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

Mar 7, 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 “Announcement on Approval of the Cap for Provision of Financial Assistance by GFL International (a Wholly-Owned Subsidiary of the Company) to Minera Exar (a Shareholding Subsidiary of the Company) through Exar Capital (a Shareholding Subsidiary of the Company) in 2019 and Related Party Transaction” on the website of the Shenzhen Stock Exchange (http:// www.szse.cn/). 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 March 8, 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 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 2019-010

GANFENG LITHIUM CO., LTD. ANNOUNCEMENT ON APPROVAL OF THE CAP FOR

PROVISION OF FINANCIAL ASSISTANCE BY GFL INTERNATIONAL (A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY) TO MINERA EXAR (A SHAREHOLDING SUBSIDIARY OF THE COMPANY) THROUGH EXAR CAPITAL (A SHAREHOLDING SUBSIDIARY OF THE COMPANY) IN 2019

AND RELATED PARTY TRANSACTION

The Company and all members of its Board 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 PROVISION OF EXTERNAL FINANCIAL ASSISTANCE

1.The Resolution on Approval of the Cap for Provision of Financial Assistance by GFL International (a Wholly-owned Subsidiary of the Company) to Minera Exar (a Shareholding Subsidiary of the Company) through Exar Capital (a Shareholding Subsidiary of the Company) in 2019 and Related Party Transaction ( 《 關於批准全資子公司贛鋒國際通過參 股子公司 Exar Capital 為參股子公司 Minera Exar 提供2019年度財 務資助額度暨關聯交易的議案 》 ) was considered and approved at the 29th meeting of the fourth session of the board of directors (the “Board”) convened by Ganfeng Lithium Co., Ltd. (the “Company”) on March 7, 2019, pursuant to which, GFL International Co., Limited (“GFL International”, a wholly-owned subsidiary of the Company) was approved to provide financial assistance with a cap of no more than US$100 million to Exar Capital BV, a shareholding subsidiary of the Company, (previously known as “Netherlands NHC”; the name finally registered with the Registrar of Companies in Netherlands is “Exar Capital BV”; and hereinafter referred to as “Exar Capital”) in 2019. Such financial assistance will be provided to Minera Exar S.A. (a shareholding company of the Company in Argentina, and hereinafter referred to as “Minera Exar”)

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through Exar Capital, and used for promoting the development and construction of Cauchari-Olaroz Lithium Brine Project of Minera Exar.

1. As Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serves as a director of Exar Capital; and both Mr. Li Liangbin, the chairman and president of the Company, and Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serve as directors of Minera Exar, the transaction constitutes a related party transaction but does not constitute a material asset restructuring under the Measures for the Administration of the Material Asset Restructuring of Listed Companies, and is still subject to consideration at the general meeting of the Company.

II. BASIC INFORMATION ON THE RELATED PARTIES

1. GFL International is an investment and trading company established by the Company in Hong Kong in 2011. As at the disclosure date of this announcement, GFL International has registered capital of US$380,693,200 and RMB50 million. It has not been listed . The Company holds 100% equity interest in GFL International.

Mr. Li Liangbin, the chairman and president of the Company, and Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serve as directors of GFL International.

1. Lithium Americas Corp. (“Lithium Americas”) is a Canada-based resource company and trades on Toronto Stock Exchange under ticker symbol “ LAC ” . Its registered address is at Suite 1100-355 Burrard Street ， Vancouver ， British Columbia ， Canada ， V6C 2G8. As at the disclosure date of this announcement, Lithium Americas has 302,534,441 outstanding ordinary shares and is held as to 16.9% by GFL International.

Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serve as a director of Lithium Americas.

1. Exar Capital is a mineral investment and trading company in Netherlands. It was established in October 2018 with its registered address at WTC Schiphol Airport, D Tower 11th Floor Schiphol Boulevard 359, 1118 BJ Amsterdam Schiphol, As at the disclosure date of this announcement, Exar Capital has not been listed. It is held as to 37.5% and 62.5% by GFL International and Lithium Americas, respectively.

