GALAN LITHIUM LIMITED — Director's Dealing 2011

Jun 29, 2011

30 June 2011

Fiona Murphy ASX Compliance Pty Ltd Level 8, Exchange Plaza, 2 The Esplanade Perth WA 6000

Dear Jill

In response to your letter dated 28 June 2011 regarding the late lodgement of an Appendix 3Y for Mr Nathan McMahon, Dempsey Minerals Limited ("Dempsey" or "the Company") responds as follows:

1. Please explain why the Appendix was lodged late

The Appendix was lodged late due to Mr McMahon being overseas and not contactable. Mr McMahon had placed a previous buy orders which had neglected to be removed prior to Mr McMahon travelling internationally and the orders were subsequently executed. Mr McMahon notified the Company as soon as he became aware of the trades (and subsequently the Appendix 3Y was lodged).

2. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A

The Company has entered into an agreement with it's Directors and has a process that requires all Directors to notify the Company Secretary of any transactions involving any change of their notifiable interest immediately or at the very latest, within three business days after the changes occur. Additionally, the Company Secretary and the officers assigned to report to the ASX review the directors' shareholding regularly to ensure that all relevant movements are reported to the ASX within the time frame.

3. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.198

Apart from this oversight, the Company considers the current arrangements to be adequate to ensure compliance with listing rule 3.19B and note that this late lodgement of the Appendix was a result of a communication error between the Director and his broker and compounded by the Director travelling and not accessing emails or phone calls.

Yours faithfully

Lisa Wynne Non-Executive Director & Company Secretary Email: lisa@dempseyminerals.com.au Phone: +61 8 9322 6283

ممنا

ASX Compliance Pty Limited ABN 26 087 780 489 Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

GPO Box D187 PERTH WA 6840

Telephone 61 8 9224 0000 Facsimile 61 8 9221 2020 www.asx.com.au

28 June 2011

Ms Lisa Wynne Company Secretary Demosey Minerals Limited Level 2, 38 Richardson Street West Perth, WA 6005

Dear Lisa

Dempsey Minerals Limited (the "Company") Appendix 3Y - Change of Director's Interest Notice

We refer to the following:

• The Appendix 3Y lodged by the Company with ASX Ltd ("ASX") on 28 June 2011 regarding a change in the 1. director's interest for Nathan Bruce McMahon ("Appendix 3Y").
• $2.$ Listing rule 3.19A which requires an entity to tell ASX the following:
• The notifiable interests of a director of the entity (or In the case of a trust, a director of the 3.19A.1 responsible entity of the trust) at the following times.
  • On the date that the entity is admitted to the official list.
  • On the date that a director is appointed. $\blacksquare$

The entity must complete an Appendix 3X and give it to ASX no more than 5 business days after the entity's admission or a director's appointment.

• A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the 3.19A.2 responsible entity of the trust). The entity must complete an Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.
• 3.19A.3 The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The entity must complete an Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.
• Э. Listing rule 3.19B which states as follows.

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 4. business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

The Appendix 3Y indicates that a change in the director's notifiable interest occurred on each of 8 June 2011, 9 June 2011 and 16 June 2011 respectively. It appears that the Appendix 3Y should have been lodged with ASX in respect of each change by 16 June 2011, 17 June 2011 and 23 June 2011 respectively. Consequently, the Company may be in breach of listing rules 3.19A and/or 3.19B.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the listing rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: "Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities", we ask that you answer each of the following questions.

• 1. Please explain why the Appendix 3Y was lodged late.
• $2.$ What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?
• 3 If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.198?

Your response should be sent to me by e-mail to fiona murphy@asx.com.au or by facsimile on facsimile number (08) 9221 2020. It should not be sent to the Company Announcements Office.

A response is requested as soon as possible and, in any event, not later than 5:00 pm WST on Thursday 30 June 2011.

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and must separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.

Yours sincerely

[sent electronically without slanature]

Fiona Murphy Adviser, Listings (Perth)