 The easy to extract tender rock (regolith) is reported to  Business lines: Agriculture & Mining
have an “above average” graphite content1
 Average annual revenue over the last 5 years: €3m
 Original export documents reveal high-quality flakes (80% sisal, 13% mica, 7% others)
 Workforce: 392 full-time, 527 part-time, 1,073 laborers
 Local population and former mine employees pleased to
 Headquarter: Antananarivo, Madagascar
see Group Akesson come back
 Number of companies in the Group: 9, incl. Somagra
 Akesson family honorary consuls of Sweden and Malta
Source: Company, 1Outputs of recent topographic and geophysical surveys, SGDM, 2Competent Person Report
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 Draft Historical background of Permit n°4 CONFIDENTIAL

PERMIT N°4 HISTORICAL BACKGROUND CUMULATED GRAPHITE SALES (1999-2003)

 The area covered by permit n°4 has been exploited until 1977
1,700 1,020 440 256 40
and then by a related company of the group until 2003

tons
(historical data available over the 1999-2003 period)
 Reserves estimated by BRGM in 1999 through core drilling
Ongoing review  The exploitation program was stopped because of the falling
graphite prices
 Graphite in saprolite was collected openly by conventional
methods
 The process consisted of crushing and / or grinding followed by
sieving and classification by flotation
 Quality of exported graphite: Fine: 11%, Medium: 23%, Large:
17%, Jumbo: 17% and all coming: 32%

RANKING OF CLIENTS BY EXPORTED TONS OF GRAPHITE CUMULATED REVENUES FROM GRAPHITE SALES (‘99-’03)
1. MRP (Göttingen) 1,660 tons 800
2. MANI (Hamburg) 1,116 tons 700

€*1000
3. MRP (Baltimore) 288 tons 600
4. MRP (Hamburg) 200 tons 500
400
5. MRP (Hopkinsville) 72 tons 300
6. MNI (Hamburg) 40 tons 200
7. MRP (Karachi) 40 tons 100
8. MANI (Antwerp) 20 tons 0
1 2 3 4 5
9. MRP (Antwerp) 20 tons Year

Source: Company
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 Draft Preliminary economic studies: scopes and calendar CONFIDENTIAL

PRELIMINARY ECONOMIC ASSESSMENT (PEA) FEASIBILITY STUDY (FS)

 Process design:  Engineering design
 Review the geological and chemical results of the  Plant layout drawings
drilling campaign  General arrangement drawings
The initial drilling  Develop the high-level process design criteria (PDC)  Plant design specifications
campaign started in  Compile a block flow diagram of each process option  Steelwork quantities from design, using the vendor
January 2019. PEA will  Compile the process description report information and the mechanical equipment general
follow in February, PFS  Develop high-level mass balances arrangement drawings
in May and FS in  Compile a high-level equipment list  Mechanical Bill of Quantities
September  Capital Cost Estimate – Accuracy +/-35%  Electrical single line diagram (SLD)
 Operating cost estimate – Accuracy +/-35%  Electrical material take-off, electrical motor lists and
instrument volumes from the P&IDs
 Civil and Structural Design
 Mechanical Equipment, Platework, Structures and Piping
PRE-FEASIBILITY STUDY (PFS)  Electrical & Instrumentation
 Capital Cost Estimate – Accuracy +/-10%
 Sample preparation including crushing and milling curve
indexes  Operating cost estimate – Accuracy +/-10%
 Chemical head analysis
 Size by assay analysis to understand the deportment
 Flotation testwork
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
 Product and tails size by assay analysis to understand the
yields and recoveries
 Process Design (Process Flow Diagrams, Functional
specification, Equipment list, Electrical load list)
 Capital Cost Estimate – Accuracy +/-20%
 Operating cost estimate – Accuracy +/-20%

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Appendices
 Appendix 1. Copy of Permit n°4 – Pages 1 & 2 CONFIDENTIAL

Draft

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 Appendix 1. Copy of Permit n°4 – Pages 3 & 4 CONFIDENTIAL

Draft

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 Appendix 2. Presentation of Groupe Akesson Mineragrex CONFIDENTIAL

IDENTITY CARD GROUP’S COMPANIES AND ACTIVITIES

 1978: Creation of Groupe Akesson Mineragrex by Carl  Mining
Draft Gustaf Bertil Akesson: acquisition of former large French 1. SOMAGRA: graphite production & export
companies based in Madagascar (e.g. “Les Grands 2. SOMIDA: mica mining & export
Domaines de Madagascar”)
 Agriculture
 Group’s presidency: 3. SPSM / SDSM: sisal fibers production & export
 1978-2013: Carl Gustaf Bertil Akesson 4. SLAMI: Robusta Bio green coffee production & export
 Since 2013: Karl Bertil (Carl Gustaf Bertil’ son) 5. SOMIA: rice production and exploitation
 Business lines: Mining & Agriculture  Others
 Average annual revenue over the last 5 years: €2.8m 6. COGEPA: property assets management
 Workforce: 392 full-time, 527 part-time, 1,073 laborers 7. OASIS: travel agency
 Headquarter: Antananarivo, Madagascar 8. SCIAMA: production of mica powder by grinding

BREAKDOWN OF REVENUE (AVERAGE 2013-2017) SOCIAL RESPONSIBILITY

 Specific program MAHERI aimed at promoting an
Others “inclusive development”
7%
Mica  Inspired from local programs set up by municipalities
13%
 Target: Local Farmers
 Priorities:
- Access to drinkable water, healthcare, education
€2.8m
- Fight against economic youth exclusion
- Sustainable management of natural resources
 Ongoing actions:
Sisal
80%
 Reforestation (Amboasary and Région Sofia)
 On-site waste treatment (Amboasary)
Source: Groupe Akesson Mineragrex
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 Draft Global graphite market CONFIDENTIAL

GRAPHITE MARKET OVERVIEW AND MAIN DRIVERS GRAPHITE MARKET GROWTH FORECAST
 Graphite is flexible in nature and has both metallic and
non-metallic properties, which makes it appropriate for a 20

$bn
diverse range of industrial applications, including
lubrication, refractories, battery production, and foundry 18 CAGR:
18.8
Demand for graphite +5.4%
 In the upcoming years, the global graphite market is 16
driven by economic
growth in emerging expected to witness various growth opportunities:
14 16.9
countries and  The continuous expansion of the steel industry
increasing use of  The rise in the demand for lightweight materials in 12 15.2
portable batteries in aircraft components 13.7
mature markets  The development in the production of lithium-ion 10
batteries (highest-growing segment with an expected 2016 2018 2020 2022
CAGR 2015-2022 of +6%)
Source: Allied Market Research, Ibid Source: Allied Market Research, Ibid

GRAPHITE END-USER MARKET (2015) GRAPHITE CONSUMPTION BY REGION (2020E)

$16.9bn

Source: Industrial Minerals, BCP Equities, September 21st, 2016 Source: P&S Market Research, Global Graphite Market Size, Share,
eponyme partners Development, Growth and Demand Forecast to 2020 18