Mr. Martin Perez de Solay reports

ALLKEM CONFIRMS MATERIAL GROWTH PROFILE UNDERPINNED BY 40 MT RESOURCE

Allkem Ltd. has reviewed and updated technical studies for the Olaroz, Sal de Vida, Cauchari, James Bay and Mount Cattlin operations and projects, which also assist with preparation for the proposed merger with Livent Corp.

The findings of these studies will be published in National Instrument 43-101 format as required by the Toronto Stock Exchange, the format required by the New York Stock Exchange under Subpart 1300 of Regulation S-K of the U.S. Securities Act of 1933, and are summarized in individual Joint Ore Reserves Committee-compliant Australian Securities Exchange releases published at the date of this announcement.

Key points

Group:

• Updated studies confirm the robust economics and Tier 1 nature of the asset base, further derisking both company growth and future production.
• Total group resources of approximately 40 million tonnes lithium carbonate equivalent demonstrate the world-class asset base of the Allkem group.
• Highly competitive and low overall group cost of production and capital intensity of growth projects will deliver material operating cash flow under current market conditions and industry pricing forecasts.
• Allkem (100-per-cent basis) plans to deliver 179,000 tonnes of LCE production capacity by fiscal 2028 (165,000 tonnes of LCE capacity on an attributable basis), up from approximately 50,000 t forecast for fiscal 2024.
• Growth projects are planned to be fully financed from existing corporate cash, existing or new corporate debt/project finance facilities, and cash flow from operations.
• It has potential for further multiple large-scale expansions at Olaroz, Sal da Vida, James Bay and Cauchari.

James Bay:

• It has a material increase of mineral resource estimate to 110.2 Mt at 1.30 per cent Li2O. The deposit is open laterally and at depth with possible significant additional mineralization to be drilled later in calendar year 2023.
• Capital costs have increased in line with industry conditions, with economics remaining robust.
• A larger development, supported by the increased mineral resource estimate, will be evaluated by management and the technical team.
• Its continued evaluation of downstream opportunities in North America will include the potential to leverage the Becancour site and design following the merger with Livent.
• Federal approvals were obtained in January, 2023, and the provincial approval process is in the final stages.

Mount Cattlin:

• Successful ore reserve and resource replacement confirm mine life extension;
• Production forecast of 210 to 230 kt for fiscal 2024 as main parts of the orebody are reached.

Olaroz:

• Finalizing commissioning of Stage 2 with first wet production achieved in July;
• Long-term operating costs for the combined Stage 1 and Stage 2 operation are estimated at $4,149 (U.S.) per tonne LCE over the life of mine, considering operational synergies from the joint operation of Stage 1 and 2;
• Olaroz resource increased to 22 million tonnes LCE and, when combined with the adjacent Cauchari resource, provides 28 Mt of LCE, underpinning potential for future increases in production within the Olaroz/Cauchari complex.

Sal da Vida (SDV):

• SDV 1 and SDV 2 capital costs have increased to $1,031-million (U.S.) in line with general industry inflation, with economics remaining robust. This cost increase incorporates the impact of engineering upgrades, Argentine inflation and new taxes on imports.
• SDV 1 plans to achieve mechanical completion in first half calendar year 2025 and first production in second half calendar year 2025 after also incorporating engineering upgrades and experiences of other projects in the region.
• Long-term operating costs remain competitive at $4,003 (U.S.) per tonne LCE for SDV 1 and SDV 2, and $4,529 (U.S.) per tonne LCE for SDV 1 on a stand-alone basis, making it a very competitive operation able to deliver high margins across a range of pricing outcomes.
• Resource upgraded to 7.2 Mt LCE supports potential further production expansion.
• SDV plans to provide 30 kt of additional LCE production with first production targeted for calendar year 2027.

Cauchari:

• The 2019 technical study has been updated for the 100-per-cent-owned Cauchari project with production capacity of 25,000 tonnes per year, operating costs at $4,081 (U.S.) per tonne LCE and first production planned in calendar year 2027.
• The proposed Cauchari development plan will benefit from engineering design work and learnings at Olaroz, with a significant efficiency improvement opportunity through leveraging Olaroz infrastructure.

Managing director and chief executive officer Martin Perez de Solay commented: "These project updates confirm the robust economics and Tier 1 nature of our asset base, further derisking company growth, future production and profitability. The studies which are underpinned by our significant operating and project development experience demonstrate low costs and low capital intensity that will maximize margins and shareholder returns throughout the pricing cycle. The Allkem project portfolio provides us with a solid base to enhance our vertical integration strategy and relationships downstream in the global supply chain."

James Bay project summary:

• The updated feasibility study confirms a robust, high-value hardrock lithium operation utilizing renewable hydro power.
• Material approximately 108-per-cent increase in pretax net present value (NPV) to $2.9-billion (U.S.) with a strong internal rate of return and short payback period.

