Lithex Resources Limited

LitheXLitheXResources Limited

Lithex Resources Limited

This is an important document which should be read in its entirety.

You may wish to consult your professional advisor about the contents of this prospectus,

an investment in shares offered by this prospectus should be considered as speculative

Prospectus

ASCOT SECURITIES PTY. LTD.L E A D M A N A G E R

For the issue of 10,000,000 Shares at an issue price of 20 cents each

to raise $2,000,000.

Oversubscriptions of up to a further 10,000,000 Shares at an issue price of

20 cents each to raise up to a further $2,000,000 may be accepted.

ACN 140 316 463


11 Rafferty Close

MANDURAH WA 6210

Website: www.lithex.com.au

Email: [email protected]

Tel: (08) 9583 5109

Fax: (08) 9264 8207

ACN 140 316 463

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LITHEX RESOURCES LIMITED

ACN 140 316 463

PROSPECTUS

For the issue of 10,000,000 Shares

at an issue price of 20 cents each

to raise $2,000,000

(Oversubscriptions of up to a further 10,000,000 Shares

at an issue price of 20 cents each to raise up to a further

$2,000,000 may be accepted)

IMPORTANT NOTICE

Shares offered by this Prospectus should be considered speculative and potential investors should refer to Section

for further details concerning the Risk Factors.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not

understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or

professional adviser.

Neither Lithex Resources Limited nor any other person guarantees the performance of the Shares offered pursuant

to this Prospectus, or the performance of Lithex Resources Limited, or the return on any investment.

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DIRECTORS

COMPANY SECRETARY

REGISTERED OFFICE

LEAD MANAGER & CORPORATE ADVISER

Ascot Securities Pty Ltd

SOLICITOR TO THE COMPANY

House Legal

SOLICITOR TO THE OFFER

Steinepreis Paganin Lawyers & Consultants

INDEPENDENT GEOLOGIST

Al Maynard and Associates

Malcolm Carson Non Executive Chairman

Robert Mandanici Managing Director

Steven Crabbe Executive Director

Neal Shoobert

11 Rafferty Close

MANDURAH WA 6210



Tel: (08) 9583 5109

Fax: (08) 9264 8207

Level 8

530 Little Collins Street

MELBOURNE VIC 3000

Website: www.ascotsecurities.com.au

Tel: 03 8686 5788

Fax: 03 8686 5790

86 First Avenue

MOUNT LAWLEY WA 6050

Level 4, The Read Buildings

16 Milligan Street

PERTH WA 6000

9/280 Hay Street

SUBIACO WA 6008

AUDITOR

Rothsay Chartered Accountants

INVESTIGATING ACCOUNTANT

Rothsay Consulting Services Pty Ltd

SHARE REGISTRY

Security Transfer Registrars Pty Ltd

Level 18

6-10 O'Connell Street

SYDNEY NSW 2000

Level 18

6-10 O'Connell Street

SYDNEY NSW 2000

770 Canning Highway

APPLECROSS WA 6153


Tel: (08) 9315 2333

Fax: (08) 9315 2233

DIRECTORY

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INVESTMENT HIGHLIGHTS

RISKS SUMMARY

• Large strategic tenement holding within the East Pilbara and Gascoyne Geological Provinces of

Western Australia.

focussing on exploration and adding value for shareholders through exploration and strategic

business development;

taking advantage of the upsurge in demand and strong commodity prices for rare mineral

commodities;

developing at least one of Lithex Resources' projects into a viable mine and rare minerals export

business; and

minimising other costs and administration overheads.

There are risks associated with investing in the share market generally and in this Company specifically. These risks

are more clearly outlined in Section of the Prospectus, however, listed below are, in the Directors' opinion, the key

risks associated with this investment:

• Substantial position within the historical tin and tantalum producing districts of the Achaean Pilbara

Craton.

• Operations ceased 25 years ago due to weak demand and prices for rare metal commodities at thattime.

• Prices of rare metal commodities have firmed to record highs and Lithex Resources will undertakemodern exploration on these abandoned fields.

• The Moolyella, Shaw River and Pilgangoora projects are strategically located between Marble Bar andPort Hedland within trucking distance of ports.

• The Arthur River project is located within the Gascoyne Mineral Field approx. 250 KM east of

Carnarvon and north of Gascoyne Junction. This is a region known to contain rare metal pegmatites.

• Lithex Resources is managed by a board with a blend of technical, corporate and capital market

experience.

• Lithex Resources represents an opportunity for investors seeking exposure to lithium, tantalum, tin

and rare earth metals.

• The directors are committed to:

• The tenements are at various stages of exploration, which of itself is a high risk undertaking. There can

be no guarantee that the exploration activities of the Company will result in the discovery of an

economic deposit;

• no guarantee that tenements in application stage will ultimately be granted;

• environmental bond review by the State Government may affect Company funding;

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Key Risks

INVESTMENT HIGHLIGHTS AND RISKS SUMMARY

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no assurance can be given that the cost estimates of proposed exploration expenditures and the

underlying assumptions will be realised in practice, which may materially and adversely affect the

Company's viability;

the overall share market may negatively impact an investment in the Company;

commodity prices may go down;

access to land may be stopped;

the Company may be unable to obtain environmental approvals;

the Company may not be able to raise further funds as and when required; and

Directors and consultants may leave the Company.

Tantalite recovered from surface sampling at The Moolyella Project - 2010

INVESTMENT HIGHLIGHTS AND RISKS SUMMARY

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CHAIRMAN'S LETTER

Dear Investor,

On behalf of the Directors of Lithex Resources Limited (“Lithex” or “the Company”), it is my pleasure to introduce

this Prospectus to you and invite you to become a Shareholder of the Company.

This Prospectus has been issued by Lithex for the purposes of offering 10 million Shares at $0.20 each to raise $2

million before costs. Oversubscription of up to a further 10 million Shares at an issue price of $0.20 each to raise up

to a further $2 million may be accepted.

Lithex was incorporated on 30 October 2009 for the purpose of exploration on tenements it has secured the rights

to acquire which are located within the Pilbara and Gascoyne regions of Western Australia.

Lithex tenements cover areas which contain the valuable transition metal minerals including tin, tantalum,

niobium, alkali metals including lithium, potassium and with scope to define rare mineral lanthanides and

actinides.

Lithex's tenements near Marble Bar (Moolyella and Shaw River) cover areas which were mined extensively for tin

with secondary tantalum and niobium for nearly 100 years. Operations ceased in the mid 1980's due to the collapse

in tin prices which was caused by the massive stockpiles acquired by the International Tin Council (ITC) to support

the price against competitive pressure from aluminium and plastic substitutes. In 1985 the ITC could no longer

finance the stockpiles and was forced to sell tin into the market both suppressing the price and causing capacity to

be shut-down. Following the disposal of the inventory (in the 1990's) tin prices have dramatically improved due to

increased demand from China and Indonesia, new high-tech uses and constrained supply.

World tin production doubled 1990 levels in 2004/2005 (351,800t) and uses for tin broadened from solder, tin foil

and plating for tin cans to modern applications which take advantage of its “superconductor” properties, such as in

mobile phones. For example, tin when combined with niobium (a metal associated with tantalum and which exists

on Lithex's tenements) is used in wires for very light superconducting magnets. There are also a number of

applications for tin in organotin compounds.

Lithex's projects are well placed to move from exploration to development and to achieve an early cash flow which

places the Company in a strong position to take advantage of the demand and high prices for these rare minerals.

In addition, to the west of Marble Bar Lithex has tenements located on rock units with potential to contain tin,

tantalum, lithium and rare earth mineralisation and which are positioned in the Pilbara near the Wodgina

tin/tantalum mine operated by Talison Minerals and Mt Cassiterite deposits and in the Gascoyne the Arthur River

tantalum niobium mine operated by Tantalum Australia.

Therefore, tin is enjoying a revival and the price and the accessory rare metals and rare earth minerals market is

strengthening in anticipation of expanding uses of these minerals in sophisticated electronics, batteries for hybrid

cars and a range of highly prized exotic uses.

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CHAIRMAN'S LETTER

Tantalum which naturally occurs with niobium, melts at a uniquely high 3,000C and also has unique electrical

properties. Tantalum's electronic properties are used in sophisticated electronics including computers and

mobile phones. Its physical properties are exploited in gas turbine blades which operate at very high

temperatures.

Lithex's budgets presented with this prospectus capture the implementation of exploration and evaluation

programs on these tenements which have not been explored thoroughly with modern techniques. The

tenements have historically produced substantial quantities of tin and tantalum over many decades from large

alluvial deposits, with the primary source yet to be discovered.

Furthermore the company has been fortunate to secure the services of Executive Directors Rob Mandanici and

Steve Crabbe. They have experience in the operation of private and public companies, knowledge of the local

mineralisation, practical hands-on experience in mining operations and the ambition to drive these projects to

define tangible assets, build a viable mining business and add value for shareholders.

This Prospectus contains detailed information about Lithex and the Company's current exploration projects in

addition to independent professional reports.

Please read this Prospectus carefully before you make your investment decision and, where necessary, consult

your professional advisers.

Once again, on behalf of the Board, I commend Lithex to you and invite you to become a Shareholder and a part

of this exciting investment opportunity.

Yours sincerely

Chairman

[email protected]

There are modern opportunities for miners of tin, tantalum/niobium, lithium and rare earth minerals and the

opportunity to revitalise an industry which closed down 25 years ago.

Therefore, the Directors of Lithex believe its projects are exciting and have the scope to add shareholder value

through strategically focussed exploration.


Malcolm Carson

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TABLE OF CONTENTS

1. DETAILS OF THE OFFER .................................................................................................11

2. COMPANY OVERVIEW AND THE PROJECTS....................................................................18

3. BOARD AND MANAGEMENT.........................................................................................23

4. RISK FACTORS...............................................................................................................30

1.1 Pro Forma Capital Structure ............................................................................................................11

1.2 Options ............................................................................................................................................11

1.3 Indicative Timetable ........................................................................................................................11

1.4 Shares Offered for Subscription.......................................................................................................11

1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders.......................12

1.6 Public Offer......................................................................................................................................12

1.7 Minimum Subscription ....................................................................................................................12

1.8 Purpose Of The Offer.......................................................................................................................12

1.9 Underwriting ...................................................................................................................................14

1.10 Risks.................................................................................................................................................14

1.11 Brokerage and Handling Fees ..........................................................................................................14

1.12 Cash Flow Projections......................................................................................................................14

1.13 Allotment and Allocation Of Shares ................................................................................................15

1.14 Applicants outside Australia ............................................................................................................15

1.15 ASX Listing .......................................................................................................................................15

1.16 CHESS and Issuer Sponsored Holdings ............................................................................................15

1.17 Enquiries in Relation to the Offer ....................................................................................................16

1.18 How to Apply ...................................................................................................................................16

1.19 Escrow Provisions ............................................................................................................................16

1.20 Electronic Prospectus ......................................................................................................................17

1.21 Privacy Disclosure............................................................................................................................17

2.1 The Company...................................................................................................................................18

2.2 Corporate Objectives.......................................................................................................................19

2.3 Exploration History ..........................................................................................................................19

2.4 Projects Overview............................................................................................................................20

2.5 Exploration Expenditure Summary..................................................................................................22

3.1 Board of Directors............................................................................................................................23

3.2 Corporate Governance ....................................................................................................................24

4.1 Exploration Success .........................................................................................................................30

4.2 Failure to satisfy expenditure commitments ...................................................................................30

4.3 No JORC compliant resource ...........................................................................................................31

4.4 Contract Risk....................................................................................................................................31

4.5 Application Risk ...............................................................................................................................31

4.6 The overall share market may negatively impact an investment in the Company ..........................31

4.7 The Company may be unable to obtain environmental approvals ..................................................31

4.8 Environmental Bonds ......................................................................................................................31

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4.9 The Company may not be able to secure insurance ........................................................................31

4.10 A commercial return may not be achievable ...................................................................................32

4.11 Native Title.......................................................................................................................................32

4.12 The Company may not be able to secure additional capital if required ..........................................32

4.13 External economic factors may negatively impact prospects ..........................................................32

4.14 Key management may leave the Company......................................................................................32

8.1 Rights Attaching to Shares ...............................................................................................................91

8.2 Summary of Material Contracts.......................................................................................................92

8.3 Interests of Directors of the Company.............................................................................................94

8.4 Interests of Persons Named in this Prospectus................................................................................95

8.5 Consents ..........................................................................................................................................95

8.6 Expenses of the Offer ......................................................................................................................96

8.7 Taxation............................................................................................................................................96

8.8 Exposure Period...............................................................................................................................97

8.9 Litigation ..........................................................................................................................................97

8.10 Electronic Prospectus ......................................................................................................................97

8.11 Terms and Conditions of Options ....................................................................................................97

8.12 Consent by the Directors .................................................................................................................98

5. INDEPENDENT GEOLOGIST'S REPORT............................................................................33

6. INVESTIGATING ACCOUNTANT'S REPORT......................................................................72

7. SOLICITOR'S REPORT ON TENEMENTS...........................................................................82

8. ADDITIONAL INFORMATION .........................................................................................91

9. GLOSSARY OF NAMES AND TERMS ...............................................................................99

TABLE OF CONTENTS

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Dry Blowing Tin At Moolyella - 1920s E.L. Mitchell

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IMPORTANT NOTICE

This Prospectus is dated 9 March 2011

A copy of this Prospectus was lodged with ASIC on 9 March 2011. Neither ASIC nor ASX takes any responsibility for

the contents of this Prospectus.

This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at

www.lithex.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic

version of this Prospectus in Australia. The Corporations Act prohibits any person from passing on the Application

Form to another person unless it is attached to or accompanied by a complete and unaltered version of this

Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the

Company by e-mail at [email protected].

No person or entity is authorised to give any information or to make any representation in connection with the offer

which is not contained in this Prospectus. Any information or representation not so contained may not be relied on

as having been authorised by the Company in connection with the Offer.

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Application will be made within seven days after the date of this Prospectus for permission for the Shares offered by

this Prospectus to be listed for Quotation.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful

to make an offer. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and

persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any

failure to comply with such restrictions may constitute a violation of applicable securities laws.

In accordance with Chapter 6D of the Corporations Act, this Prospectus is subject to an Exposure Period of 7 days

from the date of lodgement of the Prospectus with ASIC. This period may be extended by ASIC for a further period

of 7 days. The purpose of this Exposure Period is to enable the Prospectus to be examined by market participants

prior to the raising of the funds, which examination may result in the identification of deficiencies in this

Prospectus. If this Prospectus is found to be deficient, Applications received during the Exposure Period will be

dealt with in accordance with section 724 of the Corporations Act. Applications received prior to the expiration of

the Exposure Period will not be processed until after the Exposure Period. No preference will be conferred upon

Applications received during the Exposure Period.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisers

before deciding whether to apply for Shares. There are risks associated with an investment in Lithex Resources Ltd

and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered

under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the

future value of the Shares.

Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally

identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in

Section 9 of this Prospectus and also within its body.

All amounts are in Australian dollars unless otherwise specified.

The people and assets depicted in photographs in this Prospectus are not employees or assets of Lithex

Resources Ltd, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not

be drawn to scale.

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DETAILS OF THE OFFER

1. DETAILS OF THE OFFER

1.1 Pro Forma Capital Structure

1.2 Options

1.3 Indicative Timetable

1.4 Shares Offered for Subscription

The pro-forma capital structure of Lithex Resources Ltd is summarised below and assumes the Offer is fully

subscribed.

7,130,000 unlisted options exercisable at 20 cents at any time prior to 30 June 2015 have been issued to

certain of the promoters, vendors and advisers or their nominees. The terms and conditions of these options

are set out in Section 8.11. In addition, the Company will issue an additional 4,500,000 Options as part

consideration for the acquisition of the various tenements. Further details of the Company's issued capital

are contained in the Independent Accountant's Report in Section . Summaries of the Project Purchase

Agreements are outlined in Section 8.2.

These dates are indicative only and may vary. Lithex reserves the right to close the Offer early, or extend the

Closing Date without prior notice. Applicants are therefore encouraged to submit Applications as soon as

possible after the Opening Date.

Subject to Section 1.13 this Prospectus invites investors to apply for a total of 10,000,000 Shares at an issue

price of 20 cents per Share to raise $2,000,000 before expenses of the Offer.

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Lodgement of Prospectus with ASIC 9 March 2011

Opening Date for Applications 17 March 2011

Closing Date for Applications 6 May 2011

Dispatch of Statements of Shareholdings 10 May 2011

Quotation of Shares on ASX expected to commence 16 May 2011

Number % Over

Subscription

% Over

Subscribed

Shares on issue at date of Offer 15,630,010 46% 15,630,010 36%

Shares to be issued as vendor

consideration

8,000,000 24% 8,000,000 18%

Shares to be issued pursuant to Offer 10,000,000 30% 20,000,000 46%

33,630,010 43,630,010Issued capital on completion of Offer 100% 100%

,000,000Amount to be raised $2,000,000 $4

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Oversubscription of up to a further 10,000,000 Shares at an

n only be made b

issue price of 20 cents each to raise up to a

further $2,000,000 may be accepted. All Shares issued pursuant to this Prospectus will be issued as fully

paid and will rank equally in all respects with the Shares already on issue.

Applications must be for a minimum of 10,000 Shares ($2,000) and thereafter in multiples of 2,000 Shares

($400), and ca y completing the Application Form attached to this Prospectus.

The Company reserves the right to reject any Application or to allocate any Applicant fewer Shares than the

number applied for.

Lithex is inviting all Montezuma and South Boulder shareholders ( ) to apply as priority

applicants for Shares by completing the Application Form enclosed with the Prospectus. Priority

Shareholders may apply for a minimum of 10,000 Shares representing a minimum investment of $2,000.

Whilst the Company will endeavour to offer all eligible Priority Shareholders Shares, the allocation of Shares

to Priority Shareholders will be at the Board's discretion.

The Public Offer is open to public investors.

Applications must be made on the Application Form enclosed with the Prospectus.


($400), and can only be made by completing the Application Form attached to this Prospectus.

The minimum subscription to the Offer is 10,000,000 Shares raising $2,000,000 before expenses of the Offer.

In accordance with the Corporations Act, no shares will be allotted by the Company until the minimum

subscription has been received.

If the minimum subscription is not achieved within 4 months after the date of this Prospectus, the Company

will either repay the Application Monies to Applicants or issue a supplementary or replacement Prospectus

and allow Applicants one month to withdraw their Applications and be repaid their Application Monies.

The purpose of the Offer is to provide Lithex with funding to prioritise and evaluate projects and identify

potential acquisition opportunities.

1.5 Montezuma Mining Company Ltd and South Boulder Mines Limited Shareholders

Priority Shareholders

1.6 Public Offer

1.7 Minimum Subscription

1.8 Purpose Of The Offer

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Year 1

Moolyella 250,000 500,000

Shaw River 180,000 360,000

Pilgangoora 150,000 200,000

Arthur River 120,000 200,000

Total 700,000 1,260,000

Year 2

Moolyella 320,000 600,000

Shaw River 250,000 400,000

Pilgangoora 160,000 200,000

Arthur River 140,000 200,000

Total 870,000 1,400,000

Exploration expenditure – sub total 1,570,000 2,660,000

Expenses of the Offer 287,000 412,000

Vendor Consideration 66,000 66,000

Administration 700,000 700,000

Additional Project Generation 0 600,000

Unallocated working capital 36,284 287,284

Total Funds Applied $2,659,284 $4,659,284

Use of Funds over 2 years Minimum $ Maximum $

Pre-Offer cash and receivables 659,284 659,284

Total raised in the Offer 2,000,000 4,000,000

Total Funds Available 2,659,284 4,659,284

EXPLORATION EXPENDITURE

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Notes:

1. In the event that the Company raises more than minimum subscription by accepting

oversubscriptions but less than the full oversubscriptions, the additional funds raised will be first

applied towards the expenses of the Offer, followed by exploration on the Projects, with any residual

funds allocated to unallocated working capital.

