The document discusses considerations for graphite going forward. It summarizes that graphite demand will increase due to growth in lithium-ion batteries and other technologies. While China currently dominates graphite production, rising costs and resource nationalism may constrain future Chinese supply. The document emphasizes understanding a graphite deposit's characteristics, as different particle sizes and carbon contents appeal to different buyers. It also stresses the importance of security of supply given graphite's strategic uses.

3. How To Think About Graphite Going Forward
May 2, 2012
Toronto, ON
Graphite Express Conference
Chris Berry
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4. The material herein is for informational purposes only and is not intended
to and does not constitute the rendering of investment advice or the
solicitation of an offer to buy securities. The foregoing discussion
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (The Act). In particular when
used in the preceding discussion the words “plan,” confident that,
believe, scheduled, expect, or intend to, and similar conditional
expressions are intended to identify forward-looking statements subject
to the safe harbor created by the ACT. Such statements are subject to
certain risks and uncertainties and actual results could differ materially
from those expressed in any of the forward looking statements. Such
risks and uncertainties include, but are not limited to; future events and
financial performance of an investment which are inherently uncertain
and actual events and / or results may differ materially. In addition from
time to time I discuss investments that are not registered in the U.S. or
Canada. We may, from time to time, own a position in companies
mentioned in this presentation. Please perform your own due diligence
and consult your financial advisor before considering investing in
companies discussed this presentation.
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11. Electrification
The rising quality of life in the
emerging world
Resource Nationalism – The
Strategic/Critical Metal Theme
Security of supply
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12. China figures prominently
Synthetic graphite is a major factor,
but is expensive to produce
Our research indicates that there is
excess capacity in the marketplace
This is a market negotiated by
buyers and sellers so pricing can
vary
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13. Today’s uses:
 Refractories and Crucibles – 33%
 Steelmaking – 26%
 Brake Linings – 7%
 Batteries – 5%
 Other Uses – 29%
Tomorrow’s Uses:
 Lithium-ion batteries – growing at 20%/y
 Fuel cells – non-transportation applications
 Pebble bed nuclear reactors – pebbles are tennis ball size
and must be replaced
 VRBs – need 300 t graphite for 1,000 MW storage
Of note is investment in battery capacity
 GS Yuasa – $350M
 LG Chem – $303M
 Liotech - $420M
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14. We see excess capacity in China, however
many expect supply to be constrained
through export quotas, VATs, and mine
closures
If we look at the market for “today’s uses”
of graphite and assume it grows at 5% y-o-y
to 2020, world consumption will grow to
1.86 Mt
This ignores the higher projected growth
rates in batteries, fuel cells, and pebble bed
nukes (PBNRs)
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15. The need for graphite inside the Middle
Kingdom is clear:
The 12th Five Year Plan is the
“greenest” in Chinese history
US$634 billion on next generation R&D
Rising extraction costs, depleting
resources, and mine consolidation
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16. KNOW THE FOOTPRINT
A graphite deposit is not “one size fits
all”
Mesh size and carbon content can vary
A graphite producer must sell all
inventory – can it do so at a profit?
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17. 25% +48 mesh jumbo flake 97% C
20% +80 mesh large flake 94% C
40% +100 mesh medium flake 95% C
15% +200 mesh small flake 94% C
A “balanced” footprint is likely the best as
this can help insulate a company from
demand shocks
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18. Electrification
The race for intellectual property
pushing innovation forward
Resource Nationalism
Security of supply is HUGE
KNOW THE FOOTPRINT
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19.  Our focus is on the interplay between macro
economics, geopolitics, and the natural resource
sector
 We co-publish a complimentary newsletter with Dr.
Michael Berry focused on Discovery Investing called
Morning Notes. You can subscribe at
www.discoveryinvesting.com
 My email: cberry@house-mountain.com
 Twitter: cberry1
 Skype: chrisberry97
 LinkedIn
 www.house-mountain.com
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