GALAN LITHIUM LIMITED — M&A Activity 2011

Nov 22, 2011

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----- Start of picture text ----- ACN 149 349 646----- End of picture text -----

ASX ANNOUNCEMENT

23 November 2011

ASX Release

Takeover bid for Winmar Resources Limited

Dempsey Minerals Limited ( Dempsey ) advises that it intends to make an off‐market takeover offer for all of the shares in Winmar Resources Limited (ASX:WFE) ( Winmar ).

The offer consideration will be 4 Dempsey shares for every 7 Winmar shares ( Offer ).

Reasons Winmar shareholders should ACCEPT the Dempsey Offer

Dempsey believes that Winmar shareholders should ACCEPT the Offer for the following reasons:

 Winmar has an urgent need for cash

Winmar has spent almost all of the $7 million it raised at the start of the year and requires an urgent cash injection to continue its development of the Hamersley Iron Ore Project and other exploration activities.

As at 30 September 2011, Winmar reported for the September quarter a net operating cash outflow of $577,000, cash on hand of $354,000 and an estimated cash outflow for the current quarter ending 31 December 2011 of $410,000.

Winmar directors disclosed in the financial statements for the year ended 30 June 2011, and it was noted by independent auditors, KPMG, that there was material uncertainty regarding Winmar's continuation as a going concern, for the reasons set out in note 2.2 to the Winmar accounts.

In those financial statements, Winmar disclosed that its ability '... to continue its planned project evaluation activities is dependent on the Company raising additional working capital in the next twelve months .'

 Winmar has been unsuccessful in raising capital

Winmar announced at its recent AGM on 22 November 2011 that the funding deal with iron ore miner VS Lad Group announced almost 5 months ago (at the end of June 2011) was 'for all practical purposes void given the lack of any communication from them for the past few months '.

Winmar's corporate advisors, Summit Equities, were appointed almost 3 months ago to raise capital but have not succeeded.

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Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398

www.dempseyminerals.com.au

ACN 149 349 646

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• Winmar has better prospects of raising capital under Dempsey control

If Dempsey secures control of Winmar, its present intention is to recompose all or a majority of the Winmar board. Dempsey believes that the combined Dempsey ‐ Winmar Group will be more attractive for investment and will have better prospects of raising capital for Winmar’s exploration activities than Winmar alone.

If Dempsey acquired 100% of Winmar under the Offer, Winmar shareholders would hold approximately 57.5% of the enlarged Dempsey.

Offer conditions

• The Offer is subject to a number of conditions which are set out in the attached Schedule and include:  A 50.1% minimum acceptance condition.

• Receipt of all regulatory approvals and no actions by a public authority adversely affecting the Offer.

• No person other than Dempsey or its related entities acquiring a relevant interest in more than 20% of Winmar shares.

• Third party consents for change of control, no prescribed occurrences, and no material adverse changes, material transactions, changes or claims affecting Winmar.

Bidder's Statement

Dempsey is preparing a Bidder's Statement in relation to the Offer which will be lodged with ASIC and despatched to Winmar shareholders in due course. The Bidder’s Statement will set out all of the terms of the Offer.

Dempsey has engaged Cardinals Lawyers and Consultants as its legal advisers. For further information, please contact:

Nathan McMahon

Non‐executive Chairman Email: nathan@dempseyminerals.com.au Phone +618 9322 6283

__________________________________________________________________________________ Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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SCHEDULE

1. CONDITIONS OF THE OFFER

1.1 50.1% minimum acceptance

By the end of the Offer Period, Dempsey and its Associates together have a Relevant Interest in at least 50.1% of the Winmar shares on issue.

1.2 Other regulatory approval

Before the end of the Offer Period, Dempsey has obtained on an unconditional basis all approvals required by law or by any Public Authority as are necessary in relation to the Offer including to enable the Offer to be lawfully made to and accepted by Winmar shareholders, and all such approvals remain in full force and effect as at the end of the Offer Period. For the avoidance of doubt, an approval is not required to be obtained under this condition if this would not:

• (a) restrain or prohibit or otherwise materially adversely affect the making of the Offer, or the completion of any transaction contemplated by the Offer, or the rights of Dempsey in respect of Winmar and the Winmar shares to be acquired under the Offer; or

• (b) require the divestiture by Dempsey of Winmar shares, or the divestiture of any assets of the Winmar Group, the Dempsey Group or otherwise.