2. Exploration expenditures will be reviewed on an on-going basis, depending upon the progressive

results of the proposed work programs.

The above table states the intended use of the funds raised by the Company as at the date of this

Prospectus. However, it must be recognised that all exploration budgets may change as the

conducted programs provide encouragement or disappointment and new opportunities may be

identified elsewhere.

3. It is the Company's intention to increase and accelerate its exploration and drilling programs to

achieve results as soon as practicable and, subject to encouraging results being obtained, to

delineate resources. The Company may seek to raise additional funds within two years after listing

on ASX to the extent required to increase and accelerate the exploration and drilling programs as

determined by the Board.

Following the completion of the Offer, the Company will have sufficient working capital to carry out its

stated objectives.

The Offer is not underwritten.

An investment in Lithex is speculative in nature. Risks associated with investments in exploration companies

such as Lithex are generally considered high. Investment risks include share market, exploration, operating,

insurance, commercialisation, competition, no profit to date, future capital needs, environmental,

economic and government, government regulation and policy, commodity and exchange, key personnel,

native title and tenure and access.

Investors are directed to Section 4 of this Prospectus which provides further details of the above and some

other risks associated with making an investment in the Company.

The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a management fee of

$60,000 plus GST and a commission of 6% plus GST on the total amount raised under the offer. Out of the

commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence holders a fee for

Applications bearing their stamp.

Lithex is a lithium, tantalum, tin, rare earth metal and base metals exploration company. Given the

speculative nature of exploration and lithium, tantalum, tin, rare earth metals and base metal development

and production, there are significant uncertainties associated with forecasting future revenue. On this

basis, the Directors believe that reliable forecasts cannot be prepared and accordingly have not included

forecasts in this Prospectus.

1.9 Underwriting

1.10 Risks

1.11 Brokerage and Handling Fees

1.12 Cash Flow Projections


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1.13 Allotment and Allocation Of Shares

1.14 Applicants outside Australia

1.15 ASX Listing

1.16 CHESS and Issuer Sponsored Holdings

CHESS

Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares

to Applicants will occur as soon as possible after the Offer is closed, following which statements of

Shareholdings will be dispatched. It is the responsibility of Applicants to determine the number of shares

allotted to them prior to trading in Shares. Applicants who sell Shares before they receive their holding

statements will do so at their own risk.

Pending the issue of the Shares, or return of the Application Monies, the Application Monies will be held in

trust for the Applicants.

The Directors in consultation with the Company's Lead Manager & Corporate Adviser, Ascot Securities Pty

Ltd, have the right to allocate Shares under the Offer. The Company may reject any Application or allocate

any Applicant fewer Shares than applied for under the Offer.

If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will

be refunded. Interest will not be paid on Application Monies refunded.

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any person to whom,

it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who

is resident outside Australia to ensure compliance with all laws of any country relevant to their Application,

and any such Applicant should consult their professional advisers as to whether any government or other

consents are required, or whether any formalities need to be observed to enable them to apply for and be

allotted Shares.

No action has been taken to register or qualify the Shares or the Offer or otherwise to permit a public offering

of the Shares in any jurisdiction outside Australia.

Within 7 days after the date of this Prospectus, application will be made for the Company to be admitted to

the Official List and for the Shares offered by this Prospectus to be granted Quotation.

If approval for Quotation is not granted within 3 months after the date of this Prospectus, the Company will

not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may admit Lithex to its

Official List is not to be taken in any way as an indication of the merits of the Company or the Shares offered

pursuant to this Prospectus.

Lithex will apply to participate in the Clearing House Electronic Subregister System ( ), operated by ASX

Settlement Pty Ltd (a wholly owned subsidiary of ASX), in accordance with the Listing Rules and ASX

Settlement Operating Rules. On admission to CHESS, the Company will operate an electronic issuer-

sponsored subregister and an electronic CHESS subregister. The two subregisters together will make up the

Company's register of securities.

Under CHESS, the Company will not issue certificates to Shareholders. Instead, the Company will provide

Shareholders with a holding statement (which is similar to a bank account statement) that sets out the

number of Shares allotted to that Shareholder under this Prospectus.


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This statement will also advise investors of either their Holder Identification Number ( ) in the case of a

holding on the CHESS sub-register or Security Holder Reference Number ( ) in the case of a holding on the

issuer sponsored sub-register.

HIN

SRN

-

A statement will be routinely sent to holders at the end of any calendar month during which their holding

changes. A holder may request a statement at any other time however a charge may be incurred for

additional statements.

This Prospectus provides information for potential investors in Lithex, and should be read in its entirety.

Additional copies of the Prospectus

or further advice on how to complete the Application Form can be obtained by contacting or visiting:

Applications for Shares under the Offer can only be made on the Application Form attached to this

Prospectus.

The Application Form must be completed in accordance with the instructions set out on the back of each

Application Form.

Cheques must be made payable to and crossed “Not Negotiable”.

No brokerage or stamp duty is payable by Applicants.


($400) at the issue price of 20 cents per Share.

Securities on issue as at the date of this Prospectus may be subject to the restricted securities provisions of

the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to

24 months and may not be transferred, assigned or otherwise disposed of during that period.

1.17 Enquiries in Relation to the Offer

1.18 How to Apply

Completed Application Forms and accompanying cheques should, at any time after the Opening Date be:

“Lithex Resources Ltd - Share Account”

1.19 Escrow Provisions

If,

after reading this Prospectus, you have any questions about any aspect of an investment in Lithex, please

contact your stockbroker, accountant or independent financial adviser.

Posted to:


c/- Security Transfer Registrars Pty Ltd

GPO Box 535

APPLECROSS WA 6953

Delivered to:


c/- Security Transfer Registrars Pty Ltd

770 Canning Highway

APPLECROSS WA 6153


11 Rafferty Close

MANDURAH WA 6210

(08) 9583 5109

www.lithex.com.au

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Agreements in respect of all such restricted securities have been or will be entered into in accordance with

the Listing Rules and as required by ASX.

This Prospectus is available on-line at www.lithex.com.au

The Company collects information in relation to each Applicant as provided on an Application Form

( ) for the purposes of processing the Application Form and, should the Application be

successful, to administer the Applicant's security holding in the Company ( ).

The Company may use the Information for the Purposes and the Company may disclose the Information for

the Purposes to the Share Registrar, the Company's related bodies corporate, agents, contractors and third

party service providers, and to ASX, ASIC and other regulatory authorities.

The Information may also be used and disclosed to persons inspecting the register, including bidders for

Shares in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including

the Australian Taxation Office.

1.20 Electronic Prospectus

1.21 Privacy Disclosure

Information

Purposes

Processed & Un-Processed Material Remaining At The Moolyella Project 2010

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2. COMPANY OVERVIEW AND THE PROJECTS

2.1 The Company

Lithex Resources Limited was incorporated on 30 October 2009 in anticipation of the acquisition of certain

mineral interests of a number of Public and Private Companies within the existing Marble Bar / Pilbara

Mineral Field as well as the Gascoyne Mineral Field.

The Company has specifically targeted these projects as they provide the Company and investors with

exposure to lithium, tantalum, tin and rare earth metals.

Lithex believes that the lithium, tantalum, tin and rare earth metal markets are well placed to see robust

price increases in the near and medium term.

(Figure 1).

18

Figure 1 - Lithex Resources Limited Project Location Map

COMPANY OVERVIEW AND THE PROJECTS

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2.2 Corporate Objectives

2.3 Exploration History

The Moolyella Tin Field

The Shaw River Tin Field

The Pilgangoora Tantalite Field

The Arthur River Project

• Immediately undertake a comprehensive exploration programme over the most prospective targets.

• Achieve the maximum value from exploration programmes for Shareholders.

• Conduct exploration activities at the highest technical standards in the industry.

• Effectively communicate with Shareholders and the broader market.

Prior to the incorporation of Lithex Resources Limited, tin mining operations at Moolyella were largely

continuous from their discovery in 1898 until 1986. Between 1965 and 1985 Endeavour Resources Ltd

undertook exploration for alluvial, eluvial, deep lead and pegmatite hosted tin/tantalum mineralisation and

several substantial alluvial and eluvial tin/tantalum deposits were identified.

The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase by

Endeavour Resources Ltd of all the Moolyella mining tenements and treatment plant in 1978. These mining

operations continued till 1986 and were closed due to the fall in tin prices in late 1985.

was discovered in 1890 and had produced a total of 6,585 tonnes of tin concentrate

by 1975. Greenbushes Ltd first acquired leases in the Shaw River district in 1978 and explored for tin and

tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and rare earth metals

under a joint venture between Greenbushes and Western Australia Rare Metals until 1987. A mining

feasibility study was completed in 1988.

was first discovered in 1905 and by 1947 had produced approximately 0.7

tonnes of tantalite concentrates from small scale alluvial operations. Following 1947, larger scale mining

operations were employed and by 1975 approximately 50 tonnes of high grade tantalite together with some

13 tonnes of tin oxide (cassiterite) were produced from the area. Large scale operations continued with

Pilgan Mining between 1978-1982 and by the Pilgangoora Mining Venture between 1992 to 1996 producing

approximately 140 tonnes of tantalite concentrates from an estimated 800,000 bank cubic meters(“BCM”)

of screened alluvial and eluvial material.

Mining on Lithex's Pilgangoora Project leases was only conducted by The Pilgangoora Mining Venture which

collected bulk samples from two creeks as part of its Pilgangoora resource estimation program in 1996.

is located in the Gascoyne Mineral Field. In the early 1900's gold was mined at The

Bangemall Gold Mine. Records of gold production have not been located.

Unknown parties in the early 1940's recovered mica, beryl, tantalum-columbite and bismuth from

pegmatites and uranium style mineralisation in the area. Records of production have not been located.


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From 2004-2006 Tantalum Australia NL at the Arthur River tantalum-niobium Mine, was mining an alluvial

placer deposit. The mine is now on care and maintenance. The tantalum and niobium minerals in the

alluvials were derived locally from a columbite - tantalite granitic rare metal pegmatites. Drilling by Tantalum

Australia of a source pegmatite has yielded significant niobium mineralisation up to 1280 ppm (0.128%)

Ta O Tantalum Australia subsequently defined an Exploration Target consisting of 55,000 to 60,000 tonnes

at 0.03 percent Ta O .

The Company's projects and prospects are fully described in the Independent Geologist's Report in Section 6

of this Prospectus. An overview of Lithex's projects is presented below.

Lithex's projects are located in the East Pilbara and Gascoyne Regions of Western Australia. The East Pilbara

projects lie within the highly mineralised and historical tin and tantalum producing districts of the Achaean

Pilbara Craton. These tin and tantalum districts include Moolyella, Shaw River and Pilgangoora. The Arthur

River project is located within the Gascoyne Mineral Field, an area known to contain rare metal pegmatites.

Although exploration over Lithex's tenements is at an early stage, particularly for a large hardrock style

mineralisation, it is considered that the properties are well located with respect to the regional geological

and structural setting to be considered highly prospective for the discovery of deposits of lithium, tantalum,

tin and rare earth metal mineralisation.

The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-

north-east of the township of Marble Bar. The tenements cover The Moolyella Tin Field where continuous

mining activities were ongoing from their initial discovery in 1898 to 1986. From 1986 limited small scale

intermittent mining has been carried out on the field. A comprehensive exploration program is required to

prove up known deposits of rare metals (tin, tantalum, lithium) and rare earths (lanthanides), to locate new

alluvial deposits and to explore for the hard rock primary deposit from which these alluvial minerals have

originated.

The Shaw River project is located within the highly prospective Pilbara Goldfield and is located 50 km

southwest of Marble Bar. The project is centred on the Shaw River Tin Field which was discovered in

1890 and by 1975 produced a total of 6,585 tonnes of tin concentrate.

From 1978 to 1998 a number of companies conducted further evaluation and exploration activities

primarily for tin, tantalum and rare earth metals. A mining feasibility study of the Shaw River tin field, under

a joint venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. Due to

the collapse in the tin price the project was deemed to be sub economic and the tenements were

subsequently dropped in 1989.

2 5.

2 5

2.4 Projects Overview

Moolyella (M45/1081, E45/3172 and E45/3424) - 90%

Shaw River (E45/3354 and E45/3439) - 90%


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The project area requires further evaluation and current “state of the art” exploration for alluvial and hard

rock pegmatite deposits containing lithium, tantalum, tin and rare earth metals.

The Pilgangoora Tantalum Field is located approximately 120 km south-southeast of Port Hedland and is

adjacent and south, southwest of Lithex's Pilgangoora Project tenements. The project is accessed by

unsealed shire and station roads, various tracks that service abandoned mine workings and pastoral

stations.

The Type 1 pegmatites (Quartz-spodumene-albite-microcline pegmatites) are the primary source of

tin/tantalum mineralisation at Pilgangoora and form north north-east trending bodies up to 60m thick in

greenstones within an 8km long and 1.5km wide corridor that begins south- southwest of the tenements

and extends northwards into the Pilgangoora Project tenements.

The spodumene content of these pegmatites (~ 25 %) has previously been the focus of evaluation studies by

Pancontinental Mining Limited as a source of lithium concentrates. However whilst it is understood the

pegmatites extend in to Lithex's tenements none of these deposits studied by Pancontinental Mining

Limited in that report are located in the Pilgangoora Project tenements. Therefore the project requires

modern state of the art exploration targeting these lithium pegmatites.

* Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement

The tenements comprising the Arthur River Project are located in the Gascoyne Mineral Field,

approximately 250 kilometres east of Carnarvon. The area can be accessed via gravel road from Carnarvon

via Gascoyne Junction and then via gravel roads that connect the various pastoral leases.

Lithex's projects cover approximately 772 km and are located approximately 120 km south east of Port

Hedland and 250 km East of Carnarvon. The Company holds seven granted exploration licences, one mining

lease application and one exploration licence application as outlined in the table below.

Pilgangoora (E45/2375* and E45/3373) 90%

Arthur River (E09/1066 and E09/1067) 100%

Tenure and Location of Projects

2

21


Project Tenement Area Approx

Area (km2)

Status Equity Annual

Expenditure

Commitment

Arthur River E09/1066 12 Blocks 33 Granted 100 % $30,000.00

Arthur River E09/1067 3 Blocks 8 Granted 100 % $20,000.00

Moolyella E45/3424 56 Blocks 156 Granted 90 % $56,000.00

Moolyella E45/3172 70 Blocks 196 Application 90 % N / A

Moolyella M45/1081 526 Ha Application 90 % N / A

Shaw River E45/3439 66 Blocks 184 Granted 90 % $66,000.00

Shaw River E45/3354 62 Blocks 173 Granted 90 % $62,000.00

Pilgangoora E45/2375 3 Blocks 8 Granted 90 % $20,000.00

Pilgangoora E45/3373 5 Blocks 14 Granted 90 % $15,000.00

F:\DefineDesign\DefineDesign\Clients\LithexResources\LithexProspectus\Pagesections\Pages21-30A.cdr

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2.5 Exploration Expenditure Summary

The Company intends initially to fund the planned exploration activities from the proceeds of the offer as

outlined in the tables below. It should be noted that budgets were formulated on the basis of the

programmes detailed in the Independent Geologist's Report and will be subject to assessment and

modification on an ongoing basis depending on progressive results from the exploration work undertaken.

The Company will be continually reviewing all exploration activities which may lead to higher or lower levels

of expenditure on each property reflecting a change in emphasis. Subject to the above, the following

expenditure is proposed:


Exploration Expenditure Summary by Activity on Granted Tenements

Data Compilation

Geochemical surveys

Sampling

Drilling

Geology & Field Work

Tenement & Administration

Total

Minimum

84,000

62,500

110,000

210,000

138,500

95,000

$700,000

Over

Subscription

151,000

114,000

195,000

385,000

250,000

165,000

$1,260,000

Minimum

114,000

65,000

132,000

270,000

161,000

128,000

$870,000

Over

Subscription

190,000

100,000

215,000

440,000

260,000

195,000

$1,400,000

Activity Year 1 $ Year 2 $

Exploration Expenditure Summary by Project on Granted Tenements

Minimum Minimum Over

Subscription

Moolyella

Shaw River

Pilgangoora

Arthur River

Total

Project Year 1 $ Year 2 $

250,000

180,000

150,000

120,000

$700,000

500,000

360,000

200,000

200,000

$1,260,000

320,000

250,000

160,000

140,000

$870,000

600,000

400,000

200,000

200,000

$1,400,000

Over

Subscription


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3. BOARD AND MANAGEMENT

3.1 Board of Directors

Malcolm Carson - Chairman

Robert Mandanici - Managing Director

Steven Crabbe - Executive Director

Neal Shoobert - Company Secretary

Brian Davis - Exploration Geologist

Mr Carson has over 35 years experience in all aspects of the resources sector ranging from mineral resource

exploration to investment banking (project finance, debt and equity funding, royalty finance, corporate

finance and treasury), government, mining equipment manufacture and hire, asset acquisition, corporate

restructuring and business development. Mr Carson has held various senior exploration and mine

management, director and chief executive positions during his career in the mining industry, including in ASX

listing companies.

As a project exploration geologist and exploration manager, Mr Carson has been responsible for supervising

early exploration which has led to a number of mineral resource discoveries and the development of gold,

coal and nickel mines and major discoveries of iron ore and copper yet to be developed.

Mr Carson has direct relevant experience in exploration for tin and tantalum in the Pilbara Mineral Fields and

rare earth oxides.

Mr Mandanici has worked in both the Private and Government sector and has extensive knowledge of

corporate governance, process and procedure. He was previously a director of Auvex Resources Limited.

Steve Crabbe has held senior positions in mining companies in the maintenance and production areas. He

has 34 years experience in the mining and processing of iron ore, titanium minerals, alumina, gold and

manganese. Steve was the founder of Auvex Resources Limited and as Managing Director took the company

from inception to a producing manganese miner. Steve is a Director of Naracoota Resources Limited, an

exploration company with Gold projects.

He is the founder and director of a successful mining services company.

A qualified accountant for over 20 years, Neal Shoobert is an accomplished financial and management

consultant possessing extensive experience in corporate compliance and provides company secretarial

services for several ASX listed companies.

Mr Davis has over 30 years experience as an exploration geologist and has held many senior positions across

all facets of the mining industry. Mr Davis has extensive geological experience both within Australia and

internationally.

BOARD AND MANAGEMENT


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3.2 Corporate Governance

Principle 1 - Lay solid foundations for management and oversight

The Board is responsible for the overall corporate governance of the Company, and it recognises the need for

the highest standards of ethical behaviour and accountability. The Board is committed to administering its

Corporate Governance structures to promote integrity and responsible decision-making.

The following policies and procedures have been implemented and are available in full on the Company's

website at www.lithex.com.au;

In accordance with the recommendations of the ASX, information published on the Company's web site

includes charters of the Board and its subcommittees, codes of conduct and other policies and procedures

relating to the Board and its responsibilities.

To the extent that they are relevant to the organisation, the Company has adopted the Eight Corporate

Governance Principles and Best Practice Recommendations as published by the ASX Corporate Governance

Council.

The Board's primary role is to represent Shareholders and to promote and protect the interests of Lithex by

governing the Company.

To fulfill this role the Board is responsible, amongst other things, for:

• Statement of Board and Management Functions;

• Nomination Committee Charter;

• Code of conduct for Directors and Key Executives;

• Code of Conduct for Dealing in Securities;

• Audit Committee Charter;

• Continuous Disclosure Policy;

• Shareholder Communications Strategy;

• Risk Management Charter;

• Remuneration Committee Charter; and

• Corporate Code of Conduct.

•

•

•

Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated

to senior executives.

overseeing the activities of the Company, including its control and accountability systems;

providing input into and final approval of corporate strategy and performance objectives;

reviewing, ratifying and monitoring systems of risk management and internal control;


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•

•

•

•

•

•

•

•

•

monitoring performance and implementation of strategy;

approving policies of Company-wide and general application;

approving and monitoring budgets, capital management and acquisitions and divestments;

approving and monitoring all financial reporting to the market;

formal determinations that are required by the Company's constitutional documents or by law orother external regulation.

