Placement In Excess Of $12 Million

Lithium Australia Limited (ASX: LIT) (Lithium Australia or the Company) is pleased to announce it has received firm commitments to raise $12,075,202 through a placement of 185,772,347 ordinary shares (Placement Shares) to s708 and professional investors at an issue price of $0.065 per Share, together with an attaching one for two (1:2) option, with an exercise price of $0.10 and an expiry of three years from date of issue (Placement Options) (Placement).

HIGHLIGHTS

• $12.1m raised (before costs) at $0.065 per share as part of a Placement to existing shareholders, new high net worth sophisticated and institutional investors, includingDirector participation
• Placement managed by CPS Capital Group Pty Ltd (CPS)
• Funds raised will be used primarily towards commercialisation of Battery Recycling through Envirostream and Advanced Cathode Powders through VSPC

The Placement includes participation by a Director of the Company, who has subscribed for 1,538,462 Shares (value of $0.1m), subject to receipt of shareholder approval (Director Placement Shares).

Funds raised will be used towards commercialisation of the Company’s wholly owned subsidiaries Envirostream Australia Pty Ltd (Envirostream) and VSPC Pty Ltd (VSPC), and for general working capital.

Envirostream is leading the Australian battery recycling industry. Funds will be used to drive the increase of safe recycling of spent battery volumes at its operational facilities in Victoria. A national expansion study will also be undertaken during FY2023.

VSPC is developing advanced powders for next generation lithium-ion batteries, especially lithium ferro phosphate (LFP). Funds will be used to complete engineering studies for the expansion of our current facilities and to advance offtake and raw material relationships for the LFP supply chain.

The Placement was managed by Perth based CPS Capital Group Pty Ltd (CPS). Pursuant to a mandate executed between the parties, CPS are entitled to receive selling and management fees of 6% on the total amount raised under the Placement, and in addition will receive options on a 1:4 basis of shares issued under the Placement (on the same terms as the Placement Options). These options are subject to shareholder approval (Broker Options). Due to the expected corporate advisory requirements by the Company over the next 12 months CPS have also been engaged as the Company’s corporate advisor and will be entitled to receive a monthly fee of $6,000.

The issue price of the Placement Shares represents a discount of 22% to the last close price of $0.083 (26 August 2022) and a discount of 21% to the 5-day and 10-day VWAP of $0.082.

Comment from Chairman George Bauk

“We are very pleased with the strong support from existing and new shareholders for the capital raising. This funding puts us in a strong position to continue to progress our core opportunities of battery recycling and advanced cathode materials. This is an exciting time for the Company and we look forward to delivering on our strategy.”

The Placement is proposed to be completed in two tranches:

• Tranche 1 will consist of a total of 184,233,885 Shares (Tranche 1 Shares) to raise $11,975,202. The Tranche 1 Shares are expected to be issued on or around 9 September 2022 by utilising the Company’s existing placement capacity under ASX Listing Rule 7.1 (80,716,958 Shares) and ASX Listing Rule 7.1A (103,516,927 Shares); and

• Tranche 2 will consist of a total of 1,538,462 Shares (Tranche 2 Shares) to raise $100,000 (being the Director Placement Shares), all Placement Options, and the Broker Options, which will be issued subject to receipt of shareholder approval, which will be sought as soon as possible.

The Company will seek to have the Placement Options and Broker Options quoted subject to ASX approvals.

With this successful fundraise, the Company will have sufficient cash reserves to meet the requirements of the use of funds and therefore the Directors do not see a reason to draw on the At-the-Market Subscription Agreement (ATM) with Acuity Capital for the near future.

This announcement is intended to lift the trading halt requested by the Company after market close on 26 August 2022 in relation to its securities.

Authorised for release by the Board.

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