Graphex Group’s exclusive MOU with Emerald Energy Solutions LLC is a key step toward the construction of a graphite processing facility in the greater Michigan area to support EV battery production across the United States

ROYAL OAK, Mich., Feb. 07, 2022 (GLOBE NEWSWIRE) — Graphex Technologies, LLC, a wholly owned subsidiary of Graphex Group Limited (collectively “Graphex”) (OTCQX: GRFXY | HKSE: 6128), has entered into an exclusive non-binding memorandum of understanding (MOU) to form a joint venture with Michigan-based Emerald Energy Solutions LLC (“EES”) for constructing and operating a graphite processing facility. The joint venture is considering several Michigan sites as well as other sites for the facility. Final decision and site selection is expected in March and is subject to agreements being reached with state and local governments and agencies. Graphex expects that a facility could be operational before the end of Q2 2023 with an initial capacity to deliver 10,000 metric tons per annum (TPA) of coated spherical graphite used in EV battery anodes and may increase the capacity to 20,000 TPA relatively quickly to meet increased demand.

Processed spherical graphite is the predominant anode material used in most lithium-ion batteries for EVs and renewable energy storage. The processing and supply of coated spherical graphite is expected to significantly increase every year to satisfy the skyrocketing demand for EVs. With EVs expected to make up 45% of all vehicles sold in the United States by 2035, the advantages for anode material processing within the U.S. alone are significant. Domestic facilities with the expertise and proven capability to produce high-quality anode materials at scale will create localized stable supply and reduce potential logistical and geopolitical interruptions.

Graphex, a global leader in the industry, has been proficient in commercial graphite processing since 2013 and is currently producing over 10,000 metric tons of spherical graphite annually. Its operation is highly scalable and repeatable. Graphex expects to leverage its experience and expertise in the processing of high-quality graphite anode material globally and to open the Michigan facility quickly. Graphex possesses patents and utility models covering various technological, design, and processing applications in addition to trade secrets and technological expertise. Graphex’s senior executives include individuals with proven sophisticated experience and knowledge in production methodology for producing spherical graphite and coating.     

“The establishment of a US-based facility represents one of many steps in Graphex’s expansion plans,” said John DeMaio, President of the Graphene Division of Graphex. “While localizing this integral element of the EV supply chain certainly creates commercial opportunity, we are equally pleased to be able to import technological expertise and create well-paying jobs in the U.S. as we support the energy transition at a foundational level. We also could not be more pleased than to partner with EES in this venture. Their long-term local presence, skill, experience, and stellar reputation for specialized construction and power installations can bring this facility from plans to plant quickly and economically. We have choices, and we would like to choose Michigan — and the opportunity to work with EES is a key driver in that decision.”

EES is led by lifelong Michiganders and maintains a large team of local professionals experienced in handling all aspects of the design, construction, regulatory, supply sourcing, legal, and financial affairs for building first class manufacturing and processing facilities in the Detroit metropolitan area as well as other states. Its affiliated entity currently operates Emerald Business Park, a 23-acre industrial park in Warren, MI featuring a 12-megawatt power substation and 400,000 rentable square feet. The complex was recently upcycled into several manufacturing and first-class processing facilities, accommodating specialized processing equipment and critical environmental climate controls for a highly regulated industry.   

“Global EV growth creates unprecedented demand for battery materials and graphite continues to be a key material in future battery chemistries. Detroit is positioning itself to be a global leader not only in traditional automobile manufacturing, but also the leader in EV manufacturing,” said David Halabu, Managing Partner of EES. “As a Michigan company with a team born and raised in the metro Detroit area, we are determined to create synergies between Graphex and American automakers. No better place than the Motor City to see the electrical vehicle future come to reality.”

Under the MOU, the EES team will primarily be responsible for site assessment and selection, inspections, acquisitions, design, regulatory approval, construction, and mechanical operation of the facility, and will also provide office and administrative support for the joint venture. In addition, EES will have primary responsibility for providing and/or obtaining the requisite funding and capital to purchase, construct, and operate the facility. EES will manage all governmental and regulatory concerns. Graphex will provide the patents, trade secrets, technological knowhow, and expertise necessary to construct and operate the facility. Appropriate Graphex personnel will be involved in all stages of development and operation of graphite processing and pitch coating. Graphex will arrange for the supply of the necessary graphite material to be processed at the facility.