Beyond those matters, the Board has delegated all authority to the Managing Director for management of

the Company's business within any limits imposed by the Board.

The Company currently only employs one executive being the Managing Director. The Company has

established a nomination committee which is responsible for the evaluation of all executives and Board

members.

The Board comprises three directors, one of whom is a non-executive however only the chair is classified as

independent. The Board believes that this is both appropriate and acceptable at this stage of the Company's

development.

.

The Chair is independent.

.

These positions are held by separate persons.

Established and operates under the Nomination Committee Charter. The nomination committee's main

responsibilities include, but are not limited to:

implement processes to assess the necessary and desirable competencies of Board membersincluding, experience, expertise, skills and performance of the Board and its committees;

evaluate on the performance of the Managing Director;

annually evaluate the performance and effectiveness of the Board to facilitate the directors fulfillingtheir responsibilities in a manner that serves the interests of shareholders;

before recommending an incumbent, replacement or additional director, review his or herqualifications, including capability, availability to serve, conflicts of interest, and other relevantfactors;

Recommendation 1.2:

Principle 2 - Structure the board to add value

Companies should disclose the process for evaluating the performance of senior

executives.

A majority of the board should be independent directors.

The chair should be an independent director

The roles of chair and chief executive officer should not be exercised by the same

individual

The board should establish a nomination committee.

Recommendation 2.1:

Recommendation 2.2:

Recommendation 2.3:

Recommendation 2.4:



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• assist in identifying, interviewing and recruiting candidates for the Board; and

Disclosed under the Nomination Committee Charter which is available on the Company's website.

The Board has established Code of Conduct which all employees and Directors are expected, at a minimum

to follow. The Code of Conduct categorises five main areas:

Lithex has established a Code for Dealing in Securities ( ) which sets out the requirements for Directors,

employees, consultants and contractors of Lithex dealing in Lithex securities. In order to ensure that Lithex

personnel do not inadvertently breach the insider trading provisions of the Corporations Act, they are only

permitted to deal in Lithex securities in limited circumstances specified in determined by this Code. These

limited circumstances are called “ ”

Even during trading windows, a securities dealing written request must be submitted to and approved by the

Chair or his delegate prior to any dealing in Lithex securities.

• annually review the composition of each committee and present recommendations for committee

memberships to the Board as needed.

• the treatment each other with respect and dignity;

• respect for the law and acting accordingly;

• fairness and honesty in our dealings;

• use of the Company's property responsibly and in the best interest of the Company and its reputation;

and

• responsibility for our actions and accountable for their consequences.

•

•

•

•

Recommendation 2.5:

Recommendation 3.1:

Recommendation 3.2:

Recommendation 4.1:

Recommendation 4.2:

Recommendation 4.3:

Companies should disclose the process for evaluating the performance of the board,

its committees and individual directors.

Companies should establish a code of conduct and disclose the code.

Companies should establish a policy concerning trading in company securities.

The board should establish an audit committee.

The audit committee should be structured so that it:

The audit committee should have a formal charter.

Principle 3 - Promote ethical and responsible decision-making

Code

trading windows

Principle 4 - Safeguard integrity in financial reporting

consists only of non-executive directors

consists of a majority of independent directors

is chaired by an independent chair, who is not chair of the board

has at least three members



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Lithex has established an Audit Committee consisting of the Company Secretary and 2 directors, only one of

whom is classified as independent. The Audit Committee operates under the Audit Committee Charter

which lists the main responsibilities of the Committee being:

Lithex has adopted a Continuous Disclosure Policy, a copy of which is available on the Company's website.

The policy aims to:

The Company has a Shareholder Communication policy, a copy of which is available on the Company's

website. The Policy states that The Board of the Company aims to ensure that the shareholders are informed

of all major developments affecting the Company's state of affairs.

•

•

•

•

•

•

•

•

•

•

review any financial reports externally;

monitor corporate risk assessment processes;

review the nomination and performance of the external auditor;

monitor the establishment of appropriate ethical standards;

monitor the procedures to ensure compliance with the Corporations Act and the ASX Listing Rules

and all other regulatory requirements;

address any matters outstanding with auditors, regulatory bodies and financial institutions; and

review the results and findings of the auditor, the adequacy of accounting and financial controls and

to monitor the implementation of any recommendations made.

ensure that the Company, as a minimum, complies with its continuous disclosure obligations under

the Corporations Act and ASX Limited Listing Rules and as much as possible seeks to achieve and

exceed best practice;

provide shareholders and the market with timely, direct and equal access to information issued by the

Company; and

promote investor confidence in the integrity of the Company and its securiti

Principle 5 - Make timely and balanced disclosure

Principle 6 - Respect the rights of shareholders

Recommendation 5.1:

Recommendation 6.1:

Companies should establish written policies designed to ensure compliance with ASX

Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that

compliance.

Companies should design a communications policy for promoting effective

communication with shareholders and encouraging their participation at general meetings.

es.



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Principle 7 - Recognise and manage risk

Principle 8 - Remunerate fairly and responsibly

Recommendation 7.1:

Recommendation 7.2:

Recommendation 7.3:

Recommendation 8.1:

Companies should establish policies for the oversight and management of material

business risks.

The board should require management to design and implement the risk

management and internal control system to manage the company's material business risks and report to it

on whether those risks are being managed effectively.

The board should disclose whether it has received assurance from the chief executive

officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in

accordance with section 295A of the Corporations Act is founded on a sound system of risk management and

internal control and that the system is operating effectively in all material respects in relation to financial

reporting risks.

The board should establish a remuneration committee.

The Company has established a Risk Management Committee to monitor and review on behalf of the Board

the system of risk management which the Group has established. This system aims to identify, assess,

monitor and manage operational and compliance risks.

The Audit and Risk Committee determines the Group's “risk profile” and is responsible for overseeing and

approving risk management strategy and policies, internal compliance and non-financial internal control.

The Committee will report to the Board on this system of risk management and make appropriate

recommendations to ensure the adequacy of the system.

When required, the Board will receive written assurances from the CEO and CFO (or equivalent) in relation to

the above statement.

A Remuneration Committee has been formed which operates under the Remuneration Committee Charter.

Its primary responsibilities are:

• assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration

levels and policies including incentive policies for directors and senior executives;

• assess the market to ensure that senior executives are being rewarded commensurate with their

responsibilities;

• review recommendations from the managing director relating to proposed merit increases;

• obtain the best possible advice in establishing salary levels;

• set policies for senior executives' remuneration;

• review the salary levels of senior executives and make recommendations to the Board on any

proposed increases;



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• propose, for full Board approval, the terms and conditions of employment for the managing director;

and

The Board will consider on an ongoing basis its Corporate Governance procedures and whether they are

sufficient as the Company's activities develop in size, nature and scope.

The Company has adopted a securities trading policy for the purpose of outlining the procedures for all

Directors, employees, consultants and contractors ( ) in relation to the buying and selling of the

Company's Securities in order to ensure that those parties do not inadvertently breach the insider trading

provisions of the Australian Corporations Act.

As a matter of law, all Personnel must not deal (meaning any change whatsoever including, but not limited

to, any sale, purchase, exercise of options (even if due to expire), discharge of any right or obligation, or

transfer) in Securities where:

In addition, no Personnel are entitled to trade in the Company's Securities during the following periods:

Even during trading windows, prior to any dealing in the Company's Securities a dealing request must be

submitted to and approved by the Managing Director or his delegate or, in the case of Directors (other than

the Chairman) by the Chairman. Such approval shall be in the form approved by the Managing Director from

time to time and shall include electronic approval via email.

A full outline of the securities trading policy is available from the Company.

• undertake a review, which will be reported to and confirmed by the full Board, of the managing

director's performance, at least annually, including setting the managing director goals for the coming

year and reviewing progress in achieving those goals.

• they possess information which is not generally available;

• that information may have a material effect on the price or value of the Securities; and

• they know or ought reasonably to know that the information is not generally available and if it were it

might have a material effect on the price of Securities, as such information constitutes inside

information.

• where the Managing Director or his delegate has issued an instruction prohibiting trading in Company

Securities by Employees; or

• it is the day on which the Company has made, or is expected to make, an announcement to the ASX, up

until the time the announcement is released by ASX.

3.3 Code for Dealing in Securities

Personnel


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4. RISK FACTORS

Investors wishing to subscribe for Shares offered by this Prospectus should read this Prospectus in its

entirety in order to make an informed assessment of the effect of the issue of Shares on the Company and

the rights attaching to the Shares offered by this Prospectus.

Investors should consider carefully whether Shares in the Company are an appropriate investment for them

and should appreciate that share prices can fall as well as rise.

Shares under this Prospectus should be viewed as highly speculative and whilst the Directors recommend

the Offer, investors should be aware of and take into account the risk factors described below, together with

information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

The Tenements are at various stages of exploration, and potential investors should understand that mineral

exploration and development are high risk undertakings.

There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired

in the future, will result in the discovery of an economic ore deposit. Even if an apparently viable deposit is

identified, there is no guarantee that it can be economically exploited.

The future exploration activities of the Company may be affected by a range of factors including geological

conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and

technical difficulties, industrial and environmental accidents, native title processes, changing government

regulations and many other factors beyond the control of the Company.

The success of the Company will also depend upon the Company having access to sufficient development

capital, being able to maintain title to its Tenements and obtaining all required approvals for its activities. In

the event that exploration programmes prove to be unsuccessful this could lead to a diminution in the value

of the Tenements, a reduction in the cash reserves of the Company and possible relinquishment of the

Tenements.

4.1 Exploration Success

The exploration costs of the Company described in the Independent Geologist's Report are based on certain

assumptions with respect to the method and timing of exploration. By their nature, these estimates and

assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ

from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and

the underlying assumptions will be realized in practice, which may materially and adversely affect the

Company's viability.

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the

granting of licenses or permits. Each licence is or permit is for a specific term and carries with it annual

expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently,

the Company could lose title to or its interest in the Tenements if any licence conditions are not met or if

insufficient funds are available to meet expenditure commitments.

The Company considers that given the number of Tenements that it currently has an interest in, in the event

that only the minimum subscription is raised, the Company will have sufficient funds to meet the

expenditure commitments on its granted Tenements, as well as the remaining applications, assuming that

they are granted to the Company.

4.2 Failure to satisfy expenditure commitments

RISK FACTORS


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4.3 No JORC compliant resource

4.4 Contract Risk

The Company has not currently defined a JORC resource on any of its Tenements. Further exploration is

required to determine the extent of the Company's viable base metals deposits on all of the Tenements.

There can be no assurance that exploration of the Tenements, or any other tenements that may be acquired

by the Company in the future, will result in the discovery of a JORC Code resource classification.

The Company is acquiring its interests in a number of Tenements through a series of agreements entered into

with unrelated parties, all of which are intended to settle following the completion of the Offer and the

receipt of confirmation from ASX that the Company will be conditionally admitted to Quotation on ASX.

Should the other parties to those agreements fail to satisfy their obligations to transfer the respective

Tenements to the Company as agreed, there is a risk that the Company would have to take action to enforce

the agreements with those parties. Any such action may delay the time at which the Company will gain access

to those Tenements and delay the Company's exploration programmes. The Company has no current reason

to believe that the parties that it has contracted with will not meet and satisfy their respective obligations

under each of the acquisition agreements. Each of the acquisition agreements are summarised in Section 8.2

below.

4.5 Application Risk

4.6 The overall share market may negatively impact an investment in the Company

4.7 The Company may be unable to obtain environmental approvals

4.8 Environmental Bonds

Department

4.9 The Company may not be able to secure insurance

The Company cannot guarantee that those Tenements in which it has an interest and which are still in the

application stage will ultimately be granted in whole or in part pursuant to the applicable legislation.

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable

influences on the market for equities in general.

The Company's exploration programmes will, in general, be subject to approval by State and Federal

governmental authorities. Development of any of the Company's properties will be dependent on the

project meeting environmental guidelines and, where required, being approved by governmental

authorities.

The Western Australian Department of Mines and Petroleum ( ) from time to time reviews the

environmental bonds that are placed on tenements. The Directors are not in a position to state whether a

review is imminent or whether the outcome of such a review would be detrimental to the funding needs of

the Company.

The Company intends to insure its operations in accordance with industry practice. However, in certain

circumstances the Company's insurance may not be of a nature or level to provide adequate insurance cover.

The occurrence of an event that is not covered or fully covered by insurance could have a material adverse

effect on the business, financial condition and results of the Company.

Insurance of all risks associated with mineral exploration and production is not always available and where

available the costs can be prohibitive.

RISK FACTORS

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4.10 A commercial return may not be achievable

Even if the Company discovers commercial quantities of minerals, there is a risk that the Company will not

achieve a commercial return. The Company may not be able to transport the minerals at a reasonable cost or

may not be able to sell the minerals to customers at a price which would cover its operating and capital costs.

The Company will also need to receive regulatory approval to convert its existing exploration licenses into

mining leases. There is a risk that this approval may not be obtained.

4.11 Native Title

4.12 The Company may not be able to secure additional capital if required

4.13 External economic factors may negatively impact prospects

4.14 Key management may leave the Company

The Tenements extend over areas in which legitimate common law native title rights of indigenous

Australians exist. The ability of the Company to gain access to its Tenements and conduct exploration,

development and mining operations remains subject to native title rights and the terms of registered native

title agreements.

The Directors will closely monitor the potential effect of native title claims involving the Tenements in which

the Company has or may have an interest.

The Company's capital requirements depend on numerous factors. Depending on the Company's ability to

generate income from its operations, the Company may require further financing in addition to amounts

raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt

financing, if available, may involve restrictions on financing and operating activities. If the Company is

unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and

scale back its exploration programs as the case may be.

Economic factors beyond the control of the Company, such as changes in commodity prices, interest rates,

inflation, exchange rates and taxation, may negatively impact on the Company's exploration, development

and production activities as well as its ability to fund those activities, and also on the revenue and

profitability of the Company.

The responsibility of overseeing the day-to-day operations and the strategic management of the Company

depends substantially on its management and its personnel. There can be no assurance that there will be no

detrimental impact on the Company if one or more of these employees cease their employment.

RISK FACTORS

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INDEPENDENT GEOLOGIST'S REPORT

5. INDEPENDENT GEOLOGIST'S REPORT

A M AL AYNARD& SSOCIATES

Consulting Geologists

Australian & International Exploration & Evaluation of Mineral Properties

INDEPENDENT GEOLOGICAL REPORT ON THE MINERAL

RESOURCES AND EXPLORATION ASSETS OF LITHEX RESOURCES

www.geological.com.au (ABN 95 336 331 535)

9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449

SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected]

Australia

Allen J Maynard, BAppSc (Geol), MAIG, MAusIMM.

1st March, 2011

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Contents

1. SUMMARY OF THE LITHEX RESOURCES PROJECTS 41

1.0 MOOLYELLA PROJECT 42

2.0 SHAW RIVER PROJECT 49

3.0 THE PILGANGOORA PROJECT 54

4.0 6

5.0 REFERENCES 67

6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS 68

List of FIGURES

List of TABLES

Figure 1 Lithex Resources Limited Project Location Map.....................................................................................18

Figure 1 Project Locality Map...............................................................................................................................38

Figure 2 Location of East Pilbara Tin Projects ......................................................................................................41

Figure 3 Solid geology map of the Shaw River tin field........................................................................................46

Figure 4 Solid geology map of the Shaw River tin field........................................................................................52

Figure 5 Solid geology map of the Pilgangoora Project........................................................................................56

Figure 6 A schematic block diagram showing a generalised mineral distribution within a

complex zoned pegmatite after Anderson I.G., 1979 .............................................................................59

Figure 7 Arthur River - Geology and Mineral Occurrences ..................................................................................62

Figure 8: Arthur River tenement E9/1066 airborne uranium anomalies ..............................................................64

Table 1: Moolyella Project Tenement Details.......................................................................................................42

Table 2: Exploration Targets of the Moolyella tin/tantalum field.........................................................................44

Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella.....................................................45

Table 4: Exploration Targets of primary tin mineralisation at Moolyella .............................................................45

Table 5: Moolyella 1982 geochemistry from drill cuttings in pegmatites ............................................................47

Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab samples

(composites from 16 samples) ...............................................................................................................48

Table 7: Moolyella Proposed Expenditure...........................................................................................................49

Table 8: Shaw River Project Tenement Details .....................................................................................................50

ARTHUR RIVER PROJECT 0


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Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials.......................................................51

Table 10: ExplorationTargets of the Shaw River tin/tantalite high-grade .............................................................51

Table 11: Proposed Expenditure Shaw River Project ............................................................................................54

Table 12: Pilgangoora Tenement Details ...............................................................................................................55

Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora Project alluvials (1996) .............57

Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora Project alluvials (1981) ..............57

Table 15: Pilgangoora Project Proposed Expenditure ..........................................................................................60

Table 16: Arthur River Project Tenement Details ..................................................................................................61

Table 17: 2007 Geochemical sample Highlights....................................................................................................63

Table 18: Arthur River Project Proposed Expenditure .........................................................................................66

.


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A M AL AYNARD& SSOCIATES

Consulting Geologists

Australian & International Exploration & Evaluation of Mineral Properties

www.geological.com.au (ABN 95 336 331 535)

9/280 Hay Street, Tel: (+618) 9388 1000 Mob: 04 0304 9449

SUBIACO, WA, 6008 Fax: (+618) 9388 1768 [email protected]

Australia

The Directors 1st March, 2011

Lithex Resources Ltd

11 Rafferty Close

Mandurah, WA. 6210.

Dear Sirs,

Al Maynard and Associates (“AM&A”) has been engaged by Lithex Resources Limited (LTX)

to prepare an Independent Geological Report of the mineral assets to be acquired by LTX

pursuant to the various agreements outlined elsewhere in this prospectus. Opinions are

presented in accordance with the JORC Code (2005) and other regulations and guidelines

that govern the preparation of such reports.

This report is to be included in a prospectus to be lodged with ASIC on or about the 24 of

January, 2011 offering for subscription 10 million shares at an issue price of 20 cents per

share (“Prospectus”) to raise a total of $2.0 million (before costs associated with the issue).

These funds will primarily be used for the exploration, evaluation and development of the

mineral properties as outlined in this report.

The legal status, including Native Title considerations associated with the tenure of the LTX

Mineral Assets, is subject to a separate Independent Solicitor's Report, which appears in

Section 7 of this Prospectus. These matters have not been independently verified by

AM&A. The present status of tenements listed in this report is based on information

provided by LTX and the report has been prepared on the assumption that the tenements

will prove lawfully accessible for evaluation and development.

The LTX mineral assets comprise four projects in Western Australia that are at various stages

of exploration ranging from encouraging results from surface sampling and drilling to

second stage investigation. All the projects have potential to host their target commodities

as described hereunder and warrant the exploration and testing programs as set out. The

projects are currently at an advanced stage of exploration and have potential to host

economic mineral deposits. The localities of LTX's Mineral Assets are depicted in Figure 1

and Figure 2.

INDEPENDENT REPORT ON MINERAL ASSETS

th

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It is our opinion that the mineral properties described in this report warrant the proposed

evaluation exploration and testing programs. It is noted that proposed programs may be

subject to change according to results yielded as work is carried out. We are of the opinion

that LTX has satisfactorily defined exploration and expenditure programs which are

reasonable, having regard to the stated objectives of LTX.


Figure 1 - Project Locality Map

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In the course of the preparation of this report, access has been provided to all relevant data

held by LTX and various other technical reports and information quoted in the bibliography.

We have made all reasonable endeavours to verify the accuracy and relevance of the

database LTX has warranted to AM&A that full disclosure has been made of all material in

its possession and that information provided, is to the best of its knowledge, accurate and

true. None of the information

.

provided by LTX has been specified as being confidential and

not to be disclosed in our report. The author is familiar with the areas covered by the LTX

Mineral Assets. As recommended by the Valmin Code, LTX has indemnified AM&A for any

liability that may arise from AM&A's reliance on information provided by LTX or not

provided by LTX.

