Pilbara Minerals : Share Purchase Plan

This document is dated 27 June 2017.

This document is not a prospectus and has not been lodged with ASIC. Accordingly, this document does not contain all the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding whether or not to invest in the New Shares offered by this document.

This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand or are in doubt about the contents of this document, or the action you should take, you should consult your financial or other professional adviser without delay.

The market price of Shares may rise or fall between the date of this document and the date the New Shares are issued to you. This means that up to or after the date on which the New Shares are issued to you, you may be able to buy Shares on the market at a lower price than the Issue Price. The Company and its Directors do not offer any recommendation or advice regarding participation in the Offer.

Holding securities in an emerging Australia strategic minerals producer such as the Company is a speculative form of investment and the future price of Shares may rise or fall depending on, amongst other things, production success and fluctuations on the stock market generally.

This document does not, and is not intended to, constitute an Offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an Offer or to issue this document.

No action has been taken to permit the Offer in any jurisdiction other than Australia and New Zealand to the extent set out in this document.

The distribution of this document in jurisdictions outside Australia and New Zealand may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any other jurisdiction.

Application will be made for the New Shares to be quoted on ASX. The New Shares have not been and will not be registered under any other applicable securities laws and they may not, subject to certain exceptions, be offered or sold directly or indirectly within any jurisdiction outside Australia and New Zealand.

Capitalised terms in this document are defined in the Glossary.

This document may not be released or distributed in the United States. The New Shares have not been and will not be registered under the US Securities Act 1933 (the "Securities Act") or the securities laws of any state or other jurisdiction of the United States. The New Shares may not be offered, sold or otherwise transferred in the United States except in a transaction exempt from, or not subject to, the registration of the Securities Act and the applicable laws of any state or other jurisdiction in the United States.

The information in this document is not a recommendation to accept the Offer and does not constitute financial advice. Eligible Shareholders should therefore conduct their own investigations, assessment and analysis of the Company and its operations and prospects and must base their investment decision solely on those investigations and that assessment and analysis.

If, after reading this document, Eligible Shareholders have any questions regarding the Offer, they should contact their financial or other professional adviser before deciding whether or not to accept the Offer.

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27 June 2017

Dear Shareholder

The Company is pleased to offer Eligible Shareholders the opportunity to participate in the Company's share purchase plan (Offer).

The Offer will give Eligible Shareholders the opportunity to apply for up to $15,000 worth of New Shares at an issue price of $0.35 for each New Share (Issue Price) without incurring brokerage or other transaction costs.

The Issue Price represents a discount of 10.9% to volume weighted average market price of Shares, calculated over the last 5 days on which Shares were recorded as trading on ASX prior to 15 June 2017 (being the date on which the Offer was announced).

On 19 June 2017, the Company announced an oversubscribed placement of new ordinary shares to institutional, professional and sophisticated investors (in both Australia and selected foreign jurisdictions) to raise $80 million (Placement). It is intended that the proceeds of the Placement and the Offer will be used for the following purposes:

1. development of the Pilgangoora Lithium-Tantalum Project in Western Australia;

2. corporate, exploration and interest costs as well as project contingency and liquidity reserves; and

3. general working capital purposes.

Further details of the Placement and a summary of some of the key risks faced by the Company are set out in the Company's Investor Presentation dated 15 June 2017 which is available from ASX announcements at www.asx.com.au or www.pilbaraminerals.com.au.

The Offer is targeting to raise up to $15 million, however the Company reserves discretion regarding the final amount raised under the SPP. If total demand for the Offer exceeds $15 million, the Company reserves the right to close the Offer early and scale back applications in its discretion. When determining the amount (if any) by which to scale back an application, the Company may take into account a number of factors, including the size of an applicant's shareholding, the extent to which eligible shareholders have sold or bought additional shares after the Record Date and the date an application was made. Eligible Shareholders are therefore encouraged to submit their applications early. In the event the total value of the acceptances under the Offer for New Shares exceeds an aggregate amount of $15 million worth of New Shares, the Company reserves the right to accept oversubscriptions (subject to compliance with ASX Listing Rules) in its discretion.

To provide certainty as to the funds raised under the SPP, the Company has entered into an underwriting agreement with Hartleys Limited (Hartleys) and UBS AG Australia Branch (UBS) to underwrite the SPP in the event of any shortfall. UBS and Hartleys must, or arrange for nominated sub-underwriters (who are institutional, professional and sophisticated investors) to, subject to approval being sought, subscribe for any balance of the Shares not subscribed for by eligible Shareholders under the SPP.

Participation in the Offer is entirely voluntary. The issue of New Shares is expected to take place on or around 2 August 2017.

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The Offer is offered exclusively to all Eligible Shareholders (including Custodians), being registered holders of Shares as at 5.00pm WST on 14 June 2017 (Record Date) with a registered address in Australia or New Zealand, and not resident or located in the United States of any other jurisdiction in or into which an offer of New Shares would be unlawful, who meet certain other conditions as expressly prescribed in the Terms & Conditions (Eligible Shareholders).

The Offer opens at 9.00am (WST) on 27 June 2017 and expected to close at 5:00pm (WST) on 17 July 2017.

No late applications will be accepted. However, the Directors reserve their right, subject to the Corporations Act and the ASX Listing Rules, to vary the closing date without prior notice. If the closing date is varied, subsequent dates may also be varied accordingly.

Subject to ASX Listing Rule 10.12 Exception 8 being satisfied at the date of the issue of the New Shares, Directors who are Eligible Shareholders may (without having to obtain prior Shareholder approval), participate in the Offer, on the same terms as all other Eligible Shareholders. Directors may apply to subscribe for up to the maximum number of New Shares permitted by the Terms & Conditions.

The Offer provides Eligible Shareholders with an opportunity to acquire a parcel of New Shares in the Company. Shareholders may apply for New Shares in 5 different parcels:

No fraction of New Shares will be issued.

All Application Monies must be paid in Australian dollars.

The Company reserves its right to issue fewer New Shares than an Eligible Shareholder applies for under the Offer or none at all and its right to scale back applications in such manner as the Directors see fit. Any determination by the Directors in respect of any scaling back or refusal of any application will be final. If a scale back occurs or the Company refuses an application, the Company will refund any excess Application Monies to the relevant Eligible Shareholders in full (without interest).

The Company has entered into an underwriting agreement with Hartleys Limited (Hartleys) and UBS AG Australia Branch (UBS) to underwrite the Offer. UBS and Hartleys must, or arrange for nominated sub- underwriters (who are institutional, professional and sophisticated investors) to, subject to shareholder approval being sought, subscribe for the shortfall. Refer to section 10 for further details.

As stated above, the Issue Price of each New Share will be $0.35 which is the same price as shares issued pursuant to the Placement.

The market price of the Shares may rise or fall between the date of this document and the date that New Shares are issued to you under the Offer. This means that the price at which New Shares are issued to you may be greater or less than the prevailing market price of the Shares at the date of this document. Further, the Issue Price may exceed the price at which you would be able to buy Shares on the market at the same time that New Shares are issued to you under the Offer. We recommend that you seek financial advice from a suitably qualified adviser before you decide to participate in the Offer.

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