GALAN LITHIUM LIMITED — Proxy Solicitation & Information Statement 2019

May 5, 2019

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GALAN LITHIUM LIMITED

ACN 149 349 646

NOTICE OF GENERAL MEETING

TIME : 3:00pm (WST) DATE : 6 June 2019 PLACE : Level 2 38 Richardson Street WEST PERTH WA 6005

This Notice of General Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of General Meeting please do not hesitate to contact the Company Secretary on (+61 8) 9322 6283.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed Resolutions)	2
Explanatory Memorandum (explaining the proposed Resolutions)	6
Glossary	13
Proxy Form

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

Notice is given that the General Meeting of the Shareholders convened by this Notice of Meeting will be held at 3:00pm (WST) on Thursday 6 June 2019 at:

Level 2 38 Richardson Street WEST PERTH WA 6005

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your Shareholding and your vote is important.

ATTENDANCE AND VOTING ELIGIBILITY

For the purposes of regulation 7.11.37 of the Corporations Regulations 2001 (Cth) the Directors have determined that the Shares quoted on the ASX at 5.00pm (WST) on 4 June 2019 will be taken, for the purposes of this General Meeting, to be held by the persons who held them at that time. Accordingly those persons are entitled to attend and vote (if not excluded) at the Meeting.

VOTING IN PERSON

To vote in person, attend the General Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the Proxy Form enclosed (and the power of attorney or other authority (if any) under which it is signed (or a certified copy)) and either:

• (a) deliver the Proxy Form to the Company’s registered office at Level 2, 38 Richardson Street, West Perth, Western Australia 6005;

• (b) send the Proxy Form by post to Galan Lithium Limited, PO Box 396, West Perth, Western Australia 6872;

• (c) send the Proxy Form by facsimile to the Company on facsimile number (08) 9322 6398; or

• (d) email the Proxy Form to mrobbins@galanlithium.com.au

so that it is received not later than 3:00pm (WST) on 4 June 2019.

Proxy Forms received later than this time will be invalid.

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NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Galan Lithium Limited will be held at Level 2, 38 Richardson Street, West Perth, Western Australia at 3:00pm (WST) on Thursday 6 June 2019.

The Explanatory Memorandum to this Notice of Meeting provides additional information on matters to be considered at the General Meeting. The Explanatory Memorandum and the Proxy Form are part of this Notice of Meeting.

Terms and abbreviations used in this Notice of Meeting and Explanatory Memorandum (including any Annexures) are defined in the Glossary unless defined elsewhere in the Explanatory Memorandum.

AGENDA

RESOLUTION 1 – RATIFICATION OF ISSUE OF 180,891 SHARES TO NOMINEES OF BARCLAY WELLS LIMITED AS SHORTFALL SECURITIES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 180,891 Shares to nominees of Barclay Wells Ltd, being those persons identified in the Explanatory Memorandum, as shortfall securities, on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of this Resolution by the nominees of Barclay Wells Ltd referred to in the Explanatory Memorandum having regard to the resolution and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 2 – APPROVAL OF ISSUE OF 10,000,000 PERFORMANCE SHARES TO MR JUAN PABLO VARGAS DE LA VEGA

To consider and, if thought fit, to pass, with or without amendment, the following as an ordinary resolution :

“That for the purposes of ASX Listing Rule 10.11, Section 200B of the Corporations Act, section 200E of the Corporations Act and for all other purposes, Shareholders approve the issue of up to 5,000,000 Class A Performance Shares and 5,000,000 Class B Performance Shares to Mr Juan Pablo Vargas de la Vega, who is a Director, and/or his nominee(s), on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement :

The Company will disregard any votes cast in favour of this Resolution by Mr Juan Pablo Vargas de la Vega and/or his nominee(s) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such a member.

However, a person described above (the “voter”) may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

(a) the voter is appointed as a proxy appointed by writing that specifies the way the proxy is to vote on the Resolution; and

• (b) the voter is the Chair and the appointment of the Chair as proxy:

• (i) does not specify the way the proxy is to vote on this Resolution; and

• (ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company or, if the Company is part of a consolidated entity, for the entity.

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RESOLUTION 3 – RATIFICATION OF THE ISSUE OF 3,257,338 PLACEMENT SHARES UNDER LISTING RULE 7.1

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the prior issue of 3,257,338 Placement Shares to the persons, on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of this Resolution by a person who participated in the issue or any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 4 – RATIFICATION OF THE ISSUE OF 11,288,117 PLACEMENT SHARES UNDER LISTING RULE 7.1A

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the prior issue of 11,288,1171 Placement Shares to the persons, on the terms and conditions and in the manner set out in the Explanatory Memorandum.”

Voting Exclusion Statement:

The Company will disregard any votes cast in favour of this Resolution by a person who participated in the issue or any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

OTHER BUSINESS

To deal with any business that may be lawfully brought forward.

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PROXIES

A Shareholder entitled to attend and vote at the Meeting has a right to appoint a proxy to attend and vote instead of the Shareholder. A proxy need not be a Shareholder and can be either an individual or a body corporate. If a Shareholder appoints a body corporate as a proxy that body corporate will need to ensure that it:

• a) appoints an individual as its corporate representative to exercise its powers at the Meeting, in accordance with section 250D of the Corporations Act; and

• b) provides the Company with satisfactory evidence of the appointment of its corporate representative prior to commencement of the Meeting.

If such evidence is not received before the Meeting, then the body corporate (through its representative) will not be permitted to act as proxy.

A Shareholder who is entitled to cast two (2) or more votes may appoint two (2) proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the Shareholder's votes. Fractions of votes will be disregarded.

In order to vote on behalf of a company that is a Shareholder, a valid Power of Attorney in the name of the attendee, must be either lodged with the Company prior to the Meeting, or be presented at the Meeting before registering on the attendance register for the Meeting.

Forms to appoint proxies, and the Power of Attorney (if any) under which they are signed, must be posted or lodged at the registered office of the Company, at Level 2, 38 Richardson Street, West Perth WA 6005, or PO Box 396 West Perth WA 6872, or by facsimile to (61 8) 9322 6398, or by email to mrobbins@galanlithium.com.au not less than 48 hours before the time of the Meeting or resumption of an adjourned meeting at which the person named in the instrument proposes to vote.

