TALGA GROUP LTD — Capital/Financing Update 2014

Jun 29, 2014

ASX: TLG

30 JUNE, 2014

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Talga Resources Ltd ABN 32 138 405 419

1st Floor, 2 Richardson St, West Perth, WA 6005

T: +61 8 9481 6667 F: +61 8 9322 1935 www.talgaresources.com

ALLOTMENT OF SHORTFALL SHARES AND OPTIONS AND COMPLETION OF PLACEMENT

Talga Resources Limited (ASX:TLG) (“Talga” or “the Company”) is pleased to advise it has completed the allotment of the shortfall under the Company’s non-renounceable entitlement offer and completed a placement to professional and sophisticated investors to raise $1 million.

Entitlement Offer Shortfall

Further to the Company’s announcement on 25 June 2014, the Company advises it has today allotted 1,941,942 Shares and 970,971 Listed Options under the shortfall of the non-renounceable entitlement offer.

Placement

Corporate Information ASX Code TLG

Shares on issue 124.6m Options (unlisted) 6.25m Options (Listed) 7.75m

Further to the Company’s announcement dated 21 May 2014, the Company is pleased to advise it has received $1 million in funds as part of a placement to professional and sophisticated investors and has today issued 5,000,000 Shares at 20 cents per ordinary share together with 2,500,000 free attaching Listed Options on the basis of 1 option for every 2 new shares applied for and issued (“Placement”).

The 5 million shares were issued under the Placement pursuant to the Company’s 15% capacity under ASX Listing Rule 7.1.

The Company annexures an Appendix 3B.

Company Directors Keith Coughlan Non-Executive Chairman

Mark Thompson Managing Director

Grant Mooney Non-Executive Director

For further information, contact:

Lisa Wynne

Company Secretary

Talga Resources Ltd

Tel +61 (08) 9481 6667 Email admin@talgaresources.com

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ASX Code: TLG

TALGA RESOURCES LTD ASX AND MEDIA RELEASE

PAGE 1

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

TALGA RESOURCES LTD

ABN

32 138 405 419

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)	1. Ordinary Shares 2. Listed Options
	1. 6,941,942 2. 3,470,971
	1. Fully paid ordinary shares 2. Listed options exercisable at $0.35 expiring 30 November 2015

• See chapter 19 for defined terms.

Appendix 3B Page 1

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)	1. Yes 2. No – upon conversion into ordinary shares, the allotted and issued shares will rank equally in all respects with an existing class of quoted securities. The options do not entitle the holder to participate in the next dividend or interest payment.
	1. $0.20 per Share 2. Free attaching options on the basis of 1 option for every 2 New Shares subscribed for and issued under the shortfall of the non-renounceable rights issue and Placement to sophisticated and professional investors
	1,941,942 shares and 970,971 options Issued of shortfall under the non-renounceable rights issue pursuant to the Prospectus dated 28 May 2014 and 5,000,000 shares and 2,500,000 options issued to professional and sophisticated investors under the Placement announced to 21 May 2014. The funds raised are intended to be used to accelerate development work on the Company's high grade graphite projects in Sweden, to fund a trial mining program and pilot plant to process a bulk sample and confirm new graphite-graphene production pathway on larger scale, to provide commercially significant size samples of graphite and graphene for more advanced economic evaluations, and for general working capital.

• See chapter 19 for defined terms.

Appendix 3B Page 2

Appendix 3B New issue announcement

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 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	Yes
	21 November 2013
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	See Annexure 1

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

7 +Issue dates 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) 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	30 June 2014
	Number	+Class
	124,566,097 7,752,963	Ordinary fully paid shares Listed $0.35 options, expiry 30 November 2015
	Number	+Class
	500,000 500,000 2,750,000 2,500,000	Unlisted $0.35 options, expiry 21 July 2015 Unlisted $0.45 options, expiry 3 October 2016 Unlisted $0.40 options, expiry 30 November 2014 Unlisted $0.54 options, expiring 23 June 2014
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 4

Appendix 3B New issue announcement

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 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	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

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	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 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

• See chapter 19 for defined terms.

Appendix 3B Page 6

Appendix 3B New issue announcement

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 N/A +quotation is sought 39 +Class of +securities for which N/A quotation is sought

• 40 Do the[+] securities rank equally in N/A 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

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

41 Reason for request for quotation N/A now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and +class of all N/A +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 8

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.

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Sign here: ............................................................Date: 30 June 2014

(Company secretary)

Print name:

Lisa Wynne

• See chapter 19 for defined terms.

Appendix 3B Page 9

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1 Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Part 1 Introduced 01/08/12 Amended 04/03/13

Rule 7.1 – Issues exceeding 15% of capital Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1Introduced 01/08/12 Amended 04/03/13	Part 1Introduced 01/08/12 Amended 04/03/13
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	55,304,406
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	- 8,295,661 issued 17/09/2013 - 21,200,022 issued 24/10/2013 - 8,564,066 issued under a non- renounceable entitlement issue Prospectus dated 28/05/14 - 1,941,942 shortfall of the non- renounceable entitlement issue (the subject of this 3B) - 100,000 issued to contractors 21/11/13 (ratified at general meeting 23/06/14) - 160,000 issued to contractors (ratified at general meeting 23/06/14) - 11,519,991 issued to professional & sophisticated investors under rule 7.1 on 21/03/14 (ratified at general meeting 23/06/14) - 8,480,009 issued to professional & sophisticated investors under rule 7.1A on 21/03/14 (ratified at general meeting 23/06/14) - 4,000,000 Shares issued to the Managing Director approved at general meeting 23/06/14
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	Nil
“A”	119,566,097

• See chapter 19 for defined terms.

Appendix 3B Page 10

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	17,934,914
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	- 5,000,000 ordinary shares (the subject of this 3B) - 2,500,000 $0.35 Listed options expiring 30/11/15 (the subject of this 3B)
“C”	7,500,000
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	17,934,914
Subtract“C” Note: number must be same as shown in Step 3	7,500,000
Total[“A” x 0.15] – “C”	10,434,914 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	17,934,914
Note: number must be same as shown in
Step 2
Subtract“C”	7,500,000
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	10,434,914
	[Note: this is the remaining placement capacity
	under rule 7.1]

• See chapter 19 for defined terms.

Appendix 3B Page 11

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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” 119,566,097 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 11,956,609

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

Insert number of[+] equity securities issued 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” -

• See chapter 19 for defined terms.

Appendix 3B Page 12

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	11,956,609
Subtract“E” Note: number must be same as shown in Step 3	-
Total[“A” x 0.10] – “E”	11,956,609 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 13

04/03/2013