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LITHEX RESOURCES LIMITED

ACN 140 316 463

PROSPECTUS

For the issue of 10,000,000 Shares at an issue price of 20 cents each to raise $2,000,000

(Oversubscriptions of up to a further 10,000,000 Shares at an issue price of 20 cents each to raise up to a further $2,000,000 may be accepted)

IMPORTANT NOTICE

Shares offered by this Prospectus should be considered speculative and potential investors should refer to Section 4 for further details concerning the Risk Factors.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser.

Neither Lithex Resources Limited nor any other person guarantees the performance of the Shares offered pursuant to this Prospectus, or the performance of Lithex Resources Limited, or the return on any investment.

DIRECTORS

Malcolm Carson Non Executive Chairman Robert Mandanici Managing Director Steven Crabbe Executive Director

AUDITOR

Rothsay Chartered Accountants

Level 18 6-10 O’Connell Street SYDNEY NSW 2000

COMPANY SECRETARY

Neal Shoobert

INVESTIGATING ACCOUNTANT

Rothsay Consulting Services Pty Ltd

REGISTERED OFFICE

11 Rafferty Close MANDURAH WA 6210 Website: www.lithex.com.au Email: [email protected] Tel: (08) 9583 5109 Fax: (08) 9264 8207

LEAD MANAGER & CORPORATE ADVISER

Ascot Securities Pty Ltd

Level 8 530 Little Collins Street MELBOURNE VIC 3000

Level 18 6-10 O’Connell Street SYDNEY NSW 2000

SHARE REGISTRY

Security Transfer Registrars Pty Ltd

770 Canning Highway APPLECROSS WA 6153 Email: [email protected] Tel: (08) 9315 2333 Fax: (08) 9315 2233

Website: www.ascotsecurities.com.au Tel: 03 8686 5788 Fax: 03 8686 5790

SOLICITOR TO THE COMPANY

House Legal 86 First Avenue MOUNT LAWLEY WA 6050

SOLICITOR TO THE OFFER

Steinepreis Paganin Lawyers & Consultants Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

INDEPENDENT GEOLOGIST

Al Maynard and Associates 9/280 Hay Street SUBIACO WA 6008

INVESTMENT HIGHLIGHTS AND RISKS SUMMARY

INVESTMENT HIGHLIGHTS

Large strategic tenement holding within the East Pilbara and Gascoyne Geological Provinces of Western Australia.
Substantial position within the historical tin and tantalum producing districts of the Achaean Pilbara Craton.
Operations ceased 25 years ago due to weak demand and prices for rare metal commodities at that time.
Prices of rare metal commodities have firmed to record highs and Lithex Resources will undertake modern exploration on these abandoned fields.
The Moolyella, Shaw River and Pilgangoora projects are strategically located between Marble Bar and Port Hedland within trucking distance of ports.
The Arthur River project is located within the Gascoyne Mineral Field approx. 250 KM east of Carnarvon and north of Gascoyne Junction. This is a region known to contain rare metal pegmatites.
Lithex Resources is managed by a board with a blend of technical, corporate and capital market experience.
Lithex Resources represents an opportunity for investors seeking exposure to lithium, tantalum, tin and rare earth metals.
The directors are committed to:
focussing on exploration and adding value for shareholders through exploration and strategic business development;
taking advantage of the upsurge in demand and strong commodity prices for rare mineral commodities;
developing at least one of Lithex Resources’ projects into a viable mine and rare minerals export business; and
minimising other costs and administration overheads.

RISKS SUMMARY

There are risks associated with investing in the share market generally and in this Company specifically. These risks are more clearly outlined in Section 4 of the Prospectus, however, listed below are, in the Directors’ opinion, the key risks associated with this investment:

Key Risks

The tenements are at various stages of exploration, which of itself is a high risk undertaking. There can be no guarantee that the exploration activities of the Company will result in the discovery of an economic deposit.
no guarantee that tenements in application stage will ultimately be granted;
environmental bond review by the State Government may affect Company funding;

no assurance can be given that the cost estimates of proposed exploration expenditures and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability;
the overall share market may negatively impact an investment in the Company;
commodity prices may go down;
access to land may be stopped;
the Company may be unable to obtain environmental approvals;
the Company may not be able to raise further funds as and when required; and
Directors and consultants may leave the Company.

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TANTALITE RECOVERED FROM SURFACE SAMPLING AT THE MOOLYELLA PROJECT – 2010

CHAIRMAN’S LETTER

Dear Investor,

On behalf of the Directors of Lithex Resources Limited (“Lithex” or “the Company”), it is my pleasure to introduce this Prospectus to you and invite you to become a Shareholder of the Company.

This Prospectus has been issued by Lithex for the purposes of offering 10 million Shares at $0.20 each to raise $2 million before costs. Oversubscription of up to a further 10 million Shares at an issue price of $0.20 each to raise up to a further $2 million may be accepted.

Lithex was incorporated on 30 October 2009 for the purpose of exploration on tenements it has secured the rights to acquire which are located within the Pilbara and Gascoyne regions of Western Australia.

Lithex tenements cover areas which contain the valuable transition metal minerals including tin, tantalum, niobium, alkali metals including lithium, potassium and with scope to define rare mineral lanthanides and actinides.

Lithex’s tenements near Marble Bar (Moolyella and Shaw River) cover areas which were mined extensively for tin with secondary tantalum and niobium for nearly 100 years. Operations ceased in the mid 1980’s due to the collapse in tin prices which was caused by the massive stockpiles acquired by the International Tin Council (ITC) to support the price against competitive pressure from aluminium and plastic substitutes. In 1985 the ITC could no longer finance the stockpiles and was forced to sell tin into the market both suppressing the price and causing capacity to be shut-down. Following the disposal of the inventory (in the 1990’s) tin prices have dramatically improved due to increased demand from China and Indonesia, new high-tech uses and constrained supply.

World tin production doubled 1990 levels in 2004/2005 (351,800t) and uses for tin broadened from solder, tin foil and plating for tin cans to modern applications which take advantage of its “superconductor” properties, such as in mobile phones. For example, tin when combined with niobium (a metal associated with tantalum and which exists on Lithex’s tenements) is used in wires for very light superconducting magnets. There are also a number of applications for tin in organotin compounds.

Therefore, tin is enjoying a revival and the price and the accessory rare metals and rare earth minerals market is strengthening in anticipation of expanding uses of these minerals in sophisticated electronics, batteries for hybrid cars and a range of highly prized exotic uses.

Lithex’s projects are well placed to move from exploration to development and to achieve an early cash flow which places the Company in a strong position to take advantage of the demand and high prices for these rare minerals.

In addition, to the west of Marble Bar Lithex has tenements located on rock units with potential to contain tin, tantalum, lithium and rare earth mineralisation and which are positioned in the Pilbara near the Wodgina tin/tantalum mine operated by Talison Minerals and Mt Cassiterite deposits and in the Gascoyne the Arthur River tantalum – niobium mine operated by Tantalum Australia.

CHAIRMAN’S LETTER

Tantalum which naturally occurs with niobium, melts at a uniquely high 3,000C and also has unique electrical properties. Tantalum’s electronic properties are used in sophisticated electronics including computers and mobile phones. Its physical properties are exploited in gas turbine blades which operate at very high temperatures.

There are modern opportunities for miners of tin, tantalum/niobium, lithium and rare earth minerals and the opportunity to revitalise an industry which closed down 25 years ago.

Lithex’s budgets presented with this prospectus capture the implementation of exploration and evaluation programs on these tenements which have not been explored thoroughly with modern techniques. The tenements have historically produced substantial quantities of tin and tantalum over many decades from large alluvial deposits, with the primary source yet to be discovered.

Therefore, the Directors of Lithex believe its projects are exciting and have the scope to add shareholder value through strategically focussed exploration.

Furthermore the company has been fortunate to secure the services of Executive Directors Rob Mandanici and Steve Crabbe. They have experience in the operation of private and public companies, knowledge of the local mineralisation, practical hands-on experience in mining operations and the ambition to drive these projects to define tangible assets, build a viable mining business and add value for shareholders.

This Prospectus contains detailed information about Lithex and the Company’s current exploration projects in addition to independent professional reports.

Please read this Prospectus carefully before you make your investment decision and, where necessary, consult your professional advisers.

Once again, on behalf of the Board, I commend Lithex to you and invite you to become a Shareholder and a part of this exciting investment opportunity.

Yours sincerely Lithex Resources Limited

Malcolm Carson

Chairman [email protected]

1.	DETAILS OF THE OFFER .................................................................................. 11	DETAILS OF THE OFFER .................................................................................. 11
	1.1	Pro Forma Capital Structure................................................................................ 11
	1.2	Options .............................................................................................................. 11
	1.3	Indicative Timetable ........................................................................................... 11
	1.4	Shares Offered for Subscription .......................................................................... 11
	1.5	Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders
		12
	1.6	Public Offer ........................................................................................................ 12
	1.7	Minimum Subscription ....................................................................................... 12
	1.8	Purpose Of The Offer .......................................................................................... 12
	1.9	Underwriting ...................................................................................................... 14
	1.10	Risks ................................................................................................................... 14
	1.11	Brokerage and Handling Fees ............................................................................. 14
	1.12	Cash Flow Projections ......................................................................................... 14
	1.13	Allotment and Allocation Of Shares .................................................................... 14
	1.14	Applicants outside Australia ............................................................................... 15
	1.15	ASX Listing .......................................................................................................... 15
	1.16	CHESS and Issuer Sponsored Holdings ................................................................ 15
	1.17	Enquiries in Relation to the Offer ........................................................................ 16
	1.18	How to Apply ...................................................................................................... 16
	1.19	Escrow Provisions ............................................................................................... 16
	1.20	Electronic Prospectus ......................................................................................... 17
	1.21	Privacy Disclosure ............................................................................................... 17
2.	COMPANY OVERVIEW AND THE PROJECTS ..................................................... 18
	2.1	The Company ..................................................................................................... 18
	2.2	Corporate Objectives .......................................................................................... 19
	2.3	Exploration History ............................................................................................. 19
	2.4	Projects Overview............................................................................................... 20
	2.5	Exploration Expenditure Summary...................................................................... 22
3.	BOARD AND MANAGEMENT ......................................................................... 23
	3.1	Board of Directors .............................................................................................. 23
	3.2	Corporate Governance ....................................................................................... 24
4.	RISK	FACTORS .............................................................................................. 30
	4.1	Exploration Success ............................................................................................ 30
	4.2	Failure to satisfy expenditure commitments ....................................................... 31
	4.3	No JORC compliant resource............................................................................... 31
	4.4	Contract Risk ...................................................................................................... 31
	4.5	Application Risk .................................................................................................. 32
	4.6	The overall share market may negatively impact an investment in the Company 32
	4.7	The Company may be unable to obtain environmental approvals ....................... 32
	4.8	Environmental Bonds ......................................................................................... 32

	4.9	The Company may not be able to secure insurance ............................................ 32
	4.10	A commercial return may not be achievable ....................................................... 32
	4.11	Native Title ......................................................................................................... 33
	4.12	The Company may not be able to secure additional capital if required ............... 33
	4.13	External economic factors may negatively impact prospects............................... 33
	4.14	Key management may leave the Company ......................................................... 33
5.	INDEPENDENT GEOLOGIST’S REPORT ............................................................. 34
6.	INVESTIGATING ACCOUNTANT’S REPORT ....................................................... 72
7.	SOLICITOR’S REPORT ON TENEMENTS ............................................................ 82
8.	ADDITIONAL INFORMATION .......................................................................... 92
	8.1	Rights Attaching to Shares .................................................................................. 92
	8.2	Summary of Material Contracts .......................................................................... 93
	8.3	Interests of Directors of the Company ................................................................ 96
	8.4	Interests of Persons Named in this Prospectus.................................................... 96
	8.5	Consents ............................................................................................................ 97
	8.6	Expenses of the Offer ......................................................................................... 98
	8.7	Taxation ............................................................................................................. 98
	8.8	Exposure Period ................................................................................................. 99
	8.9	Litigation ............................................................................................................ 99
	8.10	Electronic Prospectus ......................................................................................... 99
	8.11	Terms and Conditions of Options ........................................................................ 99
	8.12	Consent by the Directors .................................................................................. 100
9.	GLOSSARY OF NAMES AND TERMS .............................................................. 102

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DRY BLOWING TIN AT MOOLYELLA – 1920S E.L. MITCHELL

IMPORTANT NOTICE

This Prospectus is dated 9 March 2011

A copy of this Prospectus was lodged with ASIC on 9 March 2011. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus.

This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at www.lithex.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic version of this Prospectus in Australia. The Corporations Act prohibits any person from passing on the Application Form to another person unless it is attached to or accompanied by a complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at [email protected].

No person or entity is authorised to give any information or to make any representation in connection with the offer which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application will be made within seven days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for Quotation.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

In accordance with Chapter 6D of the Corporations Act, this Prospectus is subject to an Exposure Period of 7 days from the date of lodgement of the Prospectus with ASIC. This period may be extended by ASIC for a further period of 7 days. The purpose of this Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of the funds, which examination may result in the identification of deficiencies in this Prospectus. If this Prospectus is found to be deficient, Applications received during the Exposure Period will be dealt with in accordance with section 724 of the Corporations Act. Applications received prior to the expiration of the Exposure Period will not be processed until after the Exposure Period. No preference will be conferred upon Applications received during the Exposure Period.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisers before deciding whether to apply for Shares. There are risks associated with an investment in Lithex Resources Ltd and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Shares.

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 9 of this Prospectus and also within its body.

All amounts are in Australian dollars unless otherwise specified.

The people and assets depicted in photographs in this Prospectus are not employees or assets of Lithex Resources Ltd, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not be drawn to scale.

DETAILS OF THE OFFER

1. DETAILS OF THE OFFER

1.1 Pro Forma Capital Structure

The pro-forma capital structure of Lithex Resources Ltd is summarised below and assumes the Offer is fully subscribed.

	Number	%	Over Subscription	% Over Subscribed

Shares on issue at date of Offer	15,630,010	46%	15,630,010	36%
Shares to be issued as vendor consideration	8,000,000	24%	8,000,000	18%
Shares to be issued pursuant to Offer	10,000,000	30%	20,000,000	46%
Issued capital on completion of Offer	33,630,010	100%	43,630,010	100%
Amount to be raised	$2,000,000		$4,000,000

1.2 Options

7,130,000 unlisted options exercisable at 20 cents at any time prior to 30 June 2015 have been issued to certain of the promoters, vendors and advisers or their nominees. The terms and conditions of these options are set out in Section 8.11. In addition, the Company will issue an additional 4,500,000 Options as part consideration for the acquisition of the various tenements. Further details of the Company’s issued capital are contained in the Independent Accountant’s Report in Section 6. Summaries of the Project Purchase Agreements are outlined in Section 8.2.

1.3 Indicative Timetable

Lodgement of Prospectus with ASIC	9 March 2011
Opening Date for Applications	17 March 2011
Closing Date for Applications	6 May 2011
Dispatch of Statements of Shareholdings	10 May 2011
Quotation of Shares on ASX expected to commence	16 May 2011

These dates are indicative only and may vary. Lithex reserves the right to close the Offer early, or extend the Closing Date without prior notice. Applicants are therefore encouraged to submit Applications as soon as possible after the Opening Date.

1.4 Shares Offered for Subscription

Subject to Section 1.13 this Prospectus invites investors to apply for a total of 10,000,000 Shares at an issue price of 20 cents per Share to raise $2,000,000 before expenses of the Offer. Oversubscription of up to a further 10,000,000 Shares at an

DETAILS OF THE OFFER

issue price of 20 cents each to raise up to a further $2,000,000 may be accepted. All Shares issued pursuant to this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares already on issue.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares ($400), and can only be made by completing the Application Form attached to this Prospectus.

The Company reserves the right to reject any Application or to allocate any Applicant fewer Shares than the number applied for.

1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders

Lithex is inviting all Montezuma and South Boulder shareholders ( Priority Shareholders ) to apply as priority applicants for Shares by completing the Application Form enclosed with the Prospectus. Priority Shareholders may apply for a minimum of 10,000 Shares representing a minimum investment of $2,000.

Whilst the Company will endeavour to offer all eligible Priority Shareholders Shares, the allocation of Shares to Priority Shareholders will be at the Board’s discretion.

1.6 Public Offer

The Public Offer is open to public investors.

Applications must be made on the Application Form enclosed with the Prospectus.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares ($400), and can only be made by completing the Application Form attached to this Prospectus.

1.7 Minimum Subscription

The minimum subscription to the Offer is 10,000,000 Shares raising $2,000,000 before expenses of the Offer. In accordance with the Corporations Act, no shares will be allotted by the Company until the minimum subscription has been received.

If the minimum subscription is not achieved within 4 months after the date of this Prospectus, the Company will either repay the Application Monies to Applicants or issue a supplementary or replacement Prospectus and allow Applicants one month to withdraw their Applications and be repaid their Application Monies.

1.8 Purpose Of The Offer

The purpose of the Offer is to provide Lithex with funding to prioritise and evaluate projects and identify potential acquisition opportunities.

Use of Funds over 2 years	Minimum $ Maximum $
Pre-Offer cash and receivables Total raised in the Offer Total Funds Available EXPLORATION EXPENDITURE	659,284 659,284 2,000,000 4,000,000
	2,659,284 4,659,284

DETAILS OF THE OFFER

Year 1 Moolyella Shaw River Pilgangoora Arthur River Total Year 2 Moolyella Shaw River Pilgangoora Arthur River Total Exploration expenditure – sub total Expenses of the Offer Vendor Consideration Administration Additional Project Generation Unallocated working capital Total Funds Applied	250,000 500,000 180,000 360,000 150,000 200,000 120,000 200,000 700,000 1,260,000 320,000 600,000 250,000 400,000 160,000 200,000 140,000 200,000 870,000 1,400,000 1,570,000 2,660,000 287,000 412,000 66,000 66,000 700,000 700,000 0 600,000 36,284 287,284
	$2,659,284 $4,659,284

Notes:

In the event that the Company raises more than minimum subscription by accepting oversubscriptions but less than the full oversubscriptions, the additional funds raised will be first applied towards the expenses of the Offer, followed by exploration on the Projects, with any residual funds allocated to unallocated working capital.
Exploration expenditures will be reviewed on an on-going basis, depending upon the progressive results of the proposed work programs.

The above table states the intended use of the funds raised by the Company as at the date of this Prospectus. However, it must be recognised that all exploration budgets may change as the conducted programs provide encouragement or disappointment and new opportunities may be identified elsewhere.

It is the Company’s intention to increase and accelerate its exploration and drilling programs to achieve results as soon as practicable and, subject to encouraging results being obtained, to delineate resources. The Company

DETAILS OF THE OFFER

may seek to raise additional funds within two years after listing on ASX to the extent required to increase and accelerate the exploration and drilling programs as determined by the Board.

Following the completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives.

1.9 Underwriting

The Offer is not underwritten.

1.10 Risks

An investment in Lithex is speculative in nature. Risks associated with investments in exploration companies such as Lithex are generally considered high. Investment risks include share market, exploration, operating, insurance, commercialisation, competition, no profit to date, future capital needs, environmental, economic and government, government regulation and policy, commodity and exchange, key personnel, native title and tenure and access.

