Announcement PDF 20 January 2016 ASX ANNOUNCEMENT COMPLETION OF $4m PLACEMENT and FIRST CORNERSTONE INVESTOR Global lithium developer, Lithium Australia NL (ASX:LIT or Company) advises that it has completed the formalities in regards to the placement of $4m to Lanstead Capital LP. This now completes the formalities in regard to the $6.55m funding package announced on 11 January 2016 at a price of $0.14 per share. The attached Appendix 3B reflects the $4m placement along with further conversions of LITCC partly paid shares to fully paid ordinary (LIT) shares and shares issued under the directors and senior management fee and remuneration sacrifice share plan. Managing Director Adrian Griffin: “Lithium Australia welcomes its first institutional shareholder. This funding package places LIT in an excellent position to pursue its lithium strategy of controlling the world’s largest lithium inventory. We are grateful to BW Equities for its role in organising this funding package. We welcome Lanstead as a cornerstone investor and thank them for showing their commitment to LIT to allow the Company to pursue its strategy.” Adrian Griffin Managing Director Mobile +61 (0) 418 927 658 Adrian.Griffin@lithium-au.com Notice under section 708A(5)(e) of the Corporations Act 2001 Lithium Australia NL (ASX: LIT) (Company) has issued and allotted 31,635,403 fully paid ordinary shares in the capital of the Company at issue prices as outlined in the attached Appendix 3B. Accordingly, the Company gives notice under section 708A(5)(e)(i) of the Corporations Act 2001 (Cth) (Act) that: 1. ll the abovementioned shares were issued without disclosure to investors under Part 6D.2 of the Act; 2. as at the date of this notice the Company has complied with: (i) the provisions of Chapter 2M of the Act as they apply to the Company; and (ii) 3. section 674 of the Act; and as at the date of this notice there is no information to be disclosed which is “excluded information” as defined in subsection 708A(7) of the Act that is reasonable for investors and their professional advisers to find in a disclosure document. About Lithium Australia NL: LIT is a dedicated developer of disruptive lithium extraction technologies. LIT has strategic alliances with a number of companies, potentially providing access to a diversified lithium mineral inventory on three continents. MEDIA CONTACT: Adrian Griffin Lithium Australia NL Kevin Skinner Field Public Relations 08 6145 0288 | 0418 927 658 08 8234 9555 | 0414 822 631 Appendix 3B New issue announcement Rule 2.7, 3.10.3, 3.10.4, 3.10.5 Appendix 3B New issue announcement, application for quotation of additional securities and agreement Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public. Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13 Name of entity Lithium Australia NL ABN 29 126 129 413 We (the entity) give ASX the following information. Part 1 - All issues You must complete the relevant sections (attach sheets if there is not enough space). 1 +Class of +securities issued or to Fully paid ordinary shares be issued 2 Number of +securities issued or (1) 30,000,000 to be issued (if known) or (2) 150,000 maximum number which may (3) 1,485,403 be issued 3 Principal terms of the (1) – (3) Fully paid ordinary shares +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion) + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 3 Appendix 3B New issue announcement 4 Do the +securities rank equally (1) – (3) Yes in all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration (1) 14 cents per share (2) 2.9 cents per share (3) Various monthly VWAP 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an +eligible entity Yes that has obtained security holder approval under rule 7.1A? (1) Project development, process development, working capital and general corporate purposes (includes shares issued pursuant to placement announced on 11 January 2016). (2) Issued upon conversion of LITCC partly paid shares to fully paid ordinary shares (LIT) (3) Issued pursuant to the directors and senior management fee and remuneration sacrifice share plan If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder 30 November 2015 resolution under rule 7.1A was passed + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 4 Appendix 3B New issue announcement 6c Number of +securities issued 14,181,720 without security holder approval under rule 7.1 6d Number of +securities issued with security holder approval under rule 7.1A 6e Number of +securities issued 15,818,280 - 30 November 2015 with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued 1,635,403 under an exception in rule 7.2 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If +securities were issued under N/A rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining Rule 7.1 – 1,763,893 issue capacity under rule 7.1 and rule 7.1A – complete Rule 7.1A – nil Annexure 1 and release to ASX Market Announcements Yes, issue price was 88% of 15 day VWAP of $0.159 based on placement as announced on 11 January 2016 (a) and on 15 January 2016 (b) Issue date 15 January 2016 Issue Price $0.14 per share (a) VWAP calculation source: IRESS (b) VWAP calculation source: Weblink + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 5 Appendix 3B New issue announcement 7 +Issue dates (1) 15 January 2016 (2) 20 January 2016 (3) 20 January 2016 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 9 10 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable) Number +Class 193,957,089 Fully paid ordinary shares 25,957,656 Partly paid shares, paid to $0.021 and unpaid $0.029 Number +Class Number and +class of all 14,700,000 +securities not quoted on ASX (including the +securities in section 2 if applicable) 3,000,000 Partly paid contributing shares paid to $0.0001 each ($0.2499 unpaid) 8,200,000 $0.15 options exercisable on or before 1 July 2019 8,200,000 $0.20 options exercisable on or before 1 July 2019 9,200,000 $0.30 options exercisable on or before 1 July 2019 10,340,000 Performance Rights as approved by shareholders on 15 July 2015 3,000,000 Performance Rights as approved by shareholders on 30 November 2015 $0.10 options exercisable on or before 1 July 2016 Dividend policy (in the case of a N/A trust, distribution policy) on the increased capital (interests) + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 6 Appendix 3B New issue announcement Part 2 - Pro rata issue 11 Is security required? holder approval 12 Is the issue renounceable or non-renounceable? 