About Graphex Group
Graphex Group Limited is a Cayman Island company with principal and administrative offices in Hong Kong and subsidiary office in Royal Oak, MI. Graphex is focused on the development of technologies and products for the enhancement of renewable energy, particularly the enrichment of spherical graphite and graphene, key components for EV batteries and lithium-ion batteries for other use cases. With our current manufacturing facility in Heilongjiang Province, we are strategically located near one of the world’s largest high-quality sources of natural flake graphite raw material. Graphex Group is currently among the top suppliers of specialized spherical graphite to the EV and renewable energy industries and holds 23 patents in areas including products, production methods, machinery design and environmental protection.

About Emerald Energy Solutions
Emerald Energy Solutions LLC has its principal offices in Royal Oak, MI and is experienced in all aspects of site assessment and selection, inspections, acquisitions, regulatory approval, supply sourcing, legal and financial affairs for the design and construction of first class manufacturing and processing facilities in the Detroit metropolitan area as well as other states. Its affiliated entity currently operates a 23-acre industrial park in Warren, MI featuring a 12-megawatt power substation and 400,000 rentable square feet. The complex was recently upcycled into several manufacturing and first-class processing facilities.   

Safe Harbor Statement
This press release is being made pursuant to, and in accordance with, Rule 135 under the Securities Act of 1933, as amended (the ‘Securities Act’), and shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act.

Statements about the Company’s future expectations and all other statements in this press release other than historical facts, are ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby.

The above information contains information relating to the Company that is based on the beliefs of the Company and/or its management, as well as assumptions made by any information currently available to the Company or its management. Without limiting the foregoing, the planned construction of a facility is subject to construction and permitting delays as well as any other condition that materially impacts construction of a facility, including government approvals, financing and any litigation. When used in this document, the words ‘anticipate,’ ‘estimate,’ ‘expect,’ ‘intend,’ ‘plans,’ ‘projects,’ and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company regarding future events and are subject to certain risks, uncertainties and assumptions, including the risks and uncertainties noted. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or projected. In each instance, forward-looking information should be considered in light of the accompanying meaningful cautionary statements herein. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, the impact of competitive services and pricing and general economic risks and uncertainties.

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The collaboration intends to deliver a vertically integrated supply of active anode material to meet the quality, quantity, and delivery time frames required by the EV/battery industry in North America and beyond

ROYAL OAK, Mich., January 25, 2023–(BUSINESS WIRE)–Graphex Group Limited (NYSE American: GRFX | HKSE: 6128) and its U.S. subsidiary, Graphex Technologies LLC (collectively “Graphex”), a global leader in the downstream processing of specialized natural graphite used in electric vehicle (EV) lithium-ion (Li-ion) batteries, today announced it has entered into a non-binding Letter of Intent (“LOI”) with Gratomic Inc., a graphite company based in Toronto, Ontario (TSX-V:GRAT)(OTCQX:CBULF)(Frankfurt:CB82) (the “Company” or “Gratomic”). The intent of the LOI is to combine Gratomic’s raw material supply capabilities with Graphex’s proven downstream processing expertise to solve an industry wide supply-demand gap by delivering an end-to-end supply of graphite from mine to battery with facilities to be located in North America.

Pursuant to the LOI, Graphex and Gratomic intend to diligently and in good faith negotiate the terms of a Joint Venture, including management and ownership structures, to jointly produce coated spherical graphite anode material for the EV/battery market. Graphex will license and/or contribute its technology and expertise to the Joint Venture and Gratomic will provide security of raw material supply (graphite concentrate). It is contemplated that Graphex will provide all the technology, plans and expertise for building and operating the plant(s). Graphex has existing processing facilities in Asia and has also secured and is developing a site in Warren Michigan that is being designed to produce 15,000 tonnes per annum (tpa) of battery anode material. Gratomic is the holder of 100% interests in the Aukam property located in southern Namibia and the Buckingham property in Quebec, Canada as well as mineral claims in Capim Grosso in Brazil, from which property rights and claims Gratomic intends to develop operating graphite concentrating facilities. Gratomic shall remain entitled to enter into supply agreements with third parties for raw material not committed to the Joint Venture.

