Talison Lithium Files Final Prospectus

Talison Lithium Limited ("Talison") (TSX:TLH) - 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Talison Lithium Limited ("Talison") announces that it has filed a final short
form prospectus (the "Final Prospectus") with the securities regulatory
authorities in each province of Canada other than Quebec in connection with its
previously announced offering of ordinary shares (the "Offering"). The Offering
is being made pursuant to an underwriting agreement dated January 19, 2011 (the
"Underwriting Agreement") among Talison and a syndicate of underwriters led by
Cormark Securities Inc. and including Scotia Capital Inc., Haywood Securities
Inc. and Byron Securities Limited (collectively, the "Underwriters"). Pursuant
to the terms of the Underwriting Agreement, the Underwriters have agreed to
purchase 10,703,000 ordinary shares of Talison (the "Shares") at a purchase
price of $6.50 per Share for aggregate gross proceeds of $69,569,500. Talison
has granted the Underwriters an option (the "Over-Allotment Option") to purchase
up to an additional 1,605,000 ordinary shares at the offering price to cover
over-allotments and for market stabilization purposes. The Over-Allotment Option
is exercisable in whole or in part on or following the closing of the Offering
for a period of 30 days thereafter. If the Over-Allotment Option is exercised in
full, the total gross proceeds of the Offering will be $80,002,000.


The Offering is scheduled to close on or about February 10, 2011. The Toronto
Stock Exchange ("TSX") has conditionally approved the listing of the Shares,
subject to fulfilment by Talison of the requirements of the TSX. A copy of the
Final Prospectus is available on SEDAR at www.sedar.com and can also be obtained
by contacting Cormark Securities Inc. at [e-mail].


During the course of clearing the Final Prospectus, the Ontario Securities
Commission requested that Talison adopt the continuity of interest accounting
policy for the acquisition by Talison of the Greenbushes Lithium Operations
(Western Australia) ("GLO") on August 12, 2010, which is considered a common
control transaction. As a result of this request, Talison has re-filed its
previously filed financial statements and management discussion and analysis for
the three month period ended September 30, 2010 (the "Original Financial
Statements") to reflect the application of continuity of interest accounting and
presentation of the comparative historical results of GLO. The Original
Financial Statements were prepared in accordance with and are compliant with
International Financial Reporting Standards ("IFRS"). While IFRS does not
require continuity of interest accounting for a common control transaction, it
does not prohibit it. Continuity of interest accounting is common practice under
Canadian generally accepted accounting principles for such transactions.
Therefore, by Talison electing to adopt continuity of interest accounting for
the acquisition of GLO, the re-filed financial statements and management
discussion and analysis for the three month period ended September 30, 2010 (the
"Restated Financial Statements") now include information on GLO for the period
from July 1, 2010 to August 12, 2010, being the 42 day period of the financial
quarter prior to the acquisition of GLO by Talison.


The following table provides a summary comparison of the Restated Financial
Statements to the Original Financial Statements:




                                     Restated Financial  Original Financial
                                             Statements          Statements
                                     Three Months Ended  August 12, 2010 to
                                     September 30, 2010   September 30,2010
                                             (Unaudited)         (Unaudited)
                                                 A$'000              A$'000
INCOME STATEMENT                                                           
Sales revenue                                    21,072              10,152
Earnings before interest,                                                  
income tax, and depreciation 
and amortization ("EBITDA")(1)                    4,770               2,069
Net profit                                        5,874               3,803
                                                                           
CASH FLOW STATEMENT                                                        
Operating activities                              8,010               2,711
Investing activities                             (3,713)             (1,656)
Financing activities                             33,399              38,101
--------------------------------------                                      
Note:                                                                       
(1) EBITDA is a non-IFRS financial measure. For a reconciliation of EBITDA  
to its IFRS-compliant income statement, see "Non-IFRS Performance Measures".



Talison notes that the adoption of continuity of interest accounting did not
alter the statement of financial position as at September 30, 2010, as presented
in the Original Financial Statements. In addition, as a result of adopting the
continuity of interest accounting, the Restated Financial Statements include as
comparatives the results of GLO for the three month period ended September 30,
2009 and as at June 30, 2010 which have been previously filed by Talison and are
available on Talison's website at www.talisonlithium.com or Talison's SEDAR
profile at www.sedar.com. 


