Lithium Power International Ltd

Highlights:

• STRONG ASSET: MARICUNGA PROJECT – The Maricunga project is located within the ‘Lithium Triangle’ in northern Chile, home to the largest and highest quality lithium brine deposits.
• SUSTAINABILITY IN DESIGN – Green producer reflected in the design: 50% of the water is produced by the project and used of renewable solar energy.
• SUPPLIES HAVE BEEN SECURED – Water supply secured and port and logistics assessment have been completed. MOU with a mining company for the use of existing electricity infrastructure. Existing international highway
• HIGHEST QUALITY – Test work has produced battery-grade Li2CO3 samples, achieving 99.92% purity using Maricunga’s brine from the Pilot Evaporation Ponds.
• PROGRESS ON KEY STRATEGIC MILESTONES – The project is being developed with a low-risk strategy with significant expansion potential. Lower risk on Stage One and expansion potential.
• EXCELLENT LOCAL & INDIGENOUS RELATIONSHIPS – New standard for the relationship with Indigenous Communities and other Stakeholders, set on the Maricunga development.
• FULLY PERMITTED FOR STAGE ONE – High technical environment standards reflected on the environmental approval received by the Chilean authorities in February 2020.
• SOLID TEAM – We have highly experienced and proven board, management and technical teams in mining, lithium exploration and strategic transactions. The project has been developed with Tier-1 companies like GEA, Worley, Stantec etc.
• MARICUNGA MINERAL RESOURCE ESTIMATE – The updated resource estimate of 1,905,000 tonnes of lithium carbonate equivalent represents close to double the initial resource of 1,020,000 tonnes in the 2019 Definitive Feasibility Study.
• OUTSTANDING ECONOMICS – Maricunga is among the most efficient producers with an OPEX of US$3,718 per tonne. The project is projected to produce 15,200 tonnes per annum over 20 years with a pre-tax NPV of US$1.97B.

Highlights:

• Completion of the MSB ownership consolidation enabled LPI to increase its presence in Chile. A major public relations program is underway in Chile to explain development plans for LPI’s Maricunga lithium brine project.
• The Chilean Government recently announced the long awaited National Lithium Policy for the country, that outlines the plans intended to bring Chile back to the forefront of global lithium production. The Company is pleased to provide comments on the impacts it will have on its Maricunga lithium brine project.
• LPI is currently evaluating a number of financing options for the Maricunga Stage One project, ranging from strategic equity investments from potential offtake partners to debt/equity financing alternatives.
• Work at Maricunga continues to meet high ESG standards, on the back of the fully approved and awarded environmental permit.
• LPI commenced and completed its inaugural drilling program at its East Kirup lithium prospect, located in the Greenbushes region of Western Australia.
• The WA demerger process continues to be advanced and will be continually accessed in relation to capital market conditions.

LPI is pleased to provide updated comments on the recent announcement of the new National Lithium Policy in Chile, and the potential impact it will have on the company’s Maricunga lithium brine project.

• LPI is pleased to provide an English translation of two media reports in Chile in response to the initial release of the Chilean National Lithium Policy and the potential effect on the company’s Maricunga lithium brine project.
• The Policy determines clear general guidelines, which will give way to various projects in the existing salt flats network, incorporating the necessary competition in the industry and accelerating the processes of innovation and adoption of new standards for lithium projects in Chile.
• LPI expects further information on the release of more details of the policy, possibly providing the effect on the Maricunga project in coming days and will provide updates the market accordingly.

Highlights:

• Chile is expected soon to release a new lithium policy that LPI believes will be supportive of private developers and may also involve the option of partial State equity collaborations.
• Work at LPI’s Maricunga lithium brine project continues to ensure high ESG standards, on the back of the fully approved and awarded environmental and social permits.
• A major program is underway to explain Maricunga’s project plans at all levels of government, local communities and the Chilean public.
• Funding discussions are ongoing with financial institutions and potential strategic partners/off-takers. Letters of Intent for debt financing have been received covering more than 70 per cent of expected CAPEX.

Highlights:

REVIEW OF OPERATIONS

• The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $5,615,324 (31 December 2021: $7,313,541).