Investors are directed to Section 4 of this Prospectus which provides further details of the above and some other risks associated with making an investment in the Company.

1.11 Brokerage and Handling Fees

The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a management fee of $60,000 plus GST and a commission of 6% plus GST on the total amount raised under the offer. Out of the commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence holders a fee for Applications bearing their stamp.

1.12 Cash Flow Projections

Lithex is a lithium, tantalum, tin, rare earth metal and base metals exploration company. Given the speculative nature of exploration and lithium, tantalum, tin, rare earth metals and base metal development and production, there are significant uncertainties associated with forecasting future revenue. On this basis, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included forecasts in this Prospectus.

1.13 Allotment and Allocation Of Shares

Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Offer is closed, following which statements of Shareholdings will be dispatched. It is the responsibility of Applicants to determine the number of shares allotted to them prior to trading in Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk.

Pending the issue of the Shares, or return of the Application Monies, the Application Monies will be held in trust for the Applicants.

The Directors in consultation with the Company’s Lead Manager & Corporate Adviser, Ascot Securities Pty Ltd, have the right to allocate Shares under the Offer. The

DETAILS OF THE OFFER

Company may reject any Application or allocate any Applicant fewer Shares than applied for under the Offer.

If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will be refunded. Interest will not be paid on Application Monies refunded.

1.14 Applicants outside Australia

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who is resident outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted Shares.

No action has been taken to register or qualify the Shares or the Offer or otherwise to permit a public offering of the Shares in any jurisdiction outside Australia.

1.15 ASX Listing

Within 7 days after the date of this Prospectus, application will be made for the Company to be admitted to the Official List and for the Shares offered by this Prospectus to be granted Quotation.

If approval for Quotation is not granted within 3 months after the date of this Prospectus, the Company will not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit Lithex to its Official List is not to be taken in any way as an indication of the merits of the Company or the Shares offered pursuant to this Prospectus.

1.16 CHESS and Issuer Sponsored Holdings

Lithex will apply to participate in the Clearing House Electronic Subregister System ( CHESS ), operated by ASX Settlement Pty Ltd (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and ASX Settlement Operating Rules. On admission to CHESS, the Company will operate an electronic issuer-sponsored subregister and an electronic CHESS subregister. The two subregisters together will make up the Company’s register of securities.

Under CHESS, the Company will not issue certificates to Shareholders. Instead, the Company will provide Shareholders with a holding statement (which is similar to a bank account statement) that sets out the number of Shares allotted to that Shareholder under this Prospectus.

This statement will also advise investors of either their Holder Identification Number ( HIN ) in the case of a holding on the CHESS sub-register or Security Holder Reference Number ( SRN ) in the case of a holding on the issuer–sponsored sub-register.

DETAILS OF THE OFFER

A statement will be routinely sent to holders at the end of any calendar month during which their holding changes. A holder may request a statement at any other time however a charge may be incurred for additional statements.

1.17 Enquiries in Relation to the Offer

This Prospectus provides information for potential investors in Lithex, and should be read in its entirety. If, after reading this Prospectus, you have any questions about any aspect of an investment in Lithex, please contact your stockbroker, accountant or independent financial adviser. Additional copies of the Prospectus or further advice on how to complete the Application Form can be obtained by contacting or visiting:

Lithex Resources Limited 11 Rafferty Close MANDURAH WA 6210 (08) 9583 5109 www.lithex.com.au

1.18 How to Apply

Applications for Shares under the Offer can only be made on the Application Form attached to this Prospectus.

The Application Form must be completed in accordance with the instructions set out on the back of each Application Form.

Completed Application Forms and accompanying cheques should, at any time after the Opening Date be:

Posted to: Delivered to: Lithex Resources Limited Lithex Resources Limited c/- Security Transfer Registrars Pty Ltd c/- Security Transfer Registrars Pty Ltd GPO Box 535 770 Canning Highway APPLECROSS WA 6953 APPLECROSS WA 6153

Cheques must be made payable to “ Lithex Resources Ltd – Share Account ” and crossed “Not Negotiable”.

No brokerage or stamp duty is payable by Applicants.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares ($400) at the issue price of 20 cents per Share.

1.19 Escrow Provisions

Securities on issue as at the date of this Prospectus may be subject to the restricted securities provisions of the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to 24 months and may not be transferred, assigned or otherwise disposed of during that period. Agreements in respect of all

DETAILS OF THE OFFER

such restricted securities have been or will be entered into in accordance with the Listing Rules and as required by ASX.

1.20 Electronic Prospectus

This Prospectus is available on-line at www.lithex.com.au

1.21 Privacy Disclosure

The Company collects information in relation to each Applicant as provided on an Application Form ( Information ) for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicant’s security holding in the Company ( Purposes ).

The Company may use the Information for the Purposes and the Company may disclose the Information for the Purposes to the Share Registrar, the Company’s related bodies corporate, agents, contractors and third party service providers, and to ASX, ASIC and other regulatory authorities.

The Information may also be used and disclosed to persons inspecting the register, including bidders for Shares in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including the Australian Taxation Office.

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Processed & Un-Processed Material Remaining At The Moolyella Project – 2010

COMPANY OVERVIEW AND THE PROJECTS

2. COMPANY OVERVIEW AND THE PROJECTS

2.1 The Company

Lithex Resources Limited was incorporated on 30 October 2009 in anticipation of the acquisition of certain mineral interests of a number of Public and Private Companies within the existing Marble Bar / Pilbara Mineral Field as well as the Gascoyne Mineral Field.

The Company has specifically targeted these projects as they provide the Company and investors with exposure to lithium, tantalum, tin and rare earth metals.

Lithex believes that the lithium, tantalum, tin and rare earth metal markets are well placed to see robust price increases in the near and medium term.

(Figure 1).

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Figure 1 Lithex Resources Limited Project Location Map

COMPANY OVERVIEW AND THE PROJECTS

2.2 Corporate Objectives

Immediately undertake a comprehensive exploration programme over the most prospective targets.
Achieve the maximum value from exploration programmes for Shareholders.
Conduct exploration activities at the highest technical standards in the industry.
Effectively communicate with Shareholders and the broader market.

2.3 Exploration History

The Moolyella Tin Field

Prior to the incorporation of Lithex Resources Limited, tin mining operations at Moolyella were largely continuous from their discovery in 1898 until 1986. Between 1965 and 1985 Endeavour Resources Ltd undertook exploration for alluvial, eluvial, deep lead and pegmatite hosted tin/tantalum mineralisation and several substantial alluvial and eluvial tin/tantalum deposits were identified.

The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase by Endeavour Resources Ltd of all the Moolyella mining tenements and treatment plant in 1978. These mining operations continued till 1986 and were closed due to the fall in tin prices in late 1985.

The Shaw River Tin Field was discovered in 1890 and had produced a total of 6,585 tonnes of tin concentrate by 1975. Greenbushes Ltd first acquired leases in the Shaw River district in 1978 and explored for tin and tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and rare earth metals under a joint venture between Greenbushes and Western Australia Rare Metals until 1987. A mining feasibility study was completed in 1988.

The Pilgangoora Tantalite Field was first discovered in 1905 and by 1947 had produced approximately 0.7 tonnes of tantalite concentrates from small scale alluvial operations. Following 1947, larger scale mining operations were employed and by 1975 approximately 50 tonnes of high grade tantalite together with some 13 tonnes of tin oxide (cassiterite) were produced from the area. Large scale operations continued with Pilgan Mining between 1978-1982 and by the Pilgangoora Mining Venture between 1992 to 1996 producing approximately 140 tonnes of tantalite concentrates from an estimated 800,000 bank cubic meters(“BCM”) of screened alluvial and eluvial material.

Mining on Lithex’s Pilgangoora Project leases was only conducted by The Pilgangoora Mining Venture which collected bulk samples from two creeks as part of its Pilgangoora resource estimation program in 1996.

The Arthur River Project is located in the Gascoyne Mineral Field. In the early 1900’s gold was mined at The Bangemall Gold Mine. Records of gold production have not been located.

Unknown parties in the early 1940’s recovered mica, beryl, tantalum-columbite and bismuth from pegmatites and uranium style mineralisation in the area. Records of production have not been located.

COMPANY OVERVIEW AND THE PROJECTS

From 2004-2006 Tantalum Australia NL at the Arthur River tantalum-niobium Mine, was mining an alluvial placer deposit. The mine is now on care and maintenance. The tantalum and niobium minerals in the alluvials were derived locally from a columbite - tantalite granitic rare metal pegmatites. Drilling by Tantalum Australia of a source pegmatite has yielded significant niobium mineralisation up to 1280 ppm (0.128%) Ta2O5.Tantalum Australia subsequently defined an Exploration Target consisting of 55,000 to 60,000 tonnes at 0.03 percent Ta2O5.

2.4 Projects Overview

The Company’s projects and prospects are fully described in the Independent Geologist’s Report in Section 6 of this Prospectus. An overview of Lithex’s projects is presented below.

Lithex’s projects are located in the East Pilbara and Gascoyne Regions of Western Australia. The East Pilbara projects lie within the highly mineralised and historical tin and tantalum producing districts of the Achaean Pilbara Craton. These tin and tantalum districts include Moolyella, Shaw River and Pilgangoora. The Arthur River project is located within the Gascoyne Mineral Field, an area known to contain rare metal pegmatites.

Although exploration over Lithex’s tenements is at an early stage, particularly for a large hardrock style mineralisation, it is considered that the properties are well located with respect to the regional geological and structural setting to be considered highly prospective for the discovery of deposits of lithium, tantalum, tin and rare earth metal mineralisation.

Moolyella (M45/1081, E45/3172 and E45/3424) – 90%

The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-north-east of the township of Marble Bar. The tenements cover The Moolyella Tin Field where continuous mining activities were ongoing from their initial discovery in 1898 to 1986. From 1986 limited small scale intermittent mining has been carried out on the field. A comprehensive exploration program is required to prove up known deposits of rare metals (tin, tantalum, lithium) and rare earths (lanthanides), to locate new alluvial deposits and to explore for the hard rock primary deposit from which these alluvial minerals have originated.

Shaw River (E45/3354 and E45/3439) – 90%

The Shaw River project is located within the highly prospective Pilbara Goldfield and is located 50 km southwest of Marble Bar. The project is centred on the Shaw River Tin Field which was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin concentrate.

From 1978 to 1998 a number of companies conducted further evaluation and exploration activities primarily for tin, tantalum and rare earth metals. A mining feasibility study of the Shaw River tin field, under a joint venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. Due to the collapse in the tin price the project was deemed to be sub economic and the tenements were subsequently dropped in 1989.

COMPANY OVERVIEW AND THE PROJECTS

The project area requires further evaluation and current “state of the art” exploration for alluvial and hard rock pegmatite deposits containing lithium, tantalum, tin and rare earth metals.

**Pilgangoora (E45/2375* and E45/3373) – 90%**

The Pilgangoora Tantalum Field is located approximately 120 km south-southeast of Port Hedland and is adjacent and south, southwest of Lithex’s Pilgangoora Project tenements. The project is accessed by unsealed shire and station roads, various tracks that service abandoned mine workings and pastoral stations.

The Type 1 pegmatites (Quartz-spodumene-albite-microcline pegmatites) are the primary source of tin/tantalum mineralisation at Pilgangoora and form north northeast trending bodies up to 60m thick in greenstones within an 8km long and 1.5km wide corridor that begins south- southwest of the tenements and extends northwards into the Pilgangoora Project tenements.

The spodumene content of these pegmatites (~ 25 %) has previously been the focus of evaluation studies by Pancontinental Mining Limited as a source of lithium concentrates. However whilst it is understood the pegmatites extend in to Lithex’s tenements none of these deposits studied by Pancontinental Mining Limited in that report are located in the Pilgangoora Project tenements. Therefore the project requires modern state of the art exploration targeting these lithium pegmatites.

Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement

Arthur River (E09/1066 and E09/1067) – 100%

The tenements comprising the Arthur River Project are located in the Gascoyne Mineral Field, approximately 250 kilometres east of Carnarvon. The area can be accessed via gravel road from Carnarvon via Gascoyne Junction and then via gravel roads that connect the various pastoral leases.

Tenure and Location of Projects

Lithex’s projects cover approximately 772 km[2 ] and are located approximately 120 km south east of Port Hedland and 250 km East of Carnarvon. The Company holds seven granted exploration licences, one mining lease application and one exploration licence application as outlined in the table below.

Project	Tenement	Area	Approx	Status	Equity	Annual
			Area (km2)			Expenditure
						Commitment
Arthur River	E09/1066	12 Blocks	33	Granted	100 %	$30,000.00
Arthur River	E09/1067	3 Blocks	8	Granted	100 %	$20,000.00
Moolyella	E45/3424	56 Blocks	156	Granted	90 %	$56,000.00
Moolyella	E45/3172	70 Blocks	196	Application	90 %	N / A
Moolyella	M45/1081	526 Ha		Application	90 %	N / A
Shaw River	E45/3439	66 Blocks	184	Granted	90 %	$66,000.00
Shaw River	E45/3354	62 Blocks	173	Granted	90 %	$62,000.00
Pilgangoora	E45/2375	3 Blocks	8	Granted	90 %	$20,000.00
Pilgangoora	E45/3373	5 Blocks	14	Granted	90 %	$15,000.00

COMPANY OVERVIEW AND THE PROJECTS

2.5 Exploration Expenditure Summary

The Company intends initially to fund the planned exploration activities from the proceeds of the offer as outlined in the tables below. It should be noted that budgets were formulated on the basis of the programmes detailed in the Independent Geologist’s Report and will be subject to assessment and modification on an ongoing basis depending on progressive results from the exploration work undertaken. The Company will be continually reviewing all exploration activities which may lead to higher or lower levels of expenditure on each property reflecting a change in emphasis. Subject to the above, the following expenditure is proposed:

Exploration Expenditure Summary by Project on Granted Tenements

Project	Year 1 $		Year 2 $
	Minimum	Over	Minimum	Over
		Subscription		Subscription
Moolyella	250,000	500,000	320,000	600,000
Shaw River	180,000	360,000	250,000	400,000
Pilgangoora	150,000	200,000	160,000	200,000
Arthur River	120,000	200,000	140,000	200,000
Total	$700,000	$1,260,000	$870,000	$1,400,000

Exploration Expenditure Summary by Activity on Granted Tenements

Activity	Year 1 $	Year 1 $	Year 2 $	Year 2 $
	Minimum	Over	Minimum	Over Subscription
		Subscription
Data Compilation	84,000	151,000	114,000	190,000
Geochemical surveys	62,500	114,000	65,000	100,000
Sampling	110,000	195,000	132,000	215,000
Drilling	210,000	385,000	270,000	440,000
Geology & Field Work	138,500	250,000	161,000	260,000
Tenement & Administration	95,000	165,000	128,000	195,000
Total	$700,000	$1,260,000	$870,000	$1,400,000

BOARD AND MANAGEMENT

3. BOARD AND MANAGEMENT

3.1 Board of Directors

Malcolm Carson – Chairman

Mr Carson has over 35 years experience in all aspects of the resources sector ranging from mineral resource exploration to investment banking (project finance, debt and equity funding, royalty finance, corporate finance and treasury), government, mining equipment manufacture and hire, asset acquisition, corporate restructuring and business development. Mr Carson has held various senior exploration and mine management, director and chief executive positions during his career in the mining industry, including in ASX listing companies.

As a project exploration geologist and exploration manager, Mr Carson has been responsible for supervising early exploration which has led to a number of mineral resource discoveries and the development of gold, coal and nickel mines and major discoveries of iron ore and copper yet to be developed.

Mr Carson has direct relevant experience in exploration for tin and tantalum in the Pilbara Mineral Fields and rare earth oxides.

Robert Mandanici – Managing Director

Mr Mandanici has worked in both the Private and Government sector and has extensive knowledge of corporate governance, process and procedure. He was previously a director of Auvex Resources Limited.

Steven Crabbe – Executive Director

Steve Crabbe has held senior positions in mining companies in the maintenance and production areas. He has 34 years experience in the mining and processing of iron ore, titanium minerals, alumina, gold and manganese. Steve was the founder of Auvex Resources Limited and as Managing Director took the company from inception to a producing manganese miner. Steve is a Director of Naracoota Resources Limited, an exploration company with Gold projects.

He is the founder and director of a successful mining services company.

Neal Shoobert – Company Secretary

A qualified accountant for over 20 years, Neal Shoobert is an accomplished financial and management consultant possessing extensive experience in corporate compliance and provides company secretarial services for several ASX listed companies.

Brian Davis – Exploration Geologist

Mr Davis has over 30 years experience as an exploration geologist and has held many senior positions across all facets of the mining industry. Mr Davis has extensive geological experience both within Australia and internationally.

BOARD AND MANAGEMENT

3.2 Corporate Governance

The Board is responsible for the overall corporate governance of the Company, and it recognises the need for the highest standards of ethical behaviour and accountability. The Board is committed to administering its Corporate Governance structures to promote integrity and responsible decision-making.

The following policies and procedures have been implemented and are available in full on the Company’s website at www.lithex.com.au;

Statement of Board and Management Functions;
Nomination Committee Charter;
Code of conduct for Directors and Key Executives;
Code of Conduct for Dealing in Securities;
Audit Committee Charter;
Continuous Disclosure Policy;
Shareholder Communications Strategy;
Risk Management Charter;
Remuneration Committee Charter; and
Corporate Code of Conduct.

In accordance with the recommendations of the ASX, information published on the Company’s web site includes charters of the Board and its subcommittees, codes of conduct and other policies and procedures relating to the Board and its responsibilities.

To the extent that they are relevant to the organisation, the Company has adopted the Eight Corporate Governance Principles and Best Practice Recommendations as published by the ASX Corporate Governance Council.

Principle 1 – Lay solid foundations for management and oversight

Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated to senior executives

The Board’s primary role is to represent Shareholders and to promote and protect the interests of Lithex by governing the Company.

To fulfill this role the Board is responsible, amongst other things, for:

overseeing the activities of the Company, including its control and accountability systems;
providing input into and final approval of corporate strategy and performance objectives;
reviewing, ratifying and monitoring systems of risk management and internal control;

BOARD AND MANAGEMENT

monitoring performance and implementation of strategy;
approving policies of Company-wide and general application;
approving and monitoring budgets, capital management and acquisitions and divestments;
approving and monitoring all financial reporting to the market;
formal determinations that are required by the Company’s constitutional documents or by law or other external regulation.

Beyond those matters, the Board has delegated all authority to the Managing Director for management of the Company’s business within any limits imposed by the Board.

Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives

The Company currently only employs one executive being the Managing Director. The Company has established a nomination committee which is responsible for the evaluation of all executives and Board members.

Principle 2 – Structure the board to add value

Recommendation 2.1: A majority of the board should be independent directors.

The Board comprises three directors, one of whom is a non-executive however only the chair is classified as independent. The Board believes that this is both appropriate and acceptable at this stage of the Company’s development.

Recommendation 2.2: The chair should be an independent director .

The Chair is independent.

Recommendation 2.3: The roles of chair and chief executive officer should not be exercised by the same individual .

These positions are held by separate persons.

