News

Salares and Talison also announce a CAD$40 Million Private Placement to Fund Growth

FOR IMMEDIATE RELEASE Highlights

• Combination of the world's largest, high quality, low cost lithium producer located in Australia with a prospective, large scale brine exploration portfolio in Chile
• Unique exposure to both mineral and brine sources of lithium, with the ability to respond to the growing demand for lithium for electric vehicle batteries
• Board and management teams with complementary skills and extensive experience
• Fully subscribed private placement of CAD$40 million to fund growth

VANCOUVER, July 15, 2010 -- Salares Lithium Inc. (TSXV: LIT) ("Salares") and Talison Minerals Pty Ltd ("Talison") are pleased to announce that they have executed a binding letter agreement ("Letter Agreement") to combine their respective lithium assets and create the world's largest, publicly traded lithium production and exploration company.

The merger will combine Talison's world class lithium minerals production in Australia with Salares' prospective, large scale lithium brines exploration project in Chile. Upon completion of the proposed transaction, the combined entity will be well-funded, allowing for immediate expansion of the producing Australian operations to run in parallel with an accelerated exploration program at the Salares brine projects.

Immediate production expansions at Talison's Australian operations are required to satisfy substantial growth in lithium demand from Chinese battery producers, for whom Talison is the primary supplier. This demand has been driven by government policies encouraging alternative energy vehicles in pursuit of energy security, reduced reliance on oil imports and environmental objectives. Additional large scale production expansion is also being pursued by Talison to meet the anticipated global growth in the lithium market.

Salares' Chairman David Shaw said today: "The merger of Salares with Talison will create a unique lithium company with exposure to both lithium minerals and lithium brines, building on the strong foundation of both companies to continue growing and delivering value for shareholders."

Talison Chairman Peter Robinson stated: "Talison is already the largest lithium producer in the world and the largest supplier of lithium concentrates into the growing Chinese market. The merger with Salares will offer shareholders exposure to substantial growth opportunities for the potential production of lithium carbonate from lithium brines as well as from lithium minerals, to satisfy the demand for lithium products destined for the global electric vehicle market."

The Boards of Salares and Talison believe the benefits of the merger are compelling, with:

• An attractive diversified mix of lithium mineral and brine assets in both Australia and Chile:
  • Combination of the high quality, low cost Australian based lithium minerals production with promising lithium brines exploration properties located in Chile;
• Multiple actionable growth strategies, including:
  • Expansion of existing lithium mineral production capacity by over 60% (currently in progress) to support the growing Chinese battery market, with demand from existing customers for over 90% of additional capacity;
  • Potential low cost lithium carbonate production from minerals conversion to supply major battery producers and vehicle manufacturers globally; and
  • Future potential lithium carbonate production from prospective Chilean brines;
• Access to an extensive global customer network, established over a 25-year lithium operations history, with the leading position in the growing Chinese battery market; and
• Board and management teams with complementary skills and extensive experience in the technical and commercial aspects of project development, production and marketing lithium.

The market dynamics for lithium are positive. Lithium demand has grown consistently over the past decade and is expected to accelerate significantly in the near term from increased consumption of lithium batteries, which are a critical component of hybrid and electric vehicles.

The board of directors of both Talison and Salares unanimously support the proposed transaction. Salares management and directors (together representing 7.43% of Salares shares on a fully diluted basis) have agreed to enter into lock-up agreements to support the transaction.

Merger Proposal
Under the terms of the proposed transaction, which is to be structured as a plan of arrangement ("Plan of Arrangement") under the British Columbia Business Corporations Act, it is anticipated that common shares of Salares will be exchanged for ordinary shares of Talison¹ on the basis of 2.81 Salares shares for one Talison share. All outstanding options and warrants of Salares will be assumed by Talison, and exercisable in accordance with their terms for Talison shares.

Upon completion of the Plan of Arrangement, existing Salares and Talison shareholders will own 20% and 80%, respectively, of the combined company (on a fully diluted basis), prior to the conversion of the Subscription Receipts issued under the CAD$40 million Private Placement (as described below).

¹It is proposed that, prior to the Plan of Arrangement, the Talison Minerals corporate group will be re-organized to, among other things, separate the tantalum business and to place a new Australian company, Talison Lithium Limited, on top of the corporate group. References to "Talison shares" are references to fully paid, ordinary shares in the capital of Talison Lithium Limited, and references to securities in Talison are references to securities in Talison Lithium Limited.

Based on a price of CAD$3.50 per Talison share, the terms of the proposed transaction provide Salares shareholders with a premium of approximately 98.2% (equal to CAD$1.25 per Salares share) based on the trailing 20 day volume weighted average price for Salares shares on the TSX Venture Exchange.

Corporate, Board and Management Structure
Following completion of the Plan of Arrangement, the merged group will be known as Talison Lithium Limited ("Talison Lithium") and will have offices in Perth, Australia and Vancouver, Canada.

Mr Peter Robinson and Mr Peter Oliver, the Chairman and CEO of Talison, respectively, will be Chairman and CEO of Talison Lithium. It is proposed that David Shaw will join the Board of Directors of Talison Lithium, and will also act as a consultant to Talison Lithium in connection with the supervision of the ongoing exploration programs for the mineral properties of Salares. Todd Hilditch, current President and CEO of at Salares, will direct the investor relations program at Talison Lithium.

Anticipated Merger Timetable and Process
The Letter Agreement sets out the terms upon which the proposed merger will be implemented, and proposes for the parties to enter into a definitive arrangement on or before August 9, 2010. Under the Letter Agreement, both Salares and Talison have agreed to pay the other party a break fee of approximately CAD$1 million in certain circumstances.