An instrument appointing a proxy:

• a) shall be in writing under the hand of the appointor or of his attorney, or if the appointor is a corporation, either under seal or under the hand of a duly authorised officer or attorney;

• b) may specify the manner in which the proxy is to vote in respect of a particular Resolution and, where an instrument of proxy so provides, the proxy is not entitled to vote on the Resolution except as specified in the instrument;

• c) shall be deemed to confer authority to demand or join in demanding a poll;

• d) shall be in such form as the Directors determine and which complies with section 250A of the Corporations Act; and

• e) which appoints the Chair as proxy but does not specify the way in which the proxy is to vote on a particular Resolution will be recorded as voting in favour of the Resolutions (subject to the other provisions of these notes on proxies and any required voting exclusions including those in the Notice) as this is the Chair’s voting intention.

Corporations

A corporation may elect to appoint a representative in accordance with the Corporations Act in which case the Company will require written proof of the representative’s appointment, which must be lodged with, or presented to, the Company before the commencement of the Meeting.

Proxies given by corporate Shareholders must be executed in accordance with their constitutions, or signed by a duly authorised attorney. A proxy may decide whether to vote on any motion, except where the proxy is required by law or the Constitution to vote, or abstain from voting, in their capacity as proxy.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

Undirected and Directed Proxies

The Company encourages all Shareholders who submit proxies to direct their proxy how to vote on each Resolution.

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The Company will not disregard any votes cast on a Resolution by a person if the person is the Chair voting an undirected proxy and their appointment expressly authorises the Chair to exercise the proxy.

If you intend to appoint the Chair as your proxy, you can direct him how to vote by marking the boxes for each resolution (for example, if you wish to vote “for”, “against” or “abstain” from voting), or you cannot mark any of the boxes and give the Chair your express authority to vote your undirected proxy (in which case the Chair will vote in favour of all Resolutions).

If you intend to appoint another member of the Key Management Personnel (such as one of the Directors) or one of their Closely Related Parties as your proxy, please ensure that you direct them how to vote on Resolution 2. If you leave your proxy form undirected on Resolution 2, the relevant Key Management Personnel (other than the Chair) and their Closely Related Parties will not be able to vote your shares on those resolutions. If the Chair is your proxy and you do not direct the Chair how to vote in respect of Resolution 2 on the proxy form, you will be deemed to have directed and expressly authorised the Chair to vote your proxy in favour of Resolution 2. This express authorisation acknowledges that the Chair may vote your proxy even though Resolution 2 is connected directly or indirectly with the remuneration of a Key Management Personnel and even though the Chair may have an interest in the outcome of those resolutions and is prohibited from voting on those resolutions (other than as authorised proxy holder) because of that interest.

In accordance with the Corporations Act, any directed proxies that are not voted on a poll at the meeting will automatically default to the Chair, who is required to vote proxies as directed.

If you appoint any other person as your proxy

You do not need to direct your proxy how to vote.

It is the Chair’s intention to vote all undirected proxies in favour of all Resolutions.

DATED: 6 MAY 2019

BY ORDER OF THE BOARD

MIKE ROBBINS COMPANY SECRETARY

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EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of shareholders of Galan Lithium Limited in connection with the business specified to be conducted in the Notice of General Meeting at the General Meeting of Shareholders to be held at Level 2, 38 Richardson Street, West Perth, Western Australia 6005 at 3:00pm (WST) on Thursday 6 June 2019.

The purpose of this Explanatory Memorandum is to provide information that the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

The Notice of Meeting, Explanatory Memorandum and Proxy Form are all important documents. The Directors recommend that Shareholders read them carefully in their entirety before making a decision on how to vote at the General Meeting.

A Glossary of terms frequently used in this Notice of Meeting and Explanatory Memorandum can be found at the end of this Explanatory Memorandum.

• 1 - RATIFICATION OF ISSUE OF 180,891 SHARES TO NOMINEES OF BARCLAY WELLS LIMITED AS SHORTFALL SECURITIES (RESOLUTION 1)

1.1 General

On 19 November 2018, the Company announced that it had entered into an underwriting agreement with Barclay Wells Limited (‘Barclay Wells’) in relation to the Company’s outstanding quoted options at the time. Barclay Wells agreed to underwrite the exercise of up to 11,391,504 of the Company’s quoted options exercisable at $0.14 each and expiring on 31 December 2018 ( Quoted Options ).

As announced on 2 January 2019, 180,891 Quoted Options (shortfall securities) were to be dealt with in accordance with the Barclay Wells underwriting agreement.

Resolution 1 seeks ratification from Shareholders for the prior issue of 180,891 Shares to nominees of Barclay Wells as shortfall securities. The Shares were issued on 14 January 2019.

1.2 ASX Listing Rule 7.4

ASX Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, Equity Securities (which includes shares) that exceed 15% of the total number of fully paid ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities. ASX Listing Rule 7.4 provides that the approval of holders of the company’s ordinary securities may be obtained after the issue of Equity Securities. The effect of such ratification is to restore the company’s discretionary power to issue further securities up to 15% of the number of fully paid ordinary securities on issue at the beginning of the relevant 12 month period without obtaining shareholder approval.

If Shareholders approve Resolution 1, the issue of 180,891 Shares will be excluded from the calculations of the 15% limit under ASX Listing Rule 7.1.

The following information is provided for the purpose of ASX Listing Rule 7.5.

(a) Number of securities issued

180,891 Shares.

• (b) Deemed Issue price of securities

$0.14 per Share.

(c) Terms of the securities

Shares were issued fully paid and rank parri passu in all respects with the Company’s other Shares on issue.

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• (d) The name of the persons to whom Galan issued the securities or the basis on which those persons were determined

Xcel Capital (33,733 Shares), Christopher Oldfield (5,671 Shares) Bill Brooks Pty Ltd (5,671 Shares), Michael Nitsche (56,713 Shares), Nathaniel Gardiner (5,627 Shares), D G Lewis & GP Lewis (25,000 Shares), M I Banks and S E Banks (11,342 Shares) and Barclay Wells Nominees (27,134 Shares).