Recommendation 2.4: The board should establish a nomination committee

Established and operates under the Nomination Committee Charter. The nomination committee’s main responsibilities include, but are not limited to:

implement processes to assess the necessary and desirable competencies of Board members including, experience, expertise, skills and performance of the Board and its committees;
evaluate on the performance of the Managing Director;
annually evaluate the performance and effectiveness of the Board to facilitate the directors fulfilling their responsibilities in a manner that serves the interests of shareholders;
before recommending an incumbent, replacement or additional director, review his or her qualifications, including capability, availability to serve, conflicts of interest, and other relevant factors;

BOARD AND MANAGEMENT

assist in identifying, interviewing and recruiting candidates for the Board; and
annually review the composition of each committee and present recommendations for committee memberships to the Board as needed.

Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.

Disclosed under the Nomination Committee Charter which is available on the Company’s website.

Principle 3 – Promote ethical and responsible decision-making

Recommendation 3.1: Companies should establish a code of conduct and disclose the code

The Board has established Code of Conduct which all employees and Directors are expected, at a minimum to follow. The Code of Conduct categorises five main areas:

the treatment each other with respect and dignity;
respect for the law and acting accordingly;
fairness and honesty in our dealings;
use of the Company’s property responsibly and in the best interest of the Company and its reputation; and
responsibility for our actions and accountable for their consequences.

Recommendation 3.2: Companies should establish a policy concerning trading in company securities

Lithex has established a Code for Dealing in Securities ( Code ) which sets out the requirements for Directors, employees, consultants and contractors of Lithex dealing in Lithex securities. In order to ensure that Lithex personnel do not inadvertently breach the insider trading provisions of the Corporations Act, they are only permitted to deal in Lithex securities in limited circumstances specified in determined by this Code. These limited circumstances are called “ trading windows ”

Even during trading windows, a securities dealing written request must be submitted to and approved by the Chair or his delegate prior to any dealing in Lithex securities.

Principle 4 – Safeguard integrity in financial reporting

Recommendation 4.1: The board should establish an audit committee

Recommendation 4.2: The audit committee should be structured so that it:

consists only of non-executive directors
consists of a majority of independent directors
is chaired by an independent chair, who is not chair of the board
has at least three members

Recommendation 4.3: The audit committee should have a formal charter

BOARD AND MANAGEMENT

Lithex has established an Audit Committee consisting of the Company Secretary and 2 directors, only one of whom is classified as independent. The Audit Committee operates under the Audit Committee Charter which lists the main responsibilities of the Committee being:

review any financial reports externally;
monitor corporate risk assessment processes;
review the nomination and performance of the external auditor;
monitor the establishment of appropriate ethical standards;
monitor the procedures to ensure compliance with the Corporations Act and the ASX Listing Rules and all other regulatory requirements;
address any matters outstanding with auditors, regulatory bodies and financial institutions; and
review the results and findings of the auditor, the adequacy of accounting and financial controls and to monitor the implementation of any recommendations made.

Principle 5 – Make timely and balanced disclosure

Recommendation 5.1: Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance

Lithex has adopted a Continuous Disclosure Policy, a copy of which is available on the Company’s website

The policy aims to:

ensure that the Company, as a minimum, complies with its continuous disclosure obligations under the Corporations Act and ASX Limited Listing Rules and as much as possible seeks to achieve and exceed best practice;
provide shareholders and the market with timely, direct and equal access to information issued by the Company; and
promote investor confidence in the integrity of the Company and its securities.

Principle 6 – Respect the rights of shareholders

Recommendation 6.1: Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings.

The Company has a Shareholder Communication policy, a copy of which is available on the Company’s website. The Policy states that The Board of the Company aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs.

BOARD AND MANAGEMENT

Principle 7 – Recognise and manage risk

Recommendation 7.1: Companies should establish policies for the oversight and management of material business risks

The Company has established a Risk Management Committee to monitor and review on behalf of the Board the system of risk management which the Group has established. This system aims to identify, assess, monitor and manage operational and compliance risks.

Recommendation 7.2: The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively.

The Audit and Risk Committee determines the Group’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and non-financial internal control.

The Committee will report to the Board on this system of risk management and make appropriate recommendations to ensure the adequacy of the system.

Recommendation 7.3: The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks

When required, the Board will receive written assurances from the CEO and CFO (or equivalent) in relation to the above statement.

Principle 8 – Remunerate fairly and responsibly

Recommendation 8.1: The board should establish a remuneration committee.

A Remuneration Committee has been formed which operates under the Remuneration Committee Charter. Its primary responsibilities are:

assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and policies including incentive policies for directors and senior executives;
assess the market to ensure that senior executives are being rewarded commensurate with their responsibilities;
obtain the best possible advice in establishing salary levels;
set policies for senior executives’ remuneration;
review the salary levels of senior executives and make recommendations to the Board on any proposed increases;
review recommendations from the managing director relating to proposed merit increases;

BOARD AND MANAGEMENT

propose, for full Board approval, the terms and conditions of employment for the managing director; and
undertake a review, which will be reported to and confirmed by the full Board, of the managing director’s performance, at least annually, including setting the managing director goals for the coming year and reviewing progress in achieving those goals.

The Board will consider on an ongoing basis its Corporate Governance procedures and whether they are sufficient as the Company’s activities develop in size, nature and scope.

3.3 Code for Dealing in Securities

The Company has adopted a securities trading policy for the purpose of outlining the procedures for all Directors, employees, consultants and contractors ( Personnel ) in relation to the buying and selling of the Company’s Securities in order to ensure that those parties do not inadvertently breach the insider trading provisions of the Australian Corporations Act.

As a matter of law, all Personnel must not deal (meaning any change whatsoever including, but not limited to, any sale, purchase, exercise of options (even if due to expire), discharge of any right or obligation, or transfer) in Securities where:

they possess information which is not generally available;
that information may have a material effect on the price or value of the Securities; and
they know or ought reasonably to know that the information is not generally available and if it were it might have a material effect on the price of Securities, as such information constitutes inside information.

In addition, no Personnel are entitled to trade in the Company’s Securities during the following periods:

where the Managing Director or his delegate has issued an instruction prohibiting trading in Company Securities by Employees; or
it is the day on which the Company has made, or is expected to make, an announcement to the ASX, up until the time the announcement is released by ASX.

Even during trading windows, prior to any dealing in the Company’s Securities a dealing request must be submitted to and approved by the Managing Director or his delegate or, in the case of Directors (other than the Chairman) by the Chairman. Such approval shall be in the form approved by the Managing Director from time to time and shall include electronic approval via email.

A full outline of the securities trading policy is available from the Company.

RISK FACTORS

4. RISK FACTORS

Investors wishing to subscribe for Shares offered by this Prospectus should read this Prospectus in its entirety in order to make an informed assessment of the effect of the issue of Shares on the Company and the rights attaching to the Shares offered by this Prospectus.

Investors should consider carefully whether Shares in the Company are an appropriate investment for them and should appreciate that share prices can fall as well as rise.

Shares under this Prospectus should be viewed as highly speculative and whilst the Directors recommend the Offer, investors should be aware of and take into account the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

4.1 Exploration Success

The Tenements are at various stages of exploration, and potential investors should understand that mineral exploration and development are high risk undertakings.

There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents, native title processes, changing government regulations and many other factors beyond the control of the Company.

The success of the Company will also depend upon the Company having access to sufficient development capital, being able to maintain title to its Tenements and obtaining all required approvals for its activities. In the event that exploration programmes prove to be unsuccessful this could lead to a diminution in the value of the Tenements, a reduction in the cash reserves of the Company and possible relinquishment of the Tenements.

The exploration costs of the Company described in the Independent Geologist’s Report are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the

RISK FACTORS

actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realized in practice, which may materially and adversely affect the Company’s viability.

4.2 Failure to satisfy expenditure commitments

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licenses or permits. Each licence is or permit is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in the Tenements if any licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

The Company considers that given the number of Tenements that it currently has an interest in, in the event that only the minimum subscription is raised, the Company will have sufficient funds to meet the expenditure commitments on its granted Tenements, as well as the remaining applications, assuming that they are granted to the Company.

4.3 No JORC compliant resource

The Company has not currently defined a JORC resource on any of its Tenements. Further exploration is required to determine the extent of the Company’s viable base metals deposits on all of the Tenements.

There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired by the Company in the future, will result in the discovery of a JORC Code resource classification.

4.4 Contract Risk

The Company is acquiring its interests in a number of Tenements through a series of agreements entered into with unrelated parties, all of which are intended to settle following the completion of the Offer and the receipt of confirmation from ASX that the Company will be conditionally admitted to Quotation on ASX. Should the other parties to those agreements fail to satisfy their obligations to transfer the respective Tenements to the Company as agreed, there is a risk that the Company would have to take action to enforce the agreements with those parties. Any such action may delay the time at which the Company will gain access to those Tenements and delay the Company’s exploration programmes. The Company has no current reason to believe that the parties that it has contracted with will not meet and satisfy their respective obligations under each of the acquisition agreements. Each of the acquisition agreements are summarised in Section 8.2 below.

RISK FACTORS

4.5 Application Risk

The Company cannot guarantee that those Tenements in which it has an interest and which are still in the application stage will ultimately be granted in whole or in part pursuant to the applicable legislation.

4.6 The overall share market may negatively impact an investment in the Company

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general.

4.7 The Company may be unable to obtain environmental approvals

The Company's exploration programmes will, in general, be subject to approval by State and Federal governmental authorities. Development of any of the Company's properties will be dependent on the project meeting environmental guidelines and, where required, being approved by governmental authorities.

4.8 Environmental Bonds

The Western Australian Department of Mines and Petroleum ( Department ) from time to time reviews the environmental bonds that are placed on tenements. The Directors are not in a position to state whether a review is imminent or whether the outcome of such a review would be detrimental to the funding needs of the Company.

4.9 The Company may not be able to secure insurance

The Company intends to insure its operations in accordance with industry practice. However, in certain circumstances the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

Insurance of all risks associated with mineral exploration and production is not always available and where available the costs can be prohibitive.

4.10 A commercial return may not be achievable

Even if the Company discovers commercial quantities of minerals, there is a risk that the Company will not achieve a commercial return. The Company may not be able to transport the minerals at a reasonable cost or may not be able to sell the minerals to customers at a price which would cover its operating and capital costs. The Company will also need to receive regulatory approval to convert its existing exploration licenses into mining leases. There is a risk that this approval may not be obtained.

RISK FACTORS

4.11 Native Title

The Tenements extend over areas in which legitimate common law native title rights of indigenous Australians exist. The ability of the Company to gain access to its Tenements and conduct exploration, development and mining operations remains subject to native title rights and the terms of registered native title agreements.

The Directors will closely monitor the potential effect of native title claims involving the Tenements in which the Company has or may have an interest.

4.12 The Company may not be able to secure additional capital if required

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be.

4.13 External economic factors may negatively impact prospects

Economic factors beyond the control of the Company, such as changes in commodity prices, interest rates, inflation, exchange rates and taxation, may negatively impact on the Company’s exploration, development and production activities as well as its ability to fund those activities, and also on the revenue and profitability of the Company.

4.14 Key management may leave the Company

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its management and its personnel. There can be no assurance that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

INDEPENDENT GEOLOGIST’S REPORT

5. INDEPENDENT GEOLOGIST’S REPORT

ALMAYNARD&ASSOCIATES Consulting Geologists

www.geological.com.au

(ABN 95 336 331 535)

9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449 SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected] Australia

Australian & International Exploration & Evaluation of Mineral Properties

INDEPENDENT GEOLOGICAL REPORT ON THE MINERAL RESOURCES AND EXPLORATION ASSETS OF LITHEX RESOURCES

Allen J Maynard, BAppSc (Geol), MAIG, MAusIMM. 1st March, 2011

INDEPENDENT GEOLOGIST’S REPORT

Contents
1. SUMMARY OF THE LITHEX RESOURCES PROJECTS 41
1.0 MOOLYELLA PROJECT 42
2 SHAW RIVER PROJECT 49
3.0 THE PILGANGOORA PROJECT 54
4.0 Arthur River Project 60
5.0 REFERENCES 67
6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS 68
List of FIGURES
Figure 1 Lithex Resources Limited Project Location Map ............................................. 18
Figure 1Project Locality Map ......................................................................................... 38
Figure 2 Location of East Pilbara Tin Projects .............................................................. 41
Figure 3Solid geology map of the Shaw River tin field ................................................... 46
Figure 4Solid geology map of the Shaw River tin field ................................................... 52
Figure 5Solid geology map of the Pilgangoora Project .................................................. 56
Figure 6 A schematic block diagram showing a generalised mineral distribution within
a complex zoned pegmatite after Anderson I.G., 1979 .................................................. 59
Figure 7 Arthur River - Geology and Mineral Occurrences ............................................ 62
Figure 8: Arthur River tenement E9/1066 airborne uranium anomalies................................ 64
List of TABLES
Table 1: Moolyella Project Tenement Details....................................................................... 42
Table 2: Exploration Targets of the Moolyella tin/tantalum field........................................... 44
Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella......................... 45
Table 4: Exploration Targets of primary tin mineralisation at Moolyella.................................. 45
Table 5: Moolyella 1982 geochemistry from drill cuttings in pegmatites............................... 47
Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab samples (composites from
16 samples).................................................................................................................... 48
Table 7: Moolyella Proposed Expenditure......................................................................... 49
Table 8: Shaw River Project Tenement Details..................................................................... 50

INDEPENDENT GEOLOGIST’S REPORT

Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials. .......................... 51 Table 10: ExplorationTargets of the Shaw River tin/tantalite high-grade . ................................ 51 Table 11: Proposed Expenditure Shaw River Project. ............................................................ 54 Table 12: Pilgangoora Tenement Details. ............................................................................ 55 Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora Project alluvials (1996). ............................................................................................................................ 57 Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora Project alluvials (1981). ............................................................................................................................ 57 Table 15: Pilgangoora Project Proposed Expenditure. .......................................................... 60 Table 16: Arthur River Project Tenement Details. ................................................................ 61 Table 17: 2007 Geochemical sample Highlights. .................................................................. 63 Table 18: Arthur River Project Proposed Expenditure. ......................................................... 66

INDEPENDENT GEOLOGIST’S REPORT

ALMAYNARD&ASSOCIATES Consulting Geologists

www.geological.com.au (ABN 95 336 331 535)

9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449 SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected] Australia

Australian & International Exploration & Evaluation of Mineral Properties

The Directors 1st March, 2011 Lithex Resources Ltd 11 Rafferty Close Mandurah, WA. 6210.

Dear Sirs,

INDEPENDENT REPORT ON MINERAL ASSETS

Al Maynard and Associates (“AM&A”) has been engaged by Lithex Resources Limited (LTX) to prepare an Independent Geological Report of the mineral assets to be acquired by LTX pursuant to the various agreements outlined elsewhere in this prospectus. Opinions are presented in accordance with the JORC Code (2005) and other regulations and guidelines that govern the preparation of such reports.

This report is to be included in a prospectus to be lodged with ASIC on or about the 24[th] of January, 2011 offering for subscription 10 million shares at an issue price of 20 cents per share (“Prospectus”) to raise a total of $2.0 million (before costs associated with the issue). These funds will primarily be used for the exploration, evaluation and development of the mineral properties as outlined in this report.

The legal status, including Native Title considerations associated with the tenure of the LTX Mineral Assets, is subject to a separate Independent Solicitor’s Report, which appears in Section 7 of this Prospectus. These matters have not been independently verified by AM&A. The present status of tenements listed in this report is based on information provided by LTX and the report has been prepared on the assumption that the tenements will prove lawfully accessible for evaluation and development.

The LTX mineral assets comprise four projects in Western Australia that are at various stages of exploration ranging from encouraging results from surface sampling and drilling to second stage investigation. All the projects have potential to host their target commodities as described hereunder and warrant the exploration and testing programs as set out. The projects are currently at an advanced stage of exploration and have potential to host economic mineral deposits. The localities of LTX’s Mineral Assets are depicted in Figure 1 and Figure 2.

INDEPENDENT GEOLOGIST’S REPORT

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Figure 1Project Locality Map

It is our opinion that the mineral properties described in this report warrant the proposed evaluation exploration and testing programs. It is noted that proposed programs may be subject to change according to results yielded as work is carried out. We are of the opinion that LTX has satisfactorily defined exploration and expenditure programs which are reasonable, having regard to the stated objectives of LTX.

In the course of the preparation of this report, access has been provided to all relevant data held by LTX and various other technical reports and information quoted in the bibliography. We have made all reasonable endeavours to verify the accuracy and relevance of the database . LTX has warranted to AM&A that full disclosure has been made of all material in its possession and that information provided, is to the best of its knowledge, accurate and true. None of the information

INDEPENDENT GEOLOGIST’S REPORT

provided by LTX has been specified as being confidential and not to be disclosed in our report. The author is familiar with the areas covered by the LTX Mineral Assets. As recommended by the Valmin Code, LTX has indemnified AM&A for any liability that may arise from AM&A’s reliance on information provided by LTX or not provided by LTX.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by, A.J. Maynard who is a Member of the AIG and the AusIMM and is qualified to provide such reports for the purpose of inclusion in public company prospectuses. A.J. Maynard has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent person as defined in the 2004 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. A.J. Maynard consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This report has been prepared in accordance with the relevant requirements of the Listing Rules of the Australian Securities Exchange Limited, Australian Securities and Investments Commission (“ASIC”) Regulatory Guidelines 111 & 112 and the Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert reports (the Valmin Code) which is binding on members of the Australasian Institute of Mining and Metallurgy (“AusIMM”).

With reference to the description of material described as “Exploration Targets” on the tenements for the quantification of volumes and grade of alluvial tin material there is no implied status that it constitutes a Mineral Resource as identified by the JORC code (2005). As such the potential quality and grade is conceptual in nature, mainly based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.

AM&A is an independent geological consultancy established 25 years ago and has operated continuously since then. Neither AM&A nor any of its directors, employees or associates have any material interest either direct, indirect or contingent in LTX nor in any of the mineral properties included in this report nor in any other asset of LTX nor has such interest existed in the past. This report has been prepared by AM&A strictly in the role of an independent expert. Professional fees payable for the preparation of this report constitutes our only commercial interest in LTX. Payment of fees is in no way contingent upon the conclusions of these documents. A.J. Maynard is employed by AM & A.

INDEPENDENT GEOLOGIST’S REPORT

AM&A observes Section 947B of the Corporations Act 2001 (Cwlth). In accordance with Corporations Regulation 7.6.01(1)(u) and Corporations Amendment Regulations 2003 (No. 7) 2003 No. 202, this Independent Consulting Geologists’ Report is not financial product advice but is intended to provide investors with expert opinion on matters relevant to an investment in the Company. Neither Allen J Maynard nor AM&A are operating under an Australian financial services licence and the advice in this Independent Consulting Geologists’ Report is an opinion on matters other than financial products and does not include advice on a financial product.

Yours faithfully,

==> picture [154 x 72] intentionally omitted <==

Allen J. Maynard BAppSc(Geol), MAIG, MAusIMM.