1.3 No action by a Public Authority adversely affecting the Offer

Between the Announcement Date and the end of the Offer Period:

• (a) there is not in effect any preliminary or final decision, order or decree issued by a Public Authority; and

• (b) no application is made to any Public Authority (other than by a member of the Dempsey Group), and no action or investigation is announced, threatened or commenced by a Public Authority,

in consequence of, or in connection with, the Offer (other than a determination by ASIC or the Takeovers Panel in exercise of the powers and discretions conferred by the Corporations Act) which:

• (c) restrains or prohibits (or if granted could restrain or prohibit), or otherwise materially adversely impacts on, the making of the Offer or the completion of any transaction contemplated by the Offer (whether subject to conditions or not) or the rights of Dempsey in respect of Winmar and the Winmar shares to be acquired under the Offer; or

__________________________________________________________________________________ Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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• (d) requires divestiture by Dempsey of any Winmar shares, or the divestiture of any assets of the Winmar Group, the Dempsey Group or otherwise.

1.4 Interest in Winmar

Between the Announcement Date and the end of the Offer Period, no person other than Dempsey or a Related Entity of Dempsey obtains a Relevant Interest in more than 20% of Winmar shares.

1.5 No Winmar Material Adverse Change

Before the end of the Offer Period, no Winmar Material Adverse Change occurs, is discovered, announced or disclosed or otherwise becomes known to Dempsey (whether or not becoming public).

1.6 No material transactions, claims or changes

Except as disclosed in any public announcement by Winmar delivered to ASX prior to the Announcement Date, no member of the Winmar Group has between the Announcement Date and the end of the Offer Period:

• (a) acquired, offered to acquire or agreed to acquire, or disposed of, offered to dispose of or agreed to dispose of, one or more shares, companies or assets (or an interest in one or more shares, companies or assets) for an amount in aggregate that is material or disposed of, offered to dispose of or agreed to dispose of, any asset that has not reached the limit of its economic life;

• (b) disposed of, offered to dispose of, or agreed to dispose of, any interest in any mining or exploration tenement or surrendered or relinquished the whole or part of any mining or exploration tenement other than to give effect to any relinquishment requirement pursuant to the conditions of a tenement;

• (c) entered into or offered to enter into any joint venture, asset or profit sharing, partnership or merger of businesses (including through a multiple listed companies structure) or of corporate entities, or commodities sale agreement, involving a commitment in aggregate of not less than $100,000;

• (d) other than in the ordinary course of business, incurred, committed to or brought forward the time for incurring or committing to, or granted to another person a right the exercise of which would involve a member of the Winmar Group incurring or committing to, any capital expenditure or liability, or forgone any revenue, for one or more related items or amounts that in aggregate exceed $100,000;

• (e) recommended, declared, paid or made, or resolved to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash, in specie or otherwise;

• (f) issued or agreed to issue any debentures, or except in the ordinary course of business incurred or increased any indebtedness or become subject to any contingent liability for an amount in aggregate of not more than $100,000;

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Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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• (g) borrowed or agreed to borrow any money (except for temporary borrowing from its bankers in the ordinary course of business) for amounts which in aggregate exceed $100,000);

• (h) implemented or entered into any scheme or arrangement or compromise (including one for a reconstruction or amalgamation of any members of the Winmar Group), or a deed of company arrangement, or any analogous procedure, scheme or arrangement in any jurisdiction;

• (i) entered into, renewed or changed the terms of, any contract of service with any director or employee of any member of the Winmar Group;

• (j) had any claim made or threatened against it, or litigation, arbitration proceedings, prosecution or other legal proceedings commenced against it for amounts which in aggregate exceed $100,000;

• (k) waived or compromised any claim for amounts which in aggregate exceed $100,000;

• (l) made any changes in its constitution or passed any special resolution;

• (m) entered into any contract, commitment, arrangement or agreement, passed any resolution or made any offer (which remains open for acceptance) with respect to, or publicly announced an intention to, or proposal to, do anything described in clauses 1.6(a) to 1.6(l);

• (n) made any material correction or restatement to any documents lodged by Winmar with ASX or ASIC under its periodic or continuous disclosure obligations under the ASX Listing Rules or the Corporations Act prior to the Announcement Date or lodged such documents containing a statement which is incorrect or misleading in any material particular or from which there is a material omission;

• (o) become subject to an investigation under the Australian Securities and Investments Commission Act 2001 (Cth) or any corresponding legislation; or

• (p) entered into, or otherwise become a party to, any transaction with a Related Party or a Related Entity.

1.7 Prescribed Occurrences

Before the end of the Offer Period, no Prescribed Occurrence occurs, other than an issue of shares on the exercise of Winmar options or Winmar performance rights.

