Ganfeng Lithium Group Co., Ltd. — Capital/Financing Update 2019

May 20, 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1772)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is made pursuant to the disclosure requirements under Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

According to the relevant regulations of the People’s Republic of China, GANFENG LITHIUM CO., LTD. (the “ Company ”) had published the following announcement. The following is a translation of the official announcement solely for the purpose of providing information.

By order of the Board GANFENG LITHIUM CO., LTD. LI Liangbin Chairman

Jiangxi, PRC May 21, 2019

As at the date of this announcement, the Board comprises Mr. LI Liangbin, Mr. WANG Xiaoshen, Mr. SHEN Haibo, Ms. DENG Zhaonan and Mr. XU Xiaoxiong as executive directors of the Company; Mr. HUANG Daifang as a non-executive director of the Company; and Mr. GUO Huaping, Mr. HUANG Huasheng, Mr. LIU Jun and Ms. WONG Sze Wing as independent non-executive directors of the Company.

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Stock Code: 002460 Stock Abbreviation: Ganfeng Lithium Number: Lin 2019-051

GANFENG LITHIUM CO., LTD. ANNOUNCEMENT ON ENTERING INTO LETTER OF INTENT FOR STRATEGIC COOPERATION

The Company and all members of its board of directors warrant that the information contained in this announcement is true, accurate and complete and that there are no false representations or misleading statements contained in or material omissions from this announcement.

I. OVERVIEW OF THE TRANSACTION

Recently, Ganfeng Lithium Co., Ltd. (the " Company " or " Ganfeng Lithium ") and Bacanora Lithium Plc (" Bacanora ") entered into a non-binding letter of intent for strategic cooperation (the " LOI "). Pursuant to the LOI, Ganfeng Lithium intends to make strategic investment in Bacanora, which includes subscribing for 29.99% shares of Bacanora, and making an investment in Sonora Lithium Ltd, a lithium-clay project company of Bacanora, in exchange for 22.5% equity interest in the project company and an option to increase its shareholding in the project company to no more than 50% in the future. The LOI stipulates that after the completion of the strategic investment, Ganfeng Lithium will purchase a certain proportion of the output of Phase I and Phase II of the Sonora lithium-clay project owned by Sonora Lithium Ltd on a long-term basis. In addition, Ganfeng Lithium will assist Bacanora to complete the EPC design, as well as subsequent construction and commissioning of the Sonora project. The LOI is a framework agreement for cooperation between the two parties, and thus is not required to be submitted to the board of directors and the shareholders' general meeting for deliberation. As the official acquisition details and form of cooperation shall be subject to consideration and approval of the board of directors of each of the Company and Bacanora, there are certain uncertainties in connection therewith.

The transaction contemplated under the LOI does not constitute a related-party transaction, nor does it constitute a material asset reorganization as stipulated in the Administrative Measures for the Material Asset Reorganizations of Listed Companies

(上市公司重大資産重組管理辦法).

II. BASIC INFORMATION OF THE COUNTERPARTY

Bacanora, established in 2018 with its registered address at 4 More London Riverside, London, SE1 2AU, is a company listed on the AIM market of the London Stock Exchange (AIM code: BCN), mainly engaged in investment holding and lithium clay resource and project management. Its major assets are the Sonora lithium-clay project in Mexico. As of the date of this announcement, the issued share capital of Bacanora comprises 134,464,872 shares, 10% of which are held by M&G Investments Fund, its substantial shareholder.

The Sonora project is a lithium-clay project located in Mexico and is currently one of the largest lithium resource projects in the world. According to the feasibility study

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report of the Sonora project, the total lithium resources of the project are about 8.8 million tonnes of lithium carbonate equivalent. Due to the unique advantages of lithium clay resources, the lithium extraction technology of the project has the both advantages of the extracting lithium from ores and from salt-lake brines, which means it can complete the lithium extraction process in a short time at a speed similar to that of extracting lithium from ores, and at a lower cost similar to that of extracting lithium salt-lake brines. As of the date of this announcement, the project has not yet been put into operation, and the annual lithium carbonate production capacity of the first phase of the project upon commencement of operation is expected to be 17,500 tonnes.

Bacanora is not connected with the controlling shareholder, de facto controller, directors, supervisors and senior management of the Company in terms of equity, business, asset, liability and debt, personnel and so forth.

III. MAIN CONTENTS OF THE LOI

The Company intends to carry out strategic investment and cooperation with Bacanora and its subsidiary, Sonora Lithium Ltd, main contents of which are as follows:

(1) the Company will subscribe for 29.99% shares of Bacanora through a private placement at the price of £0.25 per share, totaling £14,400,091. Upon completion of the private placement, Ganfeng Lithium will have the right to nominate a director to the board of directors of Bacanora;

(2) the Company will make an investment in Sonora Lithium Ltd, a project company of Bacanora, in exchange for its 22.5% equity interest. The investment is to be carried out by way of a private placement at the price of £0.25per share, totaling £7,563,649, and Ganfeng Lithium will be granted an option to increase its shareholding in the project company to no more than 50%. Upon completion of the private placement, Ganfeng Lithium will have the right to nominate a director to the board of directors of Sonora Lithium Ltd;

(3)conditional on the completion of the strategic investment, the Company will be granted offtake rights to offtake 50% of all lithium products of the Sonora project during Phase I of production. The Company would have the option to increase its offtake to 75% during Phase II of production.;

(4) in addition, the Company will assist Bacanora to complete the EPC design, as well as subsequent construction and commissioning of the Sonora project.

The specific matters such as cooperative project, cooperation method and scale will be subject to the definitive agreements to be entered into between the parties.

IV. PURPOSE OF THE COOPERATION, ITS IMPACT ON THE COMPANY AND THE RISKS INVOLVED

1. Purpose of the cooperation and its impact on the Company

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The establishment of a long-term strategic cooperation relationship with Bacanora well help further lock up the upstream resources of the Company, improve the Company's sustained profitability, and benefit the Company's long-term development.

The Letter of Intent for Strategic Investment sets forth the framework description on the parties’ cooperation intention and principles, and the specific matters such as cooperative project, cooperation method and scale will be subject to the definitive agreements to be entered into between the parties. The Company will go through relevant approval procedures and fulfill the obligation of information disclosure in a timely manner in light of the subsequent progress of the cooperation. The signing of the LOI will not have any significant impact on the Company’s financial results for 2019.

2. Risk Warning

As the LOI is only a framework document for strategic cooperation, and the Company still needs to negotiate and enter into a specific project agreement with the counterparty, there are certain uncertainties in connection therewith. The Company will perform corresponding approval procedures and the obligation of information disclosure in a timely manner according to the subsequent progress and in accordance with the requirements of the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Articles of Association of the Company and other applicable laws and regulatory documents.

V. DOCUMENT AVAILABLE FOR INSPECTION

Letter of Intent for Strategic Investment

The announcement is hereby given.

The Board of Directors

Ganfeng Lithium Co., Ltd.

May 21, 2019