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Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serve as a director of Exar Capital.

1. Minera Exar is a mining and exploration company in Argentina. It was established in 2006, with its registered address at Palma de 4 Carrillo 54, Planta Baja Of. 7, San Salvador de Jujuy (4600) Argentina. As at the disclosure date of this announcement, Minera Exar has not been listed. It is held as to 37.5% and 62.5% by GFL International’s 100% owned subsidiary Ganfeng Lithium Netherlands Co., B.V. （ “Ganfeng Netherlands” ） and Lithium Americas, respectively.

Mr. Li Liangbin, the chairman and president of the Company, and Mr. Wang Xiaoshen, the vice chairman and vice president of the Company, serve as directors of Minera Exar.

1. Related relationship: Lithium Americas, Exar Capital and Minera Exar are all related legal persons of the Company.

The shareholding relationships among all related legal persons are as follows:

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III. BASIC INFORMATION ON THE RECIPIENTS OF THE FINANCIAL ASSISTANCE

1. For the basic information on Exar Capital, please refer to “II. Basic Information on the Related Parties” in this announcement.

As at the disclosure date of this announcement, the company has no financial data.

1. For the basic information on Minera Exar, please refer to “II. Basic Information on the Related Parties” in this announcement.

Financial data of Minera Exar for the latest year and period:

Unit: US$ ’000

Index	June 30, 2018 （audited）	December 31, 2018 （unaudited）
Total assets	85,841	179,885
Net assets	35,089	75,459
Index	January to June 2018 （audited）	2018 （unaudited）
Operating revenue	-	-
Net profit	-934	-911

Note ： US$1 =RMB6.70

IV. MAIN CONTENTS OF THE FINANCIAL ASSISTANCE

1. Purpose of the financial assistance: the financial assistance to be provided by GFL International to Exar Capital will be completely used to finance the development and construction of the Cauchari-Olaroz Lithium Brine Project of Minera Exar, for which it is proposed to commence the construction of camp, pit and salt pan and the ordering of important equipment from the first quarter of 2019. It is estimated that the total investment will reach approximately US$230 million in 2019, for which GFL International and Lithium Americas will provide financial assistance

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in proportion to their respective shareholding in Exar Capital. Phase I of the project has a planned annual production capacity of 25,000 tonnes of battery grade lithium carbonate and is scheduled to be put into production in the first half of 2020.

1. Amount of the financial assistance: In 2019, the cap of financial assistance to be provided by GFL International to Exar Capital is no more than US$100 million. Such financial assistance will be eventually provided to Minera Exar through Exar Capital.

3. Source of funds: Self-owned funds

1. Annual interest rate: No interest will be accrued on the loan since the Company will obtain the 77.5% offtake rights for the planned annual production capacity of 25,000 tonnes of battery grade lithium carbonate under the Phase I of Cauchari-Olaroz Lithium Brine Project.

2. Financial assistance provided by other shareholders to Exar Capital and Minera Exar: Lithium Americas will provide financial assistance on equal terms in proportion to its shareholding in Exar Capital.

3. Repayment guarantee: Exar Capital and Minera Exar will repay the loan with the operating income of Cauchari-Olaroz Lithium Brine Project.

7. Performance of approval procedures for this transaction

The provision of external financial assistance was considered and approved at the 29th meeting of the fourth session of the Board of the Company convened on March 7, 2019 with 8 voted for, 0 voted against and 0 abstained from voting. Mr. Li Liangbin and Mr. Wang Xiaoshen, as related directors, abstained from voting, and the matter is subject to consideration at the general meeting of the Company. The convening, holding and voting procedures of the Board meeting are in line with the requirements of laws, regulations and the articles of association, and the resolutions passed at the meeting are legal and valid.