The information in this report that relates to Exploration Results, Mineral Resources or Ore

Reserves is based on information compiled by, A.J. Maynard who is a Member of the AIG

and the AusIMM and is qualified to provide such reports for the purpose of inclusion in

public company prospectuses. A.J. Maynard has sufficient experience which is relevant to

the style of mineralisation and type of deposit under consideration and to the activity which

he is undertaking to qualify as a competent person as defined in the 2004 Edition of the

Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

A.J. Maynard consents to the inclusion in the report of the matters based on his information

in the form and context in which it appears. This report has been prepared in accordance

with the relevant requirements of the Listing Rules of the Australian Securities Exchange

Limited, Australian Securities and Investments Commission (“ASIC”) Regulatory Guidelines

111 & 112 and the Guidelines for Assessment and Valuation of Mineral Assets and Mineral

Securities for Independent Expert reports (the Valmin Code) which is binding on members

of the Australasian Institute of Mining and Metallurgy (“AusIMM”).

With reference to the description of material described as “Exploration Targets” on the

tenements for the quantification of volumes and grade of alluvial tin material there is no

implied status that it constitutes a Mineral Resource as identified by the JORC code (2005).

As such the potential quality and grade is conceptual in nature, mainly based upon historical

data which has had insufficient exploration to be defined as a Mineral Resource. It is

uncertain if further exploration will result in the determination of a Mineral Resource.

AM&A is an independent geological consultancy established 25 years ago and has operated

continuously since then. Neither AM&A nor any of its directors, employees or associates

have any material interest either direct, indirect or contingent in LTX nor in any of the

mineral properties included in this report nor in any other asset of LTX nor has such interest

existed in the past. This report has been prepared by AM&A strictly in the role of an

independent expert. Professional fees payable for the preparation of this report constitutes

our only commercial interest in LTX. Payment of fees is in no way contingent upon the

conclusions of these documents. A.J. Maynard is employed by AM & A.

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AM&A observes Section 947B of the Corporations Act 2001 (Cwlth). In accordance with

Corporations Regulation 7.6.01(1)(u) and Corporations Amendment Regulations 2003 (No.

7) 2003 No. 202, this Independent Consulting Geologist’s Report is not financial product

advice but is intended to provide investors with expert opinion on matters relevant to an

investment in the Company. Neither Allen J Maynard nor AM&A are operating under an

Australian financial services licence and the advice in this Independent Consulting

Geologist’s Report is an opinion on matters other than financial products and does not

include advice on a financial product.

Yours faithfully,

BAppSc(Geol), MAIG, MAusIMM.Allen J. Maynard

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1. SUMMARY OF THE LITHEX RESOURCES PROJECTS

• The Moolyella, Shaw River, Pilgangoora and Arthur River tenements have a strong history of alluvial

tin mining and due to fragmented small land holdings and fluctuations of the tin price there has been

no large scale commercial development.

• There are several previously sampled alluvial tin-tantalite Exploration Targets at Moolyella,

Pilgangoora and Shaw River.

• No REE deposits within the district have been discovered to date despite the REE bearing Euxenite

group minerals commonly occurring in the tantalum concentrates. Therefore the potential remains

high for the discovery of economic quantities of this mineral group and all occurrences should be

evaluated.

• Within the spodumene rich 'type 1' pegmatites at Pilgangoora as well as in the pegmatites of

Moolyella there is potential for lithium deposits.


Figure 2 - Location of East Pilbara Tin Projects

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1.0 MOOLYELLA PROJECT

1.1 Introduction

1.2 Location and Access

1.3 Tenure


The tin/tantalum deposits of the Pilbara Craton are derived from pegmatites associated with the 28902830

Ma highly fractionated late to post-tectonic monzogranite to syenogranite plutons of the Split Rock

Supersuite. Tin and tantalum bearing minerals associated with the Split Rock Supersuite include Cassiterite

(SnO2), the Tantalite-Columbite group (Fe,Mn)(Ta,Nb)2O6, the Euxenite group((Y,Ca,Ce,U,Th)(Nb,Ta,Ti)2)O6

and the Fergusonite group ((Y,Er,Ce,La,Nd,Dy,U,Zr,Th,Ca,Fe )(Nb,Ta,Ti,Sn,W))O4.

The Moolyella project is within the highly prospective Pilbara Goldfield and is located 23 kilometres east-

north-east of the township of Marble Bar. The tenements cover the Moolyella Tin Field where continuous

mining activities have been ongoing since their initial discovery in 1898. From 1986 limited mining activities

and exploration has been undertaken. A more comprehensive program of geological activities is required to

locate additional alluvial/eluvial tin/ tantalum deposits and their source of origin.

The project is also prospective for quartz vein style gold deposits found in the Talga Talga gold centre.

Anomalous zinc values have been identified at Murphy's well from rock chip sampling and similarly

anomalous nickel has been reported from rock chip samples in the vicinity of the Talga Talga gold centre.

The Moolyella Project is situated 23 kilometres east-north-east of Marble Bar with access via unsealed shire

and station roads and tracks.

The Moolyella project comprises one Mining Lease application covering 526 hectares one granted

Exploration Licence that covers 56 graticular blocks and one Exploration Licence application that covers 70

graticular blocks. Tenement details are summarised in (Table 1) with locations shown in Figure 3.

Tin mining operations in Moolyella area were mostly continuous from their discovery in 1898 until 1986. The

important prospects within the Moolyella Tin field and associated geology are illustrated in Figure 4.

2+

Table 1: Moolyella Project Tenement Details.

Tenement Status Share Current Date Area

Number % Holder Application

M45/1081 Pending 90 Stubbs, Jeanette Rae 22/11/2004 526Ha

E45/3172 Pending 90 Ellis, Michael Jeremy 19/11/2007 70Blks

E45/3424 Granted 90 JML Resources Ltd 01/05/2009 56Blks

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Between 1965 and 1985 Endeavour Resources Ltd undertook exploration for alluvial, eluvial, deep lead and

pegmatite hosted tin/tantalum mineralisation and several substantial alluvial and eluvial tin/tantalum

deposits were identified. The exploration programs consisted predominantly of widely spaced costeaning

and pitting and some auguring.

In 1981-1982 Endeavour Resources conducted an 18 drill-hole program to target four areas, previously

identified from mapping, for primary mineralisation.

Figure 3 shows the locations of the tin/tantalum targets, the alluvial and eluvial areas sampled by Endeavour

Resources Ltd and the local drainage systems that host the alluvial placers. Historically the highest grades of

the field came from the Moolyella lead and the McDonald lead.

The drill holes were all 51m deep except for one hole to 188m. The program intersected numerous

pegmatites with grades varying between 10 to 6,750 ppm Sn (Tin) in cassiterite as well as 4 to 110ppm Nb

(Niobium) and 10 to 120ppm Ta (Tantalum) in columbite-tantalite and rare molybdenum (Mo). The best

intercept of the program was 12m averaging 1,099ppm Sn in drill hole DH1. No further exploration has been

undertaken in the project area since this time.

The first large scale mining operation of the Moolyella tin/tantalum field occurred following the purchase, by

Endeavour Resources Ltd (Endeavour), of all the Moolyella mining tenements and treatment plant in 1978.

These mining operations continued to 1986 and subsequently closed due to the fall in tin prices.

In 1989 W.J. Ryan of Ryteck Pty Ltd, a former Endeavour geologist at Moolyella, published a report for Viking

Resources, a wholly owned subsidiary of Centamin Limited.

The report post dates the mining operations of Endeavour and provides a comprehensive list of Exploration

Targets due to the variability within alluvial and eluvial deposits. The report includes descriptions of the

targets, recovered and expected grades of heavy mineral concentrates as well as expected stripping ratios.

A summary of the quoted Exploration Targets is tabulated in Table 2. The composition of previous

concentrates from this field and subsequent chemical analysis can be found in Table 3.

Three shallow areas of mineralisation were quantified from the Endeavour Resource drilling program using

pegmatite intercepts over 1,000ppm Sn and an S.G. of 2.6. The results of the volume analysis are shown in

Table 4.

Between 1890 and 1940 narrow stratabound quartz veins within the McPhee Formation of the Marble Bar

greenstone belt were mined to produce 60.6kg of gold, predominantly from the McPhee Reward mine. A

similar amount is also likely to have been mined from alluvial material.

The area containing the Talga Talga gold centre is currently excised from the Moolyella Project tenements

(see Figure 3).

From 1969-1973 Hawkstone Minerals explored for base metals adjacent to the Talga Talga gold centre where

anomalous gossanous rock chip samples assaying as high as 2,295ppm Ni were recorded.


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Esso explored the northern region of the Moolyella Project area discovering base metal mineralisation at

the Murphy Well prospect (see Figure 3). The mineralisation is associated with narrow quartz veins in a

granitoid that has intruded the felsic volcanoclastic dominated Duffer Formation.

The veins are locally anomalous in base metals at Murphy Well, and 7km to the east-southeast, surface

samples assayed 3.4% Zn, 2.7% Cu, and 0.149% Pb. Esso eventually abandoned the tenement as the

prospect showed little potential for large-tonnage mineralisation.

Table 2 Exploration Targets of the Moolyella tin/tantalum field.:

Note - the swell factor from BCM to LCM is approx. 1.3 for alluvials and 1.1 for tailings.

55,800 62,000

13,500 15,000

Material Volume

BCM

(Lower

Range)

Volume

BCM

(Upper

Range)

Grade by

Ryteck

kg/LCM

(Lower

Range)

Grade by

Ryteck

kg/LCM

(Upper

Range)

Raw

Conc.

(tonnes

– lower

range)

Raw

Conc.

(tonnes –

upper

range)

Tested Alluvials

Prospectors Creek 38,520 42,800 0.66 0.74 37 41

Dead Donkey Lead 30,240 33,600 0.77 0.86 34 38

Six Mile and Tribs 0.85 0.95 69 77

Subtotal 124,560 138,400 0.76 0.86 140 156

Untested Alluvials

West Brockman

South

90,000 100,000 0.77 0.86 105 116

Prospector Tribs

South

27,000 30,000 0.77 0.86 31 35

Five Mile Creek

North

18,000 20,000 0.77 0.86 20 23

East Huntsman Tribs 0.77 0.86 15 17

Eight Mile Creek 22,500 25,000 0.77 0.86 26 29

Moolyella Channels 49,500 55,000 0.77 0.86 58 64

Subtotal 220,500 245,000 0.77 0.86 255 284

Eluvial tested 364,500 405,000 0.40 0.45 213 237

Eluvial untested 450,000 500,000 0.36 0.40 198 220

Tailings

Subtotal 814,500 905,000 0.38 0.42 411 457

No. 1 Main plant 22,500 25,000 0.31 0.35 9 10

No. 2 90,000 100,000 0.36 0.40 40 44

No. 4 Carron Dam 54,000 60,000 0.36 0.40 23 26

No. 5 Lower

McDonald

45,000 50,000 0.81 0.90 45 50

Subtotal 238,500 265,000 0.44 0.49 128 143

Transplant -

Moolyella

27,000 30,000 0.36 0.40 11 13

TOTAL 1,398,060 1,553,400 934 1040


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Note: With reference to the description of material described as “Exploration Targets” for the quantification

of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral Resource as

identified by the JORC code (2004). As such the potential quality and grade is conceptual in nature, mainly

based upon historical data which has had insufficient exploration to be defined as a Mineral Resource. It is


The geology of the Moolyella Project is dominated by the Mt Edgar Granite complex which occupies the

southern and central areas of the tenements. Within the Mt Edgar Granite complex four suites of granites

have been recognised. They are the migmatised Callina (or possibly Tambina) supersuite (3,490-3,460 Ma),

the Emu Pool (3,325-3,290 Ma) and later Cleland (3,275-3,225 Ma) Supersuites and the Moolyella

Monzogranite pluton of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 3.

Swarms of simple and complex pegmatites associated with the highly fractionated Moolyella pluton have

intruded the adjacent migmatised (and foliated) Callina Supersuite granites forming a few cm to 3 m thick

bodies that can be traced for over 300m along strike (N-S) and dip gently to the east. Sediments derived from

these pegmatites form alluvial deposits of primarily cassiterite and also tantalite-columbite.

1.5 Geology

Mass in kg Percentage Tin (Sn %)Tantalite

(Ta2O5 %)

56,416 100.00

45,896 81.35 73.50 2.56

6817 12.08 1.22 26.10

3267 5.79

436 0.77

Raw concentrate

Cassiterite concentrate

Tantalite concentrate

Garnet

Magnetite

TOTAL 56,416 100.00 59.9 5.24

Table 3: Heavy mineral concentrate grades of Tin and Tantalite at Moolyella.

Area

Volume

m3

(Lower

Range)

Volume m3

(Upper

Range)

Tonnes

(Lower

Range)

Tonnes

(Upper

Range)

Grade in

kg/t Sn

(Lower

Range)

Grade in

kg/t Sn

(Upper

Range)

Pegmatite Gully 11,880 13,200 30,807 34,230 1.85 2.05

Roadside A 27,720 30,800 72,072 80,080 1.07 1.19

Roadside B 12,150 13,500 31,590 35,100 0.93 1.03

Tin Creek 810 900 2,106 2,340 1.80 2.00

TOTAL 52,560 58,400 136,572 151,750 1.41 1.56

Table 4: Exploration Targets of primary tin mineralisation at Moolyella.

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The alluvial systems in the Moolyella tin field vary from less than one metre to more than 7 metres deep with

the placers always occurring in the lowermost alluvial layer. A number of flat-lying plateau occur between

the major drainages. These areas are prospective for eluvial concentrations of cassiterite and tantalite-

columbite with significant volumes estimated by previous explorers (see Table 2) although the layer of

eluvials is usually less than 0.5m thick.

In the northwest, the project area overlies metamorphosed Archaean volcanics and metasediments of the

Warrawoona Group greenstone belt, host to the Talga Talga gold centre.

Figure 3 - Solid geology map of the Shaw River tin field


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1.6 Potential

The historical reports suggest that there are two likely sources for further discoveries of economic

tin/tantalum mineralisation. These are firstly within the braided Brockman Creek system, where over 8km of

the primary drainage channel in the Moolyella district has been only sparsely sampled. The second source is

in the widespread eluvials that exist between the creek systems.

Potential also exists for economic mineralisation within the saprolite zone. To date no systematic drilling

program has tested this target. Reports of soft clay-rich and weathered bedrock beneath the alluvial placers

may indicate, if extensively developed, an enriched and easily dug source of mineralisation.

The tenor of Ta2O5 in the tantalum concentrates of the Moolyella tin field (~25 % Ta2O5) suggests the

tantalum bearing minerals in the concentrates are unlikely to be dominated by the higher grade tantalite-

columbite group. This leaves open the possibility that the tantalum concentrates are dominated by the rare

earth elements (REE) rich euxenite or fergusonite minerals. The literature indicates that, to date, most

samples have only been assayed for tin (Sn), Tantalum (Ta2O5)and Niobium (Nb2O5) and thus there exists

the potential for economic concentrations of REEs that at this point are untested.

Bed rock sources for the alluvial and eluvial mineral occurrences have not been identified and their

discovery is therefore a potentially substantial source of mineralisation.

Percussion drilling completed by Endeavour in 1982 tested bedrock pegmatites in three locations. Assays

from 247 samples indicated the presence of several significant elements as outlined in Table 5:


Element Symbol Range From Range To Comment

Tin

Tantalum

Niobium

Lithium

Tungsten

Gold

Silver

Sn

Ta

Nb

Li

W

Au

Ag

10ppm

10ppm

4ppm

70ppm

10ppm

0ppm

0ppm

6750ppm

120ppm

110ppm

500ppm

70ppm

0.008ppm

0ppm

Significant

Significant

Significant

Significant

Weak

Very Weak

Absent

Table 5: Moolyella 1982 geochemistry from drill cuttings in pegmatites.

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Grab samples taken from abandoned stockpiles during a visit to the area in June 2010 confirmed the

existence of other anomalous and significant elements contained within the tin-tantalum product. (See

Table 6)

Little exploration attention has been paid to minerals such as the rare earths, lithium, tungsten and

molybdenum on the tenement area. However, the above tables demonstrate that there could be

commercial value for some minerals in the pegmatites.

The project area has potential for base metal mineralisation as anomalous nickel bearing gossans have been

reported from rock chip samples in the vicinity of the Talga Talga gold centre. At Murphy's Well zinc values

have been identified from rock chip sampling of gossan outcrops.

The area is also prospective for gold mineralisation of the Talga Talga type, particularly within faults and

shears in the Warrawoona Basalts.

Collation of all the existing data on a GIS database is proposed as a first priority. Following the database

review target identification and field location to be geologically mapped utilizing the latest satellite imagery

with a focus on a detailed structural survey. Ground geochemical and geophysical surveys are to follow. The

generated targets are to be tested by RAB and RC drilling programs primarily for pegmatite definition and

their tin/ tantalum and REEs content and for gold and base metal mineralisation also.

An exploration budget of $250,000 is proposed for the first year and $320,000 for year two.

1.7 Proposed Program and Expenditure


*Level at which element is considered anomalous in that environment

Table 6: Moolyella 2010 geochemistry from alluvial stockpile grab

samples (composites from 16 samples).

Element Symbol Range

From

Range

To

Anomalous

Threshhold*

Tin Sn 50ppm 2250ppm 1000ppm

Tantalum Ta 5.2ppm 69.4ppm 10ppm

Beryllium Be 4.6ppm 161ppm 10ppm

Lithium Li -5ppm 130ppm 50ppm

Strontium Sr 58ppm 276ppm 500ppm

Silver Ag -2ppm 8ppm 1ppm

Thorium Th 2.1ppm 8ppm 20ppm

Titanium Ti 120ppm 2350ppm 1000ppm

Uranium U 0.7ppm 1.7ppm 5ppm

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2.1 Introduction


2.3 Tenure

The Shaw River project is within the highly prospective Pilbara Goldfield and is located 50 km southwest of

Marble Bar and is centred on the Shaw River tin field. It comprises two granted Exploration Licences that

cover 62 graticular blocks and 66 graticular blocks respectively.

The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin

concentrate.

From 1978 to 1998 a number of companies conducted further evaluation and exploration activities

primarily for tin, tantalum and REEs. A mining feasibility study of the Shaw River tin field, under a joint

venture between Greenbushes and Western Australia Rare Metals, was completed in 1988. The project was

deemed to be sub economic and the tenements were subsequently dropped in 1989.

The project area requires further evaluation and subsequent detailed exploration for the discovery of

additional tin tantalum and REEs.

The Shaw River project is located approximately 50 km southwest of Marble Bar and is centred on the Shaw

River tin field. Access is via unsealed Shire and station roads and various bush tracks that service abandoned

mine workings see Figure 2.

The Shaw River project comprises two granted Exploration Licences that cover 128 graticular blocks. Their

details are summarised in (Table 8) and locations shown in Figure 4.

49


Moolyella

Item Year 1 $ Year 2 $ Total $

Data Compilation 30,000 35,000 65,000

Geochemical Surveys 15,000 15,000 30,000

Sampling 40,000 55,000 95,000

Drilling 80,000 100,000 180,000

Geology & Field Work 50,000 66,000 116,000

Tenement & Administration 35,000 49,000 84,000

Total $250,000 $320,000 $570,000

Minimum Expenditure 56,000 56,000 112,000

Table 7: Moolyella Proposed Expenditure.

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The Shaw River tin field was discovered in 1890 and by 1975 produced a total of 6,585 tonnes of tin

concentrate. In 1978 Greenbushes Ltd acquired leases in the Shaw River district and conducted exploration

for tin and tantalum from 1979 to 1981. Further exploration was conducted for tin, tantalum and REEs under

a joint venture between Greenbushes and Western Australia Rare Metals until 1987 and a mining feasibility

study was completed in 1988.

The feasibility study included extensive plans of the sample type and location. The project was then deemed

to be sub-economic and the tenements were subsequently dropped in 1989.

