ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2014

Dec 11, 2014

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Appendix 3B - Matmor Acquisition

Friday, 12 December 2014: Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) is pleased to advise that settlement has concluded in relation to the formal acquisition of the Matmor technology, announced via the ASX on 4 December 2014.

The attached Appendix 3B deals with the issue of 150 million ESIOB Options (agreed value of $1 million) to the former Matmor asset owners as prescribed under the Matmor Assets Sale Agreement.

For further information contact:

Ashley Moore, Managing Director 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.

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)

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

Environmental Clean Technologies Limited ( Company )

ABN

28 009 120 405

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 Options to acquire fully paid ordinary to be issued shares ( ESIOB ). 2 Number of[+] securities issued or 150,000,000 ESIOB to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (e.g. if options, An ESIOB entitles the holder to exercise exercise price and expiry date; the option for a fully paid ordinary share if partly paid[+] securities, the (ESI) in the Company ( Share ) for a price of amount outstanding and due 1.5 cents. The ESIOBs expire at 5.00 pm dates for payment; if +convertible securities, the on 31 July 2017. conversion price and dates for conversion)

+ See chapter 19 for defined terms.

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4 Do the[+] securities rank equally ESIOBs are an existing class of Securities in all respects from the[+] issue and do not rank equally with Shares (ESI). date with an existing[+] class of quoted[+] securities? The Shares issued pursuant to the exercise of the ESIOBs will rank equally with If the additional[+] securities do existing Shares (ESI). 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 million 6 Purpose of the issue Partial consideration for the purchase of (If issued as consideration for Matmor Assets under the Matmor Assets the acquisition of assets, clearly Sale Agreements announced on 4 identify those assets) December 2014. Funds raised from the exercise of the ESIOs will be used for working capital purposes and to pay the Company’s ongoing liabilities. 6a Is the entity an[+] eligible entity Yes that has obtained security holder approval under rule 7.1A? 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 28 Nov 2014 resolution under rule 7.1A was passed 6c Number of[+] securities issued 0 without security holder approval under rule 7.1 6d Number of[+] securities issued 150,000,000 with security holder approval under rule 7.1A

+ See chapter 19 for defined terms.

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6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued 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 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 issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates 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 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	NA	NA
	NA
	Yes, issue price = 0.66¢ Issue date 12 Dec 2014 15 day VWAP = 0.407¢ 75% floor = 0.305¢
	4 December 2014
	7.1 remaining capacity is 361,428,954 and 7.1A capacity is 90,952,636.
	12 December 2014
	Number	+Class
	2,409,526,361 1,396,172,364 874,768,416	Ordinary Shares Options (ESIOA) Options (ESIOB)

+ See chapter 19 for defined terms.

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Appendix 3B Page 3

Number +Class 9 Number and +class of all 20,000,000 Unlisted options +securities not quoted on ASX exercisable at 5.0 cents ( including the +securities in each and expiring on section 2 if applicable) 14 December 2014 10 Dividend policy (in the case of a None

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

+ See chapter 19 for defined terms.

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Part 2 - Pro rata issue

NA

+ See chapter 19 for defined terms.

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Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 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)

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 setting out the number of holders in the categories[+][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 ]

+ See chapter 19 for defined terms.

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Entities that have ticked box 34(b)

38 Number of+securities for which +quotation is sought 39 +Class of+securities for which quotation is sought 40 Do the+securities rank equally 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 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security) 42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)	N/A
	N/A
	N/A
	N/A
	Number	+Class
	N/A	N/A

+ See chapter 19 for defined terms.

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Appendix 3B Page 7

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: ........................................................ Date: 12 December 2014 Company secretary

Print name: Adam Giles

== == == == ==

+ See chapter 19 for defined terms.

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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

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Insert number of fully paid [+] ordinary 2,112,551,197
securities on issue 12 months before the
+issue date or date of agreement to issue
Add the following: 296,975,164
• 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
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 0
securities cancelled during that 12 month
period
“A” 2,409,526,361
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+ See chapter 19 for defined terms.

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Appendix 3B Page 9

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	361,428,954
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • 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	Nil
“C”	Nil
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	361,428,954
Subtract“C” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.15] – “C”	361,428,954 [Note: this is the remaining placement capacity under rule 7.1]

+ See chapter 19 for defined terms.

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Appendix 3B Page 10

Part 2

Part 2	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” Note: number must be same as shown in Step 1 of Part 1	2,409,526,361
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	240,952,636
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A 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	150,000,000
“E”	90,952,636

+ See chapter 19 for defined terms.

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Appendix 3B Page 11

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	216,818,175
Subtract“E” Note: number must be same as shown in Step 3	18,518,519
Total[“A” x 0.10] – “E”	198,299,656 Note: this is the remaining placement capacity under rule 7.1A

+ See chapter 19 for defined terms.

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Appendix 3B Page 12