Oversubscribed Placing to Raise £10 million

This announcement and the information contained in it is not for release, publication, or distribution, in whole or in part, directly or indirectly, in or into the United States of America, Canada, Australia (except to sophisticated investors or professional investors, as defined below), Japan, the Republic of Ireland or the Republic of South Africa or in or into any other jurisdiction where to do so might constitute a violation or breach of any applicable law or regulation.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 as imported into the laws of England and Wales by virtue of the European Union (Withdrawal) Act 2018 (as amended) and certain other enacting measures ('UK MAR'). With the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

16 April 2021

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

Oversubscribed Placing to Raise £10 million to Fast Track Development Plan

Optiva Securities Limited is Acting as Sole Broker to the Placing

Tirupati Graphite plc, the fully integrated, revenue generative, specialist graphite producer and graphene developer with operations in Madagascar and India, is pleased to announce a placing with institutional and other investors (the 'Placing') of 11,111,111 ordinary shares of £0.025 each in the Company (the 'Placing Shares') at a price of £0.90 per Placing Share (the 'Placing Price') to raise an aggregate gross amount of £10 million.  The Placing Price represents a discount of 8.6% to the closing price of £0.985 on 15 April 2021 (being the latest practicable time prior to the announcement of the Placing).

Certain directors of the Company are subscribing for shares pursuant to the Placing. Christian Dennis is subscribing for 111,111 Placing Shares at the Placing Price and Lincoln Moore and Rajesh Kedia are each subscribing for 11,111 Placing Shares at the Placing Price. 

The Placing is conditional only on admission of the Placing Shares to the Standard Segment of the Official List of the Financial Conduct Authority ('FCA') and to trading on the Main Market of the London Stock Exchange, with such admission and trading expected to become effective at 8.00 a.m. on 20 April 2021 ('Admission').

The net proceeds of the Placing will primarily be used to expedite the Company's modular medium-term development plan ('MTDP') to take advantage of the strong market demand for its products and to:

¥             Accelerate development of the next 18,000 tpa module at the Sahamamy primary flake graphite project in Madagascar ('Sahamamy') which has all requisite approvals in place. Total capacity across both Madagascan projects is anticipated to be 30,000 tpa by Q1 2022, a ten-fold increase since the Company's admission to the Official List in December 2020.

¥             Redevelop hydro power facilities at Sahamamy to meet the power requirements of current operations through renewable energy and carry out a feasibility study for c.900-kilowatt of additional hydro power facilities to meet most of the power requirements for the anticipated 30,000 tpa capacity.

¥             Increase capacity of the Company's downstream specialty graphite projects from 1,200 tpa to 16,200 tpa by H1 2022 with the setup of an integrated, multi-product 15,000 tpa Speciality Graphite Project with throughput and product capabilities consisting of:

o  3,000 tpa expandable/intercalated graphite products;

o  3,000 tpa spherical graphite for Lithium batteries;

o  3,000 tpa micronized graphite for high-tech specialty applications including lubrication, polymers, and composites; and

o  6,000 tpa high purity flake graphite for graphene and other high purity graphite  applications.

¥             Enable fast-track installation of industrial scale graphene manufacturing capabilities at the Graphene & Technology Centre to capitalise on near-term commercialisation opportunities, and for general working capital purposes.

Shishir Poddar, CEO of Tirupati Graphite, said, "We are delighted to have received such strong support in completing this oversubscribed placing, which further strengthens our confidence in our strategy and enables us to fast track our development plans to fulfil the increased demand for our graphite products.  

"Having developed a suite of graphite products spanning a variety of applications, utilising our unique sustainable processes and technologies, we are ideally positioned to competitively support the fast-emerging green graphite supply chain.  The potential green economy applications for our graphite products provides us with the opportunity to play an important role in the global efforts to reduce carbon emissions and the impacts of climate change.  

"With increasing global adoption of electric mobility we are confident that the timing is opportune for us to expedite our developments.  The World Bank Group has stated that the supply of graphite will need to increase by nearly 500% by 2050 to support the clean energy transition, while UBS increased its EV penetration estimate from 4% currently to 20% of the market by 2025, and 50% by 2030. This translates to a 22x increase in battery requirements over the decade which will see natural flake graphite demand growing by 700% to roughly 5.9Mtpa, according to the Swiss investment bank. 