The Plan of Arrangement is anticipated to be implemented by the end of September, 2010, subject to obtaining all necessary approvals and satisfaction of other conditions.

The proposed merger is subject to a number of conditions including:

• Completion of a CAD$40 million Private Placement (as described below);
• Approval of the Plan of Arrangement by Salares' shareholders;
• Approval by the Toronto Stock Exchange ("TSX") to list Talison Lithium, subject to customary conditions;
• Receipt of all applicable regulatory approvals, orders, notices and consents including: in Canada under the Competition Act; the Supreme Court of British Columbia; the Australian Foreign Investment Review Board; the TSX; and the TSX Venture Exchange;
• Completion of satisfactory due diligence on or before August 9, 2010; and,
• Other customary merger conditions.

Private Placement
In conjunction with the Plan of Arrangement, Salares will undertake a CAD$40 million private placement ("Private Placement") of subscription receipts of Salares ("Subscription Receipts").

Talison's current major shareholder, Resource Capital Fund ("RCF") has fully subscribed for the Private Placement, but at the request of the Agents (as defined below), is willing to scale back its commitment to permit Subscription Receipts to be offered for sale to other investors. RCF has also agreed to a 90 day lock up period.

The Private Placement issue price will be based on a deemed price per share in Talison of not less than CAD$3.50; under the terms of the Plan of Arrangement, this equates to a price of CAD$1.25 per Salares Subscription Receipt. Upon satisfaction of the Escrow Release Conditions (as described below), Subscription Receipts shall be exchanged into Talison shares on the basis of 2.81 Subscription Receipts for one Talison share.

The Private Placement will be managed by a syndicate of investment dealers led by Cormark Securities Inc. ("Cormark" and collectively, the "Agents") and is expected to close by the middle of August, 2010.

Upon release from escrow (as described below), it is anticipated that the proceeds of the Private Placement will be used to fund the growth strategies of the merged group, including:

• Expansion of the existing lithium minerals operations in Australia to increase production capacity to meet current Chinese demand for lithium;
• Acceleration of the exploration of Salares' properties in Chile;
• Implementation of a drilling programme at the Australian operations with an objective to increase and upgrade mineral reserves and resources;
• Initiation of further feasibility studies into developing a lithium carbonate plant using lithium mineral concentrates from the Australian operations; and
• General corporate and working capital purposes.

The gross proceeds of the Private Placement will be delivered to and held by a licensed Canadian trust company or other escrow agent (the "Escrow Agent") mutually acceptable to Cormark and Salares in an interest bearing account (the "Escrowed Funds").

The Escrowed Funds (plus any accrued interest earned thereon) will be released from escrow to Salares (after deducting certain expenses payable to the Agents) upon delivery of a notice (the "Release Notice") to the Escrow Agent from Cormark, on behalf of the Agents, and Salares, on or before 5:00 p.m. (Toronto time) on September 30, 2010 (the "Escrow Deadline") indicating the following conditions (the "Escrow Release Conditions") have been satisfied:

1. the implementation of the Plan of Arrangement;
2. the receipt of all required shareholder and regulatory approvals, including approval by the TSX; and
3. the Talison shares to be issued in connection with the Plan of Arrangement and on exchange of the Subscription Receipts not being subject to any statutory hold period in Canada.

If the Escrow Release Conditions are not satisfied on or before the Escrow Deadline, the Escrowed Funds plus accrued interest shall be returned to the holders of the Subscription Receipts and the Subscription Receipts will be cancelled without any further action on the part of the holders.

Advisors

Talison has engaged Rothschild and Cormark as its financial advisers and Blake, Cassels & Graydon LLP and Clayton Utz as its Canadian and Australian legal advisers, respectively.

Haywood Securities Inc. is acting as financial adviser to the special committee of Salares. Haywood has provided an opinion to the special committee of Salares that, subject to certain assumptions and limitations set out therein, the proposed transaction is fair, from a financial point of view to Salares shareholders. Gowling Lafleur Henderson LLP is acting as legal adviser to Salares. McCullough O'Connor Irwin LLP is acting as legal adviser to the special committee of Salares.

A presentation of the transaction highlights can be accessed at the Salares and Talison websites.

For further information please contact:

Investors
Todd Hilditch
President and CEO
Salares Lithium Inc.
Tel: (604) 443-3831
www.salareslithium.com

Peter Robinson
Chairman
Talison Minerals Pty Ltd.
Tel: +357 2695 6011
www.talisonlithium.com

Media
Kim O'Halloran
Vice President, Corporate Communications
FD
kim.ohalloran@fd.com
Tel: (312) 553-6733

About Salares Lithium Inc.
Salares Lithium Inc. is a lithium explorer in Chile that controls the 'Salares 7' lithium project made up of seven salars (brine lakes that are prospective for sub-surface lithium and potassium) and the surrounding concessions in Region III, Chile. Five of the seven salars are clustered within 155 kilometres and are 100% owned by Salares and its Chilean partner.

About Talison Minerals Pty Ltd
Talison Minerals Pty Ltd is the leading global producer of lithium. Talison mines and processes the lithium bearing mineral spodumene at the Greenbushes Lithium Operations in Western Australia. Talison has an extensive, well established global customer network and a leading position in the growing Chinese market.

No securities regulatory authority has either approved or disapproved of the contents of this news release. This press release is for information purposes only.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Not for distribution to U.S. news wire services or dissemination in the United States.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements

This release contains "forward-looking statements" which reflect the current expectations of the companies. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the companies believes to be reasonable assumptions, the companies can not assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the companies does not assume any obligation to update or revise them to reflect new events or circumstances.