In 1994 Mount Edon Gold Mines (MEGM) conducted an exploration program for tin, tantalum and REEs.

MEGM utilised scintillometers and undertook an alluvial bulk sampling program with the aim of testing for

both alluvial and primary mineralisation. MEGM reported using an airborne scintillometer survey to cover

the tenements. However, no report has been found confirming the data generated from this work.

No further exploration programs have occurred within the Shaw River Project leases since 1995.

P. Kimber of Greenex Ltd, on behalf of the Western Australian Rare Metals / Greenbushes J.V., prepared an

Exploration Target volume for the project. The report describes the sampling methodology and discusses

the results and potential of each area in a summary table. The volumes relevant to the current Shaw River

Project tenements are found below in Table 9.

Between 1994 and 1998 Valdrew Resources investigated two of the Exploration Targets (Five Mile Creek and

Spear Hill) detailed in the Greenex Ltd report with the intent to develop the deposits. Follow up sampling by

Valdrew Resources did not confirm the Greenex Ltd data and they subsequently abandoned the tenements.

In 1997 P. Kimber of Reynard Australia Pty Ltd prepared a high-grade Exploration Target for the Shaw River tin

field and the relevant volumes that occur on the Shaw River Project tenements are found below in Table 10.

Tenement Status Share Current Date Area

Number % Holder Granted/Application

E45/3354 Granted 90

Duketon

Consolidated Ltd 23/11/2009 62Blks

E45/3439 Granted 90

Duketon

Consolidated Ltd 18/06/2010 66Blks

Table 8: Shaw River Project Tenement Details.

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175k – 190k 1.0 - 1.12189.9 -

211.010.037 - 0.049 8.46 – 9.38

90k - 100k 1.0 -1.196.57 -

107.300.05 - 0.065 5.76 - 6.40

85k - 90k 1.0 -1.1593.33 -

103.710.025 - 0.033 2.70 - 2.98Hartigans

Combos

Creek

TOTAL

ProspectRange of

Tonnes

Range

SnO2 kg/t

Tonnes

SnO2

Range Ta 2O5

kg/t

Tonnes

Ta2 5O

Table 10: Exploration Targets of the Shaw River tin/tantalite high-grade.

51

Breens

Lower Cooglegong

Creek

Combos Creek

Eleys Creek

TOTAL

Prospect

Hartigans

97,312 to

108,1251.17 to 1.30

126.27 to

140.31

0.058 to

0.065

12.28 to

13.65

216,562 to

240,6250.83 to 0.92

199.26 to

221.40

0.040 to

0.045

9.71 to

10.79

88,312 to

98,1250.80 to 0.89

78.59 to

87.33

0.039 to

0.044

3.85 to

4.28

40,950 to

45,5000.85 to 0.94

38.40 to

42.67

0.033 to

0.037

1.53 to

646,558 to

718,400

0.96 to

1.09

703.20 to

781.36

0.048 to

0.054

43.26 to

48.08

Range of

Volume in

LCM

Range SnO2

kg/LCM Tonnes

Range

Ta2 5O

kg/LCM

Tonnes

203,422 to

226,0251.15 to 1.28

260.68 to

289.65

0.070 to

0.078

15.89 to

17.66

Ta2 5OSnO2

1.70

Table 9: Exploration Targets of the Shaw River tin/tantalite project alluvials.

( Note. These volumes are based on a cut off grade of 0.5 kg/LCM of SnO2.)



of volumes and grade of alluvial tin, there is no implied status that it constitutes a Mineral Resource as




The geology of the Shaw River Project is dominated by the Shaw granitic complex whose evolution includes

four episodes of granite emplacement. The oldest granites of the complex are the highly migmatised Callina

Supersuite (3,490-3,460 Ma) that are intruded by the significantly less deformed leucogranites of the

Tambina Supersuite (3,450-3,420 Ma), Sisters Supersuite (2,945-2,930 Ma) and later Cooglegong

Monzogranite of the Split Rock Supersuite (2,890-2,830 Ma) as illustrated in Figure 4.

Swarms of simple and complex <10 cm and up to 3 m thick pegmatites are associated with the Cooglegong

Monzogranite and cut across the banding of the adjacent gneissic rocks. The pegmatites, when associated

with rare metal mineralisation, have an apatite composition with accessory spessartine, green muscovite,

cassiterite, zinnwaldite, lepidolite, fluorite, tantalite and magnetite.

The locality and geology of the major tin -tantalite prospects in the project area are illustrated in Figure 4.

2.5 Geology

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Figure 4 - Solid geology map of the Shaw River tin field


Shows location of the tin/tantalum prospects and deposits, and the outlines of the sampled alluvials.

2.6 Exploration Potential

Alluvial deposits, derived from the pegmatites, have developed in an area of low undulating relief with small

shallow creeks and in major deeply incised braided streams. Eluvial and colluvial deposits are also found on

ridges and divides and typically occur as a 0.5m thick layer of cover (notably at Spear Hill and Hillside).

A granite-greenstone contact exists along the eastern margin of the Shaw River Project tenements. In other

tin-tantalum districts of the Pilbara, simple and complex pegmatites of substantial width have formed within

the foliated greenstones and around the greenstone-granite contact.

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Limited work appears to have been done in the Shaw River district to investigate them for their

mineralisation and mineral content and therefore they represent potential exploration targets. Within

some of the deeper alluvial systems in the Shaw River tin field the placers were auger drilled and

sampled.

Auger drilling historically underestimates mineral content in alluvial and eluvial type deposits. Consequently

grade and volume estimations so derived are in general conservative. Therefore there is potential for

increased mineral content using other drilling techniques such as RC.

Assays of the tantalum-bearing minerals from the Shaw River district have produced some significant results

for uranium (up to 4,750 ppm U).

The project area is considered to be potentially prospective for uranium bearing pegmatites. Furthermore

no work has been done to assess the potential for palaeo-placer type uranium deposits.

Collation of all the existing data on a GIS database is proposed as a first priority Following the database


with a focus on a detailed structural survey.

Ground geochemical and geophysical surveys are to follow. The generated targets are to be tested by RAB

and RC drilling programs primarily for pegmatite definition and their tin/ tantalum and REE content and

uranium will be searched for also.



.


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Item

Data Compilation

Geochemical Surveys

Sampling

Drilling

Geology & Field Work

Tenement & Administration

Total

Minimum Expenditure

Year 1 $ Year 2 $ Total $


20,000 34,000 54,000

17,500 20,000 37,500

25,000 32,000 57,000

50,000 80,000 130,000

42,500 45,000 87,500

25,000 39,000 64,000

$180,000 $250,000 $430,000

130,000 130,000 260,000

Shaw River

Table 11: Proposed Expenditure Shaw River Project.

3.0 THE PILGANGOORA PROJECT

3.1 Introduction


The Pilgangoora project is within the highly prospective Pilbara Goldfield and is located approximately 120

km south-southeast of Port Hedland and a portion of it covers the Pilgangoora tantalum field. The project

comprises two granted Exploration Licences that cover 8 graticular blocks.

The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had produced approximately 0.7

tonnes of tantalite concentrates from small scale alluvial operations. Larger scale mining operations were

introduced in 1974 and by 1975 approximately 50 tonnes of high grade tantalite together with some 13

tonnes of cassiterite were produced from the area.

From 1978-1982 Pilgan Mining and between 1992-1996 the Pilgangoora Mining Venture continued with

bulk scale mining operations that produced approximately 140 tonnes of tantalite concentrates from an

estimated 800,000 BCM of screened alluvial and eluvial material.

The project area contains three types of zoned tin/tantalum bearing pegmatites that requires more

detailed exploration and evaluation.

The Pilgangoora tantalum field is located approximately 120 km south-southeast of Port Hedland and is

found predominantly to the south southwest of and stretching northward into, the Pilgangoora Project

tenements. The project is accessed by unsealed shire and station roads, various tracks that service

abandoned mine workings and the stations (see Figure 2).

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3.3 Tenure


The Pilgangoora project comprises two granted Exploration Licences that cover 8 graticular blocks.

Their details are summarised in (Table 10) and locations shown in Figure 5.

The Pilgangoora tantalite field was first discovered in 1905 and by 1947 had producedapproximately 0.7 tonnes of tantalite concentrates from small scale alluvial operations. After 1947,larger scale mining operations were introduced and by 1975 approximately 50 tonnes of high gradetantalite together with some 13 tonnes of cassiterite were produced from the area.

From 1978-1982 Pilgan Mining and between 1992-1996 the Pilgangoora Mining Venture continued

with bulk scale mining operations that produced approximately 140 tonnes of tantalite

concentrates from an estimated 800,000 BCM of screened alluvial and eluvial material.

In 1996 P.B. Kimber of Prima Resources, a JV partner of the Pilgangoora Mining Venture, estimateda volume for the project area, see Table 13. His estimates utilised the estimates made by JaysExploration in 1981, see table 14.

Several creeks were re-sampled by backhoe pits dug on a 10m by 100m grid with 6 litre verticalchannel samples taken across the placers. The locations of the creeks are indicated in Figure 5.

Due to concerns about the repeatability of the resource estimates, Prima Resources bulk sampledcreeks 4 and 5. The results of this bulk sample program are not included in the available reports.

Tenement

Number Status Share Current Holder

Date

Granted Area

E45/2375 Granted 90 South Boulder Mines Ltd 13/02/2006 3Blks

E45/3373 Granted 90 JML Resources Pty Ltd 15/02/2010 5Blks

Table 12: Pilgangoora Tenement Details.


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Figure 5 - Solid geology map of the Pilgangoora Project

Shows the approximate outlines of the sampled alluvials


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The Pilgangoora Project tenements overlie the steeply dipping and synclinally folded East Strelley

Greenstone belt, and locally, the Carlindi granitic complex to the north. The greenstone belt consists of

ultramafic, mafic and felsic volcanics with intercalated chert and sedimentary rocks of the Warrawoona

(3,525-,3426 Ma) and overlying Kelly (3,350-3,300 Ma) Groups. The composition of the Carlindi granitic

complex is similar to those of the Moolyella and Shaw River districts with four episodes of granite

emplacement including the initial highly migmatised Callina Supersuite (3,490-3,460 Ma) followed by the

Cleland Supersuite (3,275-3,225 Ma), the Sisters Supersuite (2,945-2,930 Ma) and lastly by

monzogranites of the Split Rock Supersuite (,2890-2,830 Ma). Both the greenstone belt and the

migmatised granites show a well developed schistosity that trends north northeast and dips steeply to

the east.

3.5 Geology

Location Volume

in LCM

(Lower

Range)

Volume in

LCM

(Upper

Range)

Ta 2O5kg/LCM

(Lower

Range)

Ta 2O5kg/LCM

(Upper

Range)

Tonnes

Ta 2 5O

(Lower

Range)

Tonnes

Ta 2O5

(Lower

Range)

Creek 1 6,804 7,560 0.50 0.56 3.80 4.23

Creek 2 6,480 7,200 0.55 0.61 3.95 4.39

Creek 7 19,656 21,840 0.33 0.37 7.27 8.08

TOTAL 32,940 36,600 0.46 0.46 15.02 16.71

Table 13: Remaining volume estimate by Prima Resources for the Pilgangoora

Project alluvials (1996).

Location Volume in

LCM

(Lower

Range)

Volume in

LCM (Upper

Range)

Ta2O5

kg/LCM

(Lower

Range)

Ta2O5

kg/LCM

(Upper

Range)

Tonnes

Ta 2O5

(Lower

Range)

Tonnes

Ta 2O5

(Lower

Range)

Creek 1 6,804 7,560 0.50 0.56 3.80 4.23

Creek 2 11,400 12,667 0.45 0.50 5.69 6.33

Creek 7 19,656 21,840 0.33 0.37 7.27 8.08

TOTAL 37,860 42,067 0.42 0.44 16.76 18.64

Table 14: Remaining volume estimate by Jays Exploration for the Pilgangoora

Project alluvials (1981).


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Three types of tin/tantalum bearing pegmatites have been found in the Pilgangoora district and these are:

Quartz-spodumene-albite-microcline pegmatites.

Quartz-microcline, albite-muscovite pegmatites.

Quartz-muscovite-feldspar-cassiterite pegmatites.

The type 1 pegmatites are the primary source of tin/tantalum mineralisation at Pilgangoora and form north

north-east trending bodies up to 60m thick in greenstones within an 8km long and 1.5km wide corridor that

begins south- southwest of the tenements and extends northwards into the Pilgangoora Project tenements

(see Figure 5). The spodumene content of these pegmatites (~ 25 %) has previously been the focus of

feasibility studies for lithium, however none of the volumes presented in that report occur on the

Pilgangoora Project tenements.

Type 2 pegmatites occur at or close to the granite-greenstone contact and are found in the area covered by

the Pilgangoora Project tenements. The tantalum concentrates derived from these pegmatites are of a

lower tenor than the type 1 pegmatites and this is likely to be the reason for the lower grade tantalum

concentrates (~ 25 % Ta2O5) of the Pilgangoora Project than the higher (40 % and 60 % Ta2O5) grades found

in the main Pilgangoora tantalum field to the south southwest.

The type 3 pegmatites typically occur to the south of the Pilgangoora Project tenements and are usually

small and are cassiterite rich.

A schematic block diagram, showing the generalised composition with mineral distribution, within a

complex zoned pegmatite is illustrated in Figure 6.

There are two potential sources for further concentrations of tantalum minerals to be discovered within the

Pilgangoora Project leases. These include alluvials in creeks to the north of those already sampled as well as

eluvial and hard rock deposits associated with the type 1 pegmatites found within the central area of the

tenements (see Figure 5). These type 1 pegmatites may also be host to economic quantities of Li bearing

spodumene.

Little work appears to have been done on the chemistry of the tantalum bearing minerals associated with

the type 2 pegmatites and the possibility exists that economic accumulations of REEs exist in the project

area.

Alluvial gold was discovered at McPhees Patch around the turn of the 19th century. It was not until 1935 that

some attempt was made to treat the low-grade gold lodes as a large mining operation and these efforts

persisted until the outbreak of the Second World War. No further serious investigations occurred until the

gold boom of the 1980s, when various companies explored the area. From 1995 to 1998 Lynas Gold NL

mined the 125,000 ounce Lynas Find deposit.

The exploration rights for gold only exist for (E45/3373) the northern most lease of the Pilgangoora Project.

The most significant gold deposit in this area is the Birthday Gift prospect with historical production of 1,473

tonnes for 232.7 oz Au.

1

2

3

3.6 Mineralisation Potential


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Figure 6 - A schematic block diagram showing a generalised mineral distribution within a

complex zoned pegmatite after Anderson I.G., 1979.


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4.1 Introduction

Collation of all the existing data on a GIS database is proposed as a first priority Following the database




their tin/ tantalum and REE content. Gold will also be explored for.


The Arthur River project is located in the Gascoyne Mineral Field, approximately 250km east of Carnarvon

and consists of two granted Exploration Licences covering 15 graticular blocks.

In the early 1900's the Bangemall Gold Mine mined gold but no records of production figures have been

located.

Unknown parties in the early 1940's recovered mica, beryl, tantalum-columbite and bismuth from

pegmatites in the area. No records of production have been located.

From 2004-2006 Tantalum Australia NL mined the placer type Arthur River tantalum-niobium mine, now on

care and maintenance. The tantalum and niobium minerals are derived locally from columbite - tantalite

granitic rare metal pegmatites. Drilling of the source pegmatite has yielded significant tantalum

mineralisation and subsequently an Exploration Target consisting of 55,000 to 60,000 tonnes at 0.025 to

0.03 percent Ta O has been reported.

.

Note: With reference to the description of material described as “Exploration Targets” for the

quantification of volumes and grade of alluvial tin there is no implied status that it constitutes a Mineral

Resource as identified by the JORC code (2004).

4.0 Arthur River Project

2 5

Pilgangoora




Sampling 25,000 25,000 50,000

Drilling 50,000 50,000 100,000



Total $150,000 $160,000 $310,000


Table 15: Pilgangoora Project Proposed Expenditure.


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As such the potential quality and grade is conceptual in nature, mainly based upon historical data which has

had insufficient exploration to be defined as a Mineral Resource. It is uncertain if further exploration will

result in the determination of a Mineral Resource.

The tin tantalum potential of the region has not been fully explored and consequently requires additional

field programs to map the pegmatite occurrences.

Previous explorers have located anomalous hard rock, beryl-pegmatite and calcrete style uranium

mineralisation. Additionally uranium bearing pyrochlore has been noted during the excavation of the

Arthur River mine.

The project area has potential for the occurrence of gold, tin/tantalum, tungsten-molybdenum, REE and

uranium mineralisation.

The tenements comprising the Arthur River Project are located in the Gascoyne Mineral Field,

approximately 250 kilometres east of Carnarvon. The area can be accessed via gravel road from Carnarvon

via Gascoyne Junction and then via gravel roads that connect the various pastoral leases. (Figure 2).

The project consists of two granted Exploration Licences covering a total area of approximately 10,294

hectares (15 graticular blocks). Details of the Mining Licences are summarised in Table 16 and locations

shown in Figure 7.

4.2 Locality and Access

4.3 Tenure

Tenement Number Status Share % Current Holder Date Status Area

E09/1066 Live 100 Hazelwood Resources Ltd Granted 12Blks

E09/1067 Live 100 Hazelwood Resources Ltd Granted 3Blks

Table 16 Arthur River Project Tenement Details.:


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From 1992 - 2000

In the early 1900s the Bangemall Gold Mine mined gold but no records of production figures have been

located.

There is documentation that during the early 1940s mica, beryl, tantalum-columbite, and bismuth were

recovered from pegmatites by unknown parties No records of production have been located.

In April 1973 Pacminex Pty Ltd explored for hard rock and calcrete style uranium mineralisation. Utilising

airborne radiometric and detailed mapping primary and secondary uranium anomalism was indentified.

Cameco Australia Pty and PNC Exploration Australia Pty Ltd were active in an area

approximately 20 kilometres south of the westernmost EL. Several areas of significant uranium

mineralisation were identified within the regolith.

Figure 7 - Arthur River - Geology and Mineral Occurrences


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In 2004 Agip Nucleare explored for Uranium and discovered a uranium- beryl pegmatite.

During 2004-2006,Tantalum Australia NL mined the Arthur River tantalum-niobium mine, now on care and

maintenance. The deposit is a placer type containing tantalum and niobium minerals derived locally from

columbite- tantalite granitic rare metal pegmatites. A placer Exploration Target estimate of 55,000 to 60,000

tonnes at 0.025% to 0.03% Ta O has been reported.

.

Additionally, uranium bearing pyrochlore has been noted during the excavation of the Arthur River mine.

During 2007, Uranium exploration company U O Limited, recommenced Uranium exploration at the Wabli

Creek and Minindi Creek prospects, located near the occurrence discovered by Agip in 2004, and located 10

to 20 kilometres from the eastern-most Arthur River project tenement. U O Limited reported significant

calcrete uranium values of 500 to 600 ppm.

Geochemistry reported from rock chip sampling by Hazlewood Resources Pty Ltd in September 2007

indicated that there are several prospective elements present on tenement E9/1067. See Table 17 below:

From 2009 Hazelwood has completed a detailed airborne radiometric survey and has undertaken

preliminary field work. Field activities were restrained by the rugged terrain. Further field work is required

for verification of anomalies arising from the radiometric data and this will be undertaken with the

assistance of all terrain vehicles.

2 5

3 8

3 8





uncertain if further exploration will result in the determination of a Mineral Resource


Element Range From

ppm

Range To

ppm

Comment

Lithium (Li) 0.99 77.2 Very significant

Rubidium (Rb) 3.56 82.2 Very significant

Tin (Sn) 0.14 3.36 significant

Niobium (Nb) 0.11 3.28 significant

Thorium (Th) 1.44 61.9 significant

Uranium (U) 0.64 21.5 Very significant

Cerium (Ce) 5.81 200 Very significant

Cesium (Cs) 0.20 23.2 significant

Table 17: 2007 Geochemical sample Highlights.