INDEPENDENT GEOLOGIST’S REPORT

1. SUMMARY OF THE LITHEX RESOURCES PROJECTS

The Moolyella, Shaw River, Pilgangoora and Arthur River tenements have a strong history of alluvial tin mining and due to fragmented small land holdings and fluctuations of the tin price there has been no large scale commercial development.
There are several previously sampled alluvial tin-tantalite Exploration Targets at Moolyella, Pilgangoora and Shaw River.
No REE deposits within the district have been discovered to date despite the REE bearing Euxenite group minerals commonly occurring in the tantalum concentrates. Therefore the potential remains high for the discovery of economic quantities of this mineral group and all occurrences should be evaluated.
Within the spodumene rich ‘type 1’ pegmatites at Pilgangoora as well as in the pegmatites of Moolyella there is potential for lithium deposits.

==> picture [317 x 294] intentionally omitted <==

Figure 2 Location of East Pilbara Tin Projects

INDEPENDENT GEOLOGIST’S REPORT

1.0 MOOLYELLA PROJECT

1.1 Introduction

The tin/tantalum deposits of the Pilbara Craton are derived from pegmatites associated with the 2890–2830 Ma highly fractionated late to post-tectonic monzogranite to syenogranite plutons of the Split Rock Supersuite. Tin and tantalum bearing minerals associated with the Split Rock Supersuite include Cassiterite (SnO2), the Tantalite-Columbite group (Fe,Mn)(Ta,Nb)2O6, the Euxenite group((Y,Ca,Ce,U,Th)(Nb,Ta,Ti)2)O6 and the Fergusonite group 2+ ((Y,Er,Ce,La,Nd,Dy,U,Zr,Th,Ca,Fe )(Nb,Ta,Ti,Sn,W))O4.

The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-north-east of the township of Marble Bar. The tenements cover the Moolyella Tin Field where continuous mining activities have been ongoing since their initial discovery in 1898. From 1986 limited mining activities and exploration has been undertaken. A more comprehensive program of geological activities is required to locate additional alluvial/eluvial tin/ tantalum deposits and their source of origin.

The project is also prospective for quartz vein style gold deposits found in the Talga Talga gold centre.

Anomalous zinc values have been identified at Murphy’s well from rock chip sampling and similarly anomalous nickel has been reported from rock chip samples in the vicinity of the Talga Talga gold centre.

1.2 Location and Access

The Moolyella Project is situated 23 kilometres east-north-east of Marble Bar with access via unsealed shire and station roads and tracks.

1.3 Tenure

The Moolyella project comprises one Mining Lease application covering 526 hectares one granted Exploration Licence that covers 56 graticular blocks and one Exploration Licence application that covers 70 graticular blocks. Tenement details are summarised in (Table 1) with locations shown in Figure 3

Tenement	Status	Share	Current	Date	Area
Number		%	Holder	Application
M45/1081	Pending	90	Stubbs, Jeanette Rae	22/11/2004	526Ha
E45/3172	Pending	90	Ellis, Michael Jeremy	19/11/2007	70Blks
E45/3424	Granted	90	JML Resources Ltd	1/05/2009	56Blks

Table 1: Moolyella Project Tenement Details.

1.4 Exploration History

Tin mining operations in Moolyella area were mostly continuous from their discovery in 1898 until 1986. The important prospects within the Moolyella Tin field and associated geology are illustrated in figure 4

INDEPENDENT GEOLOGIST’S REPORT

Between 1965 and 1985 Endeavour Resources Ltd undertook exploration for alluvial, eluvial, deep lead and pegmatite hosted tin/tantalum mineralisation and several substantial alluvial and eluvial tin/tantalum deposits were identified. The exploration programs consisted predominantly of widely spaced costeaning and pitting and some auguring.

In 1981-1982 Endeavour Resources conducted an 18 drill-hole program to target four areas, previously identified from mapping, for primary mineralisation.

Figure 3 shows the locations of the tin/tantalum targets, the alluvial and eluvial areas sampled by Endeavour Resources Ltd and the local drainage systems that host the alluvial placers. Historically the highest grades of the field came from the Moolyella lead and the McDonald lead.

The drill holes were all 51m deep except for one hole to 188m. The program intersected numerous pegmatites with grades varying between 10 to 6,750 ppm Sn (Tin) in cassiterite as well as 4 to 110ppm Nb (Niobium) and 10 to 120ppm Ta (Tantalum) in columbite-tantalite and rare molybdenum (Mo). The best intercept of the program was 12m averaging 1,099ppm Sn in drill hole DH1. No further exploration has been undertaken in the project area since this time.

The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase, by Endeavour Resources Ltd (Endeavour), of all the Moolyella mining tenements and treatment plant in 1978. These mining operations continued to 1986 and subsequently closed due to the fall in tin prices

In 1989 W.J. Ryan of Ryteck Pty Ltd, a former Endeavour geologist at Moolyella, published a report for Viking Resources, a wholly owned subsidiary of Centamin Limited.

The report post dates the mining operations of Endeavour and provides a comprehensive list of Exploration Targets due to the variability within alluvial and eluvial deposits. The report includes descriptions of the targets, recovered and expected grades of heavy mineral concentrates as well as expected stripping ratios.

A summary of the quoted Exploration Targets is tabulated in Table 2. The composition of previous concentrates from this field and subsequent chemical analysis can be found in Table 3.

Three shallow areas of mineralisation were quantified from the Endeavour Resource drilling program using pegmatite intercepts over 1,000ppm Sn and an S.G. of 2.6. The results of the volume analysis are shown in Table 4.

Between 1890 and 1940 narrow stratabound quartz veins within the McPhee Formation of the Marble Bar greenstone belt were mined to produce 60.6kg of gold, predominantly from the McPhee Reward mine. A similar amount is also likely to have been mined from alluvial material.

The area containing the Talga Talga gold centre is currently excised from the Moolyella Project tenements (see Figure 3).

From 1969-1973 Hawkstone Minerals explored for base metals adjacent to the Talga Talga gold centre where anomalous gossanous rock chip samples assaying as high as 2,295ppm Ni were recorded.

INDEPENDENT GEOLOGIST’S REPORT

Esso explored the northern region of the Moolyella Project area discovering base metal mineralisation at the Murphy Well prospect (see Figure 3). The mineralisation is associated with narrow quartz veins in a granitoid that has intruded the felsic volcanoclastic dominated Duffer Formation.

The veins are locally anomalous in base metals at Murphy Well, and 7km to the eastsoutheast, surface samples assayed 3.4% Zn, 2.7% Cu, and 0.149% Pb. Esso eventually abandoned the tenement as the prospect showed little potential for large-tonnage mineralisation.

Material	Volume BCM (Lower Range)	Volume BCM (Upper Range)	Grade by Ryteck kg/LCM (Lower Range)	Grade by Ryteck kg/LCM (Upper Range)	Raw Conc. (tonnes – lower range)	Raw Conc. (tonnes – upper range)
Tested Alluvials
Prospectors Creek	38,520	42,800	0.66	0.74	37	41
Dead DonkeyLead	30,240	33,600	0.77	0.86	34	38
Six Mile and Tribs	55,800	62,000	0.85	0.95	69	77
Subtotal	124,560	138,400	0.76	0.86	140	156
Untested Alluvials
West Brockman South	90,000	100,000	0.77	0.86	105	116
Prospector Tribs South	27,000	30,000	0.77	0.86	31	35
Five Mile Creek North	18,000	20,000	0.77	0.86	20	23
East Huntsman Tribs	13,500	15,000	0.77	0.86	15	17
Eight Mile Creek	22,500	25,000	0.77	0.86	26	29
Moolyella Channels	49,500	55,000	0.77	0.86	58	64
Subtotal	220,500	245,000	0.77	0.86	255	284
Eluvial tested	364,500	405,000	0.40	0.45	213	237
Eluvial untested	450,000	500,000	0.36	0.40	198	220
Subtotal	814,500	905,000	0.38	0.42	411	457
Tailings
No. 1 Mainplant	22,500	25,000	0.31	0.35	9	10
No. 2	90,000	100,000	0.36	0.40	40	44
No. 4 Carron Dam	54,000	60,000	0.36	0.40	23	26
No. 5 Lower McDonald	45,000	50,000	0.81	0.90	45	50
Transplant - Moolyella	27,000	30,000	0.36	0.40	11	13
Subtotal	238,500	265,000	0.44	0.49	128	143
TOTAL	1,398,060	1,553,400			934	1040

Table 2: Exploration Targets of the Moolyella tin/tantalum field. Note – the swell factor from BCM to LCM is approx. 1.3 for alluvials and 1.1 for tailings.

INDEPENDENT GEOLOGIST’S REPORT

	Mass in kg	Percentage	Tin (Sn %)	Tantalite (Ta2O5 %)
Raw concentrate	56,416	100.00
Cassiterite concentrate	45,896	81.35	73.50	2.56
Tantalite concentrate	6817	12.08	1.22	26.10
Garnet	3267	5.79
Magnetite	436	0.77
TOTAL	56,416	100.00	59.9	5.24

Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella.

Area	Volume m3 (Lower Range)	Volume m3 (Upper Range)	Tonnes (Lower Range)	Tonnes (Upper Range)	Grade in kg/t Sn (Lower Range)	Grade in kg/t Sn (Upper Range)
Pegmatite Gully	11,880	13,200	30,807	34,230	1.85	2.05
Roadside A	27,720	30,800	72,072	80,080	1.07	1.19
Roadside B	12,150	13,500	31,590	35,100	0.93	1.03
Tin Creek	810	900	2,106	2,340	1.80	2.00
TOTAL	52,560	58,400	136,572	151,750	1.41	1.56

Table 4: Exploration Targets of primary tin mineralisation at Moolyella.

Note: With reference to the description of material described as “Exploration Targets” for the quantification of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral Resource as identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource .

1.5 Geology

The geology of the Moolyella Project is dominated by the Mt Edgar Granite complex which occupies the southern and central areas of the tenements. Within the Mt Edgar Granite complex four suites of granites have been recognised. They are the migmatised Callina (or possibly Tambina) supersuite (3,490-3,460 Ma), the Emu Pool (3,325-3,290 Ma) and later Cleland (3,275-3,225 Ma) Supersuites and the Moolyella Monzogranite pluton of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 3.

Swarms of simple and complex pegmatites associated with the highly fractionated Moolyella pluton have intruded the adjacent migmatised (and foliated) Callina Supersuite granites forming a few cm to 3 m thick bodies that can be traced for over 300m along strike (N-S) and dip gently to the east. Sediments derived from these pegmatites form alluvial deposits of primarily cassiterite and also tantalitecolumbite.

INDEPENDENT GEOLOGIST’S REPORT

The alluvial systems in the Moolyella tin field vary from less than one metre to more than 7 metres deep with the placers always occurring in the lowermost alluvial layer. A number of flat-lying plateau occur between the major drainages. These areas are prospective for eluvial concentrations of cassiterite and tantalite-columbite with significant volumes estimated by previous explorers (see Table 2) although the layer of eluvials is usually less than 0.5m thick.

In the northwest, the project area overlies metamorphosed Archaean volcanics and metasediments of the Warrawoona Group greenstone belt, host to the Talga Talga gold centre.

==> picture [410 x 488] intentionally omitted <==

Figure 3Solid geology map of the Shaw River tin field

INDEPENDENT GEOLOGIST’S REPORT

1.6 Potential

The historical reports suggest that there are two likely sources for further discoveries of economic tin/tantalum mineralisation. These are firstly within the braided Brockman Creek system, where over 8km of the primary drainage channel in the Moolyella district has been only sparsely sampled. The second source is in the widespread eluvials that exist between the creek systems.

Potential also exists for economic mineralisation within the saprolite zone. To date no systematic drilling program has tested this target. Reports of soft clay-rich and weathered bedrock beneath the alluvial placers may indicate, if extensively developed, an enriched and easily dug source of mineralisation.

The tenor of Ta2O5 in the tantalum concentrates of the Moolyella tin field (~25 % Ta2O5) suggests the tantalum bearing minerals in the concentrates are unlikely to be dominated by the higher grade tantalite-columbite group. This leaves open the possibility that the tantalum concentrates are dominated by the rare earth elements (REE) rich euxenite or fergusonite minerals. The literature indicates that, to date, most samples have only been assayed for tin (Sn), Tantalum (Ta2O5)and Niobium (Nb2O5) and thus there exists the potential for economic concentrations of REEs that at this point are untested.

Bed rock sources for the alluvial and eluvial mineral occurrences have not been identified and their discovery is therefore a potentially substantial source of mineralisation.

Percussion drilling completed by Endeavour in 1982 tested bedrock pegmatites in three locations. Assays from 247 samples indicated the presence of several significant elements as outlined in Table 5:

Element	Symbol	Range From	Range To	Comment
Tin	Sn	10ppm	6750ppm	Significant
Tantalum	Ta	10ppm	120ppm	Significant
Niobium	Nb	4ppm	110ppm	Significant
Lithium	Li	70ppm	500ppm	Significant
Tungsten	W	10ppm	70ppm	Weak
Gold	Au	0ppm	0.008ppm	VeryWeak
Silver	Ag	0ppm	0ppm	Absent

Table 5:Moolyella 1982 geochemistry from drill cuttings in pegmatites.

Grab samples taken from abandoned stockpiles during a visit to the area in June 2010 confirmed the existence of other anomalous and significant elements contained within the tin-tantalum product. (See Table 6)

Element	Symbol	Range From	Range To	Anomalous Threshhold*
Tin	Sn	50ppm	2250ppm	1000ppm
Tantalum	Ta	5.2ppm	69.4ppm	10ppm

INDEPENDENT GEOLOGIST’S REPORT

Beryllium	Be	4.6ppm	161ppm	10ppm
Lithium	Li	-5ppm	130ppm	50ppm
Strontium	Sr	58ppm	276ppm	500ppm
Silver	Ag	-2ppm	8ppm	1ppm
Thorium	Th	2.1ppm	8ppm	20ppm
Titanium	Ti	120ppm	2350ppm	1000ppm
Uranium	U	0.7ppm	1.7ppm	5ppm

* _Level at which element is considered anomalous in that environment**_

Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab samples (composites from 16 samples).

Little exploration attention has been paid to minerals such as the rare earths, lithium, tungsten and molybdenum on the tenement area. However, the above tables demonstrate that there could be commercial value for some minerals in the pegmatites.

The project area has potential for base metal mineralisation as anomalous nickel bearing gossans have been reported from rock chip samples in the vicinity of the Talga Talga gold centre. At Murphy’s Well zinc values have been identified from rock chip sampling of gossan outcrops.

The area is also prospective for gold mineralisation of the Talga Talga type, particularly within faults and shears in the Warrawoona Basalts.

1.7 Proposed Program and Expenditure

Collation of all the existing data on a GIS database is proposed as a first priority . Following the database review target identification and field location to be geologically mapped utilizing the latest satellite imagery with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and their tin/ tantalum and REEs content and for gold and base metal mineralisation also.

An exploration budget of $250,000 is proposed for the first year and $320,000 for year two.

INDEPENDENT GEOLOGIST’S REPORT

Moolyella	Moolyella	Moolyella	Moolyella
Item	Year 1 $	Year 2 $	Total $
Data Compilation	30,000	35,000	65,000
Geochemical Surveys	15,000	15,000	30,000
Sampling	40,000	55,000	95,000
Drilling	80,000	100,000	180,000
Geology& Field Work	50,000	66,000	116,000
Tenement & Administration	35,000	49,000	84,000
Total	$250,000	$320,000	$570,000
Minimum Expenditure	56,000	56,000	112,000

Table 7: Moolyella Proposed Expenditure.

2 SHAW RIVER PROJECT

2.1 Introduction

The Shaw River project is within the highly prospective Pilbara Goldfield and is located 50 km southwest of Marble Bar and is centred on the Shaw River tin field. It comprises two granted Exploration Licences that cover 62 graticular blocks and 66 graticular blocks respectively.

The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin concentrate.

From 1978 to 1998 a number of companies conducted further evaluation and exploration activities primarily for tin, tantalum and REEs. A mining feasibility study of the Shaw River tin field, under a joint venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. The project was deemed to be sub economic and the tenements were subsequently dropped in 1989.

The project area requires further evaluation and subsequent detailed exploration for the discovery of additional tin tantalum and REEs.

2.2 Location and Access

The Shaw River project is located approximately 50 km southwest of Marble Bar and is centred on the Shaw River tin field. Access is via unsealed Shire and station roads and various bush tracks that service abandoned mine workings see Figure 2.

2.3 Tenure

The Shaw River project comprises two granted Exploration Licences that cover 128 graticular blocks. Their details are summarised in (Table 8) and locations shown in Figure 4.

INDEPENDENT GEOLOGIST’S REPORT

Tenement	Status	Share	Current	Date	Area
Number		%	Holder	Granted/Application
E45/3354	Granted	90	Duketon Consolidated Ltd	23/11/2009	62Blks
E45/3439	Granted	90	Duketon Consolidated Ltd	18/06/2010	66Blks

Table 8: Shaw River Project Tenement Details.

2.4 Exploration History

The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin concentrate. In 1978 Greenbushes Ltd acquired leases in the Shaw River district and conducted exploration for tin and tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and REEs under a joint venture between Greenbushes and Western Australia Rare Metals until 1987 and a mining feasibility study was completed in 1988.

The feasibility study included extensive plans of the sample type and location. The project was then deemed to be sub-economic and the tenements were subsequently dropped in 1989.

In 1994 Mount Edon Gold Mines (MEGM) conducted an exploration program for tin, tantalum and REEs. MEGM utilised scintillometers and undertook an alluvial bulk sampling program with the aim of testing for both alluvial and primary mineralisation. MEGM reported using an airborne scintillometer survey to cover the tenements. However, no report has been found confirming the data generated from this work.

No further exploration programs have occurred within the Shaw River Project leases since 1995.

P. Kimber of Greenex Ltd, on behalf of the Western Australian Rare Metals / Greenbushes J.V., prepared an Exploration Target volume for the project. The report describes the sampling methodology and discusses the results and potential of each area in a summary table. The volumes relevant to the current Shaw River Project tenements are found below in Table 9.

Between 1994 and 1998 Valdrew Resources investigated two of the Exploration Targets (Five Mile Creek and Spear Hill) detailed in the Greenex Ltd report with the intent to develop the deposits. Follow up sampling by Valdrew Resources did not confirm the Greenex Ltd data and they subsequently abandoned the tenements.

In 1997 P. Kimber of Reynard Australia Pty Ltd prepared a high-grade Exploration Target for the Shaw River tin field and the relevant volumes that occur on the Shaw River Project tenements are found below in Table 10.

Prospect	Range of Volume in LCM	Range SnO2 kg/LCM	Tonnes SnO2	Range Ta2O5 kg/LCM	Tonnes Ta2O5
Hartigans	203,422 to 226,025	1.15 to 1.28	260.68 to 289.65	0.070 to 0.078	15.89 to 17.66

INDEPENDENT GEOLOGIST’S REPORT

Breens	97,312 to 108,125	1.17 to 1.30	126.27 to 140.31	0.058 to 0.065	12.28 to 13.65
Lower Cooglegong Creek	216,562 to 240,625	0.83 to 0.92	199.26 to 221.40	0.040 to 0.045	9.71 to 10.79
Combos Creek	88,312 to 98,125	0.80 to 0.89	78.59 to 87.33	0.039 to 0.044	3.85 to 4.28
Eleys Creek	40,950 to 45,500	0.85 to 0.94	38.40 to 42.67	0.033 to 0.037	1.53 to 1.70
TOTAL	646,558 to 718,400	0.96 to 1.09	703.20 to 781.36	0.048 to 0.054	43.26 to 48.08

Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials. ( Note. These volumes are based on a cut off grade of 0.5 kg/LCM of SnO2.)