CORPORATE

• Salar Blanco SpA (‘MSB SpA’) and Bearing Lithium Corp (‘Bearing’) (collectively, the ‘JV Partners’), agreed to a three-party consolidation of ownership of the Maricunga Lithium Brine Project (the ‘Project’) in Chile (the Maricunga Joint Venture (‘JV’)), to de-risk the development and to create a simple and transparent investment entity. It involved MSB SpA, which owned a 31.31% stake in the project, and Bearing, with 17.14%, exchanging their interests for shares in LPI. On 23 December 2022, the all-scrip merger was completed.
• These transactions increased the proportionate interest of LPI’s previous shareholder base in Maricunga from 51.55% to 57.9%.
• The consolidation was also designed to enhance the ability to raise development capital for the project. A share placement was made in September 2022, raising $25 million to accelerate progress at Maricunga.
• The financing process for Maricunga continued, with non-binding term sheets being evaluated by interested parties.
• The demerger and subsequent planned listing of LPI’s Western Lithium Ltd subsidiary was deferred until after the Maricunga consolidation was completed.

MARICUNGA LITHIUM BRINE PROJECT – CHILE

• An acquisition of water rights was made for the Project.
• Samples of brine from Maricunga were processed, yielding 99.92% pure battery grade lithium carbonate.
• Samples were sent to potential buyers to support financing plans for the development

WESTERN AUSTRALIA

• LPI became the largest tenement holder in the Greenbushes region of Western Australia, expanding its prospective ground held near the Talison lithium mine.
• Additional tenements were acquired to cover potential lithium projects in the Eastern Goldfields and Pilbara regions of Western Australia.

Highlights:

• Arrowhead is updating its coverage on Lithium Power International Ltd. (“LPI”) with a fair value bracket of AUD 0.85 – AUD 1.04 (Share Price on 13 March 2023: AUD 0.30) based on Discounted Cash Flow Valuation and Comparable Company Valuation.
• LPI is a pre-revenue pure play, diversified lithium exploration, and development company involved in acquiring and advancing promising lithium projects. LPI currently has one brine asset in Chile (“MSB”) and three hard rock assets in Australia. LPI’s flagship MSB is among the most advanced development-stage projects. It is expected to enter the construction phase in late 2023 with production likely to begin in early 2026. The Company’s other three assets are currently in the exploration stage.
• Previously, LPI’s flagship project in Chile was under a JV named Minera Salar Blanco S.A. (MSB) between LPI, Borda Group, and Bearing Lithium (TSXV: BRZ). The Company consolidated 100% interest in the project through two all-scrip mergers with its JV partners in December 2022. As per the revised DFS on Old Code Concessions, the Stage One project can produce an average of 15,200 tonnes of battery-grade lithium carbonate per annum for 20 years.
• LPI is currently focused on negotiating financing options for construction at the MSB project. LPI has received several expressions of interest in relation to debt and equity funding from strategic investors, export credit agencies, and governmental bodies.
• MSB has obtained environmental approval as well as basic infrastructure permissions and approvals for water, roads, electricity, port, logistics, etc.
• LPI’s other assets in Western Australia are Greenbushes, East Pilbara, and Eastern Goldfield. The Company is planning to demerge these assets by H1’23 by forming a new WA-focused lithium exploration company and listing it on ASX.

Highlights:

• Completed consolidating ownership of 100% of Maricunga Lithium Project.
  • Merger with Salar Blanco LLC to acquire its 31.31% of Maricunga completed on 20 December 2022.
  • Completed the Plan of Agreement with JV partner Bearing Lithium to acquire its 17.14% interest in Maricunga on 22 December 2022.
• Battery grade lithium carbonate produced with 99.92% purity from Maricunga.
  • Significantly exceeds industry standard specifications for battery grade lithium carbonate of 99.5%.
  • Samples sent to potential lithium buyers for analysis as part of LPI’s financing plans for mine development at Maricunga.
• Completed the acquisition of water rights for Maricunga.
  • Purchased 62 litres/second CAN 6 rights replace a long-term lease that was previously held for only part of Maricunga’s requirements.
• Commenced RC and diamond drilling at East Kirup lithium prospect, Western Australia.
  • Several zones encountered indicated the potential for pegmatites at part of the LPI’s Greenbushes project in the south-west of Western Australia.
• MSB continues with its project financing process.
  • Non-binding terms sheets being evaluated from parties interested in providing both equity and debt for Maricunga development. Progress as expected during upcoming months.