FIRST LITHIUM LIMITED — Capital/Financing Update 2011

Jun 8, 2011

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ADVANCED ENGINE COMPONENTS LIMITED

ACN: 009 081 770

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14 ENERGY STREET PO BOX 3126 MALAGA 6090 WESTERN AUSTRALIA

TEL: +61 8 9209 6900 FAX: +61 8 9209 6999

ISO 9001 Lic.13705 SAI Global

9 June 2011

Company Announcements Office Australian Securities Exchange By: e-lodgement (ASX code ACE)

Update

Since February 2011, Advanced Engine Components Limited (“ACE” or “the Company”) has been in ongoing discussions, negotiations and facilitated due diligence with a number of potential investors and/or joint venture partners.

As a result of those negotiations ACE has agreed to deal exclusively with a large Chinese State Owned enterprise for a period of three months. To ensure a mutually beneficial outcome the parties have formed a joint project working group. The working group role is to maximize communication, coordination and expediency throughout the period.

The Chinese enterprise has commercial operations involved in the natural gas vehicle industry.

The due diligence of ACE is expected to take one month with commercial negotiations and formalisation expected to take a further two months. The Directors would expect the suspension to be lifted following this period. The ACE Directors are negotiating with the Company’s major shareholder and a major customer to assist with required funding during the due diligence and negotiation period. During this period all ACE non-funded research and development is suspended and only cash flow positive or neutral contracts will continue.

Mr Vivekananthan M V Nathan has resigned as a Non Executive Director of ACE and Mr Tony Middleton has advised of his intention to retire from his Executive role when a suitable replacement is employed. The Board is currently negotiating with a selected candidate to replace Tony in the Managing Directors role.

ACE is of the view that reinstatement of trading in its securities is likely to be materially prejudicial to the entity’s ability to successfully complete the ongoing negotiations that are critical to ACE’s continued financial viability. ACE is not aware of any reason why the extension to the voluntary suspension should not be granted.

For further information email shares@advancedengine.com

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