• (e) Use (or intended use) of funds raised

Used to advance the Company’s maiden drilling campaign at its Hombre Muerto lithium project in Argentina.

Directors' Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 1, as it ratifies the above issue of Shares and retains the Company’s flexibility to issue further securities representing up to 15% of the Company’s Share capital during the next 12 months.

2. APPROVAL OF ISSUE OF PERFORMANCE SHARES TO MR JUAN PABLO VARGAS DE LA VEGA (RESOLUTION 2)

2.1 General

Under Resolution 2, Shareholders are being asked to approve the grant of a total of 10,000,000 Performance Shares (being 5,000,000 Class A Performance Shares and 5,000,000 Class B Performance Shares) the terms and conditions of which are summarised below), to the Managing Director, Mr Juan Pablo Vargas de la Vega.

At the Company’s AGM held on 29 November 2018, Shareholders approved the issue of two new classes of Securities (being Class A Performance Shares and Class B Performance Shares) in accordance with the requirements of section 246B of the Corporations Act and the Constitution. At the same meeting Shareholders also approved the issue of a total of 10,000,000 Performance Shares (being 5,000,000 Class A Performance Shares and 5,000,000 Class B Performance Shares) to the Managing Director, Mr Juan Pablo Vargas de la Vega.

Under the ASX Listing Rules, the Performance Shares approved by Shareholders to be issued the Managing Director were required to be issued within one month of the approval received at the AGM. Due to an administrative oversight by the Company Secretary, the Performance Shares were not issued to the Managing Director within that time frame therefore the Shareholder approval obtained at the 2018 AGM cannot be relied upon to issue the Performance Shares to the Managing Director.

The Company is therefore required to obtain new Shareholder approval so that the Performance Shares can be issued to the Managing Director.

There have been no changes to the terms and conditions or other details of the Performance Shares, that were originally approved by Shareholders at the 2018 AGM and which are proposed to be issued subject to Shareholder approval in accordance with Resolution 2. In particular, the performance milestones applicable to the Performance Shares and the determination date for satisfaction of those milestones (as set out in Annexure A and Annexure B) remain unchanged.

The Board has determined that the grant of Performance Shares to Mr Juan Pablo Vargas de la Vega in accordance with Resolution 2 is an appropriate form of medium to long term incentive for the Company’s Managing Director. The Board considers that Mr Juan Pablo Vargas de la Vega is essential to the executive management and successful exploration and development of the Company’s ongoing lithium projects in Argentina.

Further details of Mr Juan Pablo Vargas de la Vega’s remuneration are set out in the Remuneration Report of the 2018 Financial Report and in the ASX announcements dated 10 August 2018 and 25 June 2018.

2.2 Details of Performance Shares to be awarded to Mr de la Vega

Shareholder approval is being sought by the Company to allot and issue the following Performance Shares, as recommended by the Board, to Mr Juan Pablo Vargas de la Vega who is a Director:

• 5,000,000 Class A Performance Shares, which will convert to Shares upon the Company announcing an Indicated and Measured resource of 1Mt of lithium carbonate equivalent at a minimum grade of 400 mg/l of lithium pursuant to The Australasian Code for Reporting of

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Exploration Results, Mineral Resources and Ore Reserves 2012 ( JORC Code ) within a project in which the Company has an interest. In the event that the Company’s interest in that project is less than 100%, only the proportion of those 5,000,000 Class A Performance Shares that is equal to the Company’s percentage interest in the project will convert into Shares (i.e. if the Company holds a 75% interest in the relevant project, 75% of the Class A Performance Shares will convert into Shares) unless the Board agrees otherwise, and otherwise on the terms and conditions set out in Annexure A ; and

• 5,000,000 Class B Performance Shares, which will convert to Shares upon financial close for a commercial scale lithium production facility capable of production of at least 5,000tpa of lithium carbonate equivalent per annum by the Company on the terms and conditions set out in Annexure B,

for the purposes ASX Listing Rule 10.11 which provides that, subject to certain exceptions (none of which are relevant here), a company must not issue or grant securities to a related party without shareholder approval.

In determining the quantum of Performance Shares to be issued to Mr Juan Pablo Vargas de la Vega the Board took into account the Company's remuneration strategy, the Company's situation, the role and the contribution of Mr Juan Pablo Vargas de la Vega and the market practice for remuneration of executive officers in positions of similar responsibility. Accordingly, they determined that the proposed grant of Performance Shares to Mr Juan Pablo Vargas de la Vega is appropriate.

The object of Resolution 2 is to provide Mr Juan Pablo Vargas de la Vega with a mechanism to participate in the future development of the Company and an incentive for their future involvement with, and commitment to, the Company. Accordingly it is important that the Company is able to attract and retain people of the highest calibre. The Directors consider that the most appropriate means of achieving this is to provide Directors with an opportunity to participate in the Company's future growth and an incentive to contribute to that growth.

If Shareholder approval is obtained for Resolution 2, the Performance Shares will be granted within one month of the receipt of Shareholder approval.

2.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 provides that, subject to certain exemptions (none of which are relevant here), a company must not issue securities to a related party without shareholder approval. Resolution 2 seeks this approval.

Information required for the purposes of ASX Listing Rule 10.13 in relation to the Shareholder approval sought under ASX Listing Rule 10.11 pursuant to Resolution 2 is set out below:

a) The name of the person

Mr Juan Pablo Vargas de la Vega and/or his nominee.

• b) The maximum number of securities to be issued (if known) or the formula for calculating the number of securities to be issued to the person

The maximum number of Performance Shares which will be granted to Mr Juan Pablo Vargas de la Vega and/or his nominee under Resolution 2 is 5,000,000 Class A Performance Shares and 5,000,000 Class B Performance Shares.

• c) The date by which the entity will issue the securities, which must not be more than 1 month after the date of the meeting

The Performance Shares will be issued within one month of the date of the Meeting.