Prospect	Range of Tonnes	Range SnO2 kg/t	Tonnes SnO2	Range Ta2O5 kg/t	Tonnes Ta2O5
Hartigans	85k - 90k	1.0 -1.15	93.33 - 103.71	0.025 - 0.033	2.70 - 2.98
Combos Creek	90k - 100k	1.0 -1.1	96.57 - 107.30	0.05 - 0.065	5.76 - 6.40
TOTAL	175k – 190k	1.0 - 1.12	189.9 - 211.01	0.037 - 0.049	8.46 – 9.38

Table 10: Exploration Targets of the Shaw River tin/tantalite high-grade .

2.5 Geology

The geology of the Shaw River Project is dominated by the Shaw granitic complex whose evolution includes four episodes of granite emplacement. The oldest granites of the complex are the highly migmatised Callina Supersuite (3,490-3,460 Ma) that are intruded by the significantly less deformed leucogranites of the Tambina Supersuite (3,450-3,420 Ma), Sisters Supersuite (2,945-2,930 Ma) and later Cooglegong Monzogranite of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 4.

Swarms of simple and complex <10 cm and up to 3 m thick pegmatites are associated with the Cooglegong Monzogranite and cut across the banding of the adjacent gneissic rocks. The pegmatites, when associated with rare metal mineralisation, have an apatite composition with accessory spessartine, green muscovite, cassiterite, zinnwaldite, lepidolite, fluorite, tantalite and magnetite.

The locality and geology of the major tin -tantalite prospects in the project area are illustrated in Figure 4.

INDEPENDENT GEOLOGIST’S REPORT

==> picture [364 x 472] intentionally omitted <==

Figure 4Solid geology map of the Shaw River tin field Shows location of the tin/tantalum prospects and deposits, and the outlines of the sampled alluvials.

Alluvial deposits, derived from the pegmatites, have developed in an area of low undulating relief with small shallow creeks and in major deeply incised braided streams. Eluvial and colluvial deposits are also found on ridges and divides and typically occur as a 0.5m thick layer of cover (notably at Spear Hill and Hillside).

2.6 Exploration Potential

A granite-greenstone contact exists along the eastern margin of the Shaw River Project tenements. In other tin-tantalum districts of the Pilbara, simple and complex pegmatites of substantial width have formed within the foliated greenstones and around the greenstone-granite contact.

Limited work appears to have been done in the Shaw River district to investigate

INDEPENDENT GEOLOGIST’S REPORT

them for their mineralisation and mineral content and therefore they represent potential exploration targets. Within some of the deeper alluvial systems in the Shaw River tin field the placers were auger drilled and sampled.

Auger drilling historically underestimates mineral content in alluvial and eluvial type deposits. Consequently grade and volume estimations so derived are in general conservative. Therefore there is potential for increased mineral content using other drilling techniques such as RC.

Assays of the tantalum-bearing minerals from the Shaw River district have produced some significant results for uranium (up to 4,750 ppm U).

The project area is considered to be potentially prospective for uranium bearing pegmatites. Furthermore no work has been done to assess the potential for palaeoplacer type uranium deposits.

2.7 Proposed Program and Expenditure

Ground geochemical and geophysical surveys are to follow. The generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and their tin/ tantalum and REE content and uranium will be searched for also.

An exploration budget of $180,000 is proposed for the first year and $250,000 for year two.

INDEPENDENT GEOLOGIST’S REPORT

Shaw	River	River	River

Item	Year 1 $	Year 2 $	Total $
Data Compilation	20,000	34,000	54,000
Geochemical Surveys	17,500	20,000	37,500
Sampling	25,000	32,000	57,000
Drilling	50,000	80,000	130,000
Geology & Field Work	42,500	45,000	87,500
Tenement & Administration	25,000	39,000	64,000
Total	$180,000	$250,000	$430,000
Minimum Expenditure	130,000	130,000	260,000

Table 11: Proposed Expenditure Shaw River Project.

3.0 THE PILGANGOORA PROJECT

3.1 Introduction

The Pilgangoora project is within the highly prospective Pilbara Goldfield and is located approximately 120 km south-southeast of Port Hedland and a portion of it covers the Pilgangoora tantalum field. The project comprises two granted Exploration Licences that cover 8 graticular blocks.

The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had produced approximately 0.7 tonnes of tantalite concentrates from small scale alluvial operations. Larger scale mining operations were introduced in 1974 and by 1975 approximately 50 tonnes of high grade tantalite together with some 13 tonnes of cassiterite were produced from the area.

From 1978-1982 Pilgan Mining and between 1992-1996 the Pilgangoora Mining Venture continued with bulk scale mining operations that produced approximately 140 tonnes of tantalite concentrates from an estimated 800,000 BCM of screened alluvial and eluvial material.

The project area contains three types of zoned tin/tantalum bearing pegmatites that requires more detailed exploration and evaluation.

3.2 Location and Access

The Pilgangoora tantalum field is located approximately 120 km south-southeast of Port Hedland and is found predominantly to the south southwest of and stretching northward into, the Pilgangoora Project tenements. The project is accessed by unsealed shire and station roads, various tracks that service abandoned mine workings and the stations (see Figure 2).

INDEPENDENT GEOLOGIST’S REPORT

3.3 Tenure

The Pilgangoora project comprises two granted Exploration Licences that cover 8 graticular blocks. Their details are summarised in (Table 10) and locations shown in Figure 5.

Tenement Number				Date Granted
	Status	Share	Current Holder		Area
E45/2375	Granted	90	South Boulder Mines Ltd	13/02/2006	3Blks
E45/3373	Granted	90	JML Resources PtyLtd	15/02/2010	5Blks

Table 12: Pilgangoora Tenement Details.

3.4 Exploration History

The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had produced approximately 0.7 tonnes of tantalite concentrates from small scale alluvial operations. After 1947, larger scale mining operations were introduced and by 1975 approximately 50 tonnes of high grade tantalite together with some 13 tonnes of cassiterite were produced from the area.

In 1996 P.B. Kimber of Prima Resources, a JV partner of the Pilgangoora Mining Venture, estimated a volume for the project area, see Table 13. His estimates utilised the estimates made by Jays Exploration in 1981, see table 14.

Several creeks were re-sampled by backhoe pits dug on a 10m by 100m grid with 6 litre vertical channel samples taken across the placers. The locations of the creeks are indicated in Figure 5.

Due to concerns about the repeatability of the resource estimates, Prima Resources bulk sampled creeks 4 and 5. The results of this bulk sample program are not included in the available reports.

INDEPENDENT GEOLOGIST’S REPORT

==> picture [402 x 444] intentionally omitted <==

Figure 5Solid geology map of the Pilgangoora Project Shows the approximate outlines of the sampled alluvials

INDEPENDENT GEOLOGIST’S REPORT

Location	Volume in LCM (Lower Range)	Volume in LCM (Upper Range)	Ta2O5kg/LCM (Lower Range)	Ta2O5kg/LCM (Upper Range)	Tonnes Ta2O5 (Lower Range)	Tonnes Ta2O5 (Lower Range)
Creek 1	6,804	7,560	0.50	0.56	3.80	4.23
Creek 2	6,480	7,200	0.55	0.61	3.95	4.39
Creek 7	19,656	21,840	0.33	0.37	7.27	8.08
TOTAL	32,940	36,600	0.46	0.46	15.02	16.71

Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora Project alluvials (1996).

Location	Volume in LCM (Lower Range)	Volume in LCM (Upper Range)	Ta2O5 kg/LCM (Lower Range)	Ta2O5 kg/LCM (Upper Range)	Tonnes Ta2O5 (Lower Range)	Tonnes Ta2O5 (Lower Range)
Creek 1	6,804	7,560	0.50	0.56	3.80	4.23
Creek 2	11,400	12,667	0.45	0.50	5.69	6.33
Creek 7	19,656	21,840	0.33	0.37	7.27	8.08
TOTAL	37,860	42,067	0.42	0.44	16.76	18.64

Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora

Project alluvials (1981).

3.5 Geology

The Pilgangoora Project tenements overlie the steeply dipping and synclinally folded East Strelley Greenstone belt, and locally, the Carlindi granitic complex to the north. The greenstone belt consists of ultramafic, mafic and felsic volcanics with intercalated chert and sedimentary rocks of the Warrawoona (3,525-,3426 Ma) and overlying Kelly (3,350-3,300 Ma) Groups. The composition of the Carlindi granitic complex is similar to those of the Moolyella and Shaw River districts with four episodes of granite emplacement including the initial highly migmatised Callina Supersuite (3,490-3,460 Ma) followed by the Cleland Supersuite (3,275-3,225 Ma), the Sisters Supersuite (2,945-2,930 Ma) and lastly by monzogranites of the Split Rock Supersuite (,2890-2,830 Ma). Both the greenstone belt and the migmatised granites show a well developed schistosity that trends north northeast and dips steeply to the east.

INDEPENDENT GEOLOGIST’S REPORT

Three types of tin/tantalum bearing pegmatites have been found in the Pilgangoora district and these are:

1 Quartz-spodumene-albite-microcline pegmatites.
2 Quartz-microcline, albite-muscovite pegmatites.
3 Quartz-muscovite-feldspar-cassiterite pegmatites.

The type 1 pegmatites are the primary source of tin/tantalum mineralisation at Pilgangoora and form north north-east trending bodies up to 60m thick in greenstones within an 8km long and 1.5km wide corridor that begins southsouthwest of the tenements and extends northwards into the Pilgangoora Project tenements (see Figure 5). The spodumene content of these pegmatites (~ 25 %) has previously been the focus of feasibility studies for lithium, however none of the volumes presented in that report occur on the Pilgangoora Project tenements.

Type 2 pegmatites occur at or close to the granite-greenstone contact and are found in the area covered by the Pilgangoora Project tenements. The tantalum concentrates derived from these pegmatites are of a lower tenor than the type 1 pegmatites and this is likely to be the reason for the lower grade tantalum concentrates (~ 25 % Ta2O5) of the Pilgangoora Project than the higher (40 % and 60 % Ta2O5) grades found in the main Pilgangoora tantalum field to the south southwest.

The type 3 pegmatites typically occur to the south of the Pilgangoora Project tenements and are usually small and are cassiterite rich.

A schematic block diagram, showing the generalised composition with mineral distribution, within a complex zoned pegmatite is illustrated in Figure 6.

3.6 Mineralisation Potential

There are two potential sources for further concentrations of tantalum minerals to be discovered within the Pilgangoora Project leases. These include alluvials in creeks to the north of those already sampled as well as eluvial and hard rock deposits associated with the type 1 pegmatites found within the central area of the tenements (see Figure 5). These type 1 pegmatites may also be host to economic quantities of Li bearing spodumene.

Little work appears to have been done on the chemistry of the tantalum bearing minerals associated with the type 2 pegmatites and the possibility exists that economic accumulations of REEs exist in the project area.

Alluvial gold was discovered at McPhees Patch around the turn of the 19th century. It was not until 1935 that some attempt was made to treat the low-grade gold lodes as a large mining operation and these efforts persisted until the outbreak of the Second World War. No further serious investigations occurred until the gold boom of the 1980s, when various companies explored the area. From 1995 to 1998 Lynas Gold NL mined the 125,000 ounce Lynas Find deposit.

The exploration rights for gold only exist for (E45/3373) the northern most lease of the Pilgangoora Project. The most significant gold deposit in this area is the Birthday Gift prospect with historical production of 1,473 tonnes for 232.7 oz Au.

INDEPENDENT GEOLOGIST’S REPORT

==> picture [366 x 524] intentionally omitted <==

Figure 6 A schematic block diagram showing a generalised mineral distribution within a complex zoned pegmatite after Anderson I.G., 1979

INDEPENDENT GEOLOGIST’S REPORT

3.7 Proposed Program and Expenditure

An exploration budget of $150,000 is proposed for the first year and $160,000 for year two.

Pilgangoora	Pilgangoora	Pilgangoora	Pilgangoora

Item	Year 1 $	Year 2 $	Total $
Data Compilation	17,000	22,000	39,000
Geochemical Surveys	15,000	15,000	30,000
Sampling	25,000	25,000	50,000
Drilling	50,000	50,000	100,000
Geology& Field Work	25,000	28,000	53,000
Tenement & Administration	18,000	20,000	38,000
Total	$150,000	$160,000	$310,000
Minimum Expenditure	35,000	35,000	70,000

Table 15: Pilgangoora Project Proposed Expenditure.

4.0 Arthur River Project

4.1 Introduction

The Arthur River project is located in the Gascoyne Mineral Field, approximately 250km east of Carnarvon and consists of two granted Exploration Licences covering 15 graticular blocks.

In the early 1900’s the Bangemall Gold Mine mined gold but no records of production figures have been located.

Unknown parties in the early 1940’s recovered mica, beryl, tantalum-columbite and bismuth from pegmatites in the area. No records of production have been located.

From 2004-2006 Tantalum Australia NL mined the placer type Arthur River tantalumniobium mine, now on care and maintenance. The tantalum and niobium minerals are derived locally from columbite - tantalite granitic rare metal pegmatites. Drilling of the source pegmatite has yielded significant tantalum mineralisation and subsequently an Exploration Target consisting of 55,000 to 60,000 tonnes at 0.025 to 0.03 percent Ta2O5 has been reported.

INDEPENDENT GEOLOGIST’S REPORT

As such the potential quality and grade is conceptual in nature, mainly based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource .

The tin tantalum potential of the region has not been fully explored and consequently requires additional field programs to map the pegmatite occurrences.

Previous explorers have located anomalous hard rock, beryl-pegmatite and calcrete style uranium mineralisation. Additionally uranium bearing pyrochlore has been noted during the excavation of the Arthur River mine.

The project area has potential for the occurrence of gold, tin/tantalum, tungstenmolybdenum, REE and uranium mineralisation.

4.2 Locality and Access

4.3 Tenure

The project consists of two granted Exploration Licences covering a total area of approximately 10,294 hectares (15 graticular blocks). Details of the Mining Licences are summarised in Table 16 and locations shown in Figure 7.

Tenement Number	Status	Share %	Current Holder	Date Status	Area
E09/1066	Live	100	Hazelwood Resources Ltd	Granted	12Blks
E09/1067	Live	100	Hazelwood Resources Ltd	Granted	3Blks

Table 16: Arthur River Project Tenement Details.

INDEPENDENT GEOLOGIST’S REPORT

==> picture [465 x 450] intentionally omitted <==

Figure 7 Arthur River - Geology and Mineral Occurrences

4.4 Exploration History

In the early 1900stheBangemall Gold Mine mined gold but no records of production figures have been located.

There is documentation that during the early 1940s mica, beryl, tantalum-columbite, and bismuth were recovered from pegmatites by unknown parties No records of production have been located.

In April 1973 Pacminex Pty Ltd explored for hard rock and calcrete style uranium mineralisation. Utilising airborne radiometric and detailed mapping primary and secondary uranium anomalism was indentified.

From 1992 - 2000 –Cameco Australia Pty and PNC Exploration Australia Pty Ltd were active in an area approximately 20 kilometres south of the westernmost EL. Several areas of significant uranium mineralisation were identified within the regolith.

INDEPENDENT GEOLOGIST’S REPORT

In 2004 Agip Nucleare explored for Uranium and discovered a uranium- beryl pegmatite.

During 2004-2006,Tantalum Australia NL mined the Arthur River tantalum-niobium mine, now on care and maintenance. The deposit is a placer type containing tantalum and niobium minerals derived locally from columbite- tantalite granitic rare metal pegmatites. A placer Exploration Target estimate of 55,000 to 60,000 tonnes at 0.025% to 0.03% Ta2O5 has been reported.

Additionally, uranium bearing pyrochlore has been noted during the excavation of the Arthur River mine.

During 2007, Uranium exploration company U3O8 Limited, recommenced Uranium exploration at the Wabli Creek and Minindi Creek prospects, located near the occurrence discovered by Agip in 2004, and located 10 to 20 kilometres from the eastern-most Arthur River project tenement. U3O8 Limited reported significant calcrete uranium values of 500 to 600 ppm.

Geochemistry reported from rock chip sampling by Hazlewood Resources Pty Ltd in September 2007 indicated that there are several prospective elements present on tenement E9/1067. See Table 17 below:

Element	Range From ppm	Range To ppm	Comment
Lithium(Li)	0.99	77.2	Verysignificant
Rubidium(Rb)	3.56	82.2	Verysignificant
Tin(Sn)	0.14	3.36	significant
Niobium(Nb)	0.11	3.28	significant
Thorium(Th)	1.44	61.9	significant
Uranium(U)	0.64	21.5	Verysignificant
Cerium(Ce)	5.81	200	Verysignificant
Cesium(Cs)	0.20	23.2	significant

Table 17: 2007 Geochemical sample Highlights.

From 2009 Hazelwood has completed a detailed airborne radiometric survey and has undertaken preliminary field work. Field activities were restrained by the rugged terrain. Further field work is required for verification of anomalies arising from the radiometric data and this will be undertaken with the assistance of all terrain vehicles.

INDEPENDENT GEOLOGIST’S REPORT

==> picture [416 x 242] intentionally omitted <==

Figure 8: Arthur River tenement E9/1066 airborne uranium anomalies 4.5 Geology

The basement rocks to the Mt Phillip 1:250,000 sheet belong to the Gascoyne Province, a belt of high grade metamorphic rocks of dominantly Proterozoic age. The oldest rocks on the sheet are reworked Archaean gneisses, which occur as banded biotite gneiss, with minor microcline augen, layered intermediate gneiss and pink granite gneiss. Lesser amounts of biotite granite and pegmatite have resulted from Proterozoic reworking.

The Proterozoic is mainly represented by the Morrisey Metamorphic Suite, which is a mixture of prograde schists and felsic paragneiss. Smaller bodies of amphibolite, calc-silicate gneiss and marble also exist. Retrograde sericite schists have been mapped also. Peak metamorphism reached mid to upper amphibolite facies and is later overwritten by a retrogressive greenschist facies event.

Two phases of granite have been described. The first is biotite augen gneiss and is syn-peak metamorphism (2,400Ma).

The second is a biotite granodiorite (1,700Ma). The structural grain is dominated by tightly folded, northwest trending folds, with steep southeast plunges.

The Proterozoic basins, that comprises the Bangemall and Mt James Formations, onlap the Morrisey Complex.

Palaeozoic sediments of the Carnarvon Basin onlap the area in the west.

Within the project area, the geology is dominated by aeolian sands and colluvium and alluvium. Where outcrop and subcrop do occur they are dominantly quartzofeldspathic conglomerates and grits, silicified sandstone, siliceous limestone, quartzite, slates and cherts.

4.6 Mineralisation Potential

The project area is regarded to be very prospective for the discovery of additional tantalum-niobium and other rare metals associated with pegmatites. Furthermore

INDEPENDENT GEOLOGIST’S REPORT

numerous occurrences of pegmatitic rare metal mineralisation occur within the Morrisey Metamorphic suite of the Ashburton Formation, some of which have been exploited for bismuth, beryl and tantalum in the past.

