171009 Graphmada Graphite Mine Operational Update bcp · Bass plans to invest capital to expand production to greater than 20,000 tonnes per annum (Stage 2) of graphite concentrate

BassMetalsLtd.(ASX:BSM)

Email:[email protected]:(07)32035894

Post:POBox1048,SubiacoWA6904Web:www.bassmetals.com.au 1

ASXANNOUNCEMENT9OCTOBER2017

GRAPHMADAGRAPHITEMINEOPERATIONALUPDATE

HIGHLIGHTS

• BassMetalsLtdnearingcompletionofStage1oftheoptimisation

program:theestablishmentof6000tonnesperannum(tpa)

productionofpremiumgraphiteconcentratesatits100%owned

GraphmadaLargeFlakeGraphiteMine.

• MajorprocessingequipmentitemshavenowarrivedinMadagascar.

• ProcessPlantcivilworksarenearingcompletion,totimewiththe

releasefromcustomsofthemajorequipmentitems.

• ModularDryerSystem(MDS)constructionhascommencedandison

timeandbudget,withexpectedcommissioninginNovember2017.

• PricesforgraphiteconcentratesinBass’intendedendmarketshave

improvedmateriallyoverthelast2quarters.

Figure1:ThecommencementofMDSinstallation;layingoutofframes,completionofstructuralfooting,

andcontrolroomconstructionnearingcompletion.

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BassMetalsLimited(ASX:“BSM”)(the“Company”)ispleasedtoprovideanupdateonits

optimization and refurbishment of the Graphmada Graphite Mine, located in

Madagascar.

MINEHEALTHANDSAFETYUPDATE

TheCompanyispleasedtoreportthatwhilsttheoptimizationandrefurbishmentofthe

minehasbeeninprogressnoLostTimeInjurieshavebeenreported.TheCompany

continuesitsfocusofapplyingsoundsafetymanagementpracticestoitsactivitiesand

maintainsitsstrategyofengineeringasafeoperatingenvironmentintothe

refurbishmentofthemine.

OPTIMISATION&REFURBISHMENTPROGRAMUPDATE

Refurbishmentworkscontinueasplannedwiththeprogramonbudgetandonschedule.

SignificantactionsundertakensincethelastOperationalUpdateinclude:

ü ProcessingplantequipmentshippedandinMadagascarawaitingcustoms

clearance;

ü ManufactureofnewpumpscompleteandshippedtoMadagascar;

ü Allproceduresforheavyloadtransportofequipmenttositearranged;

ü Onsiteoff-loadingsafetyproceduresfinalised;

ü Plansforrefurbishingelectricalcontrolroomandplantofficesfinalised;

ü Manufacturingofallelectricalcontrolboardsandcablesinprogress;

ü Finalplanforelectricalcablingroutingconfirmed;

ü Extensionoftheexistinggeneratorshedtoaccommodateelectricaldistribution

boardsinprogress;

ü ProcessPlantcivilworksnearingcompletionintimeforthearrivalonsiteof

majorprocessingequipmentitems;

ü Integrationbetweenoldandnewfloatationcellscompleteandwaterfilltest

successful;

ü Floatationcellspipingandmaterialflowconnectionworkunderway;

ü Refurbishingofpreviouslyusedplantpumpsunderway;

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ü Surgebins,pumpsandpipinginstallationunderway.

ü AllcivilworktoaccommodateModularDryerSystem(MDS)complete;

ü AssemblyanderectionofMDScomponentsinprogress;

ü MDSelectricalcontrolroomnearingcompletion;

ü Manufacturingofdrysortingandscreeningequipmentcomplete;

ü Graphitesizefractionstoragebinscomplete;

ü Mahefadokmineplanningunderway;

ü Planningforextendedstockpilearearevisedandconfirmed.

Figure2:Completedflotationrecyclebinsinstalled.

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Figure3:MDSinstallationunderway.

SALES&MARKETUPDATE

Theminecurrentlyhas298 tonnesofgraphiteconcentrates in stock.TheCompany is

negotiatingthesaleofthisstockaspartofmaintainingregularsuppliestoGraphmada’s

maincustomers.