• d) The issue price of the securities and a statement of the terms of issue

No consideration is payable by Mr Juan Pablo Vargas de la Vega at the time of grant of the Performance Shares or upon conversion of the Performance Shares. Therefore, no funds will be raised by the issue of the Performance Shares.

The milestones upon which the Performance Shares will convert into Shares, the details of which are set out above in section 2.2, must be achieved on or before 31 July 2023 (subject to the earlier termination of Mr Juan Pablo Vargas de la Vega’s employment with the Company).

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In the event that the Performance Shares are not approved by Shareholders, in order to meet the Company’s contractual obligations under Mr Juan Pablo Vargas de la Vega’s employment contract, it will be necessary for the Board to agree an alternative remuneration structure to provide Mr Juan Pablo Vargas de la Vega with their contractual entitlement. This could include an alternative equity proposal to be put to Shareholders and/or an amount in cash. Any such offer would be equivalent to the current proposed awards and, to the extent that they are relevant, on similar terms as set out above (including the satisfaction of applicable performance hurdles and service conditions).

2.4 ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that prior approval of shareholders is required for an issue of equity securities if the equity securities will, when aggregated with the equity securities issued by a company during the previous 12 months, exceed 15% of the number of ordinary shares on issue at the commencement of that 12 month period.

Approval pursuant to ASX Listing Rule 7.1 is not required (under Exception 14 to ASX Listing Rule 7.1) in order to grant the Performance Shares to Mr Juan Pablo Vargas de la Vega and/or his nominee(s) as approval is being obtained under ASX Listing Rule 10.11.

Shareholders should note that the grant of Performance Shares to Mr Juan Pablo Vargas de la Vega and/or his nominee(s) will not be included in the 15% calculation for the purposes of ASX Listing Rule 7.1.

2.5 Chapter 2E of the Corporations Act

Chapter 2E of the Corporations Act regulates the provision of financial benefits to related parties by a public company. The issue of the Performance Rights to Mr Juan Pablo Vargas de la Vega under Resolution 2 constitutes the provision of a financial benefit to related parties.

It is the view of the Directors that the proposed grant of Performance Shares pursuant to Resolution 2, falls within the exception under section 211 of the Corporations Act (reasonable remuneration) given the circumstances of the Company and the position held by Mr Juan Pablo Vargas de la Vega. Accordingly, the Directors have determined not to seek Shareholder approval under section 208 of the Corporations Act for the grant of the Performance Shares to Mr Juan Pablo Vargas de la Vega pursuant to Resolution 2.

Other Information

Mr Juan Pablo Vargas de la Vega’s relevant interests in Securities as at the date of this Notice Of Meeting are set out below.

Fully paid ordinary shares – 6,963,574

Unquoted Options exercisable at $0.14 on or before 31 December 2019 – 5,117,658

On 6 June 2018, the Company announced that it had signed a formal Share Sale and Purchase Agreement (‘Sale Agreement’) under which it was agreed that the Company would purchase 100% of the issued share capital of Blue Sky Lithium Pty Ltd (‘Blue Sky’). Blue Sky holds the rights to mining tenements located in the world class lithium bearing Hombre Muerto salt flat in the province of Catarmarca, Argentina. Under the terms of the Sale Agreement, the following consideration is still outstanding at the date of this Notice:

• (a) upon the delineation by or on behalf of Galan of a JORC resource of not less than 80kt lithium carbonate equivalent within the area of the mining properties in which Blue Sky has an interest as at Completion, the issue of 15,000,000 Shares to the Blue Sky vendors; and

• (b) upon the commencement of commercial production from a pilot plant by on or behalf of Galan processing lithium carbonate extracted from the area of the tenements owned by Blue Sky as at Completion, the issue of 10,000,000 Shares to the Blue Sky vendors.

Mr Juan Pablo Vargas de la Vega is a Blue Sky vendor and will be entitled to further Shares in the Company if the above mentioned milestones are met.

The latest available price of Shares quoted on the ASX prior to the date of this Notice of Meeting on 3 May 2019 was $0.25 The highest price for Shares trading on the ASX over the last 12 months was $0.68 (3 March 2019) and the lowest price in that period was $0.115 (17 May 2018).

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2.6 Grant of potential termination benefits for the purposes of section 200B and 200E of the Corporations Act

Section 200B of the Corporations Act restricts the benefits that can be given to persons who hold a ‘managerial or executive office’ (as defined in the Corporations Act) on leaving their employment with a company. Specifically, a company may only give a person a benefit in connection with them ceasing to hold a managerial or executive office in the company if the benefit is approved by shareholders, under section 200E of the Corporations Act, or an exception under section 200F, 200G or 200H of the Corporations Act applies.

The term ‘benefit’ has a wide meaning and may possibly include benefits resulting from the Board exercising its discretions when an executive ceases to be employed by the Company.

Specifically, where an executive has ceased their employment before their Shares and/or Options have vested or been converted, the Board may in certain circumstances exercise its discretion to determine that some or all of the Shares and/or Options will vest or be converted (and determine the basis on which vesting or conversion will occur), having regard to the relevant performance hurdles at the time the executive’s employment ceases. The exercise of these discretions may constitute a ‘benefit’ for the purposes of section 200B of the Corporations Act.

The Board, therefore, seeks shareholder approval for the exercise of the Board’s discretion in respect of Mr Juan Pablo Vargas de la Vega and any Performance Shares that have not been converted into Shares at the time of cessation of his employment with the Company. It should also be noted that Mr Juan Pablo Vargas de la Vega must have been in the role of Managing Director for a least two years before the Board can exercise its discretion.

Provided Shareholder approval under section 200E of the Corporations Act is given, the value of these benefits will not be counted towards the cap in the termination benefits that can be given to an executive without shareholder approval under section 200F or section 200G of the Corporations Act.

The value of the termination benefits that the Board may give, by exercising its discretion to permit the conversion of any Performance Shares to Mr Juan Pablo Vargas de la Vega prior to the satisfaction of the relevant conversion milestones, cannot be determined in advance. This is because various matters will or are likely to affect that value. In particular, the value of a particular benefit will depend on factors such as the Company’s share price at the time of conversion and the number of Performance Shares that the Board decides to permit the conversion of.

