ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2013

Feb 28, 2013

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Shareholder Update: Capital Management Activities

Friday, 1 March 2013: Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) provides the following update on capital management activities.

Key Points

• ECT remains productively engaged with Monash in regard to both equity investment and investment in production facilities

• Resolution 6 of the 2012 AGM expired COB yesterday without execution by Monash

• Monash advises it is on track to close out funding arrangements imminently

Background

Resolution 6 at the November 2012 AGM provided Shareholder approval for a $6 million equity investment by Monash Capital Group (Monash) at 2c per share, with one free attaching option per share.

Just prior to the commencement of the AGM, ECT received a letter from Monash stating the first tranche of funding could be delivered within a week, however the letter also sought to make those funds conditional on the acceptance of terms that differed from those put to shareholders under Resolution 6.

The Board advised shareholders that it would need time to consider the revised offer and has since worked with Monash to come to agreement, mindful of the approval window for Resolution 6 expiring on 28 February 2013 (yesterday).

Despite extensive endeavours to resolve matters with Monash by yesterday’s expiry, several key matters remain outstanding.

Next Steps

The revised terms and conditions put to the Board by Monash largely deal with future project investment in the Commercial Demonstration Plant (CDP), the subsequent Commercial Scale Plant (CSP) and the global rollout of Coldry production facilities; specifically in regard to the risk mitigation needed for Monash to confidently invest over the long term after commercial-scale proving of ECT’s ‘first-of-a-kind’ technology.

A significant amount of headway has been made in recent discussions with Monash and we expect that mutually acceptable terms and conditions can be agreed between the parties in regard to both the equity investment component and the financing of production facilities.

This is significant in the context of ECT’s broader commercialisation strategy, and shareholders should understand that, whilst the completion of the $6 million equity placement to Monash is important in so far as it provides future working capital and delivers a Cornerstone Investor, of greater importance is the project financing support for the CDP and management of the subsequent commercial delivery.

Investors should recognise the Company’s ability to secure funding in excess of $6 million over the past year has provided ECT with the ability to continue operation and delivery of its commercialisation objectives. Over this period, discussions with Monash have been directed to getting the appropriate commercial outcome for ECT, rather than a quick solution.

In the year since we first engaged with Monash, the Company has advanced the CDP design and core design for the subsequent Commercial Scale Plant (CSP) (refer ASX announcement 18 February 2013) as well as building capital market interest in the CDP project, expanding options for CDP funding, and contributing to other initiatives such as our application for government funding under the ALDP grant scheme.

Level 7, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9909 7684 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI)

The short and medium term future for ECT is appropriately focused on Coldry technology development; the next stage of which is the proving of the technology at commercial scale through the CDP. The roll-out of commercial scale production facilities, locally and globally, cannot proceed without the demonstration provided for by the CDP. The expected cost of the CDP, at around $70m, is in excess of the Company’s current market capitalisation. The Board of ECT is of the considered view that continuing to work through the current negotiations with Monash offers ECT a realistic opportunity to strengthen and accelerate the Company’s ability to deliver on this strategic imperative.

Further updates will be provided following conclusion of discussions.

For further information contact:

Mike Davies – Managing Director +61 3 9909 7684 or info@ectltd.com.au

About ECT

ECT is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits.

We are focused on advancing a portfolio of technologies, which have significant market potential globally.

ECT’s business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms.

About Coldry

When applied to lignite and some sub-bituminous coals, the relatively simple Coldry beneficiation process produces a black coal equivalent (BCE) in the form of pellets. Coldry pellets have equal or superior energy value to many black coals and produce lower CO2 emissions than raw lignite.

About MATMOR

The MATMOR process has the potential to revolutionise primary iron making.

MATMOR is a simple, low cost, low emission, production technology, utilising the patented MATMOR retort, which enables the use of cheaper feedstocks to produce primary iron.