Mr. Peter Oliver reports

TALISON LITHIUM ANNOUNCES PRELIMINARY FISCAL YEAR 2011 PRODUCTION RESULTS

Talison Lithium Ltd. has released its preliminary sales volume and production results for the three months and the 12 months ended June 30, 2011. The company also provided an update on its three growth projects encompassing progress in its Australian capacity expansion, lithium minerals conversion plant and South American salar exploration program.

Preliminary results

Robust growth in sales volume and record production

Compared with the previous year, fiscal 2011 sales volume increased 32 per cent to 339,501 tonnes lithium concentrate (or approximately 50,000 tonnes lithium carbonate equivalent (LCE)). Fiscal 2011 production was 342,097 tonnes lithium concentrate (approximately 51,000 tonnes LCE), a 30-per-cent year-over-year increase.

Compared with the year earlier period, fourth quarter 2011 sales volume increased 5 per cent to 92,416 tonnes lithium concentrate (approximately 14,000 tonnes LCE). The company produced a record 89,505 tonnes of lithium concentrate in fourth quarter 2011 (approximately 13,000 tonnes LCE), a 25-per-cent year-over-year increase. Sales of lithium concentrates are made in large shipments to customers, and, consequently, this may result in variations between production and sales in individual quarters.

                                       PRODUCTION
                                                                                   
                  Three months ended   Three months ended    Year ended     Year ended
                            June 30,             June 30,      June 30,       June 30,
                                2011                 2010          2011           2010

Production(i)                 89,505               71,627       342,097        262,539
Sales(i)                      92,416               88,208       339,501        256,767

Note
(i) Tonnes of lithium concentrate.

The sales volume and production figures represent continued robust growth for Talison. The company's Greenbushes lithium operation is fully utilizing the new capacity created both by its Stage 1 expansion and continuing process improvement programs. Demand remains strong for all of the company's technical and chemical-grade lithium concentrate products, and Talison continues to maintain its dominant position in the rapidly growing Chinese lithium market.

Peter Oliver, chief executive officer, commented: "We are extremely pleased with the growth in our sales volume and production. The Greenbushes lithium operation is the highest-grade lithium mineral resource in the world, and completion of the current expansion will ensure Talison is highly leveraged to a stronger lithium price in a world where security of supply is expected to become increasingly important as governments look to reduce reliance on oil imports and decrease carbon dioxide emissions."

Guidance for fiscal 2012

During fiscal year 2012, Talison expects that demand will remain strong for its entire suite of products. A full-year contribution from the Stage 1 expansion of the Greenbushes lithium operation is anticipated, and Talison expects both production and sales to be capacity constrained until completion of the Stage 2 expansion in fourth quarter fiscal year 2012.

Mr. Oliver added: "We are very optimistic about the outlook for Talison as a result of the rapidly changing supply/demand dynamics developing in the lithium industry. Recent substantial price increases from other lithium suppliers are reflective of a tightening in supply conditions while global demand remains strong. In anticipation of sustained growth in lithium consumption, driven primarily by the secondary lithium battery market, Talison is investing heavily in its three growth projects."

Growth projects

Greenbushes Stage 2 expansion on schedule and on budget

The Stage 2 expansion at the Greenbushes lithium operation is proceeding on schedule and on budget. Earthworks are largely complete, concrete was poured for the finished product stockpile and the foundation framework for the two new ball mills is being erected. The company continues to expect commissioning of the Stage 2 expansion during the second calendar quarter of 2012 (fiscal fourth quarter 2012). Upon completion, the Stage 2 expansion will double the current production capacity at Greenbushes. Total nameplate production capacity will increase to approximately 740,000 tonnes per year lithium concentrate (approximately 110,000 tonnes per year LCE).

Proposed minerals conversion plant

Responding to growing global demand for an additional secure supply of lithium carbonate, particularly from electric vehicle battery manufacturers, Talison is focusing heavily on its proposed plant to convert lithium minerals into lithium carbonate. Plant capacity is proposed to be 20,000 tonnes per year LCE in the first stage, and an additional 20,000 tonnes per year LCE in the second stage.

Basic engineering and location studies for the minerals conversion plant have commenced. The location study is evaluating several Western Australian locations, including at the Greenbushes lithium operation, and one overseas location. An external engineering consultant has been appointed to expand on previously completed scoping studies and prepare an updated estimate of capital costs. Discussions with potential customers regarding future lithium carbonate requirements and specifications are also under way.

Talison has employed additional technical and marketing personnel to drive this project. Based on its analysis of the supply/demand conditions in the lithium industry, the company is targeting commissioning for the minerals conversion plant in fiscal year 2015.

Salares 7 project -- second phase exploration program

Following the receipt of outstanding results for both lithium and potassium from the initial drilling at the Salares 7 project in Chile, Talison is accelerating its exploration program. Talison is currently designing the next phase (phase 2) of its exploration program, and a new custom built sonic drill rig with specific capabilities to suit the ground conditions at the Salares 7 project is being assembled.

The phase 2 exploration program will commence in the next Chilean field season, and Talison expects to invest approximately $5-million (U.S.) on the program in fiscal year 2012. The phase 2 program includes further drilling at Salar de la Isla, sufficient to form the basis for a potential lithium mineral resource estimate, as well as additional drilling at Salar de Las Parinas, and initial drilling at Salar de Aguilar and Salar Grande.

Talison is also initiating process testwork studies to assist in designing a processing facility for the project, and collecting baseline environmental data, an activity that will need to continue for several field seasons, to be incorporated into the facility permitting procedures.

Financial results release September

Talison will release its financial results for the fourth quarter and 2011 year-end in early to mid-September, 2011.

Mr. Oliver, chief executive officer and managing director of Talison, will host a conference call to discuss the results.

Teleconference and replay call details will be distributed prior to release of financial results.

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