Mr. Adrian Hobkirk reports

NRG METALS ANNOUNCES STRATEGIC ALLIANCE WITH CHEMPHYS

NRG Metals Inc. has entered into a letter of intent (LOI) with Chengdu Chemphys Chemical Industry Co. Ltd. located in Chengdu, China, regarding the further exploration and development of the Hombre Muerto North lithium project (HMNLP). The LOI also includes a lithium offtake sales agreement and various other terms as discussed below.

About Chemphys

Chemphys was established in 1998, and has since grown into a high-tech enterprise, both ISO9001 and ISO14001 certified. The company specializes in the production of high-purity (99.99 per cent) lithium carbonate and battery grade lithium hydroxide for the manufacturing of cathode materials and electrolytes of lithium ion batteries. Chemphys was one of the first Chinese suppliers to export high-purity lithium carbonate and battery grade lithium hydroxide to leading cathode materials and lithium hexafluorophosphate manufacturers in Japan and South Korea. Chemphys also produces 99.995 per cent lithium carbonate which is used to manufacture single crystal substrates for surface acoustic wave and integrated optic devices. In addition, the company produces high-purity lithium carbonate and boric acid for the production of fusion fluxes, lithium borates for XRF analysis, and numerous other specialized materials. Chemphys has a strong research and development capability and works closely with customers to develop new materials. Chemphys product is recognized by all major lithium ion battery materials manufacturers and is an integral part of the electric vehicle supply chain.

Terms of LOI

The purpose of the LOI is to combine the development expertise of NRG, with the high-purity processing expertise of Chemphys. As a part of this process, the two parties intend to complete a private placement as described below for the financing of the HMNLP, which is currently under exploration. The intent is to quickly evaluate the project, and if deemed feasible (upon the completion of exploration and due diligence, and satisfactory studies which may include a preliminary economic assessment), rapidly move the project into production. In addition, NRG has agreed to an offtake agreement with Chemphys for the sale of any lithium produced at HMNLP, as well as a first right of refusal and first right of offer for the sale of lithium produced at any other projects that NRG moves forward, board representation and certain anti-dilution provisions and a use of proceeds agreement.

The private placement discussed above will be placed with investors acceptable to Chemphys. The private placement will consist of units at 10 cents per unit. Each unit comprises one common share and one transferable common share purchase warrant exercisable for a period of three years at an exercise price of 20 cents per warrant. The total financing will represent no less than 15 per cent of the issued and outstanding shares of the company and it is anticipated that the financing will be approximately 14 million units for gross proceeds of $1.4-million. The private placement financing was price protected Sept. 29, 2017, with the TSX Venture Exchange, will be reviewed by the exchange, and is subject to exchange and regulatory approval. No finder's fee will be payable in connection with this transaction.

Company president Adrian F.C. Hobkirk is quoted: "We are very pleased to have developed a relationship with one of the most recognized producers of high-purity lithium in the world. The financial and technical support of Chemphys will greatly increase the path for NRG to become a near-term lithium producer in Argentina. We are excited to be fast-tracking and commencing the exploration program at HMNLP. This project along with the drill program at Salar Escondido will help NRG meet these goals."

Alison Dai, of Chemphys, is quoted: "We are excited to establish a strategic partnership with NRG who have an experienced team in place to develop the HMNLP and Salar Escondido. We look forward to working closely with NRG's team to expedite the projects into production."

We seek Safe Harbor.