EUROPEAN LITHIUM LIMITED — Proxy Solicitation & Information Statement 2021

Mar 29, 2021

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European Lithium Limited ACN: 141 450 624

Supplementary Notice of General Meeting

A General Meeting of European Lithium Limited will be held at 32 Harrogate Street, West Leederville, Western Australia 6007 at 9:00am (WST) on 16 April 2021.

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This Supplementary Notice of General Meeting should be read in its entirety. If Shareholders are in any doubt as to how they should vote, they should seek advice from their professional advisor prior to voting. Please contact the Company Secretary on + 61 8 9380 9555 or melissac@europeanlithium.com if you wish to discuss any matter concerning the Meeting.

European Lithium Limited – Notice of Generall Meeting

European Lithium Limited ACN 141 450 624

Supplementary Notice of General Meeting

Notice was given on 5 March 2021 that a General Meeting of Shareholders of European Lithium Limited will be held at 32 Harrogate Street, West Leederville, Western Australia 6007 at 9:00am (WST) on 16 April 2021 ( Meeting ).

This document ( Supplementary Notice ) is supplemental to, and should be read with, the Notice of Meeting Dated 15 March 2021 ( Original Notice ). This document sets out additional Resolutions which will be proposed at the Meeting. Other than set out below, all details in relation to the Original Notice and Explanatory Memorandum remain unchanged.

Unless otherwise indicated, the terms defined and used in the Original Notice have the same meaning in this Supplementary Notice. Terms and abbreviations used in this Supplementary Notice and Supplementary Explanatory Statement are defined in Schedule 1 of this Supplementary Explanatory Statement.

Accompanying this Supplementary Notice is a replacement Proxy Form ( Replacement Proxy Form ). Using this Replacement Proxy Form will replace and supersede any earlier Proxy Form that may have been returned to the Company. Shareholders can vote by attending the Meeting by returning a completed Replacement Proxy Form or attending the Meeting in person. Instructions on how to complete a Replacement Proxy Form are set out in the Supplementary Explanatory Statement. If you have already delivered a valid Proxy Form to the Company, and do not deliver a completed Replacement Proxy Form, your earlier Proxy Form will remain valid, however you will be taken to have not voted on Resolutions 10 and 11.

Proxy Forms must be received by no later than 9:00am (WST) on 14 April 2021.

The business of the Meeting affects your shareholding and your vote is important. This Supplementary Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisors prior to voting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5:00pm (WST) on 14 April 2021.

AGENDA

RESOLUTION 10 – ISSUE OF OPTIONS TO A RELATED PARTY – MR TONY SAGE

To consider, and if thought fit, to pass the following resolution as an ordinary resolution:

“That for the purposes of Listing Rule 10.11and for all other purposes, Shareholders approve the issue of 10,000,000 Director Options to Mr Tony Sage or his nominee on the terms set out in the Explanatory Statement.”

European Lithium Limited – Notice of Generall Meeting

A voting exclusion statement is set out below.

RESOLUTION 11 – ISSUE OF OPTIONS TO A RELATED PARTY – MR MALCOLM DAY

To consider, and if thought fit, to pass the following resolution as an ordinary resolution:

“That for the purposes of Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of 10,000,000 Director Options to Mr Malcolm Day or his nominee on the terms set out in the Explanatory Statement.”

A voting exclusion statement is set out below.

VOTING PROHIBITION AND EXCLUSION STATEMENTS

ASX Listing Rules

Under Listing Rule 14.11, the Company will disregard any votes cast in favour of a resolution by or on behalf of:

• (a) the below named person or class of persons excluded from voting; or

• (b) an associate of that person or those persons:

Resolution	Persons excluded from voting
Resolution 10 – Issue of Options to a	A person who is to receive the securities in question
related party – Tony Sage	and any other person who will obtain a material
	benefit as a result of the issue of the securities
	(except a benefit solely by reason of being a holder
	of ordinary securities in the entity) or any associate
	of such person.
Resolution 11 – Issue of Options to a	A person who is to receive the securities in question
related party – Malcolm Day	and any other person who will obtain a material
	benefit as a result of the issue of the securities
	(except a benefit solely by reason of being a holder
	of ordinary securities in the entity) or any associate
	of such person.