The following additional factors may also affect the benefit’s value:

• a) Mr Juan Pablo Vargas de la Vega’s length of service and the portion of any relevant performance periods that have expired at the time he ceases employment with the Company; and

• b) Mr Juan Pablo Vargas de la Vega’s total fixed remuneration at the time grants are made and at the time he ceases employment with the Company.

Accordingly Shareholders are asked to approve, under section 200E of the Corporations Act, the giving of any benefits to Mr Juan Pablo Vargas de la Vega upon him ceasing to hold the office of Managing Director of the Company for the purpose of the Company complying with section 200B of the Corporations Act.

2.7 Change of Control

In the event that during the term of Mr Juan Pablo Vargas de la Vega’s employment a takeover event or other similar event (“Takeover Event”) occurs, and subject to the Company either having a market capitalisation of at least A$100 million as at the date that Takeover Event occurs or the transaction which gives rise to the Takeover Event having a value of at least A$100 million, any of the above Performance Shares which have not then converted into Shares will be converted into Shares on the terms and conditions set out in Annexure A and Annexure B (as applicable), subject to prior Shareholder approval and subject always to the Company complying with its obligations under ASX Listing Rules 10.18 and 10.19 and under the Corporations Act, despite the corresponding milestone not having been achieved.

Directors' recommendation

The Board considers the alignment and incentives offered to Mr Juan Pablo Vargas de la Vega to be commensurate with the value that he will provide the Company and its Shareholders. The progress made since the involvement of Mr Juan Pablo Vargas de la Vega has been substantial and has added significant value to Shareholders.

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Mr Juan Pablo Vargas de la Vega declines to make a recommendation to Shareholders in relation to Resolution 2 due to his material personal interest in the outcome of the Resolution. The Directors (other than Mr Juan Pablo Vargas de la Vega) recommend that, for the reasons set out above, Shareholders vote in favour of Resolution 2.

3. RATIFICATION OF THE ISSUE OF A TOTAL OF 14,545,455 PLACEMENT SHARES (RESOLUTIONS 3 & 4)

3.1 Background

On 9 April 2019, the Company announced a placement of Shares via the issue of 14,545,455 Shares (‘Placement Shares’), at an issue price of $0.275 per Placement Share, to raise gross proceeds of $4,000,000.

A total of 14,545,455 Placement Shares were issued on 15 April 2019. The ratification of the issue of the Placement Shares is sought under Resolutions 3 and 4 in accordance with the requirements of ASX Listing Rule 7.4.

3.2 ASX Listing Rule 7.4

ASX Listing Rule 7.1 prohibits a listed company from issuing, or agreeing to issue, Equity Securities (which includes shares) that exceed 15% of the total number of fully paid ordinary securities on issue in any 12 month period, unless approval is obtained from the holders of the company’s ordinary securities.

ASX Listing Rule 7.1A provides that certain eligible companies may seek shareholder approval at its AGM to issue up to a further 10% of its fully paid ordinary securities on issue at the start of the 12 month period commencing on the date of the AGM ("10% share issue capacity"). The Company is an eligible company and sought and received Shareholder approval to the 10% share issue capacity at its AGM on 29 November 2018. The Shareholder approval is valid for 12 months from the date of the last AGM.

ASX Listing Rule 7.4 provides that an issue of securities made without approval under Listing Rules 7.1 and 7.1A will be treated as having been made with shareholder approval for the purposes of those Listing Rules if shareholders subsequently approve it and the issue did not breach Listing Rules 7.1 or 7.1A.

Accordingly, the Company is seeking Shareholder ratification for the issue of the Placement Shares as follows:

• 3,257,338 Placement Shares issued under the Company’s 15% equity issue capacity under Listing Rule 7.1; and

• 11,288,117 Placement Shares issued under the Company’s 10% share issue capacity under Listing Rule 7.1A; and

If Shareholders approve Resolution 3, the issue of 3,257,338 Placement Shares will be excluded from the calculations of the Company’s 15% limit under ASX Listing Rule 7.1.

If Shareholders approve Resolution 4, the issue of 11,288,117 Placement Shares will be excluded from the calculations of the Company’s 10% limit under ASX Listing Rule 7.1A.

3.3 ASX Listing Rule Disclosure Requirements

The following information is provided for the purpose of ASX Listing Rule 7.5:

(a) Number of securities issued

3,257,338 Placement Shares under ASX Listing rule 7.1; and

• 11,288,117 Placement Shares under ASX Listing Rule 7.1A.

(b) Price at which the securities were issued

• $0.275 per Placement Share issued under ASX Listing Rules 7.1 and 7.1A

(c) Terms of the securities

The Placement Shares issued under ASX Listing Rules 7.1 and 7.1A are fully paid ordinary shares and rank pari passu in all respects with the Company’s other Shares on issue and are listed on the ASX.

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• (d) The name of the persons to whom Galan issued the securities or the basis on which those persons were determined

The Placement Shares were issued to various professional or sophisticated investors. Barclay Wells Limited acted as lead manager to the placement whilst Tectonic Advisory Partners (acting through Ecoban Securities Corporation) acted as the North American placement agent.

• (e) Use (or intended use) of funds raised

The net funds raised from the placement will enable the Company to continue and expand its maiden drilling campaign along the Candelas channel at the Hombre Muerto Lithium project in Argentina, commence initial resource work and for working capital purposes.

3.4 Directors' Recommendation

The Board recommends Shareholders vote in favour of Resolution 3 as it allows the Company greater flexibility to issue further Securities representing up to 15% (under ASX Listing Rule 7.1) of the total number of Shares on issue in any 12 month period without Shareholder approval.

The Board recommends Shareholders vote in favour of Resolution 4 as if Shareholders approve Resolution 4, the issue of 11,288,117 Placement Shares will be excluded from the calculations of the Company’s 10% limit under ASX Listing Rule 7.1A.

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GLOSSARY

In the Notice of Meeting (including the Annexures thereto) and the Proxy Form, the following terms have the following meanings unless they are otherwise defined or the context otherwise requires:

$ means Australian dollars.