Smallsampleshavealsobeendispatchedfromexistingstocktopotentialnewcustomers

whoareenquiringastoGraphmada’splanstosupplynaturalflakegraphitein2018.Most

interest is centred on the large to very large flake size concentrates as the market

continuestoseeasignificantdecreaseinsupplyintheseflakesizes.

Table1:CurrentStock

GRADEFC% MeshSize

+50 -50+80 -80 -100

<85 1

85-90 45 78 10

90-94 13 43 69 36

>94 1

TOTAL 14 88 150 46

Atotalof298tonnesproduct.

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PricesforgraphiteconcentratesinBass’intendedendmarketshaveimprovedmaterially

over the last 2 quarters due to weakening supply out of China from the continued

environmentalcrackdowns,particularlyintheuseofcoalindryingclosingmanyfactories

in Shandong. Reports also indicate that Expandable Graphite usage is increasing

significantlyinChinaduetorecentlegislativechangesintheuseoffireretardants.

Pricesareexpectedtocontinuetoriseinthecomingmonthsparticularlyforlargeflake

sizeswithFC>94%,thetargetofoptimizedproductionactivitiesatGraphmada.

Figure4:6monthflakegraphiteprices.

BASSMETALSCEO,MRTIMMCMANUS:

“WearenearingcompletionofStage1ofouroptimizationandrefurbishmentofthe

GraphmadaMineandaimtorampupproductionfromlate2017throughtoearly2018

toreach500tonnesamonthofhigh-valuegraphiteconcentrates(Stage1:6000tpa

run-rate).

AstheonlyindustrialmineralscompanyontheASXcapableofenteringallgraphite

marketsegmentsatpremiumpricinglevels,andwithpricingcontinuingtogrowby

doublefiguresmonthonmonth,theCompanyisexperiencingsignificantenquiresforits

futureproduction,particularlyinthelargerflakesizes.

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AssuchtheteamatBassremainsencouragedthatourstrategictimingtore-commission

theGraphmadaMinewillprovetoaddsignificantvaluetoallshareholdersandprovide

anexcellentbasetoimplementaStage2expansionto20,000tpa.”

Formoreinformation,pleasecontact:

TimMcManus

ChiefExecutiveOfficer

Phone:(07)32035894

Email:[email protected]

PeterWright

Director

Phone:(07)32035894

Email:[email protected]

Pleasevisitusat:www.bassmetals.com.au

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ASXANNOUNCEMENT19JUNE2017

ABOUTTHEGRAPHMADAJUMBOFLAKEGRAPHITEMINE

Bass Metals Ltd. is one of only three

publicly listed graphite producers in the

world. The Company 100% owns and

operates the Graphmada large flake

graphite mine, Bass’ flagship project,

located in eastern Madagascar.

Madagascar has been a recognized

producer and exporter of premium

graphite forover100yearsandsets the

world standard for product quality and

flakesize.

TheGraphmadaminehas40-yearmining

permitsinplace,containingfourpremium

quality,largeflake,graphitedepositshostedinweatheredgraphiticgneiss,asoft,easilyminablerock

thatincurslowminingcosts.Withallassociatedmininginfrastructureandlogisticsinplace,themine

currently produces and sells a range of graphite concentrates into multiple market segments, to

customersinIndia,theUnitedStatesandEurope.

Withtheaimofgeneratingrevenuethroughlowestquartilecostproduction,themineiscurrentlybeing

optimizedbyanexperiencedmanagementteamto6000tonnesperannum(Stage1)with improved

finalgraphiteconcentrategrades,inordertogrowcashmargins.

Graphmadaalsohassignificantpotentialforlowcapitalintensityexpansion.Bassplanstoinvestcapital

toexpandproductiontogreaterthan20,000tonnesperannum(Stage2)ofgraphiteconcentratesales

by2019.

InadditiontoexploringthegreatermineralizationpotentialofMadagascar,theCompanyhasalsomade

thestrategicdecision,inparallelwiththeoptimizationofGraphmada,toactivelyexploreanddevelop

depositsintheimmediateproximitytothemine,tomateriallyexpanditsresourceinventories.

