TALGA GROUP LTD — Capital/Financing Update 2014

May 28, 2014

ASX: TLG

29 MAY, 2014�

==> picture [71 x 45] intentionally omitted <==

~~TALGA~~ R E S O U R C E S

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

Corporate Information

ASX Code TLG

Shares on issue 105.1m Options (unlisted) 3.75m

Company Directors Keith Coughlan Non-Executive Chairman

Mark Thompson Managing Director

APPENDIX 3B - ENTITLEMENT ISSUE

Talga Resources Limited (ASX:TLG) (“ Talga ” or “ the Company ”) is pleased to announce the Company has lodged a prospectus outlining the full terms of the Entitlement Offer announced previously on 21 May 2014 with the Australian Securities and Investment Commission.

It is intended that all Eligible Shareholders as of the Record Date of 4 June 2014 will be entitled to participate in the Entitlement Offer. Eligible Shareholders will comprise those Shareholders registered on the Record Date and with a registered address in Australia, New Zealand, Germany, China and Hong Kong.

Appendix 3B – Entitlement Offer

Based on the capital structure of the Company as at the date of the Prospectus, a maximum of 10,506,008 New Shares and 5,253,004 Options will be issued pursuant to this Entitlement Offer to raise up to $2.1 million (before expenses). An Appendix 3B relating to the Entitlement Offer follows this release.

Appendix 3B – 25 March 2014 Amendment

The Company advises that the correct number of securities issued without security holder approval under rule 7.1 outlined at Section 6(c) of the Appendix 3B lodged with ASX on 25 March 2014 is 11,519,991.

For further information, contact:

Mark Thompson Managing Director Talga Resources Ltd

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

Grant Mooney

Non-Executive Director

==> picture [12 x 12] intentionally omitted <==

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. 10,506,008 2. 5,253,004
	1. Fully paid ordinary shares 2. Listed options exercisable at $0.35 expiring 30 November 2015

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
1

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 6c Number of+securities issued without security holder approval under rule 7.1
	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 Ordinary shares subscribed for and issued.
	1. To fund graphite and graphene metallurgy, upscaling tests, economic studies, exploration and working capital. 2. Issue of free attaching options on the basis of one free attaching option for every two shares subscribed for and issued.
	Yes
	21 November 2013
	N/A

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
2

04/03/2013

Appendix
3B New
issue
announcement

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 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)	N/A	N/A
	N/A
	N/A
	N/A
	N/A
	Capacity under LR 7.1 is 2,515,923 Capacity under LR 7.1A is 1,050,600
	On or about 26 June 2014
	Number	~~+~~Class
	115,566,097 5,253,004	Ordinary fully paid shares Listed Options exercisable at $0.35 expiring 30 November 2015

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
3

Appendix
3B New
issue
announcement

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 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	Number	Number	+Class
	500,000 500,000 2,750,000	Unlisted $0.35 options, expiry 21 July 2015 Unlisted $0.45 options, expiry 3 October 2016 Unlisted $0.40 options, expiry 30 November 2014
	N/A
	No
	Non-renounceable
	One (1) Share for every ten (10) Shares held on the Record Date with free attaching Options on the basis of one (1) option for every two (2) new Shares subscribed for and issued.
	1. Ordinary Shares 2. Listed Options exercisable at $0.35 expiring30 November 2015
	4 June 2014
	Yes
	Fractional entitlement will be rounded down to the nearest whole number
	Shareholders who do not have a registered address in Australia, New Zealand, Germany, China and Hong Kong
	19 June 2014

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
4

04/03/2013

Appendix
3B New
issue
announcement

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 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?	Far East Capital Ltd
	Nil
	Far East Capital Ltd
	Nil
	Nil
	No
	10 June 2014
	29 May 2014
	N/A
	N/A
	N/A
	N/A

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
5

Appendix
3B New
issue
announcement

• 32 How
  do
  security
  holders
  dispose of
  their
  entitlements
  (except
  by sale
  through
  a
  broker)?

N/A

• 33 +Issue
  date

On
or
about
26
June
2014

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) P +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

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
6

Appendix
3B New
issue
announcement

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

• 41 Reason
  for
  request
  for
  quotation N/A

41 Reason
for
request
for
quotation 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.

04/03/2013

Appendix
3B
Page
7

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: ............................................................Date:
29
May
2014

(Company
secretary)

Print
name: Lisa
Wynne

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
8

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

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

==> picture [415 x 404] intentionally omitted <==

----- Start of picture text -----

Insert number of fully paid [+] ordinary 54,404,407
securities on issue 12 months before the
+issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary securities
899,999
issued
20/05/2013
issued in that 12 month period under an
exception in rule 7.2 8,295,661
issued
17/09/2013
21,200,022
issued
24/10/2013
• Number of fully paid [+] ordinary securities 10,506,008
Shares,
the
subject
of
this
3B
to
be
issued in that 12 month period with issued
under
a
non-­‐renounceable
entitlement
shareholder approval issue
(Prospectus
dated
28
May
2014)
• 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
Subtract the number of fully paid [+] ordinary Nil
securities cancelled during that 12 month
period
“A” 95,306,097
----- End of picture text -----

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
9

Appendix
3B New
issue
announcement

Step 2: Calculate 15% of “A”

Appendix 3B New issue announcement	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	14,295,914
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	- 260,000 Shares issued to contractors on 21/11/13 - 11,519,991 Shares issued to professional & sophisticated investors on 21/03/14
“C”	11,779,991
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	14,295,914
Subtract“C” Note: number must be same as shown in Step 3	11,779,991
Total[“A” x 0.15] – “C”	2,515,923 [Note: this is the remaining placement capacity under rule 7.1]

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
10

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

New issue announcement Part 2	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” Note: number must be same as shown in Step 1 of Part 1	95,306,097
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	9,530,609
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber 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	8,480,009 issued to professional & sophisticated investors on 21/03/14
“E”	8,480,009

• See
  chapter
  19
  for
  defined
  terms.

04/03/2013

Appendix
3B
Page
11

Appendix
3B New
issue
announcement

Appendix 3B New issue announcement	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	9,530,609
Subtract“E” Note: number must be same as shown in Step 3	8,480,009
Total[“A” x 0.10] – “E”	1,050,600 Note: this is the remaining placement capacity under rule 7.1A

• See
  chapter
  19
  for
  defined
  terms.

Appendix
3B
Page
12