LIONTOWN LIMITED — Capital/Financing Update 2016

Sep 13, 2016

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Level 2, 1292 Hay Street West Perth Western Australia 6005 GPO Box 2890 Perth Western Australia 6001 t: + 61 8 9322 7431 f: + 61 8 9322 5800 info@ltresources.com.au www.ltresources.com.au

14 September 2016

Dear Shareholder

Notice to Ineligible Shareholders of Non-Renounceable Entitlement Offer

As announced on 6 September 2016, Liontown Resources Limited (ASX: LTR) ( Liontown or the Company ) is undertaking a non-renounceable pro-rata entitlement offer to eligible shareholders of ordinary fully paid shares in the Company at an issue price of $0.01 per share and on the basis 1 new share ( New Share ) for every 5 shares ( Entitlement Offer ). Pursuant to the Entitlement Offer, the Company will issue up to 139,890,080 New Shares to raise up to $1,398,900 before costs. The Company released an Entitlement Offer Prospectus ( Prospectus ) to ASX on 12 September 2016.

Purpose of the Entitlement Offer

Subject to the satisfactory completion of the Entitlement Offer, funds will be used to commence follow-up drilling in September at the Bynoe Project, to conduct initial exploration activities on the Kathleen Valley Lithium Project (subject to the completion of the acquisition of this project, and the required permitting and heritage clearance) and for general working capital. Funds may also be used on an exploration program at the Company’s Jubilee Reef Gold Project in Tanzania.

The Entitlement Offer is available to all Liontown shareholders ( Shareholders ) registered on the record date on 16 September 2016 ( Record Date ) whose registered address is in Australia or New Zealand ( Eligible Shareholders ).

New Shares will rank equally with all fully paid ordinary shares in the capital of the Company ( Shares ) already on issue.

Shortfall

The Company reserves the right, subject to any restrictions imposed by the Corporations Act and the Listing Rules, to issue the shortfall shares at their sole discretion. The Company may then allocate any surplus shortfall to those Eligible Shareholders who have applied for shortfall shares.

Effect on Capital Structure

The table below sets out the impact of the Entitlement Offer on the capital structure of the Company:

Detail	Number of Shares	Number of
		unquoted
		options
Balance at date of announcement	699,450,401	14,650,000
of the Entitlement Offer
Maximum Number of New Shares	139,890,080	Nil
offered under the Entitlement
Offer*
Total at completion of the	839,340,481	14,650,000
Entitlement Offer

*Assuming no options are exercised prior to the Record Date.

Ineligible shareholders A Shareholder who has a registered address outside Australia and New Zealand ( Ineligible Shareholder ) will not be eligible to participate in the Entitlement Offer.

You are not eligible to participate in the Entitlement Offer and you will not be sent a copy of the Prospectus. This decision has been made pursuant to Listing Rule 7.7.1(a) of the ASX Listing Rules after taking into consideration the costs of complying with legal and regulatory requirements in jurisdictions outside Australia and New Zealand compared with the small number of Ineligible Shareholders and the number and value of New Shares to which they would otherwise be entitled.

Subject to the receipt of ASIC approval, the Company will appoint a nominee to which the Company will transfer the New Shares that would otherwise have been issued to Ineligible Shareholders, had they participated in the Entitlement Offer. The nominee will then sell those New Shares as soon as reasonably practicable and distribute to each of the Ineligible Shareholders their proportion of the proceeds of the sale, net of all expenses (including brokerage and any applicable taxes and charges). If any such net proceeds are less than the reasonable costs that would be incurred for distributing those proceeds, such proceeds may be retained by the Company. Ineligible Shareholders may receive no net proceeds if the costs of the sale are greater than the sale proceeds.

There is no guarantee that the nominee will be able to sell the relevant New Shares and Ineligible Shareholders may receive no proceeds. Both the Company and the nominee take no responsibility for the outcome of the sale of such New Shares or the failure to sell such New Shares.

For all enquiries concerning the Entitlement Offer, please contact Leanne Stevens on +61 8 9322 7431. For all general shareholder enquiries, please contact Computershare Investor Services Pty Limited on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia).

Yours sincerely

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Tim Goyder Chairman

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