Occurrences of uranium mineralisation are recorded within 10 to 20km of the Arthur River project area. The most noteworthy are Wabli Creek; a carnotite-calcrete style deposit, and Paddy Well; a pegmatite style deposit.

Consequently the project is considered to be prospective to host both Jabiluka and Calcrete-Carnotite - style uranium mineralisation supported by the known occurrences of pegmatite and calcrete associated uranium mineralisation in areas adjacent to the project,

Exploration companies including U3O8 Limited and Tantalum Australia Ltd have recently indicated their intention to recommence uranium exploration in areas immediately adjacent to the Arthur River Project.

4.7 Proposed Program and Expenditure

Collation of all the existing data on a GIS database is proposed as a first priority . Following the database review target identification and field location to be geologically mapped utilizing the latest satellite imagery with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and their tin/ tantalum and REE content. Uranium and gold will be searched for also.

An exploration budget of $120,000 is proposed for the first year and $140,000 for year two.

INDEPENDENT GEOLOGIST’S REPORT

Arthur River	Arthur River	Arthur River	Arthur River

Item	Year 1 $	Year 2 $	Total $
Data Compilation	17,000	23,000	40,000
Geochemical Surveys	15,000	15,000	30,000
Sampling	20,000	20,000	40,000
Drilling	30,000	40,000	70,000
Geology& Field Work	21,000	22,000	43,000
Tenement & Administration	17,000	20,000	37,000
Total	$120,000	$140,000	$260,000
Minimum Expenditure	50,000	50,000	100,000

Table 18: Arthur River Project Proposed Expenditure.

INDEPENDENT GEOLOGIST’S REPORT

5.0 REFERENCES

The number of reports referenced for the purposes of carrying out of an independent geological review of the mineral properties are too numerous to list. The following reports listed below, therefore, are those that are the principal sources of information.

Anderson I. G., 1979: Tantalum-Niobium (Columbium) A Geological Review. Unpublished Internal Geological Report: Rio Tinto (Rhodesia) Limited.

Cooper D. G., 1961: The Geology of the Bikita Pegmatite. The Geology of Some Ore Deposits of Southern Africa: Volume 2. Geological Society of South Africa Publication.

Williams S. J., Williams I. R., Chin R, J., Muhling P. C., and Hoching, R. M., 1983: 1:250,000 Explanatory Notes, Mount Phillips, Sheet S.G. 50-2. Western Australia. Geological Survey of Western Australia. Publication.

Hickman A. H., and Lipple, S. L., 1978: 1:250,000 Explanatory Notes, Marble Bar, Sheet S.F. 50-8. Western Australia. Geological Survey of Western Australia Publication.

Various Open file WAMEX Annual Technical Reports covering previous exploration in the region and tenements.

INDEPENDENT GEOLOGIST’S REPORT

6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS

6.1 Glossary

Glossary
Aeromagnetic Survey	A survey made from the air for the purpose of recording
	magnetic characteristics of rocks.
Alteration Zone	Zone within which rock - forming minerals have been
	chemically changed.
Anomaly	Value higher or lower than the expected or norm.
Anomalous	Outlining a zone of potential exploration interest but not
	necessarily of commercial significance.
Anticline	Upward arching fold or rock strata (antonym = syncline).
Axial plane	A plane which joins the hinge lines of successive beds in a
	fold.
Axis	Hinge-line of a fold.
Basalt	A fine-grained volcanic rock composed primarily of
	plagioclase feldspar and mafic minerals.
Batholith	A very large, usually granitic intrusion.
Bedding	A rock surface parallel to the surface of deposition.
Cleavage	The tendency of a rock and minerals to split along closely
	spaced, parallel planes.
Country rock	A general term applied to rock surrounding or penetrated by
	mineral veins.
Dip	The angle at which a rock layer, fault of any other planar
	structure is inclined from the horizontal.
Domain	The areal extent of given lithology or environment.
Dyke	A tabular intrusive body of igneous rock that cuts across
	bedding at a high angle.
Exploration Target	A volume of mineralised rock that has not yet been defined
	as a mineral resource.
Fault	A fracture in rocks on which there has been movement on
	one of the sides relative to the other, parallel to the fracture.
Felsic	Descriptive of an igneous rock which is predominantly of
	light-coloured minerals (antonym: ofmafic).
Fold	A bend in the rock strata or planar structure.
Foliation	The laminated structure resulting from the parallel
	arrangement of different minerals.
Footwall	Rocks underlying mineralisation .
Geophysics	Study of the earth by quantitative physical methods.
Granitoid	A general field term for coarse-grained rocks containing
	quartz and felspars.

INDEPENDENT GEOLOGIST’S REPORT

Hanging wall	Rocks overlying mineralisation.
Igneous	Formed by solidification from a molten or partly molten
	state.
Inferred Resource	A resource inferred from geoscientific evidence, drillholes,
	underground openings or other sampling procedures where
	lack of data is such that continuity cannot be predicted with
	confidence and where geoscientific data may not be known
	with a reasonable level of reliability.
Isocline	An anticline or syncline so closely folded that the two sides
	have the same dip.
JORC Code	Joint Ore Reserves Committee- Australasian Code for
	Reporting of Identified Resources and Ore Reserves.
Lamination	The finest bedding, often found in shales and fine grained
	sandstones.
Lineament	A naturally occurring major linear feature in the earth’s crust,
	often associated with mineral deposits.
Lode	A deposit of potentially valuable material or minerals
	between definite boundaries.
Mafic	A loosely used group-name for silicate minerals that are rich
	in iron and magnesium, and for rocks in which these minerals
	are abundant.
Metamorphism	The mineralogical, structural and chemical changes induced
	within solid rocks through the actions of heat, pressure or the
	introduction of new chemicals. Rocks so altered are prefixed
	"meta" as in "metabasalt".
Mineral Resource	A defined tonnage and volume of rock with mineralisation of
	economic interest (according to JORC/ASX standards).
Mineralisation	In economic geology, the introduction of valuable elements
	into a rock body.
Opencut	Descriptive of a mine worked open from the surface.
Ore	A mixture of minerals, host rock and waste material which is
	expected to be mineable at a profit.
Orebody	A continuous, well-defined mass of ore.
Outcrop	The surface expression of a rock layer (verb: to crop out).
Plunge	Angle of the axis of folding with a horizontal plane.
Porphyry	A rock with conspicuous crystals in a fine-grained ground
	mass.
Primary mineralisation	Mineralisation which has not been affected by near-surface
	oxidising process.

INDEPENDENT GEOLOGIST’S REPORT

RAB R otary A ir B last (as related to drilling)—A drilling technique in which the sample is returned to the surface outside the rod string by compressed air. RC R everse C irculation (as relating to drilling)—A drilling technique in which the cuttings are recovered through the drill rods thus minimising sample losses and contamination. Resource In-situ mineral occurrence from which valuable or useful minerals may be recovered, but from which only a broad knowledge of the geological character of the deposit is based on relatively few samples or measurements. Reverse Fault A fracture in rocks in which the strata above the fracture have been displaced up the fracture plane relative to the strata below the fracture. Shear (zone) A zone in which shearing has occurred on a large scale so that the rock is crushed and brecciated. Silicified Containing a high proportion of silicon dioxide. Soil sampling Systematic collection of soil samples at a series of different locations in order to study the distribution of soil geochemical values. Strike The direction or bearing of the outcrop of an inclined bed or structure on a level surface. Strike-slipfault Faults parallel to the strike of the rock strata. Stringer A narrow vein or irregular filament of mineral traversing a rock mass. Subcrop The surface expression of a mostly concealed rock layer. Syncline A fold where the rock strata dip inwards towards the axis (antonym: anticline). Unconformity Lack of parallelism between rock strata in sequential contact, caused by a time break in sedimentation. Vein A narrow intrusive mineral body.

INDEPENDENT GEOLOGIST’S REPORT

6.2 Abbreviations

Ag Silver

As Arsenic Au Gold Ba Barium Bi Bismuth Ce Cerium Cs Cesium Cu Copper g gram kg kilogram km kilometre km[2] square kilometre Li Lithium

m metre m[2] square metre m[3] cubic metre mm millimetre MMI Mobile Metal Ions Nb Niobium Pb Lead t tonne oz troy ounce, equivalent to 31.103477g.
ppb parts per billion ppm parts per million Ta Tantalum Zn Zinc

INVESTIGATING ACCOUNANT’S REPORT

6. INVESTIGATING ACCOUNTANT’S REPORT

==> picture [452 x 87] intentionally omitted <==

27 February 2011

The Directors Lithex Resources Limited 11 Rafferty Close Mandurah WA 6210

Dear Sirs

RE: INDEPENDENT ACCOUNTANT'S REPORT

1. Introduction

This report has been prepared at the request of the Directors of Lithex Resources Limited (" Lithex " or “ the Company ”) for inclusion in a Prospectus to be dated on or around 10[th] February 2011 (“the Prospectus”) relating to the proposed issue by Lithex of 10,000,000 shares to be issued at a price of 20 cents per share to raise $2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be issued at 20 cents per share to raise up to a further $2,000,000.

2. Basis of Preparation

This report has been prepared to provide investors with information on historical results and the assets and liabilities of Lithex. This report does not address the rights attaching to the securities to be issued in accordance with the Prospectus, nor the risks associated with the investment. Rothsay Consulting Services Pty Ltd has not been requested to consider the prospects for Lithex, the securities on offer and related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has not done so, nor purports to do so. Rothsay Consulting Services Pty Ltd accordingly, takes no responsibility for those matters or for any matter or omission in the Prospectus, other than responsibility for this report.

3. Background

Lithex was incorporated on 30 October 2009 with the issue of 10 ordinary share of $0.20. On 11 February 2010, 11,000,000 ordinary shares were issued to the founders and advisers at 0.01 cents ($11,000). On 25 February 2010, 5,000,000 ordinary shares were issued to seed investors at 5 cents ($250,000) On 1 May 2010 1,360,000 ordinary shares were issued to seed investors at 5 cents ($68,000) and on 28 September 2010 770,000 ordinary shares were issued to seed investors at 5 cents ($38,500). On 9 December 2010 a further 100,000 ordinary shares were issued to the vendors for nil consideration. On 22 December 2010 6,380,000 of the founder and adviser shares were cancelled. On 25 January 2011 780,000 ordinary shares were issued to seed investors at 10 cents ($78,000). On 31 January 2011 3,000,000 ordinary shares were issued to seed investors at 16 cents ($480,000)

The seed investors have 7,130,000 attached options exercisable at 20 cents each expiring 30 June 2015.

INVESTIGATING ACCOUNANT’S REPORT

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Potential investors should read the Prospectus in full and note the value attributed to the exploration properties acquired.

Details on all contracts entered into between Lithex and other parties are outlined in the Material Contracts section of the Prospectus.

4. Scope of Examination

You have requested Rothsay Consulting Services Pty Ltd prepare an Independent Accountant's Report on:

(a) The statement of financial position of Lithex as at 30 September 2010;
(b) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include funds to be raised by the Prospectus; and
(c) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include funds to be raised by the Prospectus and the maximum amount of over subscriptions.

We have examined the financial statements and other relevant information and made such enquiries, as we considered necessary for the purposes of this report. The scope of our examination was substantially less than an audit examination conducted in accordance with Australian Auditing Standards and accordingly, we do not express such an opinion. Our examination included:

(i) Discussions with Directors and other key management of Lithex;
(ii) A review of the accounts of Lithex;
(iii) A review of publicly available information; and
(iv) A review of work papers, accounting records and other documents.

5. Opinion

In our opinion, the proforma statement of financial position as set out in Appendix 1 presents fairly, the proforma statement of financial position of Lithex as at 31 August 2010 in accordance with the accounting methodologies required by Australian Accounting Standards on the basis of assumptions and transactions set out in Appendix 2.

To the best of our knowledge and belief, there have been no other material items, transactions or events subsequent to 31 August 2010, that have come to our attention during the course of our review which would cause the information included in this report to be misleading.

INVESTIGATING ACCOUNANT’S REPORT

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6. Other matters

At the date of this report, Rothsay Consulting Services Pty Ltd does not have any material interest in Lithex either directly or indirectly, or in the outcome of the offer. Rothsay Chartered Accountants have been appointed auditors of Lithex. Apart from this report, Rothsay Consulting Services Pty Ltd was not involved in the preparation of any other part of the Prospectus, and accordingly, make no representations or warranties as to the completeness and accuracy of any information contained in any other part of the Prospectus.

Rothsay Consulting Services Pty Ltd has consented to the inclusion of this report (including Appendices 1 to 3) in the Prospectus in the form and content in which it is included. At the date of this report, this consent has not been withdrawn.

Yours faithfully

ROTHSAY CONSULTING SERVICES PTY LTD

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Graham R Swan FCA MAICD Director

INVESTIGATING ACCOUNANT’S REPORT

INDEPENDENT ACCOUNTANT'S REPORT

APPENDIX 2 CONDENSED STATEMENTS OF FINANCIAL POSITION

Note Current Assets Cash Assets 3 Trade and other receivables Total Current Assets Non-Current Assets Capitalised tenement acquisition costs 4 Total Non-Current Assets Current Liabilities Trade and other payables Borrowings Total Current Liabilities Net Assets Equity Contributed equity 5 Accumulated losses Total Equity	Audited 30 Sept 2010 $ 101,284 247 101,531 40,000 40,000 73,147 - 73,147 68,384 350,607 (282,223) 68,384	Pro-forma 30 Sept 2010 $ 2,222,508 247 2,222,755 1,706,000 1,706,000 73,147 - 73,147 3,855,608 4,221,607 (365,999) 3,855,608	Pro-forma including over sub- scriptions 30 Sept 2010 $ 4,097,508 247
			4,097,755
			1,706,000
			1,706,000
			73,147 -
			73,147

			5,730,608
			6,096,607 (365,999)
			5,730,608

To be read in conjunction with Appendix 3

INVESTIGATING ACCOUNANT’S REPORT

INDEPENDENT ACCOUNTANT'S REPORT APPENDIX 2 NOTES TO THE STATEMENTS OF FINANCIAL POSITION

1. Statement of Significant Accounting Policies

(a) Statement of Compliance
The financial information has been prepared in accordance with the measurement requirements, but not the disclosure requirements, of the Australian Accounting Standards (AASBs) of the Australian Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act 2001.
(b) Basis of Accounting
The financial information has been prepared on an accruals basis and is based on historical costs in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board.
(c) Revenue Recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.
(d) Income Tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associated operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled

INVESTIGATING ACCOUNANT’S REPORT

entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(e) Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cashgenerating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(f) Investments and Other Financial Assets
The Company classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-tomaturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, reevaluates this designation at each reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the statement of financial position. Loans and receivables are carried at amortised cost using the effective interest method.

(g) Plant and Equipment
All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

INVESTIGATING ACCOUNANT’S REPORT

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the statement of comprehensive income during the reporting period in which they are incurred.

Depreciation of plant and equipment is calculated using the reducing balance method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term. The rates vary between 20% and 40% per annum.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income. When revalued assets are sold, it is Company policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(h) Exploration and Evaluation Costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated costs are written off to the extent that they will not be recoverable in the future.
(i)

Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial period which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
(j) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of comprehensive income over the

INVESTIGATING ACCOUNANT’S REPORT

period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguishment on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or finance cost.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for atleast 12 months after the reporting date.

(k) Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

(l) Contributed Equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

(m) Goods and services Tax

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

INVESTIGATING ACCOUNANT’S REPORT

2. Actual and Proposed Transactions to Arrive at Proforma Statement of Financial Position

Actual and proposed transactions adjusting the 30 September 2010 Audited Statement of Financial Position in the pro-forma Statement of Financial Position are as follows:

Note 3. Cash and Cash Equivalents At 30 September 2010 Issue of seed capital (e) Issue of seed capital (f) Payments to suppliers & employees (g) Issue of Shares pursuant to prospectus (a) Payment of fundraising costs (b) Payment of tenement acquisition costs (c) 4. Capitalised Tenement Acquisition Costs At 30 September 2010 Cash payment to vendors (c) Shares issued to Vendors (d)	Audited 30 Sept 2010 $ 101,284 - - - 101,284 40,000 - 40,000	Pro-forma 30 Sept 2010 $ 101,284 78,000 480,000 (83,776) 2,000,000 (287,000) (66,000) 2,222,508 40,000 66,000 1,600,000 1,706,000	Pro-forma including over sub- scriptions 30 Sept 2010 $ 101,284 78,000 480,000 (83,776) 4,000,000 (412,000) (66,000)
			4,097,508
			40,000 66,000 1,600,000
			1,706,000

INVESTIGATING ACCOUNANT’S REPORT

Note 5. Contributed Equity At 30 September 2010 Issue of seed capital (e) Issue of seed capital (f) Issue of Shares pursuant to Prospectus (a) Payment of fundraising costs (b) Shares issued to vendors (d)	Audited 30 Sept 2010 350,607 - - - 350,607	Pro-forma 30 Sept 2010 350,607 78,000 480,000 2,000,000 (287,000) 1,600,000 4,221,607	Pro-forma including over sub- scriptions 30 Sept 2010 350,607 78,000 480,000 4,000,000 (412,000) 1,600,000
			6,096,607

a) The issue of 10,000,000 ordinary shares at 20 cents each pursuant to this Prospectus to raise $2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be issued at 20 cents per share to raise up to a further $2,000,000;
b) The payment of fundraising costs estimated at $287,000 on 10,000,000 shares, and $412,000 on 20,000,000 shares;
c) Cash payment of $66,000 to a vendor for tenement acquisition;
d) The issue of 8,000,000 ordinary shares to vendors, at a deemed cost of 20 cents per share, for a total cost of $1,600,000, as consideration for tenement acquisitions;
e) The issue of 780,000 ordinary shares at 10 cents per share to seed investors
f) The issue of 3,000,000 ordinary shares at 16 cents per share to seed investors
g) Payments to suppliers and employees in the period to the issue of the prospectus

8. Contingent Liabilities

Based on discussions with the Directors and legal advisors, to our knowledge, the Company has contingent liabilities as noted by proforma adjustments (c) to (e) upon Listing. These payments of cash and issues of shares and options all relate to tenement acquisition agreements entered into by the Company.

9. Commitments

Based on discussions with the Directors the Company has exploration commitments of $279,000 in the first year to maintain its exploration permits in good standing. Additional exploration expenditure is likely to occur on a discretionary basis.

SOLICITOR’S REPORT ON TENEMENTS

7. SOLICITOR’S REPORT ON TENEMENTS

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9 February 2011

The Directors Lithex Resources Ltd 11 Rafferty Close MANDURAH WA 6210

Dear Sirs

Solicitor's Report

This report is prepared for inclusion in a prospectus ( Prospectus ) to be dated on or about 14 February 2011 for issue by Lithex Resources Limited ACN 140 316 463 ( Company ) of 10,000,000 shares at an issue price of 20 cents ($0.20) per share to raise $ 2,000,000 with provision for oversubscriptions of a further 10,000,000 Shares to raise up to a further $2,000,000.

This Report relates to various mining tenements in Western Australia ( WA Tenements ) held by the Company. The WA Tenements are set out in full in the Tenements Schedule ( Schedule ) at the end of this Report.