1.8 Third party consents

If any member of the Winmar Group is a party to, is bound by, or is subject to, a material agreement, arrangement or understanding which as a result of the Offer or acquisition of Winmar shares by Dempsey under the Offer or a change in control of Winmar as a result of the Offer entitles a third party to exercise any rights (including termination rights, modification rights or pre-emptive rights), then before the end of the Offer Period the third party:

__________________________________________________________________________________ Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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• (a) does not exercise, purport to exercise, or state an intention or claim a right to exercise, those rights; and

• (b) gives its unconditional consent to the acquisition of Winmar shares by Dempsey or otherwise waives unconditionally its entitlement to exercise rights as referred to above.

1.9 No persons exercising rights under certain instruments

After the Announcement Date and before the end of the Offer Period, no person exercises or purports to exercise, or states an intention to exercise, any rights under any provision of any material agreement, arrangement or understanding to which Winmar or any Subsidiary of Winmar is a party, or by or to which Winmar or any Subsidiary of Winmar or any of its assets may be bound or be subject, which results, or could result, in:

• (a) the interest of Winmar or any Subsidiary of Winmar in any firm, joint venture, trust, corporation or other entity (or any arrangements related to such interest) being terminated or modified; or

• (b) the business of Winmar or any Subsidiary with any other person being adversely affected,

as a result of the acquisition of Winmar shares by Dempsey.

1.10 No excessive termination payments

That there are no contracts, arrangements or understandings that any payment or other benefit will be made or given to any director, secretary or employee of any member of the Winmar Group as compensation for loss of or as consideration for or in connection with his or her retirement from office as a director, secretary or employee or any other office in connection with any member of the Winmar Group which exceed in value the aggregate sum of $50,000.

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Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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2. DEFINITIONS

In this Schedule, the following terms have the meanings set out below unless the context otherwise indicates:

Announcement Date means the date of this announcement.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited or the securities market operated by it, as the context requires.

Associate has the meaning given to that term in the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Dempsey Group means Dempsey and all of its Subsidiaries.

Material Adverse Change means any matter, event or circumstance which, either individually or when aggregated with other matters, events or circumstances of a like kind, has had or is reasonably likely to have (whether now or in the future) a material adverse effect on the business, assets, liabilities, financial or trading position, performance, profitability or prospects of the Winmar Group (taken as a whole) or Winmar or a Subsidiary of Winmar or causes a material delay in operations.

Offer Period means the period commencing on the date that the Offer opens for acceptance by Winmar shareholders and ending on the last date that the Offer is open for acceptance by Winmar shareholders. Prescribed Occurrence means any or all of the following events:

• (a) Winmar converts all or any of its shares into a larger or smaller number of shares;

• (b) Winmar or a Subsidiary of Winmar resolves to reduce its capital in any way;

• (c) Winmar or a Subsidiary of Winmar enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under subsection 257C(1) or 257D(1) of the Corporations Act;

• (d) Winmar or a Subsidiary of Winmar issues shares or grants an option over its shares, or agrees to make such an issue or grant such an option;

• (e) Winmar or a Subsidiary of Winmar issues or agrees to issue convertible notes;

• (f) Winmar or a Subsidiary of Winmar disposes, or agree to dispose of the whole, or a significant part, of its business or property;

• (g) Winmar or a Subsidiary of Winmar charges, or agree to charge the whole, or a significant part, of its business or property;

• (h) Winmar or a Subsidiary of Winmar resolves to be wound up;

• (i) A liquidator or a provisional liquidator of Winmar or a Subsidiary of Winmar is appointed;

• (j) A court makes an order for the winding up of Winmar or a subsidiary of Winmar;

• (k) An administrator of Winmar or a Subsidiary of Winmar is appointed under section 436A, 436B or 436C of the Corporations Act;

• (l) Winmar or a Subsidiary of Winmar executes a deed of company arrangement;

__________________________________________________________________________________ Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au

ACN 149 349 646

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• (m) A receiver or a receiver and manager is appointed in relation to the whole or a substantial part of the property of Winmar or a subsidiary of Winmar.

Public Authority means

• (a) a government, whether foreign, federal, state, territorial or local;

• (b) a department, office or minister of a government (whether foreign, federal, state, territorial or local) acting in that capacity; or

• (c) a commission, delegate, instrumentality, agency, board, or other government, semigovernment, judicial, administrative, monetary or fiscal authority, whether statutory or not and whether foreign, federal, state, territorial or local,

and includes ASX, ASIC and the Takeovers Panel.

Related Entity has the meaning given to that expression in the Corporations Act. Related Party has the meaning given to that expression in the Corporations Act. Relevant Interest has the meaning given to that expression in the Corporations Act. Subsidiary has the meaning given to that term in the Corporations Act. Winmar Group means Winmar and all of its Subsidiaries.

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Level 2, 38 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872 Ph. +61 8 9322 6283 Fax. +61 8 9322 6398 www.dempseyminerals.com.au