"We believe the commercialisation of graphene applications is on the cusp of rapid growth as well, with the market size forecast to breach the billion-dollar mark over the next two to three years. Moreover, the promulgation of the first international ISO standards for graphene is testimony to the forthcoming opportunities which we believe should boost adoption by end users.  The progress we have made within our graphene division is particularly exciting and we are poised to deliver ISO standard graphene on a commercial scale to buyers in the aerospace, defence, battery storage, electronics and other key sectors working on graphene-based applications. Furthermore, there are several other diverse industries and applications sectors such as flame retardants, thermal management and composite materials which provide multiple growth streams for the Company.

"This is an exciting period for Tirupati and, with this in mind, I look forward to providing further updates on our progress and growth as we look to maintain our positive momentum."

FURTHER INFORMATION

Background to the Placing

Since being admitted to listing on the Standard Segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange in December 2020, the Company has made significant progress across its three key business operations including primary mining and processing in Madagascar, speciality graphite processing in India, and the development of a state-of-the-art graphene and mineral processing R&D centre, also in India. Notably, the Company places a special emphasis on 'green' applications, including flame retardant and thermal management, energy storage and composites, and is also committed to making its operations sustainable.

At the time of its listing in December 2020, the Company had established a modular medium-term development plan ('MTDP') looking ahead to 2024 for the development of its three business units.  As demand for its products has risen across each of its three divisions and as a result of the increased demand for flake graphite on the back of EV and flame retardant applications, the Company is expediting the development of its next modules as follows.

Primary mining & processing in Madagascar

The Company operates two projects in Madagascar, Sahamamy and Vatomina.  At the time of the Company's listing, Sahamamy had capacity to produce 3,000 tpa of high-quality flake graphite concentrate with up to 96% purity, which is sold to customers globally. The Company commenced development of a 6,000 tpa module at Vatomina as planned and has since taken the decision to increase the capacity to 9,000 tpa, a 50% increase with c.30% additional CAPEX resulting in the Company aiming to deliver 12,000 tpa across both projects in Madagascar by Q2 2021. The Company is now accelerating development of the next 18,000 tpa module at Sahamamy, for which all approvals are in place, with a view to delivering a total capacity of 30,000 tpa across its two Madagascan projects by Q1 2022; this would be a ten-fold increase since listing in December 2020.  Under the MTDP, the Company also aims to deliver 84,000 tpa across both projects by 2024 by installing three additional modules each of 18,000 tpa capacity.

Notably, the Company remains commited to minimising the carbon footprint of its projects. First, Tirupati is currently redeveloping a hydro power facility at Sahamamy to meet most of the power requirements of current operations.  Second, the Company is conducting final stage studies with a view to installing a 900 kilowatt hydro power station across the two Madagascan projects which is expected to meet most of the power requirements for the planned 30,000 tpa capacity. The Company also aims to conduct studies in respect of solar and wind power potential and advance a strategy to maximise its renewable power capacity for its Madagascar projects.

Tirupati Speciality Graphite Private Limited ('TSG')

TSG is developing an array of speciality graphite products used in hi-tech applications. Such applications are the key demand growth drivers for flake graphite. Currently c.90% of speciality graphite is manufactured in China. For the purification of primary graphite to high purity graphite, a precursor to speciality graphite products, Chinese manufacturers use a hydro fluoric acid treatment process. TSG has developed a non-hydro fluoric acid, green processing technology to manufacture high purity graphite for use in high-tech applications which include lithium-ion batteries, flame retardants, thermal management, graphene manufacture and composites. The Company's current operations include the 1,200 tpa Patalganga Project which was commissioned in July 2019 and is engaged in the manufacture and sales of CARBOFLAMEX¨, a trademarked flame-retardant expandable graphite product, which was projected to be expanded to 4,800 tonne capacity adding high purity and micronized graphite products. Further development of speciality graphite products had been planned in two modules of 12,000 tpa each under the Company's MTDP.

With the rapidly evolving adaptation of electric mobility following policy and financial support from various governments globally, forecasts for the growth of spherical graphite consumption for lithium-ion batteries ('LiB') have been positive.  UBS upped its EV adoption rate from 17% to 20% by 2025 and from 40% to 50% in 2030 going from just over 3 million vehicles in 2020 to 46 million which drives a 22-fold increase in battery manufacture and translating to natural flake graphite demand growth of 700% to roughly 5.9Mtpa, according to the Swiss investment bank.  