2018 AGM means the Company’s annual general meeting held on 29 November 2018.

2018 Financial Report means the Company’s financial report for the financial year ended 30 June 2018, which can be downloaded from the Company’s website at www.galanlithium.com.au.

General Meeting or Meeting means the meeting convened by the Notice.

Annexure means an annexure to this Explanatory Memorandum.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited ACN 008 624 691 or the market operated by it, as the context requires.

ASX Listing Rules or Listing Rules means the Listing Rules of ASX and any other rules of ASX which are applicable while the Company is admitted to the official list of ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

Board means the board of Directors.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chairperson of the Meeting.

Class A Performance Shares means shares issued on the terms and conditions set out in Annexure A.

Class B Performance Shares means shares issued on the terms and conditions set out in Annexure B.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the Company;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth) that may be made for this purpose.

Company or Galan means Galan Lithium Limited ACN 149 349 646.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth) and the regulations promulgated under it, each as amended from time to time.

Director means a director of the Company.

Equity Securities has the same meaning as in the Listing Rules.

Explanatory Memorandum means the explanatory memorandum accompanying and forming part of the Notice.

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

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Notice or Notice of Meeting or Notice of General Meeting means this notice of General Meeting including the Explanatory Memorandum and the Proxy Form.

Option means an option to acquire a Share.

Performance Shares means Class A Performance Shares and Class B Performance Shares.

Placement Shares means the Shares issued under a placement announced to ASX by the Company on 9 April 2019 and being the subject of Resolutions 3 and 4.

Proxy Form means the proxy form accompanying and forming part of the Notice.

Remuneration Report means the remuneration report set out in the Director’s report section of the 2018 Financial Report.

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

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Trading Day means a day determined by ASX to be a trading day and notified to market participants being:

(a) a day other than:

(i) a Saturday, Sunday, New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day; and

(ii) any other day which ASX declares and publishes is not a trading day; and

(b) notwithstanding (a), a day which for the purposes of settlement, ASX declares is a trading day notwithstanding that dealings between market participants are suspended on that day.

WST means Western Standard Time as observed in Perth, Western Australia.

Where a word or phrase is given a defined meaning, another part of speech or other grammatical form in respect of that word or phrase has a corresponding meaning.

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ANNEXURE A

Terms and conditions of Class A Performance Shares

The terms of the Class A Performance Shares are set out as follows:

1. General

• (a) ( Performance Shares ) Each Class A Performance Share is a separate class of share in the capital of Galan Lithium Limited ( Company ) that will be convertible into fully paid ordinary shares in the capital of the Company ( Ordinary Shares ) in accordance with the rights of that class.

• (b) ( General Meetings ) The Class A Performance Shares shall confer on the holder ( Holder ) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. The Holder has the right to attend general meetings of shareholders of the Company.

• (c) ( No Voting Rights ) The Class A Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.

• (d) ( No Rights ) The Class A Performance Shares do not entitle the Holder to any dividends.

• (e) ( Return of Capital ): The Class A Performance Shares do not confer on the Holder any right to a return of capital, whether in a winding up, upon a reduction of capital or otherwise.

• (f) ( Not Transferable ) The Class A Performance Shares are not transferable.

• (g) ( Reorganisation of Capital ) If at any time the issued capital of the Company is reconstructed, all rights of the Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

• (h) ( Application to ASX ) The Class A Performance Shares will not be quoted on ASX. However, upon conversion of the Performance Shares into Ordinary Shares the Company must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on ASX.

• (i) ( No Other Rights ) The Class A Performance Shares give the Holder no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

• (j) ( Participation in Entitlements and Bonus Issues ) Holders of Class A Performance Shares will not be entitled to participate in new issues of capital offered to holders of the Ordinary Shares such as bonus issues and entitlement issues.

(k) ( Reconstruction )

• (i) If there is a reconstruction after the issue of the Class A Performance Shares (including, consolidation, subdivision, reduction or return) of the issued capital the Company, the basis for adjustment of the conversion of Class A Performance Shares into Ordinary Shares will be reconstructed in the same proportion as the issued capital of the Company is reconstructed and in a manner which will not result in any additional benefits being conferred on the Holder which are not conferred on the Shareholders of the Company, (subject to the same provisions with respect to rounding of entitlements as sanctioned by the meeting of shareholders approving the reconstruction of capital) but in all other respects the terms for conversion of the Class A Performance Shares will remain unchanged.

• (ii) The adjustments of this term will, subject to the ASX Listing Rules, be determined by the Company.

• (l) ( Amendments required by ASX ) The terms of the Class A Performance Shares may be amended as necessary by the Company in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or terminated.

2. Conversion of the Class A Performance Shares

• (a) ( Class A Performance Milestone ) Each Class A Performance Share will convert into one (1) Ordinary Share upon the Company announcing an Indicated and Measured resource of 1Mt of lithium carbonate equivalent at a minimum grade of 400 mg/l of lithium pursuant to The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 ( JORC Code ) within a project in which the Company has an interest ( Class A Performance Milestone ). In the event that the Company’s interest in that project is less than 100%, the Class A Performance Share holder will only be entitled to receive the proportion of those 5,000,000 Shares that is equal to the Company’s percentage interest in the project (i.e. if the Company holds a 75% interest in the relevant project,

15

the Class A Performance Share will be entitled to receive 75% x 5,000,000 Shares) unless the Company’s board of directors ( Board ) agrees otherwise.

• (b) ( Class A Milestone Determination Date ) The Class A Performance Milestone must be achieved on or before the first to occur of:

• (i) 31 July 2023; or

• (ii) the date on which the Holder ceases to be employed by the Company,

( Class A Milestone Determination Date ).

• (c) ( Conversion if Milestone not achieved ) If the Class A Performance Milestone set out in item 2(a) above is not achieved by the Class A Milestone Determination Date (subject always to clause 2(d)), the Class A Performance Shares will automatically convert into one Ordinary Share for every 1,000,000 Class A Performance Shares within 10 business days of the Class A Milestone Determination Date. Fractional entitlements will be disregarded.