V. PURPOSE OF THE PROVISION OF FINANCIAL ASSISTANCE, EFFECTS THEREOF ON THE COMPANY AND RELEVANT RISKS

1. Purpose of the transaction

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This transaction aims to facilitate the launch of Cauchari-Olaroz Lithium Brine Project of Minera Exar located in Jujuy, Argentina, which is conducive to the Company’s business development and enhancement of core competitiveness, and is in line with the development strategy of upstream and downstream integration of the Company and of the new energy automobile industry of the PRC.

2. Effects of the transaction on the Company

The transaction will result in certain net cash outflow of the Company but will have no material effects on the working capital required for normal operation of the Company. The Company will accelerate the development progress of Cauchari-Olaroz Lithium Brine Project. In addition, the transaction will have positive effects on the future financial situation and operating results of the Company.

3. Risks

If the production schedule of Cauchari-Olaroz Lithium Brine Project does not meet the expectations, there may be operational risks and risks of delay in repayment.

The Board of the Company will closely monitor the progress and promptly perform the disclosure obligation. Investors are advised to exercise caution and be aware of the risks involved.

VI. PROVISION OF FINANCIAL ASSISTANCE TO EXAR CAPITAL AND MINERA EXAR IN THE LAST ACCOUNTING YEAR

In the last accounting year, the Company did not provide any financial assistance to Exar Capital.

In the last accounting year, GFL International provided a financial assistance of US$27.20 million to Minera Exar through Exar Capital; Ganfeng Netherlands, a wholly-owned subsidiary of the Company, provided a financial assistance of US$25 million to Minera Exar.

VII. ACCUMULATED AMOUNT OF EXTERNAL FINANCIAL ASSISTANCE PROVIDED BY THE COMPANY AND OVERDUE AMOUNT

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As at the disclosure date of this announcement, the external financial assistance provided by the Company in aggregate are as follows:

Provider of the financial assistance	Recipient of the financial assistance	Amount
GFL International	LITIO MINERA	No more than US$12 million in total
	International Lithium	No more than US$2 million in total
	Lithium Americas	No more than US$225 million in total
GFL International （Exar Capital）	Minera Exar	No more than US$27.20 million
Ganfeng Netherlands	Minera Exar	No more than US$25 million
Total		No more than US$291.20 million in aggregate

The Company has no overdue financial assistance.

Upon provision of the financial assistance facility in an aggregate amount of no more than US$100 million provided by GFL International through shareholding subsidiary Exar Capital to shareholding subsidiary Minera Exar, the accumulated financial assistance provided by the Company will be no more than US$391.20 million (equivalent to RMB2,621.04 million, converted at the exchange rate against US$ of 6.70), representing 64.92% of the latest audited net assets of the Company.

VIII. RISK CONTROL AND OPINIONS OF THE BOARD

The Board of the Company believes that the external financial assistance is to help promote the production schedule of Cauchari-Olaroz Lithium Brine Project of Minera Exar in Jujuy, Argentina, which is conducive to the Company's business development and enhancement of core competitiveness, and is in line with the development strategy of upstream and downstream integration of the Company and of the new energy

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automobile industry of the PRC. The purpose of the loan is clear and the source of repayment is guaranteed without any prejudice to the interests of the Company and all shareholders, in particular minority shareholders. The decision-making procedures are legal and valid.

IX. PRIOR APPROVAL OPINIONS AND INDEPENDENT OPINIONS OF INDEPENDENT DIRECTORS

1. Prior approval opinions on approval of the cap for provision of financial assistance by GFL International (a wholly-owned subsidiary of the Company) to Minera Exar (a shareholding subsidiary of the Company) through Exar Capital (a shareholding subsidiary of the Company) in 2019 and related party transaction

The provision of financial assistance by GFL International and Lithium Americas through shareholding subsidiary Exar Capital to shareholding subsidiary Minera Exar in proportion to their respective shareholding is fair, just and open, and has no adverse impact on the Company's independence or any prejudice to the interests of the Company and all shareholders, in particular minority shareholders and is in line with the relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange. Therefore, we unanimously agree to table the resolution at the 29th meeting of the fourth session of the Board of the Company for consideration, and related directors of the Company shall abstain from voting thereon.

