LIVIUM LTD — Capital/Financing Update 2016

Jan 14, 2016

15 January 2016

ASX ANNOUNCEMENT

COMPLETION OF $2.5m PLACEMENT

Global lithium developer, Lithium Australia NL (ASX:LIT or Company) advises that it has completed the formalities in regards to the placement of $2.5m to clients of BW Equities. Completion of the $4m tranche will follow shortly.

Attached is the Appendix 3B in regard to tranche 1 of the $6.5m funding package.

The attached Appendix 3B also shows further conversions of LITCC partly paid shares to fully paid ordinary (LIT) shares. Holders of the Company’s 5-cent contributing shares (now paid up to 2.1 cents LITCC) continue to contact the Company regarding converting them to fully paid LIT shares.

While 2.9 cents remains to be paid on LITCCs, they are regularly quoted at a discount of greater than 2.9 cents to LIT. It is holders aware of this discount who express interest in converting LITCC to LIT shares by paying the outstanding 2.9 cents. The Company is pleased to accept such requests.

Should you wish to convert your LITCC to LIT shares, instructions on how to do so can be found on the Company website at www.lithium-au.com by clicking “LITCC” on the right hand side.

Managing Director Adrian Griffin said: “Lithium Australia welcomes those shareholders introduced by BW Equities. Recent success on the exploration and processing fronts is laying a sound foundation for the future. We are particularly pleased with our progress towards producing a lithium hydroxide product and look forward to a bright 2016 for our shareholders. ”

Adrian Griffin

Managing director Mobile +61 (0) 418 927 658 Adrian.Griffin@lithium-au.com

Notice under section 708A(5)(e) of the Corporations Act 2001

Lithium Australia NL (ASX: LIT) ( Company ) has issued and allotted 18,174,575 fully paid ordinary shares in the capital of the Company at an issue price $0.14 per share to raise approximately $2.5m (before costs). Accordingly the Company gives notice under section 708A(5)(e)(i) of the Corporations Act 2001 (Cth) ( Act ) that:

1. the abovementioned shares were issued without disclosure to investors under Part 6D.2 of the Act;

2. as at the date of this notice the Company has complied with:

3. (i) the provisions of Chapter 2M of the Act as they apply to the Company; and

4. (ii) section 674 of the Act; and

5. as at the date of this notice there is no information to be disclosed which is “excluded information” as defined in subsection 708A(7) of the Act that is reasonable for investors and their professional advisers to find in a disclosure document.

About Lithium Australia NL:

LIT is a dedicated developer of disruptive lithium extraction technologies. LIT has strategic alliances with a number of companies, potentially providing access to a diversified lithium mineral inventory on three continents.

MEDIA CONTACT:

Adrian Griffin Lithium Australia NL 08 6145 0288 | 0418 927 658 Kevin Skinner Field Public Relations 08 8234 9555 | 0414 822 631

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Lithium Australia NL

ABN

29 126 129 413

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid+securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares
	(1) 855,000 (2) 18,174,575
	(1) – (2) Fully paid ordinary shares

• See chapter 19 for defined terms.

Appendix 3B Page 3

04/03/2013

Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted+securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in relation to the+securities_ the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed	(1) – (2) Yes
	(1) 2.9 cents per share (2) 14 centsper share
	(1)Issued upon conversion of LITCC partly paid shares to fully paid ordinary shares (LIT) (2)Project development, process development, working capital and general corporate purposes (includes shares issued pursuant to placement announced on 11 January2016).
	Yes
	30 November 2015

• See chapter 19 for defined terms.

Appendix 3B Page 4

04/03/2013

Appendix 3B New issue announcement

6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements	4,526,500
	13,648,075
	Nil
	Yes, issue price was 88% of 15 day VWAP of $0.159 based on placement as announced on 11 January 2016 (a) and on 15 January 2016 (b) Issue date 15 January 2016 Issue Price $0.14 per share (a) VWAP calculation source: IRESS (b) VWAP calculation source: Weblink
	N/A
	Rule 7.1 – 15,945,613 Rule 7.1A – nil

• See chapter 19 for defined terms.

Appendix 3B Page 5

04/03/2013

Appendix 3B New issue announcement

7 +Issue dates 15 January 2016 Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.