TheLoharanodeposithasprovidedthebulkofthefeedtotheGraphmadaprocessingplantandhastotal

JORC compliant Indicated and Inferred resources of 5.7Mt@ 4.1% Grade with a 2% cut-off1. This

mineralizationisknowntogotodepthwithincreasinggrade,andisopeninalldirections.

WiththeCompanyhavingastrongcommunityengagementprogramandbeingwelldownthepathin

achievingitsoptimisationplansandgrowingitsresourceinventory,theteamatBassisconfidentofits

plansforexpansionanditsfuturevaluecreationforshareholders.

1TheseestimateswerepreparedandfirstdisclosedbyStratminGlobalResourcePLCundertheJORCCode2004.Theestimates

havenotbeenupdatedtoJORCCode2012onthebasisthattheinformationhasnotmateriallychangedsinceitwaslastreported.

ReferenceismadetotheCompany'sannouncementof2September2015,whichprovidesfurtherdetailregardingthisinformation.

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ASXANNOUNCEMENT19JUNE2017

DISCLAIMER&CAUTIONARYSTATEMENTS

DISCLAIMER

ThisdocumenthasbeenpreparedbyBassMetalsLimited(the“Company”).Itshouldnotbeconsidered

asaninvitationoroffertosubscribefororpurchaseanysecuritiesintheCompanyorasaninducement

tomakeaninvitationorofferwithrespecttothosesecurities.Noagreementtosubscribeforsecurities

intheCompanywillbeenteredintoonthebasisofthisdocument.Thisdocumentisprovidedonthe

basis that neither the Company nor its officers, shareholders, related bodies corporate, partners,

affiliates, employees, representatives and advisersmake any representation orwarranty (express or

implied) as to the accuracy, reliability, relevance or completeness of the material contained in the

documentandnothingcontainedinthedocumentis,ormayberelieduponasapromise,representation

orwarranty,whetherastothepastorthefuture.TheCompanyherebyexcludesallwarrantiesthatcan

beexcludedbylaw.

FORWARDLOOKINGSTATEMENTS

Thisdocumentmaycontaincertainforward-lookingstatements.Suchstatementsareonlypredictions,

basedoncertainassumptionsandinvolveknownandunknownrisks,uncertaintiesandotherfactors,

manyofwhicharebeyondtheCompany’scontrol.Actualeventsorresultsmaydiffermateriallyfrom

the events or results expected or implied in any forward-looking statement. The inclusion of such

statements should not be regarded as a representation,warranty or predictionwith respect to the

accuracyoftheunderlyingassumptionsorthatanyforwardlookingstatementswillbeorarelikelytobe

fulfilled. TheCompany undertakes no obligation to update any forward-looking statement to reflect

events or circumstances after the date of this document (subject to securities exchange disclosure

requirements).The information inthisdocumentdoesnottake intoaccounttheobjectives, financial

situationorparticularneedsofanyperson.Nothingcontainedinthisdocumentconstitutesinvestment,

legal,taxorotheradvice.

COMPETENTPERSONSTATEMENT

TheinformationinthisdocumentthatrelatestoExplorationResultsisbasedoninformationcompiled

byTimMcManus,aCompetentPersonwho isamemberof theAustralasian InstituteofMiningand

Metallurgyandafull-timeemployeeoftheCompany.

TimMcManushassufficientexperiencethatisrelevanttothestyleofmineralisationandtypeofdeposit

underconsiderationandtotheactivitybeingundertakentoqualifyasaCompetentPersonasdefinedin

the2012EditionoftheAustralasianCodeforReportingofExplorationResults,MineralResourcesand

OreReserves.

TimMcManusconsentstotheinclusionoftheinformationinthisdocumentintheformandcontextin

whichitappears.

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171009 Graphmada Graphite Mine Operational Update bcp · Bass plans to invest capital to expand production to greater than 20,000 tonnes per annum (Stage 2) of graphite concentrate