1 Searches

We have conducted the following searches and enquiries on 6 February 2011:

(a) searches of the WA Tenements in the register maintained by the Department of Mines and Petroleum of Western Australia ( DMP ) pursuant to the Mining Act 1978 (WA) ( Mining Act (WA) );
(b) quick appraisal searches of the WA Tenements obtained on-line from the Tengraph system maintained by the DMP; and
(c) searches of the native title application summaries maintained by the National Native Title Tribunal ( NNTT ) in relation to those native title claims which affect the Tenements.

SOLICITOR’S REPORT ON TENEMENTS

Based on our searches and enquiries and subject to the statements set out below, we confirm at the date of the searches:

(a) the details of the WA Tenements referred to in the Schedule are accurate as to the status and registered holders of those tenements;
(b) all applicable rents due in respect of the WA Tenements under the Mining Act (WA) have been paid; and
(c) none of the WA Tenements are subject to any unusual conditions of a material nature other than as disclosed in the Schedule.

2 Assumptions and qualifications

In preparing this Report:

(a) we have relied on the information provided as a result of the searches which we have made or caused to be made of the register and the Tengraph system maintained by DMP and the register maintained by the NNTT being accurate and complete;
(b) where compliance with requirements necessary to maintain a WA Tenement in good standing or a possible claim in respect of a WA Tenement is not disclosed on the face of the searches referred to above, we express no opinion on that compliance or claim;
(c) where any agreement, dealing or act (including disturbing the land for exploration or mining) in a WA Tenement requires an authorisation, approval, permission or consent ( Authorisation ) under the Mining Act (WA), any regulations made thereunder or any other relevant legislation, we have assumed that Authorisation has been or will be granted in due course;
(d) where any dealing in a WA Tenement has been lodged for registration but is not yet registered, we express no opinion as to whether the registration will be effected, or the consequences of non-registration;
(e) we have assumed that the Company has complied with all applicable provisions of the Mining Act (WA) and all other legislation relating to the WA Tenements;
(f) we have not researched the underlying land tenure in respect of the WA Tenements to determine if native title rights have or have not been extinguished, or the extent of any extinguishment;

SOLICITOR’S REPORT ON TENEMENTS

(g) we have not undertaken the extensive research necessary to establish if native title claims may be made in the future over the area of the WA Tenements; and
(h) we have not researched the area of the WA Tenements to determine if there are any registered or unregistered sites of significance to aboriginal people within the area.

3 WA Tenements

The WA Tenements comprise both applications for and granted exploration licences and one mining lease application.

Each granted WA Tenement is subject to standard conditions including conditions requiring the holder to pay rent, meet certain expenditure and reporting obligations, pay necessary government royalties on minerals mined, obtain the consent of the relevant officer of the DMP prior to conducting any ground disturbing work, basic environmental and rehabilitation conditions for minor disturbances, and prohibitions or restrictions on disturbing existing infrastructure such as roads and powerlines. Additional specific conditions are set out in the Schedule.

Significant amendments to the Mining Act (WA) ( Amendments ) came into operation on 10 and 11 February 2006. The Amendments fundamentally affect the administration of mining tenements in Western Australia.

The exploration licences were applied for or granted both prior to and after the Amendments. All were granted with 5 year terms. The terms of those applied for prior to the Amendments may be extended for up to 4 years in prescribed circumstances and further periods of 1 year in exceptional circumstances. The terms of those exploration licences applied for and granted after the Amendments may be extended for a further period of 5 years, and thereafter for further periods of 2 years.

Exploration licences applied for prior to the Amendments carry an obligation on the holder to relinquish 50% of the area of the tenements at the end of its 3[rd] year and again at the end of the 4[th] year of their grant. Exemptions from that requirement may be obtained.

An exploration licence applied for and granted after the Amendments came into operation will be subject to a requirement that the holder must relinquish 40% of the area of an exploration licence at the end of the 5[th] year of the term of the exploration licence. This relinquishment requirement may be deferred for one year but not avoided.

Ministerial consent is required under the Mining Act (WA) before any legal or equitable interest in an exploration licence can be created or dealt with during the first year of the term of the licence. An agreement to sell an interest may be entered into provided that it is subject to a condition requiring the consent of the Minister.

SOLICITOR’S REPORT ON TENEMENTS

The Mining Act (WA) gives the holder of an exploration licence the right to apply for a mining lease (or mining leases) over the area the subject of the exploration licence. The grant of any mining lease is subject to compliance with the Mining Act (WA). A mining lease may only be applied for over land where, at minimum, a mineral resource (not to a JORC standard) exists or if a mining proposal has been lodged with the application.

Mining leases are granted for a period of 21 years, renewable for a further 21 years. Ministerial consent is required under the Mining Act (WA) prior to assigning an interest in a mining lease

The Schedule sets out a brief description of the WA Tenements and a summary of any encumbrances and material conditions.

In relation to the Schedule, we make the following comments:

(a) references to the areas of the WA Tenements are taken from the details shown on the searches, it is not possible to verify those areas without conducting a survey which has not been undertaken;
(b) exploration licences are measured by graticular blocks which, depending on where the licence is located, range in area from approximately 2.8 km[2] to 3.3km[2] ; and
(c) the rights of a holder of the WA Tenements is subject to compliance by that holder with the terms and conditions under the Mining Act (WA) and regulations made thereunder and the conditions specifically set out in the grant of the relevant WA Tenement.

4 Native Title

In Mabo v Queensland (No 2) (1992 175 CLR 1) the Australian common law recognised a form of native title giving Aboriginal people certain rights to their traditional lands. The rights recognised in native title may vary from place to place and from people to people but in each case will originate in customary rights and the Aboriginal group claiming the rights must have maintained a traditional connection with the land.

Native title rights may be extinguished voluntarily or by legislative or executive action inconsistent with the native title such as the grant of a freehold interest in land. Native title may also be partially extinguished by the grant of rights over native title land not wholly inconsistent with native title rights. Where native title has been partially extinguished, it will co-exist with other rights to the land.

The Native Title Act 1993 (Cth) ( Native Title Act ) was enacted in response to the common law recognition of native title. Among other things, the Native Title Act:

SOLICITOR’S REPORT ON TENEMENTS

(a) provides a procedure for the recognition of native title claims in the Federal Court;
(b) confirms the validity of titles granted by the Federal Government prior to the commencement of the Native Title Act and provides for the States and Territories to validate such titles; and
(c) specifies the procedure for the grant of mining tenements which may affect native title rights.

The Native Title Act was amended in 1998 by the Native Title Amendment Act 1998 . The Western Australian Parliament has enacted the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 which adopts the Native Title Act in Western Australia.

5 Native Title Claims

A person claiming to hold native title may lodge an application for determination of native title with the Federal Court. If the claim satisfies the registration test set out in the Native Title Act ( Registration Test ) it will be entered on the Register of Native Title Claims maintained by the NNTT. Registered claimants are afforded certain procedural rights, including the "right to negotiate". Claims which fail the Registration Test are, nevertheless heard by the Federal Court.

Native Title Claims affecting the WA Tenements have been noted in the Schedule.

The fact a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor does the absence of a claim necessarily indicate that no native title exists over that area. The existence of native title will be established in due course as the claims are determined by the Federal Court.

6 Validity of titles

Under the Native Title Act, and subject to certain exceptions, the grant of a mining tenement on or after 1 January 1994 that affects native title is a “future act”. Mining tenements granted after 23 December 1996 that affect native title will be valid only if the applicable processes of the Native Title Act have been complied with. We understand that the DMP has complied with such processes but have not undertaken independent enquiries to confirm this is the case.

7 Aboriginal Heritage

(a) Commonwealth Legislation

The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) ( Commonwealth Heritage Act ) is aimed at the preservation and protection of any Aboriginal areas and objects that may be located on the WA Tenements.

SOLICITOR’S REPORT ON TENEMENTS

Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or permanent declarations of preservation in relation to significant Aboriginal areas or objects, which have the potential to halt exploration activities. Compensation is payable by the Minister to a person who is, or is likely to be, affected by a permanent declaration of preservation.

It is an offence to contravene a declaration made under the Commonwealth Heritage Act.

(b) Western Australia

Sites that may be of spiritual, cultural or heritage significance to Aboriginal persons may be protected by the Aboriginal Heritage Act 1972 ( Heritage Act ).

The Heritage Act makes it an offence to alter or damage a site of significance to Aboriginal people. The Heritage Act provides for but does not compel the registration of such sites. It is an obligation of a party disturbing any area of the state to ensure it does not disturb such a site.

We have not undertaken any searches or investigations as to whether there are or may be any sites protected by the Heritage Act within the area of the WA Tenements. It is common practice for an explorer to undertake surveys of any area that may host such sites prior to carrying out any ground disturbing activity.

8 Consent

This report is given on the date set out at the commencement and unless specified to the contrary, speaks only to the laws in force on that date.

House Legal has consented to the inclusion of this Report in the Prospectus in the form and context in which it is included and have not withdrawn that consent before the lodgement of the Prospectus with ASIC.

Yours faithfully

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House Legal

SOLICITOR’S REPORT ON TENEMENTS

Tenements Schedule

Tenement	Holder	Status	Area	Application	Grant Date	Expiry Date	Required	Notes
				Date			Expenditure

Arthur River Project
E09/1066	HRL	Live	12 blocks	9/7/2001	5/1/2007	4/1/2012	$30,000	1,2,12
E09/1067	HRL	Live	3blocks	9/7/2001	8/7/2006	7/7/2011	$20,000	2,12
Moolyella Project
E45/3172	Elliss	Pending	70blocks	19/11/2007	N/A	N/A	N/A	3,4,13
E45/3424	JML	Live	56 blocks	1/5/2009	31/8/2010	30/8/2015	$56,000	4,5,13
M45/1081	Stubbs	Pending	526 ha	1/12/2004	N/A	N/A	N/A	4,6,13,15
Shaw River Project
E45/3354	DCL	Live	62 blocks	16/12/2008	23/11/2009	22/11/2014	$62,000	4,7,8,13
E45/3439	DCL	Live	66blocks	5/6/2009	18/6/2010	17/6/2015	$66,000	4, 9,13
Pilgangoora Project
E45/2375	SBM	Live	3 blocks	22/1/2002	13/2/2006	12/2/2011	$20,000	4,10,11,14
E45/3373	JML	Live	5 blocks	11/2/2009	16/2/2010	15/2/2015	$15,000	4,13

SOLICITOR’S REPORT ON TENEMENTS

Key to Holders:

DCL Duketon Consolidated Pty Ltd ACN 103 340 496 Elliss Michael Jeremy Elliss
HRL Hazelwood Resources Ltd ACN 118 738 999
JML JML Resources Pty Ltd ACN 126 154 256
Lithex Lithex Resources Ltd ACN 140 316 463
SBM South Boulder Mines Ltd ACN 097 904 302 Stubbs Jeanette Rae Stubbs

Notes

Each granted tenement is subject to standard conditions including conditions requiring the holder to obtain the consent of the relevant officer of the Department of Mines and Petroleum ( DMP ) prior to conducting any ground disturbing work, basic environmental and rehabilitation conditions (such as the removal of all waste, capping of drill holes etc) and prohibitions or restrictions on disturbing existing infrastructure such as roads and survey stations. In addition to these conditions, the following applies.

The area of this tenement is subject to the Wajarri Yamatji (WAD6033/98; WC04/10) registered native title claim.
The area of this tenement is subject to the Gnulli (WAD6161/98; WC97/028) registered native title claim.
This tenement was recommended for grant on 20 March 2008.
The area of this tenement is subject to the Njamal (WAD6028/98; WC99/008) registered native title claim.

SOLICITOR’S REPORT ON TENEMENTS

No exploration or mining may be carried out on Public Utility and Stopping Place for Travellers Reserve 7080 without the prior written consent of the Minister.
This tenement was recommended for grant on 14 January 2005.
No exploration to be undertaken on Timber Reserve 13665 without the prior written consent of the Minister.
No interference with the use of an Aerial Landing Ground affecting the tenement and activity on that Aerial Landing Ground being confined to below a depth of 15m from the natural surface.
This tenement encroaches upon the Water Reserves 4974, 12402 and Timber Reserve 13684. No mining may be undertaken on those reserves without the prior written consent of the Minister.
The area of this tenement is subject to the Njamal 10 (WAD6003/005; WC00/005) registered native title claim.
The area of this tenement is subject to the Warrarn 1 (WAD0082/98; WC95/061) registered native title claim.
Lithex has the right to purchase all of HRL’s title to this tenement on terms set out in section 8.2 of this Prospectus under the heading Summary of Material Contract – Arthur River Purchase Agreement.
Lithex has the right to purchase a 90% interest in this tenement on the terms set out in section 8.2 of this Prospectus under the heading Summary of Material Contracts – East Kimberley Purchase Agreement.

SOLICITOR’S REPORT ON TENEMENTS

Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement on the terms set out in section 8.2 of this Prospectus under the heading Summary of Material Contracts – East Kimberley Purchase Agreement. The remaining mineral rights are held by Montezuma Mining Company Ltd.
This tenement is held beneficially by DCL.

ADDITIONAL INFORMATION

8. ADDITIONAL INFORMATION

8.1 Rights Attaching to Shares

There is only one class of shares in the Company being fully paid ordinary shares. The rights attaching to shares in the Company are:

a) set out in the constitution of the Company, a copy of which is available for inspection at the registered office of the Company during normal business hours; and
b) in certain circumstances, regulated by the Corporations Act, the Listing Rules of ASX, the SCH Business Rules and the general law.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the Company’s existing Shares.

(a) Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at meetings of Shareholders of Lithex:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes as bears the same proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited).

(b) Rights on Winding Up

Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a winding up of the Company all assets that may be legally distributed among members will be distributed in proportion to the number of fully paid Shares held by them (and a partly paid share is counted as a fraction of a fully paid share equal to the amount paid on it, divided by the total issue price of the share).

ADDITIONAL INFORMATION

(c) Transfer of Shares

Subject to the Constitution of the Company, the Corporations Act, and any other laws and ASTC Settlement Rules and ASX Listing Rules, Shares are freely transferable.

(d) Future Increases in Capital

The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the allotment of Shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

(e) Variation of Rights

Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares. If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the Shares of that class.

(f) Dividend Rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there are none), the profits of the Company which the Directors determine to distribute by way of dividend are divisible among the holders of ordinary Shares in proportion to the number of Shares held by them.

8.2 Summary of Material Contracts

The summary of the contracts to which the Company is a party which may be material in terms of the Offer or the operation of the business of the Company are:

(a) Project Purchase Agreements

Arthur River Purchase Agreement

On 13 May 2010, Lithex entered into the Arthur River Purchase Agreement with Hazelwood Resources Ltd ACN 118 738 999 ( Hazelwood ) whereby Lithex will purchase a 100% interest in each of Exploration Licences 09/1066 and 09/1067 ( Arthur River Project ). Completion of the purchase is conditional upon Lithex receiving conditional approval to be admitted to the Official List and will take place within 3 business days of receipt of such approval.

Lithex will issue 1,000,000 Options and 2,000,000 Shares to Hazelwood as consideration for the purchase of the Arthur River Project.

ADDITIONAL INFORMATION

East Kimberley Purchase Agreement

On 12 February 2010, Lithex entered into the East Kimberley Purchase Agreement with Duketon Consolidated Pty Ltd ACN 103 340 496 ( DCL ), South Boulder Mines Ltd ACN 097 904 302 ( SBM ), JML Resources Pty Ltd ACN 126 154 256 ( JML ), Michael Jeremy Elliss ( Ellis ) and Jeanette Rae Stubbs ( Stubbs ) whose interest is beneficially held by Duketon. The parties subsequently agreed to vary the term of the East Kimberley Purchase Agreement to extend the end date for settlement until 31 May 2011. The Company issued the vendors 100,000 Shares as consideration for the extension of the end date.

Under the East Kimberley Purchase Agreement, Lithex is entitled to purchase a 90% interest in each of Exploration Licences 45/2375, 45/3172, 45/3354, 45/3373, 45/3424, 45/3439 and M45/1081. Completion of the purchase is conditional upon Lithex receiving conditional approval to be admitted to the Official List and will take place within 5 business days of receipt of such approval.

In consideration for the purchase of the tenements, Lithex will pay DCL a total of $100,000 in three tranches. The first two, totalling $40,000, have been paid, the third, being $60,000, will be paid within 14 days of Lithex being admitted to the Official List.

Lithex will also, on completion, issue DCL 2,300,000 Shares, Montezuma Mining Company Ltd (Montezuma) 1,500,000 Shares, JML 1,200,000 Shares, SBM 1,000,000 Shares and DCL 3,500,000 Options.

On completion, each of the sellers’ 10% remaining interest in the tenements will be free carried until Lithex makes a decision to commence any commercial mining on the tenement. The holder of the residual 10% interest will, at that point, elect to contribute to the cost of mining in proportion to its 10% interest (under a joint venture to be prepared on terms that are usual in mining projects) or convert its interest to a royalty of 1.5% of gross revenue.

The rights Lithex is acquiring to E45/2375 are limited to the rights to explore for and mine tin, tantalum and lithium only, with rights to the remaining minerals being retained by Montezuma (with respect to 90%) and SBM (with respect to 10%).

(b) Executive Service Agreement – Robert Mandanici

On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Mandanici (Service Agreement).

Under the Agreement, Mr Mandanici is engaged by the Company to provide services to the Company in the capacity of Managing Director and CEO, and is entitled to be paid an annual salary of $180,000 (inclusive of superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one year’s continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous and satisfactory service.

ADDITIONAL INFORMATION

The Agreement is effective from Lithex’s admission to the Official List of the ASX and continues until terminated by either Mr Mandanici or the Company. Mr Mandanici is entitled to a minimum notice period of 3 months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr Mandanici.

(c) Executive Service Agreement – Steven Crabbe

On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Crabbe (Service Agreement).

Under the Agreement, Mr Crabbe is engaged by the Company to provide services to the Company in the capacity of Technical Director, and is entitled to be paid an annual salary of $50,000 (inclusive of superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one year’s continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous and satisfactory service.

The Agreement is effective from Lithex’s admission to the Official List of the ASX and continues until terminated by either Mr Crabbe or the Company. Mr Crabbe is entitled to a minimum notice period of 3 months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr Crabbe.

(d) Engagement Letters – Non -Executive Director

Pursuant to letter agreements between the Company and Mr Carson, dated 2 June 2010, appointment to the Board as Chairman was confirmed.

In consideration for the services provided by Mr Carson, the Company will pay him $45,000 per annum (inclusive of superannuation entitlement) from the date of Admission to the Official List, and to receive a performance incentive of 500,000 shares at the end of one year’s continuous and satisfactory service.

A Non-Executive Director is entitled to fees or other amounts as the Board determines where they perform special duties or otherwise perform services outside the scope of the ordinary duties of a Director. They may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

(e) Ascot Securities Pty Ltd Letter of Engagement

By letter dated 8 December 2010, Lithex engaged Ascot Securities Pty Ltd ( Ascot ) to act as Lead Manager & Corporate Advisor. The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a management fee of $60,000 plus GST and a commission of 6% plus GST on the total amount raised under the offer. Out of the commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence holders a fee for Applications bearing their stamp.