13 Ratio in which the +securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 7 Appendix 3B New issue announcement 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements in full through a broker? 31 How do security holders sell part of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date Part 3 - Quotation of securities You need only complete this section if you are applying for quotation of securities + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 8 Appendix 3B New issue announcement 34 Type of +securities (tick one) (a) +Securities described in Part 1 (b) All other +securities Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities Entities that have ticked box 34(a) Additional securities forming a new class of securities Tick to indicate you are providing the information or documents 35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders 36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional +securities Entities that have ticked box 34(b) 38 Number of +securities for which (1) 30,000,000 (2) 150,000 +quotation is sought (3) 1,485,403 39 +Class of +securities for which Fully paid ordinary shares quotation is sought + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 9 Appendix 3B New issue announcement 40 Do the +securities rank equally in Yes all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 42 Reason for request for quotation (1) Project development, process now development, working capital and general corporate purposes (includes shares issued Example: In the case of restricted pursuant to placement announced on 11 securities, end of restriction January 2016). period (2) Issued upon conversion of LITCC partly paid (if issued upon conversion of shares to fully paid ordinary shares (LIT) another +security, clearly identify (3) Issued pursuant to the directors and senior that other +security) management fee and remuneration sacrifice share plan Number and +class of all +securities quoted on ASX (including the +securities in clause 38) Number +Class 193,957,089 LIT Fully paid ordinary shares 25,957,656 LITCC Partly paid shares, paid to $0.021 and unpaid $0.029 + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 10 Appendix 3B New issue announcement Quotation agreement 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides. 2 We warrant the following to ASX.  The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.  There is no reason why those +securities should not be granted +quotation.  An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act. Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty  Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.  If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted. 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement. 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete. Sign here: “Barry Woodhouse” Company Secretary Date: 20 January 2016 Print name: Barry Woodhouse + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 11 Appendix 3B New issue announcement Appendix 3B – Annexure 1 Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities Introduced 01/08/12 Amended 04/03/13 Part 1 Rule 7.1 – Issues exceeding 15% of capital Step 1: Calculate “A”, the base figure from which the placement capacity is calculated Insert number of fully paid +ordinary securities on issue 12 months before the +issue date or date of agreement to issue 108,970,428 Add the following: • Number of fully paid +ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid +ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid +ordinary securities that became fully paid in that 12 month period 1,635,403 55,713,790 11,970,345 Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items Subtract the number of fully paid +ordinary securities cancelled during that 12 month period Nil “A” 178,289,966 + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 12 Appendix 3B New issue announcement Step 2: Calculate 15% of “A” “B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15 26,743,495 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of +equity securities issued or agreed to be issued in that 12 month period not counting those issued: 24,979,602 • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items “C” 24,979,602 Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1 “A” x 0.15 26,743,495 Note: number must be same as shown in Step 2 Subtract “C” 24,979,602 Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 1,763,893 [Note: this is the remaining placement capacity under rule 7.1] + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 13 Appendix 3B New issue announcement Part 2 Rule 7.1A – Additional placement capacity for eligible entities Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 178,289,966 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 17,828,996 Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of +equity securities issued or agreed to be issued in that 12 month period under rule 7.1A 17,828,996 Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items “E” 17,828,996 + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 14 Appendix 3B New issue announcement Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A “A” x 0.10 17,828,996 Note: number must be same as shown in Step 2 Subtract “E” 17,828,996 Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Nil Note: this is the remaining placement capacity under rule 7.1A + See chapter 19 for defined terms. 04/03/2013 Appendix 3B Page 15