Highlights ▪ Initial drill results received from diamond...

Highlights ▪ Initial drill results received from diamond drilling programme ▪ Results confirm significant deep mineralized zone over 500m width ▪ Mineralization is open in all directions, particularly to the east ▪ Scope for finding additional repetitions in upthrust faulted positions ▪ Formal update to the Mt Cattlin Mineral Resource and Ore Reserve underway Galaxy Resources Limited ("Galaxy" or the "Company") (ASX:GXY) is pleased to provide an update on exploration activities at the Mt Cattlin Project near Ravensthorpe in the south-west of Western Australia. Assays have been received for pegmatite samples within the first four of six holes drilled during 2016 (Hole MTCDD1 and daughter hole MTCDD1W1 (MTCDD1/W1) through to Hole MTCDD4). The six holes formed a deep stratigraphic diamond drilling programme designed to provide greater geological understanding of the Mt Cattlin structural architecture and assist in determining optimal depths for planned infill and extensional drilling of the known lithium-tantalum resource (refer figures 1, 2, 3, and 4). Importantly, the Company has greatly improved its geological knowledge beneath the existing depth extent of the current Mineral Resource. The recent drilling has now defined a new zone some 500m wide and at least 150m long, open in all directions but in particular to the east, where it appears to be increasing in thickness. Galaxy believes that given the revised scale of the mineralizing system, significant potential exists for finding additional repetitions in upthrust faulted positions closer to surface in open-pittable scenarios, given the complex post-mineralization history of the area and the lack of exploration around the known resource. Figure 1: Plan View – Drill hole location plan AS ASX ANNOUNCEMENT / MEDIA RELEASE X ANNOUNCEMENT / MEDIA RELEASE GALAXY RESOURCES LIMITED ABN: 11 071 976 442 Suite 8 / 18 Kearns Crescent, Ardross WA 6153 T: +61 (8) 9215 1700 F: +61 (8) 9215 1799 www.galaxylithium.com Holes MTCDD1 to MTCDD4 Assays have been received for pegmatite samples from the first four of six holes drilled during 2016 (Hole MTCDD1 and daughter hole MTCDD1W1 (MTCDD1/W1) through to Hole MTCDD4). Highlights from analysis of the pegmatite zones for lithium include the following significant (>5m >1.0 % Li2O) intersections*:  14.85m @ 1.16% Li2O from 65.65m in MTCDD1  10.20m @ 1.82% Li2O from 0.64m in MTCDD3  5.33m @ 1.51% Li2O from 376.6m in MTCDD3  11.00m @ 2.09% Li2O from 0.50m in MTDDD4  8.72m @ 1.27% Li2O from 352.3m in MTCDD4 *Refer to Appendix 1 for a more detailed table of intercepts True widths are expected to be in the range of 80-100% of the pegmatite drill interval. Currently only the first interval of each hole is captured by the current resource model and the additional intercepts are considered significant in that the pegmatite, while mostly flatlying, can change thickness along dip and strike, and represent a horizon to drill to for extensional and infill drilling. The company has previously released geological information to the ASX (25 February, 11 April and 22 June 2016) in relation to this drilling programme, relating to geological observations made in holes MTCDD1-4. Holes MTCDD5 and MTCDD6 Drilling of the final two holes MTCDD5 and MTCDD6, have been completed, with the pegmatite sections sampled and now awaiting assay. Drilling of MTCDD5 was finished mid-August, to a total depth of 519.8m, testing the northerly extension some 200m further along the deeper pegmatite encountered in holes 3 and 4. However, the deeper pegmatite was considerably thinner (~5m) in Hole 5, and of a different texture, with visually lesser spodumene mineralization. In addition, the 4m of upper pegmatite encountered in holes 3 and 4 at approximately 120m depth was not encountered, being possibly sheared or faulted out. Spodumene-bearing pegmatite intervals for Hole MTCDD5 are listed below: o 0-13.3m o 16.3-20.0m o 36.8-40.7m o 379.6-384.7m o 487.7-490m The decision to drill an infill hole, (MTCDD6) was made to better understand the geometry of the deeper pegmatite unit and the postmineralization deformation. MTCDD6 was drilled from the same drill pad to a depth of 465.8m at an azimuth of 020° and a dip of -85°. Spodumene-bearing pegmatite intervals for Hole MTCDD6 are listed below: o 0-12.5m o 15- 17.5m o 33.1-36.4m o 127.1 – 131.2m o 352- 366.4m o 384.3 – 385.2m Hole MTCDD6 encountered a similar interval to Hole MTCDD4, but did not appear visually to be as high grade as MTCDD4, with some spodumene alteration apparent.