ADDITIONAL INFORMATION

8.3 Interests of Directors of the Company

Except as disclosed in this Prospectus, no Director holds, or during the last two years has held any interest in:

(a) the formation or promotion of Lithex Resources Ltd;
(b) property acquired or proposed to be acquired by Lithex in connection with its formation or promotion of the Offer; or
(c) the Offer,

and no amounts of any kind (whether in cash, Shares or otherwise) have been paid or agreed to be paid to any Director to induce him to become or to qualify as a Director or otherwise for services rendered by him in connection with the formation or promotion of Lithex or the Offer.

Directors’ Shareholdings

The Directors are not required to hold any Shares in Lithex under the constitution of Lithex.

At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are as follows:

Director	No. of Shares	No. of Options
Malcolm Carson	500,000	Nil
Robert Mandanici	1,970,000	Nil
Steven Crabbe	2,500,000	500,000

Nothing in this Prospectus precludes Directors, officers or employees of Lithex from applying for Shares under this Prospectus.

Directors’ Remuneration

Pursuant to the Employment Agreement, the Directors have arranged for Mr Mandanici to provide his services as Managing Director of Lithex. Lithex will pay Mr Mandanici at an annual salary of $180,000 (inclusive of superannuation guarantee).

Mr Carson will receive director’s fees of $45,000 per annum (inclusive of superannuation guarantee).

Mr Crabbe will receive director’s fees of $50,000 per annum (inclusive of superannuation guarantee).

8.4 Interests of Persons Named in this Prospectus

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus has, or has had within the two years before lodgement of this Prospectus with ASIC, any interest in:

(a) the formation or promotion of Lithex;

ADDITIONAL INFORMATION

(b) any property acquired or proposed to be acquired by Lithex in connection with its formation or promotion or in connection with the Offer; or
(c) the Offer.

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by them in connection with the formation or promotion of the Company or the Offer.

Rothsay Consulting Services Pty Ltd will receive professional fees of $7,000 for accounting services in connection with this Prospectus including the provision of the Investigating Accountant's Report.

Rothsay Chartered Accountants will act as auditors of the Company for which they will be paid at their usual commercial rates. Rothsay have not provided any other services to the Company since incorporation.

Al Maynard & Associates will receive professional fees of $10,000 for the provision of the Independent Geologist’s Report.

House Legal will receive professional fees of $10,000 for the provision of the Solicitor’s Report included in Section 7 of this Prospectus.

Steinepreis Paganin will receive professional fees of $(*) for the provision of professional services in relation to the preparation of this Prospectus.

Security Transfer Registrars Pty Ltd has been appointed as the Company’s share registry and will be paid for these services on normal commercial terms.

8.5 Consents

The following persons have each consented to being named in the Prospectus and to the inclusion of the following statements and statements identified in this Prospectus as being based on statements made by those persons, in the form and context in which they are included, and have not withdrawn that consent before lodgement of this Prospectus with ASIC:

Al Maynard & Associates– Independent Geologist’s Report;
Rothsay Consulting Services Pty Ltd – Investigating Accountant’s Report; and
House Legal –Solicitor’s Report on Title and Section 8.2 (a)-(b).

In addition, Security Transfer Registrars Pty Ltd and Steinepreis Paganin have each consented to being named in the Prospectus in the form and context in which they are included, and have not withdrawn that consent before lodgement of this prospectus with ASIC.

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the statements referred to above and the statements

ADDITIONAL INFORMATION

identified in this Prospectus as being based on statements made by those persons.

The following persons have consented to being named in this Prospectus but, except as noted above, have not made any statements that are included in this Prospectus or statements identified in this Prospectus as being based on any statements made by those persons, and have not withdrawn their consent before lodgement of this Prospectus with ASIC:

Ascot Securities Pty Ltd – as lead manager & corporate adviser;
House Legal – as legal adviser;
Rothsay Chartered Accountants Pty Ltd - as auditor;
Al Maynard & Associates– as Independent Geologist; and
Rothsay Consulting Services Pty Ltd – as Independent Accountants.
Security Transfer Registrars Pty Ltd – as Share Registry.

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and takes no responsibility for any part of this Prospectus other than the references to their name.

8.6 Expenses of the Offer

It is estimated that Lithex will pay the following costs in connection with the preparation and issue of this Prospectus:

ation and issue of this Prospectus:
Expense	Cost (Min)	Cost (Max)
IPO & Secretarial Services	$30,000	$30,000
Brokerage & Management Fees	$180,000	$300,000
Legal services	$10,000	$10,000
Accountingservices	$7,000	$7,000
Independent Geologist’s services	$10,000	$10,000
Printing&graphic design costs	$15,000	$15,000
ASIC and ASX fees	$30,000	$35,000
Disbursements and contingencies	$5,000	$5,000
Total	$287,000	$412,000

8.7 Taxation

The acquisition and disposal of Shares in Lithex will have tax consequences which will differ depending on the individual financial affairs of each investor. All potential investors in Lithex are urged to obtain independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and generally.

To the maximum extent permitted by law, Lithex, its officers and each of their respective advisers accept no liability or responsibility with respect to the taxation consequences of subscribing for Shares under this Prospectus.

ADDITIONAL INFORMATION

8.8 Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances any Application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge Applications prior to the expiry of the Exposure Period.

8.9 Litigation

The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

8.10 Electronic Prospectus

Pursuant to Class Order 00/044 ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form.

If you have not, please email the Company at [email protected] and the Company will send you, free of charge, either a hard copy or a further electronic copy of the Prospectus or both.

Alternatively, you may obtain an electronic copy of the Prospectus from the Company’s website at: www.lithex.com.au

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

8.11 Terms and Conditions of Options

7,130,000 Options have been granted as specified in Section 1.2 on the following terms and conditions:

(a) Each option entitles the holder, to acquire one fully paid ordinary share in the Company.

ADDITIONAL INFORMATION

(b) The Options may be exercised at any time until 5pm, 30 June 2015. Each Option may be exercised by forwarding to the Company at its principal office the exercise notice, duly completed together with payment of the sum of 20cents ($0.20) per Option exercised. The Options will lapse at 5pm on 30 June 2015.
(c) The Options may not be transferred.
(d) Option holders shall be permitted to participate in new issues of securities on the prior exercise of options in which case the Option holders shall be afforded the period of at least ten business days prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the Option.
(e) Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt of a properly executed exercise notice and application moneys. Shares allotted pursuant to the exercise of an Option will rank equally with the then issued ordinary shares of the Company in all respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and the Listing Rules.
(f) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company, all rights of the Option holder will be charged to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital at the time of the reconstruction.
(g) If there is a bonus issue to Shareholders, the number of Shares over which the Option is exercisable may be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the record date for the bonus issue.
(h) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying securities of the Company, the exercise price of the Options may be reduced in accordance with Listing Rule 6.22.

8.12 Consent by the Directors

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that with respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with ASIC, or to the Directors’ knowledge, before any issue of Shares pursuant to this Prospectus.

100

ADDITIONAL INFORMATION

The Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each of the Directors of Lithex Resources Ltd has consented to the lodgement of this Prospectus in accordance with Section 720 of the Corporations Act and has not withdrawn that consent.

Dated 9 March 2011

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_____ Signed for and on behalf of Lithex Resources Limited Robert Mandanici

101

GLOSSARY OF NAMES AND TERMS

9. GLOSSARY OF NAMES AND TERMS

Applicant a person who submits an Application. Application a valid application to subscribe for Shares. Application Form the application form attached to and forming part of this Prospectus. Application Monies monies received by Lithex from Applicants. ASIC Australian Securities and Investments Commission. ASTC ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532. ASX ASX Limited ACN 008 624 691 Auditors Rothsay Chartered Accountants Pty Ltd. Board the board of Directors unless the context indicates otherwise. Business Day 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. CHESS ASX Clearing House Electronic Subregistry System. Closing Date 5.00pm WST on 6 May 2011. Company or Lithex Lithex Resources Limited ACN 140 316 463 Corporations Act the Corporations Act 2001 (Cth) of Australia. Directors the directors of the Company from time to time. Dollars or $ Australian dollars unless otherwise stated. Exposure Period the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by ASIC by not more than seven (7) days pursuant to Section 727(3) of the Corporations Act.

Independent Accountant Rothsay Consulting Pty Ltd Independent Accountant’s the report contained in Section 6of this Prospectus. Report

Independent Geologist

Al Maynard & Associates.

Independent Geologist’s the report contained in Section 5 of this Prospectus. Report

Issue funds raised in accordance with this Prospectus. Listing Rules Listing Rules of the ASX. Offer the offer of up to 10,000,000 Shares pursuant to this

102

GLOSSARY OF NAMES AND TERMS

Prospectus.

Offer Period

the period commencing on the Opening Date and ending on the Closing Date.

Official List the Official List of the ASX. Opening Date the date on which the Offer opens. Option an option to acquire 1 Share Prospectus this prospectus dated 9 March 2011 for the issue of 10,000,000 Shares at 20 cents including any electronic or online version.

Quotation quotation of the Shares on ASX. Share 1 fully paid ordinary share in Lithex. Shareholder a holder of Shares. Share Registrar Security Transfer Registrars Pty Ltd (ACN 008 894 488) Solicitor’s Report on the the report contained in Section 7 of this Prospectus.7 of this Prospectus. of this Prospectus.

Solicitor’s Report on the the report contained in Section 7 of this Prospectus.7 of this Prospectus. of this Prospectus. Tenements WST Western Standard Time, Perth, Western Australia

103

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APPLICATION FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

	RE REGISTRY: rity Transfer Registrars Pty Ltd orrespondence to: BOX 535, APPLECROSS WA 6953 Canning Highway, APPLECROSS WA 6153 1 8 9315 2333 F: +61 8 9315 2233 [email protected] ww.securitytransfer.com.au LITHEX RESOURCES LIMITED ACN: 140 316 463 REGISTRY DATE STAMP ration and Statements: re completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS. ASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM BROKER STAMP Broker Code Advisor Code (where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**	RE REGISTRY: rity Transfer Registrars Pty Ltd orrespondence to: BOX 535, APPLECROSS WA 6953 Canning Highway, APPLECROSS WA 6153 1 8 9315 2333 F: +61 8 9315 2233 [email protected] ww.securitytransfer.com.au LITHEX RESOURCES LIMITED ACN: 140 316 463 REGISTRY DATE STAMP ration and Statements: re completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS. ASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM BROKER STAMP Broker Code Advisor Code (where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**
	(where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**
Declaration and Statements: (1) I/We declare that all details and statements made by me/us are complete and accurate. (2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company. (3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us. (4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities. (5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.	ration and Statements:	REGISTRY DATE STAMP
		E & O.E.

SHARE REGISTRY:

Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 ACN: 140 316 463 770 Canning Highway, APPLECROSS WA 6153 T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected]

W: www.securitytransfer.com.au

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM

Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.

Declaration and Statements:

(1) I/We declare that all details and statements made by me/us are complete and accurate.
(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.
(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.
(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the
Application Form or a direct derivative of the Application Form before applying for the Securities.
(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided. E & O.E.

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9429373748

LIT

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSON UNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 9 MARCH 2011 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.

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APPLICATION FORMS

Please complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may be rejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares. The applicant(s) agree(s) upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to the applicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the application.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is a query in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. The Company's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.

PAYMENT

All cheques should be made payable to LITHEX RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed "Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and the acceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONS

Completed Application Forms and cheques must be:

Posted to: OR Delivered to: Lithex Resources Limited Lithex Resources Limited C/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty Ltd PO Box 535 770 Canning Highway APPLECROSS WA 6953 APPLECROSS WA 6153

Applications must be received by no later than 5.00pm (WST) on the Closing Date 6 May 2011 which may be changed immediately after the Opening Date at any time and at the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTS

The Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESS HIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERS

The collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the law not to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfranked dividend distribution at the maximum tax rate.

If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from the Australian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contact your taxation adviser or any Taxation Office.

CORRECT FORM OF REGISTRABLE TITLE

Note that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Lithex Resources Limited. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may be included by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR Individual Use given names in full, not initials. Company Use the company's full title, not abbreviations. Joint Holdings Use full and complete names. Trusts Use trustee(s) personal name(s), Do not use the name of the trust. Deceased Estates Use the executor(s) personal name(s). Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation. Partnerships Use the partners' personal names. Do not use the name of the partnership. Superannuation Funds Use the name of the trustee(s) of the super fund.	CORRECT Mr John Alfred Smith ABC Pty Ltd Mr Peter Robert Williams & Ms Louise Susan Williams Mrs Susan Jane Smith Ms Jane Mary Smith & Mr Frank William Smith Mr John Alfred Smith Mr John Robert Smith & Mr Michael John Smith Jane Smith Pty Ltd	INCORRECT J A Smith ABC P/L or ABC Co Peter Robert & Louise S Williams Sue Smith Family Trust Estate of Late John Smith or John Smith Deceased Master Peter Smith John Smith and Son Jane Smith Pty Ltd Superannuation Fund

PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

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6428373744

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APPLICATION FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

	RE REGISTRY: rity Transfer Registrars Pty Ltd orrespondence to: BOX 535, APPLECROSS WA 6953 Canning Highway, APPLECROSS WA 6153 1 8 9315 2333 F: +61 8 9315 2233 [email protected] ww.securitytransfer.com.au LITHEX RESOURCES LIMITED ACN: 140 316 463 REGISTRY DATE STAMP ration and Statements: re completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS. ASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM BROKER STAMP Broker Code Advisor Code (where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**	RE REGISTRY: rity Transfer Registrars Pty Ltd orrespondence to: BOX 535, APPLECROSS WA 6953 Canning Highway, APPLECROSS WA 6153 1 8 9315 2333 F: +61 8 9315 2233 [email protected] ww.securitytransfer.com.au LITHEX RESOURCES LIMITED ACN: 140 316 463 REGISTRY DATE STAMP ration and Statements: re completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS. ASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM BROKER STAMP Broker Code Advisor Code (where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**
	(where applicable) CHESS HIN `X` If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do not match those registered) any securities issued will be held on the Issuer Sponsored subregister. (e.g.: THE SMITH SUPER FUND A/C) Account Designation < > Shares at AUD $0.20 per share Contact Number ( ) Contact Name Email Address `@` Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only) I/We apply for: , , A I/We lodge full application of monies of: $ , , . or such lesser number of Shares which may be allocated to me/us by their Directors. Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Full Name of Applicant / Company Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #2 Title (e.g.: Dr, Mrs) Given Name(s) or Company Name Joint Applicant #3 Unit Street Number Street Name or PO BOX Postal Address / Postcode State Suburb/Town/City Country Name (if not Australia) I am a South Boulder Mines Ltd Montezuma Mining Company Ltd shareholder and my HIN/SRN is: _NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for the_ Priority to apply.**
Declaration and Statements: (1) I/We declare that all details and statements made by me/us are complete and accurate. (2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company. (3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us. (4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities. (5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.	ration and Statements:	REGISTRY DATE STAMP
		E & O.E.

SHARE REGISTRY:

W: www.securitytransfer.com.au

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM

Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.

Declaration and Statements:

(1) I/We declare that all details and statements made by me/us are complete and accurate.
(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.
(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.
(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the
Application Form or a direct derivative of the Application Form before applying for the Securities.
(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided. E & O.E.

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9429373748

LIT

This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.

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APPLICATION FORMS

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of the application.

PAYMENT

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONS

Completed Application Forms and cheques must be:

CHESS HIN/BROKER SPONSORED APPLICANTS

TAX FILE NUMBERS

CORRECT FORM OF REGISTRABLE TITLE

TYPE OF INVESTOR Individual Use given names in full, not initials. Company Use the company's full title, not abbreviations. Joint Holdings Use full and complete names. Trusts Use trustee(s) personal name(s), Do not use the name of the trust. Deceased Estates Use the executor(s) personal name(s). Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation. Partnerships Use the partners' personal names. Do not use the name of the partnership. Superannuation Funds Use the name of the trustee(s) of the super fund.	CORRECT Mr John Alfred Smith ABC Pty Ltd Mr Peter Robert Williams & Ms Louise Susan Williams Mrs Susan Jane Smith Ms Jane Mary Smith & Mr Frank William Smith Mr John Alfred Smith Mr John Robert Smith & Mr Michael John Smith Jane Smith Pty Ltd	INCORRECT J A Smith ABC P/L or ABC Co Peter Robert & Louise S Williams Sue Smith Family Trust Estate of Late John Smith or John Smith Deceased Master Peter Smith John Smith and Son Jane Smith Pty Ltd Superannuation Fund

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6428373744

AI assistant

GREEN360 TECHNOLOGIES LIMITED — Capital/Financing Update 2011

65020_rns_2011-03-20_dede209b-504d-4724-ab19-6c126e48f029.pdf

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LITHEX RESOURCES LIMITED

ACN 140 316 463

PROSPECTUS

IMPORTANT NOTICE

DIRECTORY

DIRECTORS

AUDITOR

Rothsay Chartered Accountants

COMPANY SECRETARY

INVESTIGATING ACCOUNTANT

Rothsay Consulting Services Pty Ltd

REGISTERED OFFICE

LEAD MANAGER & CORPORATE ADVISER

Ascot Securities Pty Ltd

SHARE REGISTRY

Security Transfer Registrars Pty Ltd

SOLICITOR TO THE COMPANY

SOLICITOR TO THE OFFER

INDEPENDENT GEOLOGIST

INVESTMENT HIGHLIGHTS AND RISKS SUMMARY

INVESTMENT HIGHLIGHTS

RISKS SUMMARY

Key Risks

CHAIRMAN’S LETTER

Dear Investor,

CHAIRMAN’S LETTER

Malcolm Carson

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

IMPORTANT NOTICE

DETAILS OF THE OFFER

1. DETAILS OF THE OFFER

1.1 Pro Forma Capital Structure

1.2 Options

1.3 Indicative Timetable

1.4 Shares Offered for Subscription

DETAILS OF THE OFFER

1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders

1.6 Public Offer

1.7 Minimum Subscription

1.8 Purpose Of The Offer

DETAILS OF THE OFFER

Notes:

DETAILS OF THE OFFER

1.9 Underwriting

1.10 Risks

1.11 Brokerage and Handling Fees

1.12 Cash Flow Projections

1.13 Allotment and Allocation Of Shares

DETAILS OF THE OFFER

1.14 Applicants outside Australia

1.15 ASX Listing

1.16 CHESS and Issuer Sponsored Holdings

DETAILS OF THE OFFER

1.17 Enquiries in Relation to the Offer

1.18 How to Apply

1.19 Escrow Provisions

DETAILS OF THE OFFER

1.20 Electronic Prospectus

1.21 Privacy Disclosure

COMPANY OVERVIEW AND THE PROJECTS

2. COMPANY OVERVIEW AND THE PROJECTS

2.1 The Company

COMPANY OVERVIEW AND THE PROJECTS

2.2 Corporate Objectives

2.3 Exploration History

The Moolyella Tin Field

COMPANY OVERVIEW AND THE PROJECTS

2.4 Projects Overview

Moolyella (M45/1081, E45/3172 and E45/3424) – 90%

Shaw River (E45/3354 and E45/3439) – 90%

COMPANY OVERVIEW AND THE PROJECTS

Pilgangoora (E45/2375* and E45/3373) – 90%

Arthur River (E09/1066 and E09/1067) – 100%

GREEN360 TECHNOLOGIES LIMITED Capital/Financing Update 2011

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**Pilgangoora (E45/2375* and E45/3373) – 90%**