8 Number and+class of all +securities quoted on ASX (_including_the+securities in section 2 if applicable) 9 Number and+class of all +securities not quoted on ASX (_including_the+securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	162,321,686 26,107,656	Fully paid ordinary shares Partly paid shares, paid to $0.021 and unpaid $0.029
		+Class Partly paid contributing shares paid to $0.0001 each ($0.2499 unpaid) $0.10 options exercisable on or before 1 July 2016 $0.15 options exercisable on or before 1 July 2019 $0.20 options exercisable on or before 1 July 2019 $0.30 options exercisable on or before 1 July 2019 Performance Rights as approved by shareholders on 15 July 2015 Performance Rights as approved by shareholders on 30 November 2015
	Number	+Class
	14,700,000 3,000,000 8,200,000 8,200,000 9,200,000 10,340,000 3,000,000	Partly paid contributing shares paid to $0.0001 each ($0.2499 unpaid) $0.10 options exercisable on or before 1 July 2016 $0.15 options exercisable on or before 1 July 2019 $0.20 options exercisable on or before 1 July 2019 $0.30 options exercisable on or before 1 July 2019 Performance Rights as approved by shareholders on 15 July 2015 Performance Rights as approved by shareholders on 30 November 2015
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 6

04/03/2013

Appendix 3B New issue announcement

Part 2 - Pro rata issue

11	Is security holder approval
	required?
12	Is the issue renounceable or
	non-renounceable?
13	Ratio in which the+securities
	will be offered
14	+Class of +securities to which
	the offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be
	told how their entitlements are
	to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue

• See chapter 19 for defined terms.

Appendix 3B Page 7

04/03/2013

Appendix 3B New issue announcement

23	Fee or commission payable to
	the broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and
	acceptance form and offer
	documents will be sent to
	persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell
	their entitlements_in full_through
	a broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the
	balance?
32	How do security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Issue date

Part 3 - Quotation of securities You need only complete this section if you are applying for quotation of securities

• See chapter 19 for defined terms.

Appendix 3B Page 8

04/03/2013

Appendix 3B New issue announcement

• 34 Type of[+] securities

• ( tick one )

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional +securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which (1) 855,000 (2) 18,174,575 +quotation is sought 39 +Class of +securities for which Fully paid ordinary shares quotation is sought

• See chapter 19 for defined terms.

Appendix 3B Page 9

04/03/2013

Appendix 3B New issue announcement

40 Do the[+] securities rank equally in Yes all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation (1)Issued upon conversion of LITCC partly paid now shares to fully paid ordinary shares (LIT) (2) Project development, process Example: In the case of restricted development, working capital and general securities, end of restriction period corporate purposes (includes shares issued (if issued upon conversion of pursuant to placement announced on 11 another[+] security, clearly identify January 2016). that other[+] security)

Number +Class 42 Number and +class of all 162,321,686 LIT Fully paid ordinary shares +securities quoted on ASX 26,107,656 LITCC Partly paid shares, paid ( including the[+] securities in to $0.021 and unpaid $0.029 clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 10

04/03/2013

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: “Barry Woodhouse” Date: 15 January 2016 Company Secretary

Print name: Barry Woodhouse

• See chapter 19 for defined terms.

Appendix 3B Page 11

04/03/2013

Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Rule 7.1 – Issues exceeding 15% of capital	Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the +issue date or date of agreement to issue	136,480,753
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	Nil Nil Nil
Subtractthe number of fully paid +ordinary securities cancelled during that 12 month period	Nil
“A”	136,480,753

• See chapter 19 for defined terms.

Appendix 3B Page 12

04/03/2013

Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	20,472,113
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	18,708,220
“C”	18,708,220
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	20,472,113
Subtract“C” Note: number must be same as shown in Step 3	18,708,220
Total[“A” x 0.15] – “C”	1,763,893 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 13

04/03/2013

Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 136,480,753 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 13,648,075

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

• Insert number of[+] equity securities issued 13,648,075 or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” Nil

• See chapter 19 for defined terms.

Appendix 3B Page 14

04/03/2013

Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	13,648,075
Subtract“E” Note: number must be same as shown in Step 3	13,648,075
Total[“A” x 0.10] – “E”	Nil Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 15

04/03/2013