This news release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the Shares in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or
jurisdiction. The Shares have not been, and will not be, registered under the
U.S. Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.


About Talison

Talison is a leading global producer of lithium. Talison mines and processes the
lithium bearing mineral spodumene at GLO in Western Australia. In addition,
Talison explores for lithium at the Salares 7 Lithium Project made up of seven
salars (brine lakes and surrounding concessions) located in Region III, Chile.
Talison also has an extensive, well established global customer network and a
leading position in the growing Chinese market. 


Non-IFRS Performance Measures

Talison uses EBITDA as a key metric in assessing its operating performance.
EBITDA represents Talison's profit/(loss) before the effect of interest, taxes
and depreciation and amortization. Management of Talison believes EBITDA is a
useful measure of the operating performance of the business as it excludes the
effect that changes in financial structure has on Talison's performance. EBITDA
is not a defined financial measure according to IFRS and does not have any
standardized meaning prescribed by IFRS. Therefore, this measure may not be
comparable to a similar measure used by other enterprises. This measure should
not be considered an alternative to net profit/(loss), cash flow from operating
activities or other measures of financial performance calculated in accordance
with IFRS. Rather, EBITDA is provided as additional information to complement
IFRS measures by providing further understanding of the results of operations
from management's perspective.


EBITDA is calculated by adding net interest expense/(income), income tax
expense/(benefit) and depreciation and amortization to net profit/(loss). The
following table reconciles EBITDA with net profit/(loss) for the periods
indicated:




                                   Restated Financial    Original Financial
                                           Statements            Statements
                                   Three Months Ended    August 12, 2010 to
                                   September 30, 2010     September 30,2010
                                           (Unaudited)           (Unaudited)
                                               A$'000                A$'000
----------------------------------------------------------------------------
                                                                            
Net profit / (loss)                             5,874                 3,803
Add                                                                         
Net finance expense / (income)                 (5,617)               (3,863)
Income tax expense /  (benefit)                 3,693                 1,681
Depreciation and amortization                     820                   448
                                --------------------------------------------
                                                                            
EBITDA                                          4,770                 2,069
                                --------------------------------------------
                                --------------------------------------------



Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this press release, including any information
as to Talison's strategy, projects, plans, prospects, future outlook,
anticipated events or results or future financial or operating performance
(including expectations relating to closing the Offering and the use of the
proceeds of the Offering) constitute "forward-looking statements" within the
meaning of Canadian securities laws. All statements, other than statements of
historical fact, are forward-looking statements. Forward-looking statements can
often, but not always, be identified by the use of words such as "plans",
"expects", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "predicts", "potential", "continue" or "believes", or variations
(including negative variations) of such words; or statements that certain
actions, events or results "may", "could", "would", "should", "might",
"potential to", or "will" be taken, occur or be achieved or other similar
expressions concerning matters that are not historical facts.


Forward-looking statements are necessarily based on a number of factors,
estimates and assumptions that, while considered reasonable by Talison, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies. Such factors, estimates and assumptions
include, but are not limited to, those described in the Final Prospectus, the
Restated Financial Statements, and the Company's annual information form for the
year ended June 30, 2010 dated January 12, 2011 (the "Annual Information Form"),
each of which can be found on Talison's SEDAR profile at www.sedar.com. While
the Company considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect and actual results may
vary.


Readers are cautioned that forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of Talison and/or its subsidiaries to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. These risks, uncertainties and
factors are discussed in the Final Prospectus, the Restated Financial Statements
and the Annual Information Form, each of which can be found on Talison's SEDAR
profile at www.sedar.com. Readers are cautioned that forward-looking statements
are not guarantees of future performance. All of the forward-looking statements
made or incorporated in this press release are qualified by these cautionary
statements.


Although Talison has attempted to identify statements containing important
factors that could cause actual actions, event or results to differ materially
from those described in forward-looking information, there may be other factors
that cause actions, events or results to differ from those anticipated,
estimated or intended. Forward-looking information contained herein are made as
of the date of this press release based on the opinions and estimates of
management on the date statements containing such forward looking information
are made. Except as required by law, Talison disclaims any obligation to update
any forward-looking information, whether as a result of new information,
estimates or opinions, future events or results or otherwise. There can be no
assurance that forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on
forward-looking information.