The Company has achieved European Union REACH accreditation for its expandable graphite products, providing access to the large European expandable graphite markets.  The UK has rolled out a £5 billion fund for improved fire retardants in construction, providing opportunity for growth within these advanced markets.  The Company has taken the decision to pause its expansion plan for the Patalganga Project and instead prioritise building the first module of the speciality graphite project with an increased throughput of 15,000 tpa from 12,000 tpa. The specialty graphite project is planned to have throughput and product capabilities consisting of:

o  3,000 tpa expandable/intercalated graphite products;

o  3,000 tpa spherical graphite for Lithium batteries;

o  3,000 tpa micronized graphite for high-tech specialty applications including lubrication, polymers, and composites; and

o  6,000 tpa high purity flake graphite for graphene and other specialty applications.

Tirupati Graphene and Mintech Research Centre ('TGMRC')

TGMRC is a state-of-the-art technology research and development centre being built by the Company focussed on the commercial scale manufacturing of graphene, developing its applications, and further providing environmentally friendly technologies consultancy for mineral processing. It is composed of GRACE, a graphite & graphene centre of excellence; and MINTECH, a mineral processing & extractive metallurgy centre of excellence. 

On the back of improved graphene manufacturing technology and increased product development opportunities, the Company is fast-tracking the installation of industrial scale graphene manufacturing capabilities to capitalise on near-term commercialisation opportunities, merging stages 1 and 2 of its MTDP for completion by 2022.  This is expected to enable the first commercial scale graphene manufacturing to commence Q3 2021 starting with 2 kgs per day capacity and progressively building to 10 kgs per day.

The Placing

The Placing is being conducted by way of a firm placing of Placing Shares with institutional and other investors which has been completed by Optiva Securities conditional only upon Admission.

The Placing is being conducted under existing authorities to allot shares and as such there is no requirement for shareholder approval of the Placing at a general meeting.

Directors Shareholdings

Following the subscription of certain Directors in the Placing, their resultant shareholdings are as follows:

1.                    Beneficially owned by Shishir Kumar Poddar and Hemant Kumar Poddar 

Admission and Total Voting Rights

The Placing Shares will rank pari passu with the existing ordinary shares of £0.025 each of the Company ('Ordinary Shares'). Application is being made for the admission of the Placing Shares to the Standard Segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange. Admission is anticipated to occur on 20 April 2021.

Following Admission, the Company will have 85,954,434 Ordinary Shares in issue, each with voting rights. Accordingly, 85,954,434 Ordinary Shares may be used by shareholders as the denominator for the calculations which will determine whether they are required to notify their interest in the company, or any change to that interest, under the Financial Conduct Authority's Disclosure and Transparency Rules.

** ENDS **

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

Notes

Tirupati Graphite Plc is a revenue-generating, multi-asset, multi-jurisdictional, fully integrated producer and developer of high-grade natural flake graphite, speciality graphite and graphene, which captures the entire value chain.  With a unique set of properties, graphite has diverse applications with multiple growth streams and graphene forms the new generation of 2D materials. In support of this, the Company places a special emphasis on 'green' applications, including renewable energy generation, energy storage and composites, and is committed to ensuring its operations are sustainable as well.

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina; 3,000 tpa of high-quality flake graphite concentrate with up to 96% purity is currently being produced and sold to customers globally, and this is planned to increase to 84,000 tpa by 2024 as per the Company's modular medium-term development plan.

In India, through Tirupati Speciality Graphite Private Limited ('TSG'), for which the Company has entered into a binding acquisition agreement subject to regulatory approvals, Tirupati processes and produces speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants and composites. Its specialty graphite processing operations include the 1,200 tpa Patalganga Project, which was commissioned in July 2019 to manufacture and sell CARBOFLAMEX¨, a trademarked expandable graphite product used in flame-retardant, thermal management and other applications. The Patalganga Project is currently under further development to become a centre of excellence for expandable graphite applications development and customer support.

TSG has developed unique green processing technologies for manufacturing speciality graphite products which are advanced materials used in an array of high-tech applications including lithium-ion batteries. Owing to market conditions and growing demand for speciality graphite products, the Company preferred to progress its first integrated speciality graphite module scaling it up from 12,000 tpa to 15,000 tpa capacity rather than expanding the Patalganga operations, thus bringing additional capacity online early on. Further, the project shall be expanded in capacity based on market conditions which suggest the Company may have the opportunity to set up higher range capacities in the next module.  The plant will produce expandable, high purity, micronised and spherical graphite.

Tirupati is also in the process of establishing the Tirupati Graphene and Mintech Research Centre, a state-of-the-art graphene manufacturing, application development and mineral processing technology development R&D centre. The company has developed various technologies and zero chemical graphene manufacturing capabilities and is engaged in commercialisation of graphene use in composite materials, coatings, anodes for aluminium smelters etc. It is simultaneously providing technology and consultancy for mineral processing leveraging the extensive expertise it possesses.