Lanka Graphite : Supporting information for 16 December 2015 ASX announcement

Criteria

JORC Code explanation

Commentary

Sampling techniques

• Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as downGhole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

• Aspects of the determination of mineralisation that are Material to the Public Report.

• In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

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

The Company geologist reported that grab rock samples were collected in the Bopitiya area, described as being accessible at Yatadolawatta Ihala junction of Kalutara - Mathugama road. It is totally about 3 km journey from Yatadolawatta Ihala junction along Aluthgama road and it is completely located within an abandoned private land surrounded by a state rubber plantation named Yatadola Estate (Penigala division). It has been operated with a main shaft, an adit and two ventilation shafts and at present all of these mine pits are covered with thick vegetation.

The CP was not present at the sampling

Drilling techniques

• Drill type (e.g. core, reverse circulation, openGhole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, faceGsampling bit or other type, whether core is oriented and if so, by what method, etc.).



Not applicable, as this was a rubble / spoil rock grab sampling exercise.

Drill sample recovery

• Method of recording and assessing core and chip sample recoveries and results assessed.

• Measures taken to maximise sample recovery and ensure representative nature of the samples.

• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.



Not applicable, as this was a rubble / spoil rock grab sampling exercise.

Logging

• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

• The total length and percentage of the relevant intersections logged.

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No sample descriptions were collected; samples were photographed but not geolocated.

The CP was not present at the sampling

SubDsampling techniques and

• If core, whether cut or sawn and whether quarter, half or all core taken.

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It is understood that no subsampling of the grab samples occurred prior to lab submission

Criteria

JORC Code explanation

Commentary

sample preparation

• If nonGcore, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

• Quality control procedures adopted for all subGsampling stages to maximise representivity of samples.

• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/secondG half sampling.

• Whether sample sizes are appropriate to the grain size of the material being sampled.

• The CP was not present at the sampling

Quality of assay data and laboratory tests

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

• For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

• Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

• The analytical methods used at the ALS laboratory are considered to be appropriate for high purity vein graphite as sampled. Two samples were submitted to ALS Metallurgy, Australia. These samples were described as 'rock 1' and 'powder 1'.

• Method 1 Total Carbon: the sample was first dried at 105oC, then by Loss on Ignition (LOI) at 1000oC for 24 hours.

• Method 2 Total Graphitic Carbon: the sample was first dried at 105oC to remove moisture, then heated at 425oC to account for organic carbon. This was followed by LOI at 1000oC for 24 hours.

• The two samples were crushed and tested by froth flotation.

• The two samples returned head grade LOI values of 99.5% (rock 1) and 99.6% Total Carbon (powder 1).

• After flotation the two samples returned grades of 99.9% and 99.97% carbon respectively.

• Approximately 80% of 'rock 1' was finer than 200 mesh, after flotation.

• Approximately 65% of 'powder 1' was finer than 200 mesh, after flotation.

• No QA data was provided by the Company.

Verification of sampling and assaying

• The verification of significant intersections by either independent or alternative company personnel.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

• Discuss any adjustment to assay data.

• No verification of the sampling has been completed.

• This was a grab sampling exercise of loose rubble / spoil around old workings, hence no intersection widths could be verified.

• There were no twinned holes, as this was a rock grab sampling exercise.

• The data has been stored internally by Lanka.

Location of data points

• Accuracy and quality of surveys used to locate drill holes (collar and downG hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• Specification of the grid system used.

• Quality and adequacy of topographic control.

• The coGordinate survey system in Sri Lanka is based on the Transverse Mercator Projection with the origin of the projection being 200,000m south and 200,000m west of Pidurutalagala or 7° 00j 01.729k N and 80° 46j 18.160k E.

• The samples are described as being from these locations:

Criteria

JORC Code explanation

Commentary

Data spacing and distribution

• Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

• Whether sample compositing has been applied.

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Point samples were collected from rubble / spoil material around old workings described as 'site 1'.

Orientation of

• Whether the orientation of sampling achieves unbiased sampling of possible



The samples were collected from waste / spoil material around old workings

data in relation

structures and the extent to which this is known, considering the deposit type.

and could not be directly related to any specific geological structures.

to geological

• If the relationship between the drilling orientation and the orientation of key

structure

mineralised structures is considered to have introduced a sampling bias, this

should be assessed and reported if material.

Sample security

• The measures taken to ensure sample security.



The grab samples were submitted directly by Lanka to ALS.

Audits or reviews

• The results of any audits or reviews of sampling techniques and data.



There were no audits or reviews, given that these were grab samples from around old workings.

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

• The samples were collected from EL267.

• The prospects are located in southwestern Sri Lanka.

• The tenements are in good standing and no known impediments exist.

Exploration done by other parties

• Acknowledgment and appraisal of exploration by other parties.

• There is evidence of old workings assumed to be for graphite, however no recorded assay results or vein widths. The spoil heaps are often small which suggests limited excavation.

Geology

• Deposit type, geological setting and style of mineralisation.

• Exploration is targeting vein graphite.

• Sri Lankan graphite generally occurs in the form of veins, ranging in thickness from veinlets less than 1mm thick to massive veins over 1m thick. The veins are usually located in the hinge zones of antiforms within granulite facies zones of the Precambrian Basement terrain that underlies much of Sri Lanka. Secondary fractures associated with structural hinge zones can also act as tensional areas suitable for graphite deposition.