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4.5 Geology

The basement rocks to the Mt Phillip 1:250,000 sheet belong to the Gascoyne Province, a belt of high grade

metamorphic rocks of dominantly Proterozoic age. The oldest rocks on the sheet are reworked Archaean

gneisses, which occur as banded biotite gneiss, with minor microcline augen, layered intermediate gneiss

and pink granite gneiss. Lesser amounts of biotite granite and pegmatite have resulted from Proterozoic

reworking.

The Proterozoic is mainly represented by the Morrisey Metamorphic Suite, which is a mixture of prograde

schists and felsic paragneiss. Smaller bodies of amphibolite, calc-silicate gneiss and marble also exist.

Retrograde sericite schists have been mapped also. Peak metamorphism reached mid to upper amphibolite

facies and is later overwritten by a retrogressive greenschist facies event.

Two phases of granite have been described. The first is biotite augen gneiss and is syn-peak metamorphism

(2,400Ma).

The second is a biotite granodiorite (1,700Ma). The structural grain is dominated by tightly folded,

northwest trending folds, with steep southeast plunges.

The Proterozoic basins, that comprises the Bangemall and Mt James Formations, onlap the Morrisey

Complex.

Palaeozoic sediments of the Carnarvon Basin onlap the area in the west.

Within the project area, the geology is dominated by aeolian sands and colluvium and alluvium. Where

outcrop and subcrop do occur they are dominantly quartzo-feldspathic conglomerates and grits, silicified

sandstone, siliceous limestone, quartzite, slates and cherts.

Figure 8 - Arthur River tenement E9/1066 airborne uranium anomalies

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4.6 Mineralisation Potential


The project area is regarded to be very prospective for the discovery of additional tantalum-niobium and

other rare metals associated with pegmatites. Furthermore numerous occurrences of pegmatitic rare metal

mineralisation occur within the Morrisey Metamorphic suite of the Ashburton Formation, some of which

have been exploited for bismuth, beryl and tantalum in the past.

Occurrences of uranium mineralisation are recorded within 10 to 20km of the Arthur River project area. The

most noteworthy are Wabli Creek; a carnotite-calcrete style deposit, and Paddy Well; a pegmatite style

deposit.

Consequently the project is considered to be prospective to host both Jabiluka and Calcrete-Carnotite - style

uranium mineralisation supported by the known occurrences of pegmatite and calcrete associated uranium

mineralisation in areas adjacent to the project.

Exploration companies including U3O8 Limited and Tantalum Australia Ltd have recently indicated their

intention to recommence uranium exploration in areas immediately adjacent to the Arthur River Project.

Collation of all the existing data on a GIS database is proposed as a first priority. Following the database




their tin/ tantalum and REE content. Uranium and gold will be searched for also.


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Arthur River




Sampling 20,000 20,000 40,000

Drilling 30,000 40,000 70,000



Total $120,000 $140,000 $260,000


Table 18: Arthur River Project Proposed Expenditure.

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5.0 REFERENCES

The number of reports referenced for the purposes of carrying out of an independent geological review of

the mineral properties are too numerous to list. The following reports listed below, therefore, are those

that are the principal sources of information.

Anderson I. G., 1979: Tantalum-Niobium (Columbium) A Geological Review. Unpublished Internal

Geological Report: Rio Tinto (Rhodesia) Limited.

Cooper D. G., 1961: The Geology of the Bikita Pegmatite. The Geology of Some Ore Deposits of Southern

Africa: Volume 2. Geological Society of South Africa Publication.

Williams S. J., Williams I. R., Chin R, J., Muhling P. C., and Hoching, R. M., 1983: 1:250,000 Explanatory Notes,

Mount Phillips, Sheet S.G. 50-2. Western Australia. Geological Survey of Western Australia. Publication.

Hickman A. H., and Lipple, S. L., 1978: 1:250,000 Explanatory Notes, Marble Bar, Sheet S.F. 50-8. Western

Australia. Geological Survey of Western Australia Publication.

Various Open file WAMEX Annual Technical Reports covering previous exploration in the region and

tenements.

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6.0 GLOSSARY OF TECHNICAL TERMS AND ABBREVIATIONS

6.1 Glossary

Aeromagnetic Survey

Alteration Zone -

Anomaly

Anomalous

Anticline

Axial plane

Axis

Basalt

Batholith

Bedding

Cleavage

Country rock

Dip

Domain

Dyke

Exploration Target

Fault

Felsic

mafic

Fold

Foliation

Footwall

A survey made from the air for the purpose of recording magnetic

characteristics of rocks.

Zone within which rock forming minerals have been chemically changed.

Value higher or lower than the expected or norm.

Outlining a zone of potential exploration interest but not necessarily of

commercial significance.

Upward arching fold or rock strata (antonym = syncline).

A plane which joins the hinge lines of successive beds in a fold.

Hinge-line of a fold.

A fine - grained volcanic rock composed primarily of plagioclase feldspar and

mafic minerals.

A very large, usually granitic intrusion.

A rock surface parallel to the surface of deposition.

The tendency of a rock and minerals to split along closely spaced, parallel

planes.

A general term applied to rock surrounding or penetrated by mineral veins.

The angle at which a rock layer, fault of any other planar structure is inclined

from the horizontal.

The areal extent of given lithology or environment.

A tabular intrusive body of igneous rock that cuts across bedding at a high

angle.

A volume of mineralised rock that has not yet been defined as a mineral

resource.

A fracture in rocks on which there has been movement on one of the sides

relative to the other, parallel to the fracture.

Descriptive of an igneous rock which is predominantly of light coloured

minerals (antonym: of ).

A bend in the rock strata or planar structure.

The laminated structure resulting from the parallel arrangement of different

minerals.

Rocks underlying mineralisation .

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Geophysics

Granitoid

Hanging wall

Igneous

Inferred Resource

Isocline

JORC Code

Lamination

Lineament

Lode

Mafic

Metamorphism

Mineral Resource

Mineralisation

Opencut

Ore

Orebody -

Outcrop

Plunge

Porphyry

Primary mineralisation -

Study of the earth by quantitative physical methods.

A general field term for coarse grained rocks containing quartz and felspars.

Rocks overlying mineralisation.

Formed by solidification from a molten or partly molten state.

A resource inferred from geoscientific evidence, drillholes, underground

openings or other sampling procedures where lack of data is such that

continuity cannot be predicted with confidence and where geoscientific data

may not be known with a reasonable level of reliability.

An anticline or syncline so closely folded that the two sides have the same dip.

Joint Ore Reserves Committee- Australasian Code for Reporting of Identified

Resources and Ore Reserves.

The finest bedding, often found in shales and fine grained sandstones.

A naturally occurring major linear feature in the earth's crust, often associated

with mineral deposits.

A deposit of potentially valuable material or minerals between definite

boundaries.

A loosely used group - name for silicate minerals that are rich in iron and

magnesium, and for rocks in which these minerals are abundant.

The mineralogical, structural and chemical changes induced within solid rocks

through the actions of heat, pressure or the introduction of new chemicals.

Rocks so altered are prefixed "meta" as in "metabasalt".

A defined tonnage and volume of rock with mineralisation of economic

interest (according to JORC/ASX standards).

In economic geology, the introduction of valuable elements into a rock body.

Descriptive of a mine worked open from the surface.

A mixture of minerals, host rock and waste material which is expected to be

mineable at a profit.

A continuous, well defined mass of ore.

The surface expression of a rock layer (verb: to crop out).

Angle of the axis of folding with a horizontal plane.

A rock with conspicuous crystals in a fine-grained ground mass.

Mineralisation which has not been affected by near surface oxidising process.

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RAB

RC

Resource

Reverse Fault

Shear (zone)

Silicified

Soil sampling

Strike

Strike slipfault

Stringer

Subcrop

Syncline

Unconformity

Vein

Rotary Air Blast (as related to drilling) - A drilling technique in which the sample

is returned to the surface outside the rod string by compressed air.

Reverse Circulation (as relating to drilling) - A drilling technique in which the

cuttings are recovered through the drill rods thus minimising sample losses

and contamination.

In-situ mineral occurrence from which valuable or useful minerals may be

recovered, but from which only a broad knowledge of the geological character

of the deposit is based on relatively few samples or measurements.

A fracture in rocks in which the strata above the fracture have been displaced

up the fracture plane relative to the strata below the fracture.

A zone in which shearing has occurred on a large scale so that the rock is

crushed and brecciated.

Containing a high proportion of silicon dioxide.

Systematic collection of soil samples at a series of different locations in order to

study the distribution of soil geochemical values.

The direction or bearing of the outcrop of an inclined bed or structure on a level

surface.

Faults parallel to the strike of the rock strata.

A narrow vein or irregular filament of mineral traversing a rock mass.

The surface expression of a mostly concealed rock layer.

A fold where the rock strata dip inwards towards the axis (antonym: anticline).

Lack of parallelism between rock strata in sequential contact, caused by a time

break in sedimentation.

A narrow intrusive mineral body.

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6.2 Abbreviations

Ag Silver

As Arsenic

Au Gold

Ba Barium

Bi Bismuth

Ce Cerium

Cs Cesium

Cu Copper

g gram

kg kilogram

km kilometre

km square kilometre

Li Lithium

m metre

m square metre

m cubic metre

mm millimetre

MMI Mobile Metal Ions

Nb Niobium

Pb Lead

t tonne

oz troy ounce, equivalent to 31.103477g.

ppb parts per billion

ppm parts per million

Ta Tantalum

Zn Zinc

2

2

3


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6. INVESTIGATING ACCOUNTANT'S REPORT

27 February 2011

The Directors


11 Rafferty Close

Mandurah WA 6210

Dear Sirs

This report has been prepared at the request of the Directors of Lithex Resources Limited (" " or “

”) for inclusion in a Prospectus to be dated on or around 10 February 2011 (“the Prospectus”)

relating to the proposed issue by Lithex of 10,000,000 shares to be issued at a price of 20 cents per share to

raise $2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be

issued at 20 cents per share to raise up to a further $2,000,000.

This report has been prepared to provide investors with information on historical results and the assets and

liabilities of Lithex. This report does not address the rights attaching to the securities to be issued in

accordance with the Prospectus, nor the risks associated with the investment. Rothsay Consulting Services

Pty Ltd has not been requested to consider the prospects for Lithex, the securities on offer and related

pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has not

done so, nor purports to do so. Rothsay Consulting Services Pty Ltd accordingly, takes no responsibility for

those matters or for any matter or omission in the Prospectus, other than responsibility for this report.

Lithex was incorporated on 30 October 2009 with the issue of 10 ordinary share of $0.20. On 11 February

2010, 11,000,000 ordinary shares were issued to the founders and advisers at 0.01 cents ($11,000). On 25

February 2010, 5,000,000 ordinary shares were issued to seed investors at 5 cents ($250,000) On 1 May

2010 1,360,000 ordinary shares were issued to seed investors at 5 cents ($68,000) and on 28 September

2010 770,000 ordinary shares were issued to seed investors at 5 cents ($38,500). On 9 December 2010 a

further 100,000 ordinary shares were issued to the vendors for nil consideration. On 22 December 2010

6,380,000 of the founder and adviser shares were cancelled. On 25 January 2011 780,000 ordinary shares

were issued to seed investors at 10 cents ($78,000). On 31 January 2011 3,000,000 ordinary shares were

issued to seed investors at 16 cents ($480,000)

The seed investors have 7,130,000 attached options exercisable at 20 cents each expiring 30 June 2015.

RE: INDEPENDENT ACCOUNTANT'S REPORT

1. Introduction

Lithex the

Company

2. Basis of Preparation

3. Background

th

INVESTIGATING ACCOUNTANT'S REPORT

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Potential investors should read the Prospectus in full and note the value attributed to the exploration

properties acquired.

Details on all contracts entered into between Lithex and other parties are outlined in the Material Contracts

section of the Prospectus.

You have requested Rothsay Consulting Services Pty Ltd prepare an Independent Accountant's Report on:

(a) The statement of financial position of Lithex as at 30 September 2010;

(b) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include

funds to be raised by the Prospectus; and

(c) The pro-forma statement of financial position of Lithex as at 30 September 2010 adjusted to include

funds to be raised by the Prospectus and the maximum amount of over subscriptions.

We have examined the financial statements and other relevant information and made such enquiries, as we

considered necessary for the purposes of this report. The scope of our examination was substantially less

than an audit examination conducted in accordance with Australian Auditing Standards and accordingly, we

do not express such an opinion. Our examination included:

(i) Discussions with Directors and other key management of Lithex;

(ii) A review of the accounts of Lithex;

(iii) A review of publicly available information; and

(iv) A review of work papers, accounting records and other documents.

In our opinion, the proforma statement of financial position as set out in Appendix 1 presents fairly, the

proforma statement of financial position of Lithex as at 31 August 2010 in accordance with the accounting

methodologies required by Australian Accounting Standards on the basis of assumptions and transactions

set out in Appendix 2.

To the best of our knowledge and belief, there have been no other material items, transactions or events

subsequent to 31 August 2010, that have come to our attention during the course of our review which would

cause the information included in this report to be misleading.

4. Scope of Examination

5. Opinion


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6. Other matters

ROTHSAY CONSULTING SERVICES PTY LTD

Graham R Swan FCA MAICD

Director

At the date of this report, Rothsay Consulting Services Pty Ltd does not have any material interest in Lithex

either directly or indirectly, or in the outcome of the offer. Rothsay Chartered Accountants have been

appointed auditors of Lithex. Apart from this report, Rothsay Consulting Services Pty Ltd was not involved in

the preparation of any other part of the Prospectus, and accordingly, make no representations or warranties

as to the completeness and accuracy of any information contained in any other part of the Prospectus.

Rothsay Consulting Services Pty Ltd has consented to the inclusion of this report (including Appendices 1 to

3) in the Prospectus in the form and content in which it is included. At the date of this report, this consent

has not been withdrawn.

Yours faithfully

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Note

Audited

30 Sept

2010

Pro- forma

30 Sept

2010

Pro-forma

including

over sub-

scriptions

30 Sept

2010

$ $ $

Current Assets

Cash Assets 3 101,284 2,222,508 4,097,508

Trade and other receivables 247 247 247

Total Current Assets 101,531 2,222,755 4,097,755

Non-Current Assets

Capitalised tenement acquisitioncosts 4 40,000 1,706,000 1,706,000

Total Non-Current Assets 40,000 1,706,000 1,706,000

Current Liabilities

Trade and other payables 73,147 73,147 73,147

Borrowings - - -

Total Current Liabilities 73,147 73,147 73,147

Net Assets 68,384 3,855,608 5,730,608

Equity

Contributed equity 5 350,607 4,221,607 6,096,607

Accumulated losses (282,223) (365,999) (365,999)

Total Equity 68,384 3,855,608 5,730,608

To be read in conjunction with Appendix 3

INDEPENDENT ACCOUNTANT'S REPORT

APPENDIX 2

CONDENSED STATEMENTS OF FINANCIAL POSITION

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1. Statement of Significant Accounting Policies

(a) Statement of Compliance

The financial information has been prepared in accordance with the measurement requirements, but

not the disclosure requirements, of the Australian Accounting Standards (AASBs) of the Australian

Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act

2001.

(b) Basis of Accounting

The financial information has been prepared on an accruals basis and is based on historical costs in

accordance with Australian Accounting Standards, Australian Accounting Interpretations, other

authoritative pronouncements of the Australian Accounting Standards Board.

(c) Revenue Recognition

Interest revenue is recognised on a time proportionate basis that takes into account the effective

yield on the financial assets.

(d) Income Tax

The income tax expense or revenue for the year is the tax payable on the current year's taxable

income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred

tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively

enacted at the end of the reporting period in the countries where the Company's subsidiaries and

associated operate and generate taxable income. Management periodically evaluates positions

taken in tax returns with respect to situations in which applicable tax regulation is subject to

interpretation. It establishes provisions where appropriate on the basis of amounts expected to be

paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising

between the tax bases of assets and liabilities and their carrying amounts in the consolidated

financial statements. However, the deferred income tax is not accounted for if it arises from initial

recognition of an asset or liability in a transaction other than a business combination that at the time

of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is

determined using tax rates (and laws) that have been enacted or substantially enacted by the

reporting date and are expected to apply when the related deferred income tax asset is realised or the

deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if

it is probable that future taxable amounts will be available to utilise those temporary differences and

losses.

INDEPENDENT ACCOUNTANT'S REPORT

APPENDIX 2

NOTES TO THE STATEMENTS OF FINANCIAL POSITION

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Deferred tax liabilities and assets are not recognised for temporary differences between the carrying

amount and tax bases of investments in controlled entities where the parent entity is able to control

the timing of the reversal of the temporary differences and it is probable that the differences will not

reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current

tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset

and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items

recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised

in other comprehensive income or directly in equity, respectively.

(e) Impairment of Assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and

are tested annually for impairment, or more frequently if events or changes in circumstances indicate

that they might be impaired. Other assets are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is

recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the

purposes of assessing impairment, assets are grouped at the lowest levels for which there are

separately identifiable cash inflows which are largely independent of the cash inflows from other

assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that

suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

(f) Investments and Other Financial Assets

The Company classifies its investments in the following categories: financial assets at fair value

through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale

financial assets. The classification depends on the purpose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and, in the case of

assets classified as held-to-maturity, re-evaluates this designation at each reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that

are not quoted in an active market. They are included in current assets, except for those with

maturities greater than 12 months after the reporting date which are classified as non-current assets.

Loans and receivables are included in trade and other receivables in the statement of financial

position. Loans and receivables are carried at amortised cost using the effective interest method.

(g) Plant and Equipment

All plant and equipment is stated at historical cost less depreciation. Historical cost includes

expenditure that is directly attributable to the acquisition of the items.For

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Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will flow

to the Company and the cost of the item can be measured reliably. The carrying amount of any

component accounted for as a separate asset is derecognised when replaced. All other repairs and

maintenance are charged to the statement of comprehensive income during the reporting period in

which they are incurred.

Depreciation of plant and equipment is calculated using the reducing balance method to allocate

their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the

case of leasehold improvements and certain leased plant and equipment, the shorter lease term. The

rates vary between 20% and 40% per annum.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each

reporting date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's

carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These

are included in the statement of comprehensive income. When revalued assets are sold, it is

Company policy to transfer the amounts included in other reserves in respect of those assets to

retained earnings.

(h) Exploration and Evaluation Costs

Exploration and evaluation costs are written off in the year they are incurred apart from acquisition

costs which are carried forward where right of tenure of the area of interest is current and they are

expected to be recouped through the sale or successful development and exploitation of the area of

interest or, where exploration and evaluation activities in the area of interest have not reached a

stage that permits reasonable assessment of the existence of economically recoverable reserves.

Where an area of interest is abandoned or the directors decide that it is not commercial, any

accumulated acquisition costs in respect of that area are written off in the financial period the

decision is made. Each area of interest is reviewed at the end of each accounting period and

accumulated costs are written off to the extent that they will not be recoverable in the future.

(i) Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Company prior to the end

of the financial period which are unpaid. The amounts are unsecured, non-interest bearing and are

paid on normal commercial terms.

(j) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are

subsequently measured at amortised cost. Any difference between the proceeds (net of transaction

costs) and the redemption amount is recognised in the statement of comprehensive income over the

period of the borrowings using the effective interest method. Fees paid on the establishment of loan

facilities are recognised as transaction costs of the loan to the extent that it is probable that some or

all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the

extent there is no evidence that it is probable that some or all of the facility will be drawn down, the

fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to

which it relates.

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The fair value of the liability portion of a convertible bond is determined using a market interest rate

for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost

basis until extinguishment on conversion or maturity of the bonds. The remainder of the proceeds is

allocated to the conversion option. This is recognised and included in shareholders' equity.

Borrowings are removed from the statement of financial position when the obligation specified in the

contract is discharged, cancelled or expired. The difference between the carrying amount of a

financial liability that has been extinguished or transferred to another party and the consideration

paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income

or finance cost.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer

settlement of the liability for atleast 12 months after the reporting date.