However, this does not apply to a vote cast in favour of a resolution by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with the directions given to the proxy or attorney to vote on the resolution in that way; or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

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• (c) a holder acting solely as nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

By order of the Board of Directors

Ms Melissa Chapman Company Secretary 30 March 2021

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Explanatory Statement

1 INTRODUCTION

This Supplementary Explanatory Statement has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at 32 Harrogate Street, West Leederville, Western Australia 6007 at 9:00am (WST) on 16 April 2021. The purpose of this Supplementary Explanatory Statement is to provide information to Shareholders in deciding how to vote on the Resolutions set out in the Notice.

This Supplementary Explanatory Statement should be read in conjunction with and forms part of the accompanying Supplementary Notice, and includes the following:

• 1 INTRODUCTION ........................................................................ 5

• 2 ACTION TO BE TAKEN BY SHAREHOLDERS ......................................... 5

• 3 RESOLUTIONS 10 TO 11 – ISSUE OF OPTIONS TO DIRECTORS .................... 7

A Replacement Proxy Form is located at the end of this Supplementary Explanatory Statement.

ASX takes no responsibility for the contents of the Supplementary Notice or Supplementary Explanatory Statement.

Please contact the Company Secretary on + 61 8 9380 9555 or by email at melissac@europeanlithium.com if you wish to discuss any matter concerning the Meeting.

2 ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders should read the Supplementary Notice and this Supplementary Explanatory Statement carefully before deciding how to vote on the Resolutions.

2.1 Voting by Proxy

To vote by proxy, please complete and sign and return the Replacement Proxy Form (attached to this Supplementary Notice) to the Company in accordance with the instructions on the Replacement Proxy Form. Shareholders who have already delivered a valid Proxy Form to the Company, and do not deliver a completed Replacement Proxy Form, will be taken to have voted on Resolutions 1 to 9; however will not be taken to have voted on Resolutions 10 and 11.

In accordance with section 249L of the Corporations Act, Shareholders are advised that:

• (a) each Shareholder has the right to appoint a proxy;

• (b) the proxy need not be a Shareholder of the Company; and

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• (c) a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise half of the votes.

The Company encourages Shareholders completing a Proxy Form to direct the proxy how to vote on the Resolutions.

The Proxy Form must be received no later than 48 hours before the commencement of the Meeting, i.e. by no later than 9:00am (WST) on 14 April 2021. Any Proxy Form received after that time will not be valid for the Meeting.

Shareholders can appoint the Chair of the Meeting as their proxy. Shareholders can complete the proxy form to provide specific instructions on how a Shareholder’s vote is to be cast on each item of business, and the Chair of the Meeting must follow your instructions.

2.2 Voting in person

In light of the status of the evolving COVID-19 situation and the Commonwealth and State government restrictions on public gatherings in place at the date of this Supplementary Notice of Meeting, the Directors strongly encourage all Shareholders to lodge a directed proxy form prior to the Meeting. The Chairman will adjourn the Meeting where the number of attendees may lead to the breach local public health laws and regulations.

2.3 Corporate representatives

Shareholders who are body corporates may appoint a person to act as their corporate representative at the Meeting by providing that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as the body corporate’s representative. The authority may be sent to the Company and/or registry in advance of the Meeting.

2.4 Eligibility to vote

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5:00pm (WST) on 14 April 2021.

2.5 Voting by Shareholders at the Meeting

All Resolutions will be determined by a poll at the Meeting.

The Company encourages Shareholders who submit proxies to direct their proxy on how to vote on the Resolutions. As at the date of this Notice the Chairman of the Meeting intends to vote all undirected proxies in favour of each of the Resolutions.

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3 RESOLUTIONS 10 TO 11 – ISSUE OF OPTIONS TO DIRECTORS

3.1 Introduction

The Company proposes to issue 10,000,000 Options on the same terms as those to be issued under the Placement (each to be issued one Share with an exercise price of $0.075 expiring 3 years from issue) respectively to Directors Tony Sage and Malcolm Day, or their nominees.