Project details:

• Recently announced total mineral resource of 110.2 Mt at 1.30 per cent Li2O, including 54.3 Mt at 1.30 per cent Li2O in the indicated category, and 55.9 Mt at 1.29 per cent Li2O in the inferred category, with further drilling planned to test possible extensions to mineralization;
• Ore reserve of 37.3 Mt at 1.27 per cent Li2O provides a long-life, low-cost spodumene operation, and remains in line with permitting considerations;
• Average annual production of 311,000 tpy of spodumene concentrate with an 18.8-year mine life;
• Shallow, near-surface mineralization ideal for open-cut mining with a low LOM strip ratio of 3.6 to 1;
• Two-million-tonne-per-year process plant design remains unchanged from 2021 feasibility study, producing a 6.0-per-cent Li2O spodumene concentrate with operational flexibility to produce a 5.6-per-cent Li;2O spodumene concentrate
• Very similar process design and flow sheet to that already employed at Mount Cattlin;
• Low-cost, sustainable source of hydro power now installed to site;
• Strong relationships with Cree Nation of Eastmain, Cree Nation government and all stakeholders.

(4) Resources are presented as the sum of measured, indicated and inferred resource, and are reported in line with the JORC Code (2012). The confidence categories assigned under the JORC Code are comparable with the confidence categories in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Mineral Resources and Mineral Reserves, May, 2014. The reader should be cautioned that under National Instrument 43-101 guidelines, inferred mineral resources cannot be grouped with measured and indicated categories and that the JORC Code is considered an accepted foreign code as described in Part 7 of the NI 43-101 standards of disclosure. See individual project releases dated as per this release for further information.

Project financials:

• Updated capital cost estimate (capex) of $381.5-million (U.S.), a 34-per-cent increase since 2001, which reflects inflationary conditions;
• Cash operating costs (FOB Montreal) of $407 (U.S.) per tonne of 5.6-per-cent Li2O concentrate, also reflecting some inflationary impact; this cost of production remains highly competitive and will deliver high margins across a range of pricing outcomes;
• Pretax NPV of $2.9-billion (U.S.) at an 8-per-cent discount rate and posttax NPV of $1.7-billion (U.S.) reflecting an increase in lithium price assumptions and market outlook;
• Pretax internal rate of return (IRR) of 62.2 per cent and pretax payback period of 1.4 years;
• Posttax internal rate of return of 45.4 per cent and posttax payback period of 1.7 years.

Project execution:

• Detailed engineering and procurement activities progressed at 80 per cent, supporting the updated cost estimate and bringing the project ready for approximately 19 months of construction once provincial authorization is obtained;
• Impact and benefit agreement discussions and provincial environmental and social impact study review are in final stages;
• Further carbon studies and initiatives under way to align the project to Allkem's target of net-zero emissions by 2035.

Olaroz project summary (5)

Stage 1 and 2 (42,500 lithium carbonate equivalent tonnes per year)

Financial metrics:

• Pretax NPV of $7.01-billion (U.S.) at a 10-per-cent discount rate and a posttax NPV of $4.56-billion (U.S.);
• Long-term operating costs for the combined Stage 1 and Stage 2 operation are estimated at $4,149 (U.S.) per tonne LCE over the LOM considering operational synergies from the joint operation of Stage 1 and 2 enabling high profit margins.

Mineral resource:

• Total mineral resource estimate of 22.63 Mt of LCE, a 10-per-cent increase from the previous estimate in March, 2023, with a 52-per-cent increase in measured mineral resources;
• The mineral resource comprises 11.54 Mt of LCE as measured, and 3.83 Mt as indicated for a combined 15.38 Mt of measured and indicated mineral resource; there is an additional 7.25 Mt of inferred resources for a total resource of 22.6 Mt (measured, indicated and inferred);
• The improvement in mineral resource categorization results from reclassification of indicated mineral resources between 200- and 650-metre depth as measured mineral resources in the pumping field area; this reflects the greater amount of information available from pumping performance since installation of the Stage 2 wells and the addition of Maria Victoria tenements;
• Olaroz's LOM production represents approximately 8.5 per cent of the measured and indicated mineral resources, further confirming the Tier 1 status of the basin and its potential to support additional expansions.

Stage 2 (25,000 lithium carbonate equivalent tonnes per year)

The expansion achieved first wet lithium carbonate production in July, 2023. Commissioning activities are continuing, and production is scheduled for second half calendar year 2023. Ramp-up is planned to take one year.

(5) Reported on 100-per-cent basis. Allkem share is 66.5 per cent.

