Total Graphite Plc Regulatory News (TGR)

22 June 2022

Tirupati Graphite plc ('Tirupati', 'TG' or the 'Company')

Operational Update

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist graphite and graphene company developing sustainable new age materials, is pleased to provide an update covering progress across its primary flake graphite operations.

Primary Flake Graphite operations

Primary flake graphite operations at the Sahamamy and Vatomina projects in Madagascar continued despite unusually challenging weather conditions, which have included six cyclones during the past six month period.

Key Operating results

· In Q4 FY 22 (January to March 2022), the Company recorded its highest quarterly shipment and sales of 1,137 metric tonnes (MT) at its highest average realisation of US$866 per MT.

· During FY 22 (covering the period April 2021 to March 2022), total production was 2,996 MT (FY 21 1,718 MT) and sales were 2662 MT (FY 21 1,857 MT).

· Vatomina operations, post start-up, were stabilised by end of May 2022 following debottlenecking and improving preparedness for weather conditions.

· Head grade at Vatomina currently remains at approximately 3% as against project target of 4-4.5%.

· TG's approach to achieving higher grade deposits will be progressed over the next 2-3 months with rains having receded, targeting increased average head grade from October 2022.

· Installation of the new column flotation system at Vatomina has been completed. Trials and integration with the operations are scheduled in this month with an expert team being flown in from TSG.

· Over the rest of 2022, TG's efforts will be directed to progressively increase Vatomina's production to rated capacity.

Sahamamy hydro power and 18,000 tpa facilities development

· Construction of the Sahamamy 18,000 tpa plant has continued but completion has been delayed by three months due to the difficult weather conditions and commissioning is now scheduled to start at the end of September 2022.

· Commissioning of the 100Kw hydropower plant at Sahamamy is on schedule with first power generation expected in July 2022.

Exploration activities

· New discoveries continue to be made in both the Vatomina and Sahamamy projects, as exploration activities are undertaken concurrent with development.

· Drilling activities continue to delineate new discoveries and enhance confidence in the Mineral Resource Estimates from the 2018 Competent Person's Report.

· A second diamond core drilling rig purchased by the Company is now operational in the Sahamamy project.

· With expanded target areas the ongoing exploration phase under the supervision of SRK Consulting that will be continued through the rest of 2022, an updated mineral resource statement for the two projects is expected to be released by SRK.

Infrastructure developments

· The acquisition of additional land surface rights at Vatomina commenced in the current quarter by in-country expert advisors, with the purpose of enhancing the land bank available at the project. This covers areas of newly discovered deposits which are likely to enhance the settled surface rights and thus improve the prospects for the medium-term development plan.

· Given the challenging weather conditions, the Company intends to convert all its primary internal and connecting road network, c. 50 kms, to metalled concrete or black top roads, studies for which have been initiated.

· An area grader and bull dozers have been added to the fleet of mining and earthmoving equipment to enhance and maintain the road network.

· To meet the expectations of advanced analytics by our customers and for complete control over both the mined ore and finished product, the analytical lab facilities have been enhanced with installation of microscopes and X-ray fluorescence spectroscopy (XRF).

Cost inflation

· Along with most of the sector, Tirupati has experienced cost inflation - particularly for shipping and logistics costs for the movement of equipment, plant and machinery and other inputs to and finished products from its projects.

· The increased cost of steel, petroleum products and overall inflation have contributed to increase in investments and operating costs.

· The Company is mitigating these increased costs by shifting sales to Free-On-Board (FOB) incoterms or passing the incremental costs to our buyers through increased selling prices.

Market developments

· Given the expectation of continued growth in graphite demand, particularly given the continued growth of Electric Vehicle production, and feedback from current and prospective customers, the Company remains confident of its ability to sell the increased production from the primary operations as it grows under the medium-term development plan.

Next steps

· We continue to remain focussed on developing the Madagascar primary flake graphite operations to achieve the globally significant milestone of 30,000 tons rated capacity up from the current 12,000 tpa capacity and achieve expected positive bottom line from the current financial year being 1 April 2022 to 31 March 2023.

Shishir Poddar, Chairman & CEO of Tirupati Graphite, said:

"Primary flake production and expansion of our production facilities has been impacted by the sustained period of unusually bad weather in Madagascar over the past six months; however, we continue to make excellent progress and to increase our production capacity to the targeted 84,000 tpa level from our Madagascan projects.

"The market for graphite continues to expand rapidly driven by the energy transition. This is a timely opportunity for us to grow and we are doing so, whilst having to mitigate external headwinds."

"The next six months will be crucial for us as we strengthen our foundations, increase our capacity to 30,000 tpa and position the Company to achieve better capacity utilisation which will mitigate future headwinds.

"With the travel restrictions having come to an end, we now have better mobility for our leadership team. With Vatomina stabilising, and the additional capacity of 18,000 tpa coming on stream later this year, we are focussed on delivering a positive bottom line starting the current financial year. Achieving this milestone we see as transformational in our development journey."

ENDS

For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:

About Tirupati Graphite Primary Flake Graphite Operations

Tirupati Graphite Plc owns and operates two primary flake graphite projects in Madagascar namely the Sahamamy and Vatomina projects spread over c. 33 square kilometers mining permits. It has a current nameplate capacity of 12,000 tpa, in the process of setting up additional 18,000 tpa and expanding further to 84,000 tpa capacity targeted by end of 2024. Its products are shipped across Asian, European and American markets from Madagascar with flake size distribution tilted towards the premium larger sizes. The Company places a special emphasis on "green" applications, including renewable energy and energy efficiency, energy storage and thermal management and is committed to ensuring its operations are sustainable as well. It yields construction sand as a by product which is currently used at its projects for expansion activities and infrastructure strengthening.