• (d) ( Conversion upon termination of employment ) In the event that the Holder’s employment with the Company is terminated on or before 31 July 2023, the Board may, in its sole and absolute discretion, determine that all or a portion of the Class A Performance Shares will automatically convert into Ordinary Shares upon such termination at the rate set out in clause 2(a), notwithstanding that the Company will comply with its obligations under ASX Listing Rules 10.18 and 10.19. Any portion of the Class B Performance Shares which the Board does not determine will be converted into Ordinary Shares upon termination of the Holder’s employment with the Company in accordance with this clause 2(d) will be converted into Ordinary Shares at the rate set out in clause 2(c)).

• (e) ( Conversion upon Change of Control Event ) if, on or before the Class A Milestone Determination Date:

• (i) a bona fide Takeover Bid (as that term is defined in the Corporations Act 2001 (Cth) ( Corporations Act )) received by the Company is declared unconditional and the bidder has acquired a Relevant Interest (as that term is defined in the Corporations Act) in at least 50.1% of the Company’s issued Shares; or

• (ii) a court approves, under section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies,

(each being a Change of Control Event ) and subject always to:

• (iii) the Company having a market capitalisation of at least A$100 million as at the date the circumstances set out in clause 2(e)(i) or 2(e)(ii) arise ( Relevant Date ); or

• (iv) the transaction referred to in clause 2(e)(i) or 2(e)(ii) having a value of at least A$100 million as at the Relevant Date,

any of the Class A Performance Shares which have not been issued to the Holder as at the Relevant Date will be issued to the Holder despite the Class A Performance Milestone not having been achieved at the rate set out in clause 2(a), provided that the maximum number of performance shares that can be converted into Ordinary Shares and issued upon a Change of Control Event (being all of the performance shares then on issue in the Company, including the Class A Performance Shares) must not exceed 10% of the issued capital of the Company as at the date of occurrence of the Change of Control Event and notwithstanding that the Company will comply with its obligations under ASX Listing Rules 10.18 and 10.19. Any Class A Performance Shares not converted to Ordinary Shares pursuant to this clause 2(e) will continue to be held by the Holder on the same terms and conditions.

• (f) ( Takeover Provisions ) If the conversion of Class A Performance Shares (or part thereof) under clause 2(e) would result in any person being in contravention of section 606(1) of the Corporations Act then the conversion of each Class A Performance Shares that would cause the contravention will be deferred until such time or times thereafter that the conversion would not result in a contravention of section 606(1).

• (g) ( Conversion Procedure ) The Company will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class A Performance Shares into Ordinary Shares.

• (h) ( Ranking of Shares ) The Ordinary Shares into which the Class A Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares.

The general terms and conditions of the Class A Performance Shares will comply with the ASX Listing Rules and the requirements of the ASX.

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ANNEXURE B

Terms and conditions of Class B Performance Shares

The terms of the Class B Performance Shares are set out as follows:

1. General

• (a) ( Performance Shares ) Each Class B Performance Share is a separate class of share in the capital of Galan Lithium Limited ( Company ) that will be convertible into fully paid ordinary shares in the capital of the Company ( Ordinary Shares ) in accordance with the rights of that class.

• (b) ( General Meetings ) The Class B Performance Shares shall confer on the holder ( Holder ) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. The Holder has the right to attend general meetings of shareholders of the Company.

• (c) ( No Voting Rights ) The Class B Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.

• (d) ( No Rights ) The Class B Performance Shares do not entitle the Holder to any dividends.

• (e) ( Return of Capital ): The Class B Performance Shares do not confer on the Holder any right to a return of capital, whether in a winding up, upon a reduction of capital or otherwise.

• (f) ( Not Transferable ) The Class B Performance Shares are not transferable.

• (g) ( Reorganisation of Capital ) If at any time the issued capital of the Company is reconstructed, all rights of the Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

• (h) ( Application to ASX ) The Class B Performance Shares will not be quoted on ASX. However, upon conversion of the Performance Shares into Ordinary Shares the Company must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on ASX.

• (i) ( No Other Rights ) The Class B Performance Shares give the Holder no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

• (j) ( Participation in Entitlements and Bonus Issues ) Holders of Class B Performance Shares will not be entitled to participate in new issues of capital offered to holders of the Ordinary Shares such as bonus issues and entitlement issues.

• (k) ( Reconstruction )

• (i) If there is a reconstruction after the issue of the Class B Performance Shares (including, consolidation, subdivision, reduction or return) of the issued capital the Company, the basis for adjustment of the conversion of Class B Performance Shares into Ordinary Shares will be reconstructed in the same proportion as the issued capital of the Company is reconstructed and in a manner which will not result in any additional benefits being conferred on the Holder which are not conferred on the Shareholders of the Company, (subject to the same provisions with respect to rounding of entitlements as sanctioned by the meeting of shareholders approving the reconstruction of capital) but in all other respects the terms for conversion of the Class B Performance Shares will remain unchanged.

• (ii) The adjustments of this term will, subject to the ASX Listing Rules, be determined by the Company.

• (l) ( Amendments required by ASX ) The terms of the Class B Performance Shares may be amended as necessary by the Company in order to comply with the ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or terminated.

2. Conversion of the Class B Performance Shares

• (a) ( Class B Performance Milestone ) Each Class B Performance Share will convert into one (1) Ordinary Share upon financial close for a commercial scale lithium production facility capable of production of at least 5,000tpa of lithium carbonate equivalent per annum by the Company ( Class B Performance Milestone ).

• (b) ( Class B Milestone Determination Date ) The Class B Performance Milestone must be achieved on or before the first to occur of:

• (i) 31 July 2023; or

17

• (ii) the date on which the Holder ceases to be employed by the Company,

( Class B Milestone Determination Date ).

• (c) ( Conversion if Milestone not achieved ) If the Class B Performance Milestone set out in item 2(a) above is not achieved by the Class B Milestone Determination Date (subject always to clause 2(d)), the Class B Performance Shares will automatically convert into one Ordinary Share for every 1,000,000 Class B Performance Shares within 10 business days of the Class B Milestone Determination Date. Fractional entitlements will be disregarded.

