ARIKA RESOURCES LIMITED — Capital/Financing Update 2016

Jun 5, 2016

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ASX RELEASE: 6 JUNE 2016

LITHIUM MOU AND $3M PLACEMENT

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MOU signed with and placement made to members of China Battery Association

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Strategic placement to raise ~A$3M negotiated above market price with majority funds banked MOU is non‐binding with the intent to jointly fund, develop and acquire Lithium projects

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MOU includes future off‐take of a minimum of 100,000 tpa and up to 150,000 tpa of spodumene concentrate

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Lithium exploration at Pilgangoora South, Greenbushes Regional and Lake Cowan well underway

Metalicity Limited (“Metalicity” or “the Company”) advises that it has entered into a non‐binding Memorandum of Understanding (“MOU”) and made a placement to raise ~A$3M with members of the China Battery Association, to advance its lithium exploration and business development strategy.

The MOU with China New United Shanghai Metal Resources Co, Ltd (“Shanghai Metals”) plans to jointly fund, develop and acquire Lithium projects as well as for off‐take for a minimum of 100,000 tpa and up to 150,000 tpa of lithium spodumene concentrate produced from the Company’s existing or future projects.

The controllers of Shanghai Metals have agreed to subscribe for shares in Metalicity by way of ~A$3M placement @ A7c per share. The placement agreement made to the controllers of Shanghai Metals was negotiated with reference to the 30 Day VWAP, with A$2.7M of funds now banked, and the remaining funds expected to be banked on 6 June 2016. A prospectus will be lodged during the course of this week for the purpose of the shares issued to the subscribers under the placement being tradeable on the Australian Securities Exchange.

Shanghai Metals are an emerging Lithium Industry participant whose strategy is to build on its interests in the lithium industry value chain for the ultimate production of lithium carbonate and cathodes and views Metalicity’s lithium exploration and business development strategy as an important step in achieving this goal. Shanghai Metals is a key member of the China Battery Association http://www.itdcw.com/ with whom the Metalicity team recently met in Shanghai (Figure 2).

The Company’s accelerated $1m exploration program including field exploration in the Pilgangoora, Greenbushes and Lake Cowan lithium districts is well underway with a comprehensive and systematic sampling and mapping across all projects areas being undertaken. The key focus of this phase will be the central outcropping pegmatites at Stannum which forms part of the Pilgangoora South project (Figure 1). This work is generating drill targets for a maiden drilling program planned to commence at Stannum as soon as licenses are granted and approvals obtained (see ASX Announcement 10 May 2016).

Managing Director, Matt Gauci, commented “The MOU and Placement with a key China Battery Association Member further accelerates this plan with an additional $3m of funds now banked and applied to this strategy.”

Metalicity Limited ASX Code: MCT ABN: 92 086 839 992

www.metalicity.com.au 6 Outram Street West Perth WA 6005

Figure 1: Stannum – hyperspectral data (red) highlighting potential spodumene mineralisation

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Source: Metalicity

Figure 2: Metalicity with members of the China Battery Association

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ENQUIRIES

Investors

Media

Matt Gauci Michael Vaughan Managing Director Fivemark Partners +61 8 9324 1053 +61 422 602 720 mgauci@metalicity.com.au michael.vaughan@fivemark.com.au

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