Ann: Proposed Issue of Unlisted Service Rights, page-2

7 May 2020The ManagerCompanies Announcement CentreAustralian Securities Exchange (ASX)20 Bridge StreetSYDNEY NSW 2000Dear Sir/Madam,Proposed Issue of Unlisted Service Rights pursuant to ESIPLiontown Resources Limited (ASX: LTR) (Company or Liontown) advises that, as part of themeasures announced on 30th March 2020 to conserve cash spending, the Board has resolved toissue a type of unlisted performance right (Service Rights) to directors and employees of theCompany on a quarterly basis as part of salary sacrificing arrangements under the terms andconditions of the Liontown Employee Securities Incentive Plan (ESIP).The Service Rights are subject to service conditions and are to be issued at the beginning of eachquarter. The number to be granted each quarter is based on the 20-day volume weighted averageprice (VWAP) prior to the start of each respective quarter. The first set of rights will be effective 1April 2020 and will be issued quarterly thereafter at the Company’s discretion, for the foreseeablefuture.The Non-Executive directors of the Company have agreed to accept Service Rights in lieu of all feesthey receive from the Company effective from 1 April 2020. The Managing Director (David Richards)and COO (Adam Smits) have also agreed to accept Service Rights in lieu of 45% and 40%respectively of the cash component of their remuneration.The issue of Service Rights to Directors is subject to shareholder approval at a Shareholders GeneralMeeting to be held in the coming months. A summary of the principal terms of the proposed issueis set out below and further details will be available in the relevant Notice of Meeting.Number of ServiceRights proposedor to be issuedNumber of rights is based on the value of remuneration sacrificed and the 20-day VWAP immediately prior to the start of the relevant quarter.Number ofQuarterly GrantsQuarterly grants commencing 1 April 2020 for as long as the Companyconsiders necessary, expected to be 12 months. Each quarterly grant is at theCompany’s discretion and can be settled in cash if the Company elects not toproceed with a grant for any specific quarter.Date of Grant Quarterly, at the beginning of each relevant quarter. The first quartercommencing 1 April 2020.Terms of issueThe Service Rights will be issued under the terms and conditions of theCompany’s Employee Securities Incentive Plan and are subject to serviceconditions.Exercise price NilVesting At end of each relevant quarter for rights issued at start of that quarter.Expiry date 2 years from end of each relevant quarterLIONTOWN RESOURCES LIMITED | ASX: LTR | PAGE 2A summary of the principal terms of the first quarter issue is set out belowirectors (subject to shareholderapproval) EmployeesNumber proposedor to be issued 1,251,329 510,093Terms of issueThe Service Rights will be issued under the terms and conditions of theCompany’s Employee Securities Incentive Plan and are subject to serviceconditions.20-day VWAP forrights calculation 8.05 cents (20-day VWAP ending 31 March 2020)Exercise Price NilVesting 30 June 2020Expiry date 30 June 2022This announcement has been authorised for release by the Board