The Director Options will be issued for nil cash consideration and as remuneration for Director services provided by Messrs Sage and Day to the Company. Funds raised upon exercise of Director Options will be used for general working capital.

The effect of the issues under Resolutions 10 and 11 (assuming shareholders passing all Resolutions and no other Shares are issued) on the capital structure of the Company is as follows:

	Shares
Items	Number	%
Shares currently on issue (excluding Shares issued under Resolutions 1 and 3 to 8)	780,492,554	74.48
Placement Shares (Resolution 1)	141,000,000	13.46
Maximum number of Shares issued upon conversion of Placement Options (Resolution 2)	70,500,000	6.73
Shares issued under Resolutions 3 (assuming all Placement Options are exercised)	22,820,000	2.18
Winance Debt Conversion Shares issued to Winance (Resolution 4)	1,666,667	0.16
Other Shares issued (Resolutions 5-8)	1,457,718	0.14
November 2021 Options (assuming issued and exercised) (Resolution 9)	10,000,000	0.95
Director Options (assuming issued and exercised) (Resolutions 10 and 11)	20,000,000	1.91
Total	1,047,936,939	100

3.2 Regulatory requirements

Chapter 2E of the Corporations Act prohibits a public company from giving a financial benefit to a related party of the company unless either:

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• (a) the giving of the financial benefit falls within one of the exceptions to the provision; or

• (b) prior shareholder approval is obtained to the giving of the financial benefit.

An exception to the prohibition is where the benefit to be given is remuneration that would be reasonable given:

• (c) the circumstances of the company giving the remuneration; and

• (d) the related party's circumstances (including the responsibilities involved in the office or employment).

Director Mr Kimon Gkomozias, who is independent to the proposed issue of Options to Messrs Sage and Day, has determined that the proposed issue is reasonable remuneration so that Shareholder approval is not required under Chapter 2E of the Corporations Act.

The issues of Director Options fall within Listing Rule 10.11.1 and do not fall within any of the exceptions in Listing Rule 10.12, and their issue requires Shareholder approval under Listing Rule 10.11. Resolutions 10 and 11 seek that approval. The effect of passing Resolutions 10 and 11 will be to allow the Directors to issue the Director Options in accordance with the Resolutions without those securities being included in the 15% limit under Listing Rules 7.1. If Resolution 10 or 11 is not passed, the Company will not proceed with the issues.

3.3 Resolutions 10 and 11 – Information required by Listing Rule 10.13

For the purposes of Listing Rule 10.13, the following information is provided about the grant of the Director Options under Resolutions 10 and 11:

• (a) The persons participating in the issue are Tony Sage and Malcolm Day or their nominees, each of whom is a related party.

• (b) Each of the persons is a Director, is therefore a related party and subject to Listing Rule 10.11.1.

• (c) The maximum number of securities to be issued is 20,000,000 Director Options, with the details set out in section 3.1 above.

• (d) The securities to be issued are Options each to be issued one Share with an exercise price of $0.075 expiring 3 years from issue, and otherwise on the terms in SCHEDULE 2.

• (e) The securities will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue will occur on the same date.

• (f) No funds will be raised from the issue as it is to remunerate Messrs Sage and Day. Funds raised upon exercise of Director Options will be used for general working capital.

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• (g) The Directors’ current total remuneration packages is as follows:

• (i) Tony Sage - $15,000 per month.

• (ii) Malcolm Day - $6,000 per month.

• (h) Other than those set out in this section, there are no other material terms in relation to the issue.

• (i) A voting exclusion statement is included in the Notice.

3.4 Directors recommendation

Mr Gkomozias recommends that Shareholders vote in favour of Resolutions 10 and 11, as this will remunerate Messrs Sage and Day for no cash cost to the Company. Messrs Sage and Day refrain from making a recommendation in relation to Resolutions 2 to 4 as they have a personal interest in the Resolutions.

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SCHEDULE 1 GLOSSARY

Director Options means an Option with an exercise price of $0.075, expiry date of 3 years from issue and otherwise on the terms in SCHEDULE 2.

Explanatory Statement means the explanatory statement accompanying the Notice.