• (d) ( Conversion upon termination of employment ) In the event that the Holder’s employment with the Company is terminated on or before 31 July 2023, the Board may, in its sole and absolute discretion, determine that all or a portion of the Class B Performance Shares will convert into Ordinary Shares upon such termination at the rate set out in clause 2(a), notwithstanding that the Company will comply with its obligations under ASX Listing Rules 10.18 and 10.19. Any portion of the Class B Performance Shares which the Board does not determine will be converted into Shares upon termination of the Holder’s employment with the Company in accordance with this clause 2(d) will be converted into Ordinary Shares at the rate set out in clause 2(c)).

• (e) ( Conversion upon Change of Control Event ) if, on or before the Class B Milestone Determination Date:

• (i) a bona fide Takeover Bid (as that term is defined in the Corporations Act 2001 (Cth) ( Corporations Act )) received by the Company is declared unconditional and the bidder has acquired a Relevant Interest (as that term is defined in the Corporations Act) in at least 50.1% of the Company’s issued Shares; or

• (ii) a court approves, under section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies,

(each being a Change of Control Event ) and subject always to:

• (iii) the Company having a market capitalisation of at least A$100 million as at the date the circumstances set out in clause 2(e)(i) or 2(e)(ii) arise ( Relevant Date ); or

• (iv) the transaction referred to in clause 2(e)(i) or 2(de)(ii) having a value of at least A$100 million as at the Relevant Date,

any of the Class B Performance Shares which have not been issued to the Holder as at the Relevant Date will be issued to the Holder despite the Class B Performance Milestone not having been achieved at the rate set out in clause 2(a), provided that the maximum number of performance shares that can be converted into Ordinary Shares and issued upon a Change of Control Event (being all of the performance shares then on issue in the Company, including the Class B Performance Shares) must not exceed 10% of the issued capital of the Company as at the date of occurrence of the Change of Control Event and notwithstanding that the Company will comply with its obligations under ASX Listing Rules 10.18 and 10.19. Any Class B Performance Shares not converted to Ordinary Shares pursuant to this clause 2(e) will continue to be held by the Holder on the same terms and conditions.

• (f) ( Takeover Provisions ) If the conversion of Class B Performance Shares (or part thereof) under clause 2(e) would result in any person being in contravention of section 606(1) of the Corporations Act then the conversion of each Class B Performance Shares that would cause the contravention will be deferred until such time or times thereafter that the conversion would not result in a contravention of section 606(1).

• (g) ( Conversion Procedure ) The Company will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class B Performance Shares into Ordinary Shares.

• (h) ( Ranking of Shares ) The Ordinary Shares into which the Class B Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares.

The general terms and conditions of the Class B Performance Shares will comply with the ASX Listing Rules and the requirements of the ASX.

18

PROXY FORM

APPOINTMENT OF PROXY GALAN LITHIUM LIMITED ACN 149 349 646

==> picture [462 x 134] intentionally omitted <==

----- Start of picture text -----

GENERAL MEETING
I/We
of
being a member of Galan Lithium Limited entitled to attend and vote at the General Meeting, hereby
Appoint
Name of proxy
OR the Chair as your proxy
----- End of picture text -----

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the General Meeting to be held 3.00pm (WST), on Thursday 6 June 2019 at Level 2, 38 Richardson Street, West Perth WA 6005, and at any adjournment thereof.

I/We acknowledge that the Chair intends to vote all available proxies in favour of each of Resolutions 1 to 4 (inclusive).

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN

Ordinary Resolution 1 – Ratification of Issue of 180,891 Shares to Nominees of Barclay Wells Ltd Ordinary Resolution 2 – Approval of Issue of 10,000,000 Performance Shares to Mr Juan Pablo Vargas de la Vega Ordinary Resolution 3 – Ratification of Issue of 3,257,338 Placement Shares (7.1) Ordinary Resolution 4 – Ratification of Issue of 11,288,117 Placement Shares (7.1A)

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority.

Where I/we have appointed the Chair as my/our proxy (or the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy in respect of Resolution 2 (except where I/we have indicated a different voting intention above) even though Resolution 2 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair.

If two proxies are being appointed, the proportion or number of voting rights this proxy represents is_______

Signature of Member(s):

Signature of Member(s): Individual or Member 1 Sole Director/Company Secretary	Date: ___ Member 2 Director	_______ Member 3 Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _________

GALAN LITHIUM LIMITED ACN 149 349 646

Instructions for Completing ‘Appointment of Proxy’ Form

1. ( Appointing a Proxy ): A Shareholder entitled to attend and vote at the General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion or number of the Shareholder’s voting rights. If a Shareholder appoints two proxies and the appointment does not specify this proportion or number, each proxy may exercise half the votes. Fractions will be disregarded. A duly appointed proxy need not be a Shareholder.

2. ( Direction to Vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

4. ( Proxy Voting ): Sections 250BB and 250BC of the Corporations Act broadly provide that:

5. if proxy holders vote, they must cast all directed proxies as directed; and

6. any directed proxies which are not voted will automatically default to the chair, who must vote the proxies as directed.

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the Chair – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• • if the proxy is not the Chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

If a proxy is also a Shareholder, the proxy can cast any votes the proxy holds as a Shareholder in any way that the proxy sees fit.

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the company's members; and

• the appointed proxy is not the Chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies: o the proxy is not recorded as attending the meeting; o the proxy does not vote on the resolution,

the Chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

1. ( Signing Instructions ):

2. ( Individual ): Where the holding is in one name, the Shareholder must sign.

3. ( Joint Holding ): Where the holding is in more than one name, all of the Shareholders should sign.

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

5. ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.

6. ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the Shareholder is present at the General Meeting.

8. ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and:

9. (a) deliver the Proxy Form by hand to the Company’s registered office at Level 2, 38 Richardson Street, West Perth, Western Australia 6005;

10. (b) post it to Galan Lithium Limited, PO Box 396, West Perth, WA 6872; or

11. (c) send it by facsimile to the Company on facsimile number +61 8 9322 6398,

12. (d) send by email to mrobbins@galanlithium.com.au

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy Forms received later than this time will be invalid.