“Keeping with our commitment to secure diversified sources of graphite supply to meet the industry need for battery anode material, this collaboration with Gratomic opens up potential new streams of raw material to meet the coming tidal wave of demand,” said John DeMaio, CEO of Graphex Technologies. “We are excited to expedite the due diligence phase of the collaboration to assess the impact that we can make together. Combining the experience and expertise of Graphex in downstream processing with the anticipated raw material supply from the Gratomic assets is another step forward to improve the anode supply picture for the industry.”

Arno Brand, Gratomic’s CEO, commented “We have been working diligently for a long time to find a perfect match in a downstream Processing partner to enable full cycle anode inclusion of our Graphite product. The collaboration between Gratomic and Graphex now brings forth a combination between the two companies that is unmatched in its ability to present real life mining experience with real life downstream Processing experience. We are very excited to move forward with our due diligence and expeditiously enter into a long lasting relationship with Graphex.”

Graphite is the primary anode material in electrical vehicle (EV) batteries. Typically, graphite is mined and concentrated to ~95% purity by companies such as Gratomic. The mine concentrate is then shaped, purified, and coated to create the critical EV battery anode material in a downstream process by operations like Graphex. The supply picture for natural graphite in North America is marked both by a significant shortfall in the availability of the necessary volume of graphite raw material from regions outside of China that is needed to meet projected demand, and the complete absence of experienced commercial-scale downstream processing capability to transform that raw material into battery-grade anode material. The collaboration between Gratomic and Graphex seeks to solve both issues on an industry-wide level by providing OEMs and battery makers with a transparent, ESG compliant supply of quality product needed to meet current and future demand.

Graphex has a long history of processing mine concentrate and produces 10,000 tpa of high yield, high quality battery anode material. Graphex is currently the only experienced downstream processor of natural graphite that intends to develop an anode material processing plant in North America. The collaboration with Gratomic would allow Graphex to accelerate the expansion of its experienced mid-stream processing capabilities into North America and Europe. Given the emphasis placed on creating domestic U.S. supply chains as promoted through the Inflation Reduction Act, the Bipartisan Infrastructure Law, and the Defense Production Act, the Graphex-Gratomic collaboration represents a significant advancement toward making a domestic supply chain for graphite anode material a reality.

To learn more about these developments and more from Graphex Group, please visit www.graphexgroup.com

About Graphex: Graphex Group Limited, is a Cayman Island company with its principal offices in Hong Kong and regional offices in Shanghai and Royal Oak, MI, USA. Graphex is focused on the development of technologies and products to enhance renewable energy, particularly the production of spherical graphite and graphene, key components in EVs/lithium-ion batteries as well as in other uses. Graphex has extensive commercial experience in the deep processing of graphite and producing battery grade purified spherical graphite. Current production is 10,000 tpa and an expansion is underway to increase production to 20,000 tpa within the next 12 months. Graphex intends to further expand existing operations to 40,000 tpa over the next three years. Graphex is currently among the top suppliers of specialized spherical graphite to the EV and renewable energy industries and holds patents in areas including products, production methods, machinery design, and environmental protection. Graphex’s strategy is to expand its operations globally to support energy transition and electrification efforts worldwide,

About Gratomic: Gratomic is a multinational company with projects in Namibia, Brazil, and Canada. The Company is focused on becoming a leading global graphite supplier and aims to secure a strong position in the EV (Electric Vehicle) battery supply chain. With the continued development of its flagship Aukam project and further exploration on the Company’s Capim Grosso property, Gratomic sets itself apart by seeking out unique top-quality assets around the world. True to its roots, the Company will continue to explore graphite opportunities displaying potential for development. The Company ranked third place in the top 10 performing mining stocks on the 2022 TSX Venture 50™.

Forward Looking Statements:

All statements contained in this presentation other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor in Section 27A and 21E of the Securities Act of 1933 and the Securities Exchange act of 1934, respectively. You can identify some of these forward looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. We have based these forward looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs. These forward looking statements involve various risks and uncertainties.

Information from third sources identified in this release are based on published reports for such information that are generally available by third parties. We have not commissioned any such report or study and we have assumed the accuracy of such reports without independent investigation or inquiry. Any such third party is an author or publisher of papers or studies that are used by industry professionals, generally, and there should not be any implication that any such third party is an “expert” under SEC Rule 436

This communication is for informational purposes only and is neither an offer to sell nor a solicitation of an offer to purchase any securities of Graphex Group Limited, including but not limited to its American Depositary Shares.

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