iTech Minerals Ltd. provided Sugarloaf Graphite Metallurgy update. Sugarloaf Graphite Prospect: The Sugarloaf Graphite Prospect is located approximately 30 km north-west of Cleve on the central Eyre Peninsula and is directly adjacent to iTech Minerals Ltd.'s proposed graphite processing plant for the Campoona Spherical Graphite Project. The graphite at this location occurs within the Paleoproterozoic Hutchison Group Metasediments and is likely to have formed from organic rich stratigraphic horizons metamorphosed during regional upper greenschist to lower amphibolite facies metamorphism during the Kimban Orogeny.

The graphite rich horizon forms a largely flat lying, shallow anticlinal structure as interpreted from drilling and detailed airborne and ground-based electromagnetics. Historical interpretations of the Sugarloaf Graphite Prospect: Archer Materials explored the Sugarloaf Graphite Prospect between 2008 and 2014. The project was initially investigated as a potential source of high-value coarse flake graphite for use in the more traditional foundry, refractory and steel making industries.

However, due to its fine flake size, the prospect was not deemed to be of high enough value to progress. It should be noted that, at this time, the value of fine to microcrystalline flake graphite as a source for battery anode material had not been well understood. The prospect was then investigated as a carbon-based soil conditioner/fertiliser based on a study undertake by the University of Adelaide that suggested that Sugarloaf was composed of a unique form of non-graphite carbon with high resistivity.

The prospect was interpreted as an "immature" graphite that had not been subjected to the metamorphic conditions required to form crystalline graphite. Current Metallurgical Investigations: iTech is currently part way through a program of sighter metallurgical test work to determine if Sugarloaf graphite may be a suitable feedstock to produce battery anode material. Company initial findings suggest that the previous interpretation of Sugarloaf being formed from a unique form of non-graphite carbon with high resistivity is not correct.

iTech believes that Sugarloaf is primarily conductive, crystalline flake graphite for the following reasons. All graphite analysis undertaken on drill core is done using an analytical technique that specifically targets only graphitic carbon, called total graphitic carbon (TGC). Hydrochloric acid (50%) is used first to leach any carbon present as carbonate minerals.

The sample is then roasted at 4200C driving off any organic carbon. At this stage all residual carbon should be graphitic and is measured by induction furnace/infra-red. Therefore, all drill results at Sugarloaf are only reporting graphitic carbon and not non-graphitic carbon as suggested.

It was also suggested that the carbon at Sugarloaf was resistive and not conductive. It can be shown from airborne electromagnetic surveys of the prospect that the graphitic horizons form a very conductive, shallow, sub-horizontal layer that coincide with high TGC values in drill core This suggests that are measuring only the conductive, crystalline, flake graphite component of the prospect. These observations are supported by additional petrographic and scanning electron microscope analysis of the fine flake graphite at Sugarloaf.

Petrology: Petrological analysis of graphite bearing rocks from Sugarloaf confirm the presence of abundant fine crystalline graphite. With flake sizes in the range of 5 micron (µm) to 150 micron (µm). Twelve samples of Sugarloaf graphite, from drilling undertaken in 2011 and 2012, were subjected to petrological analysis to determine graphite morphology and flake size.

The calculated mean size of graphite flakes from 12 samples across 6 drill holes is: Sighter Metallurgical Test Work and Scanning Electron Microscope Analysis iTech provided ANZAPLAN with 15 kg of graphitic drill sample from drill hole SLRC 004 to undertake sighter test work and characterise the nature of the graphite at Sugarloaf. The fixed carbon or graphite content of the sample was analysed as 10.0 wt.-% TGC along with quartz, chlorite (clinochlore) and albite. A total of 6 rougher flotation tests were undertaken with varying parameters like grind times, equipment, reagent dosage, frother and dispersing and desliming reagents.

As expected, due to thefine nature of the graphite, only a modest upgrade was achieved by flotation. Analysis of the flotation concentrates from the rougher stage by SEM showed that the graphite flakes had an average size of 10 µm and had not been ground to a sufficient size to liberate the graphite flakes from the gangue. It was determined that finer grind sizes will be required.

Work is ongoing to determine the optimum processing parameters to achieve sufficient upgrading of the graphite flake concentrate at acceptable recoveries. The aim will be to produce a >80% TGC concentrate with recoveries of >80%. With further optimisation the aim will be to increase TGC grade to >90%.