Notice or Notice of Meeting means this notice of meeting including the Supplementary Explanatory Statement and the Replacement Proxy Form.

Original Explanatory Statement means the explanatory statement that accompanied the Original Notice of Meeting.

Original Notice of Meeting means the notice of meeting issued by the Company on 5 March 2021.

Replacement Proxy means the Proxy Form that accompanies this Supplementary Notice.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of this Replacement Explanatory Statement.

Supplementary Explanatory Statement means the supplementary explanatory statement that accompanies the Supplementary Notice.

Supplementary Notice means this supplementary notice of meeting, and where the context requires, includes the Supplementary Explanatory Statement.

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SCHEDULE 2 OPTION TERMS AND CONDITIONS

• (a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

• (b) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

• (c) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company. The minimum number of Options that may be exercised at any one time is the lessor of:

• (i) $500 divided by the Option Exercise Price; and

• (ii) the total number of Options held by the holder.

• (d) Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

• (e) Timing of issue of Shares on exercise

Within 5 Business Days after the Exercise Date (or such other period as required by the Listing Rules from time to time), the Company will:

• (i) Allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the

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Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(f) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(g) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options

(h) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

• (i) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(j) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(k) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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Need assistance?

Phone:

1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia)

Online:

www.investorcentre.com/contact

YOUR VOTE IS IMPORTANT

For your proxy appointment to be effective it must be received by 9:00AM (AWST) on Wednesday, 14 April 2021.

Proxy Form

How to Vote on Items of Business

Lodge your Proxy Form:

XX

All your securities will be voted in accordance with your directions.

Online:

APPOINTMENT OF PROXY

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Lodge your vote online at www.investorvote.com.au using your secure access information or use your mobile device to scan the personalised QR code.

Your secure access information is

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Control Number: 185052

SRN/HIN:

For Intermediary Online subscribers (custodians) go to www.intermediaryonline.com

A proxy need not be a securityholder of the Company.

SIGNING INSTRUCTIONS FOR POSTAL FORMS

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne VIC 3001 Australia

By Fax:

1800 783 447 within Australia or +61 3 9473 2555 outside Australia

PARTICIPATING IN THE MEETING

Corporate Representative

If a representative of a corporate securityholder or proxy is to participate in the meeting you will need to provide the appropriate “Appointment of Corporate Representative”. A form may be obtained from Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ‘ X ’) should advise your broker of any changes.

Proxy Form

Please mark to indicate your directions

Step 1 Appoint a Proxy to Vote on Your Behalf

I/We being a member/s of European Lithium Limited hereby appoint the Chairman OR of the Meeting

XX

PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the General Meeting of European Lithium Limited to be held at 32 Harrogate Street, West Leederville, Western Australia 6007 on Friday, 16 April 2021 at 9:00AM (AWST) and at any adjournment or postponement of that meeting. Chairman authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Items 10 and 11 (except where I/we have indicated a different voting intention in step 2) even though Items 10 and 11 are connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman. Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Items 10 and 11 by marking the appropriate box in step 2.

Step 2

Items of Business

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

For Against Abstain	For Against Abstain	For Against Abstain	For Against Abstain	For Against Abstain	For Against Abstain	For Against Abstain	For Against Abstain 10 Issue of Options to a related party – Tony Sage 11 Issue of Options to a related party – Malcolm Day
1 Ratification of prior issue of Shares under the Placement
2 Approval to issue Free Attaching Options under the Placement
3 Approval to issue Broker Placement Securities
4 Ratification of prior issue of Shares – Winance
5 Ratification of prior issue of Shares – Spark Plus
6 Ratification of prior issue of Shares – Robert Grassler
7 Ratification of prior issue of Shares – Allegra Capital
8 Ratification of prior issue of Shares – Dietrich Wanke
9 Ratification of Agreement to issue November 2021 Options

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

Step 3 Signature of Securityholder(s)

This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
/ /
Sole Director & Sole Company Secretary Director Director/Company Secretary Date
Update your communication details (Optional) By providing your email address, you consent to receive future Notice
Mobile Number Email Address of Meeting & Proxy communications electronically
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