(k) Employee Benefits

Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be

settled within 12 months of the reporting date are recognised in other payables in respect of

employees' services up to the reporting date and are measured at the amounts expected to be paid

when the liabilities are settled.

(l) Contributed Equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a

deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new

shares or options for the acquisition of a business are not included in the cost of the acquisition as

part of the purchase consideration.

(m) Goods and services Tax

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST

incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost

of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net

amount of GST recoverable from, or payable to, the taxation authority is included with other

receivables or payables in the statement of financial position.

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2. Actual and Proposed Transactions to Arrive at Proforma Statement of Financial

Position

Actual and proposed transactions adjusting the 30 September 2010 Audited Statement of Financial Position

in the pro-forma Statement of Financial Position are as follows:

Note

Audited

30 Sept 2010

Pro -forma

30 Sept 2010

Pro-forma

including

over sub-

scriptions

30 Sept 2010

$ $ $

3. Cash and Cash EquivalentsAt 30 September 2010 101,284 101,284 101,284

Issue of seed capital (e) 78,000 78,000

Issue of seed capital (f) 480,000 480,000

Payments to suppliers & employees (g) (83,776) (83,776)

Issue of Shares pursuant toprospectus (a) - 2,000,000 4,000,000Payment of fundraising costs (b) - (287,000) (412,000)Payment of tenement acquisitioncosts (c) - (66,000) (66,000)

101,284 2,222,508 4,097,508

Capitalised Tenement AcquisitionCostsAt 30 September 2010 40,000 40,000 40,000Cash payment to vendors (c) - 66,000 66,000Shares issued to Vendors (d) 1,600,000 1,600,000

40,000 1,706,000 1,706,000

4.

80


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Note

Audited

30 Sept 2010

Pro -forma

30 Sept 2010

Pro-forma

including

over sub-

scriptions

30 Sept 2010

5. Contributed EquityAt 30 September 2010 350,607 350,607 350,607Issue of seed capital (e) 78,000 78,000Issue of seed capital (f) 480,000 480,000Issue of Shares pursuant toProspectus (a) - 2,000,000 4,000,000Payment of fundraising costs (b) - (287,000) (412,000)Shares issued to vendors (d) - 1,600,000 1,600,000

350,607 4,221,607 6,096,607

a) The issue of 10,000,000 ordinary shares at 20 cents each pursuant to this Prospectus to raise

$2,000,000. The Company may accept oversubscriptions of up to a further 10,000,000 shares to be

issued at 20 cents per share to raise up to a further $2,000,000;

b) The payment of fundraising costs estimated at $287,000 on 10,000,000 shares, and $412,000 on

20,000,000 shares;

c) Cash payment of $66,000 to a vendor for tenement acquisition;

d) The issue of 8,000,000 ordinary shares to vendors, at a deemed cost of 20 cents per share, for a total

cost of $1,600,000, as consideration for tenement acquisitions;

e) The issue of 780,000 ordinary shares at 10 cents per share to seed investors;

f) The issue of 3,000,000 ordinary shares at 16 cents per share to seed investors;

g) Payments to suppliers and employees in the period to the issue of the prospectus;

Based on discussions with the Directors and legal advisors, to our knowledge, the Company has contingent

liabilities as noted by proforma adjustments (c) to (e) upon Listing. These payments of cash and issues of

shares and options all relate to tenement acquisition agreements entered into by the Company.

Based on discussions with the Directors the Company has exploration commitments of $279,000 in the first

year to maintain its exploration permits in good standing. Additional exploration expenditure is likely to

occur on a discretionary basis.

8. Contingent Liabilities

9. CommitmentsFor

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7. SOLICITOR'S REPORT ON TENEMENTS

9 February 2011

The Directors

Lithex Resources Ltd

11 Rafferty Close

MANDURAH WA 6210

Dear Sirs

This report is prepared for inclusion in a prospectus ( ) to be dated on or about 14 February 2011

for issue by Lithex Resources Limited ACN 140 316 463 ( ) of 10,000,000 shares at an issue price of

20 cents ($0.20) per share to raise $ 2,000,000 with provision for oversubscriptions of a further 10,000,000

Shares to raise up to a further $2,000,000.

This Report relates to various mining tenements in Western Australia held by the

Company. The WA Tenements are set out in full in the Tenements Schedule at the end of this

Report.

We have conducted the following searches and enquiries on 6 February 2011:

(a) searches of the WA Tenements in the register maintained by the Department of Mines and Petroleum

of Western Australia pursuant to the Mining Act 1978 (WA) );

(b) quick appraisal searches of the WA Tenements obtained on-line from the Tengraph system

maintained by the DMP; and

(c) searches of the native title application summaries maintained by the National Native Title Tribunal

( ) in relation to those native title claims which affect the Tenements.

Solicitor's Report

Prospectus

Company

(WA Tenements)

(Schedule)

(DMP) (Mining Act (WA)

NNTT

1 Searches

SOLICITOR'S REPORT ON TENEMENTS

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Based on our searches and enquiries and subject to the statements set out below, we confirm at the date of

the searches:

(a) the details of the WA Tenements referred to in the Schedule are accurate as to the status and

registered holders of those tenements;

(b) all applicable rents due in respect of the WA Tenements under the Mining Act (WA) have been paid;

and

(c) none of the WA Tenements are subject to any unusual conditions of a material nature other than as

disclosed in the Schedule.

In preparing this Report:

(a) we have relied on the information provided as a result of the searches which we have made or caused

to be made of the register and the Tengraph system maintained by DMP and the register maintained

by the NNTT being accurate and complete;

(b) where compliance with requirements necessary to maintain a WA Tenement in good standing or a

possible claim in respect of a WA Tenement is not disclosed on the face of the searches referred to

above, we express no opinion on that compliance or claim;

(c) where any agreement, dealing or act (including disturbing the land for exploration or mining) in a WA

Tenement requires an authorisation, approval, permission or consent ( ) under the

Mining Act (WA), any regulations made thereunder or any other relevant legislation, we have

assumed that Authorisation has been or will be granted in due course;

(d) where any dealing in a WA Tenement has been lodged for registration but is not yet registered, we

express no opinion as to whether the registration will be effected, or the consequences of non-

registration;

(e) we have assumed that the Company has complied with all applicable provisions of the Mining Act

(WA) and all other legislation relating to the WA Tenements;

(f) we have not researched the underlying land tenure in respect of the WA Tenements to determine if

native title rights have or have not been extinguished, or the extent of any extinguishment;

2 Assumptions and qualifications

Authorisation

(g) we have not undertaken the extensive research necessary to establish if native title claims may be

made in the future over the area of the WA Tenements; and

(h) we have not researched the area of the WA Tenements to determine if there are any registered or

unregistered sites of significance to aboriginal people within the area.


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3 WA Tenements

The WA Tenements comprise both applications for and granted exploration licences and one mining lease

application.

Each granted WA Tenement is subject to standard conditions including conditions requiring the holder to

pay rent, meet certain expenditure and reporting obligations, pay necessary government royalties on

minerals mined, obtain the consent of the relevant officer of the DMP prior to conducting any ground

disturbing work, basic environmental and rehabilitation conditions for minor disturbances, and prohibitions

or restrictions on disturbing existing infrastructure such as roads and powerlines. Additional specific

conditions are set out in the Schedule.

Significant amendments to the Mining Act (WA) ( ) came into operation on 10 and 11 February

2006. The Amendments fundamentally affect the administration of mining tenements in Western Australia.

The exploration licences were applied for or granted both prior to and after the Amendments. All were

granted with 5 year terms. The terms of those applied for prior to the Amendments may be extended for up

to 4 years in prescribed circumstances and further periods of 1 year in exceptional circumstances. The terms

of those exploration licences applied for and granted after the Amendments may be extended for a further

period of 5 years, and thereafter for further periods of 2 years.

Exploration licences applied for prior to the Amendments carry an obligation on the holder to relinquish 50%

of the area of the tenements at the end of its 3 year and again at the end of the 4 year of their grant.

Exemptions from that requirement may be obtained.

An exploration licence applied for and granted after the Amendments came into operation will be subject to

a requirement that the holder must relinquish 40% of the area of an exploration licence at the end of the 5

year of the term of the exploration licence. This relinquishment requirement may be deferred for one year

but not avoided.

Ministerial consent is required under the Mining Act (WA) before any legal or equitable interest in an

exploration licence can be created or dealt with during the first year of the term of the licence. An

agreement to sell an interest may be entered into provided that it is subject to a condition requiring the

consent of the Minister.

Amendments

rd th

th

The Mining Act (WA) gives the holder of an exploration licence the right to apply for a mining lease (or mining

leases) over the area the subject of the exploration licence. The grant of any mining lease is subject to

compliance with the Mining Act (WA). A mining lease may only be applied for over land where, at minimum,

a mineral resource (not to a JORC standard) exists or if a mining proposal has been lodged with the

application.

Mining leases are granted for a period of 21 years, renewable for a further 21 years. Ministerial consent is

required under the Mining Act (WA) prior to assigning an interest in a mining lease.


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The Schedule sets out a brief description of the WA Tenements and a summary of any encumbrances and

material conditions.

In relation to the Schedule, we make the following comments:

(a) references to the areas of the WA Tenements are taken from the details shown on the searches, it is

not possible to verify those areas without conducting a survey which has not been undertaken;

(b) exploration licences are measured by graticular blocks which, depending on where the licence is

located, range in area from approximately 2.8 km to 3.3km ; and

(c) the rights of a holder of the WA Tenements is subject to compliance by that holder with the terms and

conditions under the Mining Act (WA) and regulations made thereunder and the conditions

specifically set out in the grant of the relevant WA Tenement.

In (1992 175 CLR 1) the Australian common law recognised a form of native title

giving Aboriginal people certain rights to their traditional lands. The rights recognised in native title may

vary from place to place and from people to people but in each case will originate in customary rights and the

Aboriginal group claiming the rights must have maintained a traditional connection with the land.

Native title rights may be extinguished voluntarily or by legislative or executive action inconsistent with the

native title such as the grant of a freehold interest in land. Native title may also be partially extinguished by

the grant of rights over native title land not wholly inconsistent with native title rights. Where native title

has been partially extinguished, it will co-exist with other rights to the land.

The (Cth) ( ) was enacted in response to the common law recognition of

native title. Among other things, the Native Title Act:

(a) provides a procedure for the recognition of native title claims in the Federal Court;

(b) confirms the validity of titles granted by the Federal Government prior to the commencement of the

Native Title Act and provides for the States and Territories to validate such titles; and

(c) specifies the procedure for the grant of mining tenements which may affect native title rights.

The Native Title Act was amended in 1998 by the The Western Australian

Parliament has enacted the which adopts

the Native Title Act in Western Australia.

2 2

4 Native Title

Mabo v Queensland (No 2)

Native Title Act 1993

Native Title Amendment Act 1998.

Titles (Validation) and Native Title (Effect of Past Acts) Act 1995

Native Title Act


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5 Native Title Claims

6 Validity of titles

7 Aboriginal Heritage

A person claiming to hold native title may lodge an application for determination of native title with the

Federal Court. If the claim satisfies the registration test set out in the Native Title Act (Registration Test) it

will be entered on the Register of Native Title Claims maintained by the NNTT. Registered claimants are

afforded certain procedural rights, including the "right to negotiate". Claims which fail the Registration Test

are, nevertheless heard by the Federal Court.

Native Title Claims affecting the WA Tenements have been noted in the Schedule.

The fact a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor

does the absence of a claim necessarily indicate that no native title exists over that area. The existence of

native title will be established in due course as the claims are determined by the Federal Court.

Under the Native Title Act, and subject to certain exceptions, the grant of a mining tenement on or after 1

January 1994 that affects native title is a “future act”. Mining tenements granted after 23 December 1996

that affect native title will be valid only if the applicable processes of the Native Title Act have been complied

with. We understand that the DMP has complied with such processes but have not undertaken

independent enquiries to confirm this is the case.

(Cth) (

) is aimed at the preservation and protection of any Aboriginal areas and objects that

may be located on the WA Tenements.

Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or

permanent declarations of preservation in relation to significant Aboriginal areas or objects, which

have the potential to halt exploration activities. Compensation is payable by the Minister to a person

who is, or is likely to be, affected by a permanent declaration of preservation.

It is an offence to contravene a declaration made under the Commonwealth Heritage Act.

(a) Commonwealth Legislation

Commonwealth

Heritage Act

The Aboriginal and Torres Strait Islander Heritage Protection Act 1984

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(b) Western Australia

Heritage Act

Sites that may be of spiritual, cultural or heritage significance to Aboriginal persons may be protected

by the ( ).

The Heritage Act makes it an offence to alter or damage a site of significance to Aboriginal people. The

Heritage Act provides for but does not compel the registration of such sites. It is an obligation of a

party disturbing any area of the state to ensure it does not disturb such a site.

We have not undertaken any searches or investigations as to whether there are or may be any sites

protected by the Heritage Act within the area of the WA Tenements. It is common practice for an

explorer to undertake surveys of any area that may host such sites prior to carrying out any ground

disturbing activity.

This report is given on the date set out at the commencement and unless specified to the contrary, speaks

only to the laws in force on that date.

House Legal has consented to the inclusion of this Report in the Prospectus in the form and context in which

it is included and have not withdrawn that consent before the lodgement of the Prospectus with ASIC.

Yours faithfully

House Legal

Aboriginal Heritage Act 1972

8 Consent


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Key to Holders:

DCL Duketon Consolidated Pty Ltd ACN 103 340 496

Elliss Michael Jeremy Elliss

HRL Hazelwood Resources Ltd ACN 118 738 999

JML JML Resources Pty Ltd ACN 126 154 256

Lithex Lithex Resources Ltd ACN 140 316 463

SBM South Boulder Mines Ltd ACN 097 904 302

Stubbs Jeanette Rae Stubbs

Each granted tenement is subject to standard conditions including conditions requiring the holder to obtain

the consent of the relevant officer of the Department of Mines and Petroleum ( ) prior to conducting

any ground disturbing work, basic environmental and rehabilitation conditions (such as the removal of all

waste, capping of drill holes etc) and prohibitions or restrictions on disturbing existing infrastructure such as

roads and survey stations. In addition to these conditions, the following applies.

1. The area of this tenement is subject to the Wajarri Yamatji (WAD6033/98; WC04/10) registered native

title claim.

2. The area of this tenement is subject to the Gnulli (WAD6161/98; WC97/028) registered native title

claim.

3. This tenement was recommended for grant on 20 March 2008.

4. The area of this tenement is subject to the Njamal (WAD6028/98; WC99/008) registered native

title claim.

Notes

DMP

5. No exploration or mining may be carried out on Public Utility and Stopping Place for Travellers

Reserve 7080 without the prior written consent of the Minister.

6. This tenement was recommended for grant on 14 January 2005.

7. No exploration to be undertaken on Timber Reserve 13665 without the prior written consent of

the Minister.

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8. No interference with the use of an Aerial Landing Ground affecting the tenement and activity on that

Aerial Landing Ground being confined to below a depth of 15m from the natural surface.

9. This tenement encroaches upon the Water Reserves 4974, 12402 and Timber Reserve 13684. No

mining may be undertaken on those reserves without the prior written consent of the Minister.

10. The area of this tenement is subject to the Njamal 10 (WAD6003/005; WC00/005) registered native

title claim.

11. The area of this tenement is subject to the Warrarn 1 (WAD0082/98; WC95/061) registered native

title claim.

12. Lithex has the right to purchase all of HRL's title to this tenement on terms set out in section 8.2 of this

Prospectus under the heading Summary of Material Contract - Arthur River Purchase Agreement.

13. Lithex has the right to purchase a 90% interest in this tenement on the terms set out in section 8.2 of

this Prospectus under the heading Summary of Material Contracts - East Kimberley Purchase

Agreement.

14. Lithex has the right to purchase a 90% interest in the tin, tantalum and lithium on this tenement on the

terms set out in section 8.2 of this Prospectus under the heading Summary of Material Contracts -

East Kimberley Purchase Agreement. The remaining mineral rights are held by Montezuma Mining

Company Ltd.

15. This tenement is held beneficially by DCL.


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8. ADDITIONAL INFORMATION

8.1 Rights Attaching to Shares

There is only one class of shares in the Company being fully paid ordinary shares. The rights attaching to

shares in the Company are:

a) set out in the constitution of the Company, a copy of which is available for inspection at the registered

office of the Company during normal business hours; and

b) in certain circumstances, regulated by the Corporations Act, the Listing Rules of ASX, the SCH

Business Rules and the general law.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This

summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of

Shareholders.

All Shares issued pursuant to this Prospectus will from the time they are issued, rank pari passu with all the

Company's existing Shares.

Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present

there are none), at meetings of Shareholders of Lithex:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative

of a Shareholder has one vote; and

(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a

Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is

appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly

paid Shares, shall have such number of votes as bears the same proportion which the amount paid

(not credited) is of the total amounts paid and payable (excluding amounts credited).

Subject to the rights of holders of shares with special rights in a winding up (at present there are none), on a

winding up of the Company all assets that may be legally distributed among members will be distributed in

proportion to the number of fully paid Shares held by them (and a partly paid share is counted as a fraction of

a fully paid share equal to the amount paid on it, divided by the total issue price of the share).

Subject to the Constitution of the Company, the Corporations Act, and any other laws and ASTC Settlement

Rules and ASX Listing Rules, Shares are freely transferable.

(a) Voting Rights

(b) Rights on Winding Up

(c) Transfer of Shares

(d) Future Increases in Capital

The allotment and issue of any Shares is under the control of the Directors. Subject to restrictions on the

allotment of Shares to Directors or their associates, the ASX Listing Rules, the Constitution of the Company

and the Corporations Act, the Directors may allot or otherwise dispose of Shares on such terms and

conditions as they see fit.

ADDITIONAL INFORMATION

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(e) Variation of Rights

(f) Dividend Rights

(a) Project Purchase Agreements

Under the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting

of Shareholders vary or abrogate the rights attaching to Shares. If at any time the share capital is divided into

different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of the

issue of the shares of that class), whether or not the Company is being wound up may be varied or abrogated

with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised

by a special resolution passed at a separate meeting of the holders of the Shares of that class.

Subject to the rights of holders of shares issued with special, preferential or qualified rights (at present there

are none), the profits of the Company which the Directors determine to distribute by way of dividend are

divisible among the holders of ordinary Shares in proportion to the number of Shares held by them.

The summary of the contracts to which the Company is a party which may be material in terms of the Offer or

the operation of the business of the Company are:

On 13 May 2010, Lithex entered into the Arthur River Purchase Agreement with Hazelwood Resources Ltd

ACN 118 738 999 ( ) whereby Lithex will purchase a 100% interest in each of Exploration Licences

09/1066 and 09/1067 ( ). Completion of the purchase is conditional upon Lithex

receiving conditional approval to be admitted to the Official List and will take place within 3 business days of

receipt of such approval.

Lithex will issue 1,000,000 Options and 2,000,000 Shares to Hazelwood as consideration for the purchase of

the Arthur River Project.

8.2 Summary of Material Contracts

Arthur River Purchase Agreement

Hazelwood

Arthur River Project

East Kimberley Purchase Agreement

DCL SBM

JML Ellis Stubbs

On 12 February 2010, Lithex entered into the East Kimberley Purchase Agreement with Duketon

Consolidated Pty Ltd ACN 103 340 496 ( ), South Boulder Mines Ltd ACN 097 904 302 ( ), JML

Resources Pty Ltd ACN 126 154 256 ( ), Michael Jeremy Elliss ( ) and Jeanette Rae Stubbs ( )

whose interest is beneficially held by Duketon. The parties subsequently agreed to vary the term of the East

Kimberley Purchase Agreement to extend the end date for settlement until 31 May 2011. The Company

issued the vendors 100,000 Shares as consideration for the extension of the end date.

