Mr. Brian Bosse reports

ZENTEK PROVIDES REVIEW OF ALBANY GRAPHITE

Further to Zentek Ltd.'s press release dated April 25, 2023, announcing the intention to transfer its Albany graphite project located north of Lake Superior and southwest of James Bay in Ontario to its currently wholly owned subsidiary Albany Graphite Corp., the company has provided a review of some of the past testing conducted on the material produced from the Albany graphite project, and key drivers of value since 2015.

The Albany graphite deposit was discovered in 2011 and was identified as a unique hydrothermal graphite deposit formed by an igneous rather than sedimentary process. Flake graphite is formed by the metamorphism of sedimentary rocks rich in organic carbonaceous material. Albany graphite, however, was formed through an igneous process where carbon-bearing fluids separated from an ascending carbon-rich magma and were subsequently precipitated as graphite. Due to this unique igneous origin, Albany Graphite has high performance properties comparable with synthetic graphite.

Zentek, under its previous name Zenyatta Ventures Ltd., reported in several previous news releases how Albany graphite material performed in key metrics including on:

Oct. 3, 2013:

"Published physics data on electrical resistivity of graphite typically ranges from .003 to .060 ohm centimetre. Zenyatta's graphite showed a resistivity of .0034 ohm centimetre for a compressed bulk graphite test bar measuring 50 by 12 by 2.4 millimetres. These results are comparable with high-grade synthetic graphite and represent a value at the top of the range. The resistivity test was conducted on a random sample of Zenyatta's high-purity Albany graphite without any attempt to select particle size or to align the graphite crystals to optimize the test results. These initial test results are very encouraging and indicate that Zenyatta's high-purity graphite should be competitive with the best graphite available for a variety of applications including electronic components and batteries."

Aug. 12, 2015:

"Thermogravimetric analysis (TGA) results showed that all Albany graphite samples had high thermal stability under the Ballard standard TGA protocol. Under this protocol most forms of graphite undergo complete thermal decomposition at around 860 degrees to lose all carbon. On the other hand, Zenyatta's Albany graphite samples only lost 60 to 65 per cent even at 1,000 degrees. The detailed investigation clearly indicated that the Albany graphite exhibits excellent thermal stability, and this can be used advantageously in the subcomponents of fuel cells, in particular as the gas diffusion layer material. Also, corrosion resistance is an important requirement for an electrically conductive material like graphite used as a component material in fuel cells. Our testing results revealed that Zenyatta graphite samples of a certain particle size was found to be more corrosion resistant than typical graphite."

March 29, 2016:

"Zenyatta natural graphite material was prototyped, tested and compared for key mechanical and electrical properties against Ballard's baseline synthetic graphite in a commercial product platform. Importantly, the properties of Zenyatta's Albany graphite material were all within the specifications needed for high performance of Ballard products in a number of commercial fuel cell applications. The components made from Albany graphite were equivalent to the existing synthetic graphite made components. This is another significant step in the process of qualifying Zenyatta's Albany graphite for existing fuel cell markets in transportation and stationary energy storage.

"From an environmental and cost advantage, the Ballard report also concluded:

1. "Zenyatta graphite provides a clean carbon option for fuel cell components (in example, plates and membrane electrode assembly).
2. "If Zenyatta's hydrothermal graphite can also be low cost compared to existing synthetic graphite, it will facilitate fuel cell cost reduction and market penetration."

Past testing strongly suggest that Albany graphite has the high performance metrics, such as electrical resistivity, heat tolerance and corrosion resistance, required to compete directly with synthetic graphite in high-end applications like batteries and fuel cells.

Increased recovery

On March 20, 2019, the company reported that work completed at SGS Canada Inc. (SGS) Lakefield, Ont., successfully simulated an industrial process to purify Albany graphite concentrate. This new process increased recovery from 75 per cent to 90 per cent while achieving greater efficiency in both chemical reagent consumption and energy input when compared with the previous flow sheet.

Increasing demand for graphite

The graphite industry appears to be at the start of a significant increase in demand that is expected to grow to eight to 25 times current demand by 2040* due mainly to growth in the electric vehicle industry. A lithium-ion battery's biggest contributor by weight is graphite, making up to 28 per cent of the battery thus a key demand driver in the graphite industry for both natural graphite and synthetic graphite.

* IEA (2021), The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris.

Impact of the Inflation Reduction Act (IRA)

The IRA of the United States announcement in August, 2022, requires that starting in 2027, 80 per cent of the market value of critical minerals in an electric vehicle's battery must be sourced domestically or from United States free-trade partners to be eligible for a tax credit. Currently, China is the dominant player in both the graphite production and processing industry, and the impact of the IRA will support a significant shift in the graphite market and support North American production and processing.

Brian Bosse, chief executive officer of Albany Graphite, commented:

"All these factors have played a significant role in Zentek's decision to transfer the Albany graphite project to a separate entity and to resume work on this unique graphite deposit. The determination to restart this work is the result of a careful review by our team and I am eager to get this excellent project moving forward."

Any scientific and technical content of this news release was reviewed, verified and approved by Peter Wood, PEng, PGeo, vice-president of special projects of Zentek, a qualified person as defined by Canadian Securities Administrators National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

About Zentek Ltd.

Zentek is a graphene technology company focused on the research, development and commercialization of graphene-based novel products to give its commercial partners a competitive advantage by making their products better, safer and greener.

Zentek's patented ZenGuard coating is shown to have 99-per-cent anti-microbial activity and to significantly increase the bacterial and viral filtration efficiency of both surgical masks and HVAC systems. Zentek's ZenGuard production facility is located in Guelph, Ont. Zentek's second technology is the patent-pending ZenArmor platform focused on corrosion protection applications.

We seek Safe Harbor.