Sal de Vida project summary

Stage 1 and 2 (45,000 lithium carbonate equivalent tonnes per year)

Financial metrics:

• Pretax NPV of $5.51-billion (U.S.) at a 10-per-cent discount rate; the posttax NPV10 is $3.18-billion (U.S.);
• Operating cost highly competitive at $4,003 (U.S.) per tonne LCE despite increases in the price of soda ash, lime and labour costs.

Mineral resource and ore reserve:

• Total mineral resource estimate of 7.17 Mt LCE, a 5-per-cent increase from the previous estimate in 2022, with a 41-per-cent increase in measured mineral resources;
• Total ore reserve estimate of 2.49 Mt LCE supporting a 40-year project life based on ore reserves only, a 43-per-cent increase from the previous statement due to a revised point of reference for ore reserve reporting of brine pumped to the evaporation ponds.

Stage 1 (15,000 lithium carbonate equivalent tonnes per year)

Financial metrics:

• Pretax NPV of $2.01-billion (U.S.) at a 10-per-cent discount rate;
• Operating costs of $4,529 (U.S.) per tonne LCE despite increases in the price of soda ash, lime, natural gas and labour costs.

Project cost and schedule update:

• Development capex of $374-million (U.S.), which is in line with inflationary conditions;
• Substantial mechanical completion, precommissioning and commissioning activities are planned in first half calendar year 2025 with first production planned in second half calendar year 2025 and ramp-up planned to take one year;
• The schedule adjustment comes with an improved understanding of the execution plan, and the continuing import challenges and delays experienced in country by Allkem and its contractors and vendors, as well as an improved understanding of regional productivity factors.

Stage 2 (30,000 tonnes lithium carbonate equivalent per year)

Project cost and schedule update:

• The prefeasibility study update confirms the Stage 2 expansion will be completed and substantially the same design basis as Stage 1 with a twofold modular replication of the Stage 1 design.
• Capex is estimated at approximately $657-million (U.S.) with Stage 2 benefiting from Stage 1 detailed engineering, established on-site infrastructure, and established regional construction teams and facilities.
• Stage 2 construction is anticipated to commence upon receipt of applicable permits and substantial mechanical completion of Stage 1 with Stage 2 first production approximately 2.5 to three years thereafter.

Cauchari project summary

Financial metrics:

• Analysis based on 25,000-tonne-per-year production capacity updating the April, 2019, study;
• Pretax NPV of $2.52-billion (U.S.) and posttax NPV of $1.37-billion (U.S.) at 10-per-cent discount rate;
• Operating costs of $4,081 (U.S.) per tonne LCE after increases in the price of soda ash, lime, natural gas and employment costs.

Mineral resource and ore reserve:

• Total mineral resource estimate of 5.95 Mt LCE;
• Total ore reserve estimate of 1.13 Mt LCE supporting a 30-year project life based on ore reserves only, an 11-per-cent increase from the previous statement due to a revised point of reference for ore reserve reporting of brine pumped to the evaporation ponds.

Project cost and schedule update:

• Development capex of $659-million (U.S.) for mechanical completion;
• Substantial mechanical completion, precommissioning and commissioning activities are planned by first half calendar year 2027 with first production planned in second half calendar year 2027 and ramp-up planned to take one year.

Mount Cattlin resource and ore reserve estimate

The Mount Cattlin ore reserve estimate is based on an updated mineral resource estimate released on April 17, 2023. The mineral resource was updated after the completion of a major infill drilling program, which upgraded inferred mineral resources.

Allkem has reviewed and updated the Mount Cattlin ore reserve, incorporating infill drilling results from the 2NW deposit, depleted mined material and site stockpiles at June 30, 2023, and material to be mined after this date is presented in accordance with JORC (2012) ore reserve reporting.

Resource and ore reserve controls and governance

Allkem continues to evolve processes to ensure that quoted mineral resource and ore reserve estimates are subject to internal controls and external review. Mineral resource and ore reserves are estimated and reported in accordance with the 2012 edition of the JORC Code.

Allkem stores and collects exploration data using industry standard software that contains internal validation checks. Exploration samples from drilling have certified reference material standards introduced to the sample stream at set ratios, typically one per 25 samples. These are reported as necessary to the relevant competent persons to assess both accuracy and precision of the assay data applied to resource estimates. In resource modelling, block models are validated by checking the input drill hole composites against the block model grades by domain.

Allkem engages independent, qualified experts on a commercial-fee-for-service basis to undertake mineral resource and ore reserve audits. Allkem internally reconciles the resource outcomes to validate both the process and the outcome.

The company has developed its internal systems and controls to maintain JORC compliance in all external reporting, including the preparation of all reported data by competent persons who are members of the Australasian Institute of Mining and Metallurgy or a recognized professional organization. The mineral resource and ore reserve statements included in this announcement were reviewed by suitably qualified competent persons prior to their inclusion in the form and context announced.

We seek Safe Harbor.