Under the East Kimberley Purchase Agreement, Lithex is entitled to purchase a 90% interest in each of

Exploration Licences 45/2375, 45/3172, 45/3354, 45/3373, 45/3424, 45/3439 and M45/1081. Completion

of the purchase is conditional upon Lithex receiving conditional approval to be admitted to the Official List

and will take place within 5 business days of receipt of such approval.

In consideration for the purchase of the tenements, Lithex will pay DCL a total of $100,000 in three tranches.

The first two, totalling $40,000, have been paid, the third, being $60,000, will be paid within 14 days of Lithex

being admitted to the Official List.

Lithex will also, on completion, issue DCL 2,300,000 Shares, Montezuma Mining Company Ltd (Montezuma)

1,500,000 Shares, JML 1,200,000 Shares, SBM 1,000,000 Shares and DCL 3,500,000 Options.

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On completion, each of the sellers' 10% remaining interest in the tenements will be free carried until Lithex

makes a decision to commence any commercial mining on the tenement. The holder of the residual 10%

interest will, at that point, elect to contribute to the cost of mining in proportion to its 10% interest (under a

joint venture to be prepared on terms that are usual in mining projects) or convert its interest to a royalty of

1.5% of gross revenue.

The rights Lithex is acquiring to E45/2375 are limited to the rights to explore for and mine tin, tantalum and

lithium only, with rights to the remaining minerals being retained by Montezuma (with respect to 90%) and

SBM (with respect to 10%).

On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Mandanici (Service

Agreement).

Under the Agreement, Mr Mandanici is engaged by the Company to provide services to the Company in the

capacity of Managing Director and CEO, and is entitled to be paid an annual salary of $180,000 (inclusive of

superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one

year's continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous

and satisfactory service.

The Agreement is effective from Lithex's admission to the Official List of the ASX and continues until

terminated by either Mr Mandanici or the Company. Mr Mandanici is entitled to a minimum notice period of

3 months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr

Mandanici.

(b) Executive Service Agreement - Robert Mandanici

(c) Executive Service Agreement - Steven Crabbe

(d) Engagement Letters - Non -Executive Director

On 8 January 2010 the Company entered into an Executive Service Agreement with Mr Crabbe (Service

Agreement).

Under the Agreement, Mr Crabbe is engaged by the Company to provide services to the Company in the

capacity of Technical Director, and is entitled to be paid an annual salary of $50,000 (inclusive of

superannuation entitlement) and to receive a performance incentive of 1,000,000 shares at the end of one

year's continuous and satisfactory service and a further 1,000,000 shares at the end of two years continuous

and satisfactory service.

The Agreement is effective from Lithex's admission to the Official List of the ASX and continues until

terminated by either Mr Crabbe or the Company. Mr Crabbe is entitled to a minimum notice period of 3

months from the Company and the Company is entitled to a minimum notice period of 3 months from Mr

Crabbe.

Pursuant to letter agreements between the Company and Mr Carson, dated 2 June 2010, appointment to the

Board as Chairman was confirmed.

In consideration for the services provided by Mr Carson, the Company will pay him $45,000 per annum

(inclusive of superannuation entitlement) from the date of Admission to the Official List, and to receive a

performance incentive of 500,000 shares at the end of one year's continuous and satisfactory service. A Non-

Executive Director is entitled to fees or other amounts as the Board determines where they perform special

duties or otherwise perform services outside the scope of the ordinary duties of a Director. They may also be

reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.


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Director No. of Shares No. of Options

Malcolm Carson 500,000 Nil

Robert Mandanici 1,970,000 Nil

Steven Crabbe 2,500,000 500,000

94

(e) Ascot Securities Pty Ltd Letter of Engagement

By letter dated 8 December 2010, Lithex engaged Ascot Securities Pty Ltd (Ascot) to act as Lead Manager &

Corporate Advisor. The company will pay the lead manager, Ascot Securities Pty Ltd (AFSL: 246718) a

management fee of $60,000 plus GST and a commission of 6% plus GST on the total amount raised under the

offer. Out of the commission, Ascot Securities Pty Ltd may pay other Australian Financial Service Licence

holders a fee for Applications bearing their stamp.

Except as disclosed in this Prospectus, no Director holds, or during the last two years has held any interest in:

(a) the formation or promotion of Lithex Resources Ltd;

(b) property acquired or proposed to be acquired by Lithex in connection with its formation or promotion

of the Offer; or

(c) the Offer,

and no amounts of any kind (whether in cash, Shares or otherwise) have been paid or agreed to be paid to

any Director to induce him to become or to qualify as a Director or otherwise for services rendered by him in

connection with the formation or promotion of Lithex or the Offer.

The Directors are not required to hold any Shares in Lithex under the constitution of Lithex.

At the date of this Prospectus the relevant interests of each of the Directors in the Shares of the Company are

as follows:

Nothing in this Prospectus precludes Directors, officers or employees of Lithex from applying for Shares

under this Prospectus.

Pursuant to the Employment Agreement, the Directors have arranged for Mr Mandanici to provide his

services as Managing Director of Lithex. Lithex will pay Mr Mandanici at an annual salary of $180,000

(inclusive of superannuation guarantee).

Mr Carson will receive director's fees of $45,000 per annum (inclusive of superannuation guarantee).

Mr Crabbe will receive director's fees of $50,000 per annum (inclusive of superannuation guarantee).

8.3 Interests of Directors of the Company

Directors' Shareholdings

Directors' Remuneration


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8.4 Interests of Persons Named in this Prospectus

8.5 Consents

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as

performing a function in a professional, advisory or other capacity in connection with the preparation or

distribution of this Prospectus has, or has had within the two years before lodgement of this Prospectus with

ASIC, any interest in:

(a) the formation or promotion of Lithex;

(b) any property acquired or proposed to be acquired by Lithex in connection with its formation or

promotion or in connection with the Offer; or

(c) the Offer.

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given

to any of those persons for services rendered by them in connection with the formation or promotion of the

Company or the Offer.

Rothsay Consulting Services Pty Ltd will receive professional fees of $7,000 for accounting services in

connection with this Prospectus including the provision of the Investigating Accountant's Report.

Rothsay Chartered Accountants will act as auditors of the Company for which they will be paid at their usual

commercial rates. Rothsay have not provided any other services to the Company since incorporation.

Al Maynard & Associates will receive professional fees of $10,000 for the provision of the Independent

Geologist's Report.

House Legal will receive professional fees of $10,000 for the provision of the Solicitor's Report included in

Section 7 of this Prospectus.

Steinepreis Paganin will receive professional fees of $10,000 for the provision of professional services in

relation to the preparation of this Prospectus.

Security Transfer Registrars Pty Ltd has been appointed as the Company's share registry and will be paid for

these services on normal commercial terms.

The following persons have each consented to being named in the Prospectus and to the inclusion of the

following statements and statements identified in this Prospectus as being based on statements made by

those persons, in the form and context in which they are included, and have not withdrawn that consent

before lodgement of this Prospectus with ASIC:

In addition, Security Transfer Registrars Pty Ltd and Steinepreis Paganin have each consented to being named

in the Prospectus in the form and context in which they are included, and have not withdrawn that consent

before lodgement of this prospectus with ASIC.

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and

takes no responsibility for any part of this Prospectus other than the statements referred to above and the

statements identified in this Prospectus as being based on statements made by those persons.

• Al Maynard & Associates - Independent Geologist's Report;

• Rothsay Consulting Services Pty Ltd - Investigating Accountant's Report; and

• House Legal - Solicitor's Report on Title and Section 8.2 (a)-(b).


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The following persons have consented to being named in this Prospectus but, except as noted above, have

not made any statements that are included in this Prospectus or statements identified in this Prospectus as

being based on any statements made by those persons, and have not withdrawn their consent before

lodgement of this Prospectus with ASIC:

To the maximum extent permitted by law, each of the persons referred to above expressly disclaims and

takes no responsibility for any part of this Prospectus other than the references to their name.

It is estimated that Lithex will pay the following costs in connection with the preparation and issue of this

Prospectus:

The acquisition and disposal of Shares in Lithex will have tax consequences which will differ depending on

the individual financial affairs of each investor. All potential investors in Lithex are urged to obtain

independent financial advice about the consequences of acquiring Shares from a taxation viewpoint and

generally.

To the maximum extent permitted by law, Lithex, its officers and each of their respective advisers accept no

liability or responsibility with respect to the taxation consequences of subscribing for Shares under this

Prospectus.

• Ascot Securities Pty Ltd - as lead manager & corporate adviser;

• House Legal - as legal adviser;

• Rothsay Chartered Accountants Pty Ltd - as auditor;

• Al Maynard & Associates - as Independent Geologist; and

• Rothsay Consulting Services Pty Ltd - as Independent Accountants;

• Security Transfer Registrars Pty Ltd - as Share Registry.

8.6 Expenses of the Offer

8.7 Taxation


Expense Cost (Min) Cost (Max)

IPO & Secretarial Services $20,000 $20,000

Brokerage & Management Fees $180,000 $300,000

Legal services $20,000 $20,000

Accounting services $7,000 $7,000

Independent Geologist’s services $10,000 $10,000

Printing & graphic design costs $15,000 $15,000

ASIC and ASX fees $30,000 $35,000

Disbursements and contingencies $5,000 $5,000

Total $287,000 $412,000

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8.8 Exposure Period

8.9 Litigation

8.10 Electronic Prospectus

8.11 Terms and Conditions of Options

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to

enable this Prospectus to be examined by market participants prior to the raising of funds. Potential

investors should be aware that this examination may result in the identification of deficiencies in the

Prospectus and, in those circumstances any Application that has been received may need to be dealt with in

accordance with Section 724 of the Corporations Act. Applications for Shares under this Prospectus will not

be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred

on persons who lodge Applications prior to the expiry of the Exposure Period.

The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors

are aware, are any such proceedings pending or threatened against the Company.

Pursuant to Class Order 00/044 ASIC has exempted compliance with certain provisions of the Corporations

Act to allow distribution of an electronic prospectus and electronic application form on the basis of a paper

prospectus lodged with ASIC, and the publication of notices referring to an electronic prospectus or

electronic application form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the

entire Prospectus accompanied by the Application Form.

If you have not, please email the Company at and the Company will send you, free of

charge, either a hard copy or a further electronic copy of the Prospectus or both.

Alternatively, you may obtain an electronic copy of the Prospectus from the Company's website at:

The Company reserves the right not to accept an Application Form from a person if it has reason to believe

that when that person was given access to the electronic Application Form, it was not provided together with

the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those

documents were incomplete or altered.

7,130,000 Options have been granted as specified in Section 1.2 on the following terms and conditions:

(a) Each option entitles the holder, to acquire one fully paid ordinary share in the Company.

(b) The Options may be exercised at any time until 5pm, 30 June 2015. Each Option may be exercised by

forwarding to the Company at its principal office the exercise notice, duly completed together with

payment of the sum of 20cents ($0.20) per Option exercised. The Options will lapse at 5pm on 30 June

2015.

(c) The Options may not be transferred.

(d) Option holders shall be permitted to participate in new issues of securities on the prior exercise of

options in which case the Option holders shall be afforded the period of at least ten business days

prior to and inclusive of the record date (to determine entitlements to the issue) to exercise the

Option.

[email protected]

www.lithex.com.au


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(e) Shares issued on the exercise of Options will be issued not more than fourteen (14) days after receipt

of a properly executed exercise notice and application moneys. Shares allotted pursuant to the

exercise of an Option will rank equally with the then issued ordinary shares of the Company in all

respects. If the Company is listed on ASX it will, pursuant to the exercise of an Option, apply to ASX for

Quotation of the Shares issued as a result of the exercise, in accordance with the Corporations Act and

the Listing Rules.

(f) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the

issued capital of the Company, all rights of the Option holder will be charged to the extent necessary

to comply with the Listing Rules applying to the reconstruction of capital at the time of the

reconstruction.

(g) If there is a bonus issue to Shareholders, the number of Shares over which the Option is exercisable

may be increased by the number of Shares which the holder of the Option would have received if the

Option had been exercised before the record date for the bonus issue.

(h) In the event that a pro rata issue (except a bonus issue) is made to the holders of the underlying

securities of the Company, the exercise price of the Options may be reduced in accordance with

Listing Rule 6.22.

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds

to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and

that with respect to any other statements made in this Prospectus by persons other than Directors, the

Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that

persons making the statement or statements were competent to make such statements, those persons have

given their consent to the statements being included in this Prospectus in the form and context in which they

are included and have not withdrawn that consent before lodgement of this Prospectus with ASIC, or to the

Directors' knowledge, before any issue of Shares pursuant to this Prospectus.

The Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to

likely investors or their professional advisers.

Each of the Directors of Lithex Resources Ltd has consented to the lodgement of this Prospectus in

accordance with Section 720 of the Corporations Act and has not withdrawn that consent.

Dated 9 March 2011

Signed for and on behalf of

8.12 Consent by the Directors


Robert Mandanici


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GLOSSARY OF NAMES AND TERMS

9. GLOSSARY OF NAMES AND TERMS

Applicant

Application

Application Form

Application Monies

ASIC

ASTC

ASX

Auditors

Board

Business Day

CHESS

Closing Date

Company or Lithex

Corporations Act

Directors

Dollars or $

Exposure Period

Independent Accountant

Independent Accountant's Report

Independent Geologist

Independent Geologist's Report

Issue

Listing Rules

a person who submits an Application.

a valid application to subscribe for Shares.

the application form attached to and forming part of this

Prospectus.

monies received by Lithex from Applicants.

Australian Securities and Investments Commission.

ASX Settlemenat and Transfer Corporation Pty Ltd

ACN 008 504 532.

ASX Limited ACN 008 624 691

Rothsay Chartered Accountants Pty Ltd.

the board of Directors unless the context indicates otherwise.

Monday to Friday inclusive, except New Year's Day, Good Friday,

Easter Monday, Christmas Day, Boxing Day, and any other day

that ASX declares is not a business day.

ASX Clearing House Electronic Subregistry System.

5.00pm WST on 6 May 2011.

Lithex Resources Limited ACN 140 316 463

the (Cth) of Australia.

the directors of the Company from time to time.

Australian dollars unless otherwise stated.

the period of 7 days after the date of lodgement of this

Prospectus, which period may be extended by ASIC by not more

than seven (7) days pursuant to Section 727(3) of the

Corporations Act.

Rothsay Consulting Pty Ltd

the report contained in Section 6 of this Prospectus.

Al Maynard & Associates.


funds raised in accordance with this Prospectus.

Listing Rules of the ASX.

Corporations Act 2001

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Offer

Offer Period

Official List

Opening Date

Option

Prospectus

Quotation

Share

Shareholder

Share Registrar

Solicitor's Report on the Tenements

WST

the offer of up to 10,000,000 Shares pursuant to this

Prospectus.

the period commencing on the Opening Date and ending on the

Closing Date.

the Official List of the ASX.

the date on which the Offer opens.

an option to acquire 1 Share

this prospectus dated 9 March 2011 for the issue of 10,000,000

Shares at 20 cents including any electronic or online version.

quotation of the Shares on ASX.

1 fully paid ordinary share in Lithex.

a holder of Shares.

Security Transfer Registrars Pty Ltd (ACN 008 894 488)


Western Standard Time, Perth, Western Australia

GLOSSARY OF NAMES AND TERMS

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SHARE REGISTRY:Security Transfer Registrars Pty LtdAll Correspondence to:PO BOX 535, APPLECROSS WA 6953770 Canning Highway, APPLECROSS WA 6153T: +61 8 9315 2333 F: +61 8 9315 2233E: [email protected]: www.securitytransfer.com.au

LITHEX RESOURCES LIMITEDACN: 140 316 463

APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

E & O.E.

LIT 5

REGISTRY DATE STAMPDeclaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate.(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the

Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribefor Securities in the

Company and that no notice of acceptance of the application will be provided.

Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM

BROKER STAMP

Broker Code

Advisor Code

(where applicable)CHESS HIN

X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.

(e.g.: THE SMITH SUPER FUND A/C)Account Designation

< >

Shares at AUD $0.20 per share

Contact Number

( )Contact Name

Email Address

@

Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)

I/We apply for:

, , AI/We lodge full application of monies of:

$ , , .or such lesser number of Shares which may be allocated to me/us by their Directors.

Title (e.g.: Dr, Mrs) Given Name(s) or Company NameFull Name of Applicant / Company

Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #2


Unit Street Number Street Name or PO BOXPostal Address

/

PostcodeStateSuburb/Town/City

Country Name (if not Australia)

*I am a South Boulder Mines Ltd

Montezuma Mining Company Ltd shareholder and my HIN/SRN is:

*NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for thePriority to apply.

9999444422229999333377773333777744448888

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APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.

PAYMENTAll cheques should be made payable to LITHEX RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency w ill NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:

Posted to: OR Delivered to:Lithex Resources Limited Lithex Resources LimitedC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153

Applications must be received by no later than 5.00pm (WST) on the Closing Date 6 May 2011 which may be changed immediately after the Opening Date at any time andat the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.

CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to LithexResources Limited. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.

Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.

Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams

Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>

Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or

<Estate John Smith A/C> John Smith Deceased

Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>

Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith

<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund

<JSuper Fund A/C>

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 9 MARCH 2011 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.

PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for s ecurities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

6666444422228888333377773333777744444444

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SHARE REGISTRY:Security Transfer Registrars Pty LtdAll Correspondence to:PO BOX 535, APPLECROSS WA 6953770 Canning Highway, APPLECROSS WA 6153T: +61 8 9315 2333 F: +61 8 9315 2233E: [email protected]: www.securitytransfer.com.au

LITHEX RESOURCES LIMITEDACN: 140 316 463

APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

E & O.E.

LIT 5

REGISTRY DATE STAMPDeclaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate.(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute and documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the

Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribefor Securities in the

Company and that no notice of acceptance of the application will be provided.

Before completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORM

BROKER STAMP

Broker Code

Advisor Code

(where applicable)CHESS HIN

X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.

(e.g.: THE SMITH SUPER FUND A/C)Account Designation

< >

Shares at AUD $0.20 per share

Contact Number

( )Contact Name

Email Address

@

Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)

I/We apply for:

, , AI/We lodge full application of monies of:

$ , , .or such lesser number of Shares which may be allocated to me/us by their Directors.

Title (e.g.: Dr, Mrs) Given Name(s) or Company NameFull Name of Applicant / Company



Unit Street Number Street Name or PO BOXPostal Address

/

PostcodeStateSuburb/Town/City

Country Name (if not Australia)

*I am a South Boulder Mines Ltd

Montezuma Mining Company Ltd shareholder and my HIN/SRN is:

*NOTE: These boxes apply to STB and MZM holders ONLY and must be marked for thePriority to apply.

9999444422229999333377773333777744448888

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APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 2,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.

PAYMENTAll cheques should be made payable to LITHEX RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency w ill NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:

Posted to: OR Delivered to:Lithex Resources Limited Lithex Resources LimitedC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153

Applications must be received by no later than 5.00pm (WST) on the Closing Date 6 May 2011 which may be changed immediately after the Opening Date at any time andat the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.

CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to LithexResources Limited. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.

Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.

Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams

Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>

Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or

<Estate John Smith A/C> John Smith Deceased

Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>

Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith

<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund

<JSuper Fund A/C>

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 9 MARCH 2011 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of Fully Paid Shares in Lithex Resources Limited pursuant to the Prospectus dated 9 March 2011.

PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for s ecurities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

6666444422228888333377773333777744444444

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This is an important document which should be read in its entirety.

You may wish to consult your professional advisor about the contents of this prospectus,

an investment in shares offered by this prospectus should be considered as speculative

Prospectus

ASCOT SECURITIES PTY. LTD.L E A D M A N A G E R

For the issue of 10,000,000 Shares at an issue price of 20 cents each

to raise $2,000,000.

Oversubscriptions of up to a further 10,000,000 Shares at an issue price of

20 cents each to raise up to a further $2,000,000 may be accepted.

ACN 140 316 463


11 Rafferty Close

MANDURAH WA 6210



Tel: (08) 9583 5109

Fax: (08) 9264 8207

ACN 140 316 463

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Documents

Lithex Resources Limited