1. Independent opinions on approval of the cap for provision of financial assistance by GFL International (a wholly-owned subsidiary of the Company) to Minera Exar (a shareholding subsidiary of the Company) through Exar Capital (a shareholding subsidiary of the Company) in 2019 and related party transaction

The financial assistance provided by GFL International and Lithium Americas through shareholding subsidiary Exar Capital to shareholding subsidiary Minera Exar in proportion to their respective shareholding is to help promote the production schedule of Cauchari-Olaroz Lithium Brine Project of Minera Exar in Jujuy, Argentina, which is conducive to the Company's business development and enhancement of core competitiveness, and is in line with the development strategy of upstream and downstream integration of the Company and of the new energy automobile industry of the PRC. The financial assistance was determined after arm’s length negotiation on fair and reasonable conditions. The procedures are in line with relevant provisions and the risk is controllable

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without any prejudice to the interests of the Company and all shareholders, in particular minority shareholders.

Based on independent judgment, we approve the cap for provision of financial assistance by GFL International through shareholding subsidiary Exar Capital to shareholding subsidiary Minera Exar and agree to table the resolution at the general meeting of the Company for consideration.

X. MISCELLANEOUS

In the twelve months prior to the disclosure date of this announcement, the Company has not temporarily replenished working capital with idle proceeds, changed the use of proceeds into permanent replenishment of working capital, or permanently used excess proceeds to supplement working capital or repay bank loans. Meanwhile, in the twelve months after the provision of the external financial assistance, the Company will not temporarily replenish working capital with idle proceeds, change the purpose of proceeds into permanent replenishment of working capital, or permanently use excess proceeds to supplement working capital or repay bank loans.

XI. OPINIONS OF SPONSORS

1. The cap for provision of financial assistance by the Company to its shareholding subsidiary and related party transaction was considered and approved at the 29th meeting of the fourth session of the Board and the 19th meeting of the fourth session of the Supervisory Committee of the Company, and independent directors have expressed their independent opinions of prior approval and consent thereon. The cap for provision of financial assistance by the Company to its shareholding subsidiary and related party transaction is still subject to consideration at the general meeting of the Company.

2. Ganfeng Lithium is not in the period of utilizing idle proceeds to temporarily replenish working capital. In the twelve months prior to consideration of the resolution by the Board, the Company did not change the use of proceeds into permanent replenishment of working capital or permanently use excess proceeds to supplement working capital or repay bank loans.

3. As a significant initiative for the realization of the strategy of upstream

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and downstream integration of the Company, the cap for the proposed provision of financial assistance by Ganfeng Lithium to its shareholding subsidiary and related party transaction is conductive to enhancing the Company's core competitiveness. The decision-making process for the cap for provision of financial assistance by Ganfeng Lithium to its shareholding subsidiary and related party transaction is in compliance with relevant laws, regulations and the articles of association.

The sponsors have no objection against the cap for provision of financial assistance to the shareholding subsidiary and related party transaction.

XII. DOCUMENTS AVAILABLE FOR INSPECTION

1. Resolutions of the 29th meeting of the fourth session of the Board of the Company

2. Resolutions of the 19th meeting of the fourth session of the Supervisory Committee of the Company

3. Prior approval opinions of independent directors on relevant matters

4. Independent opinions of independent directors on relevant matters

5. Verification opinions of PING AN Securities Company Limited on the cap for provision of financial assistance by Ganfeng Lithium Co., Ltd to its shareholding subsidiary and related party transaction.

The board of directors Ganfeng Lithium Co., Ltd March 8, 2019