Mr. Trent Mell reports

ELECTRA APPOINTS HEATHER SMILES AS VICE PRESIDENT, INVESTOR RELATIONS & CORPORATE DEVELOPMENT

Electra Battery Materials Corp. has appointed Heather Smiles as vice-president, investor relations and corporate development.

In her role, Ms. Smiles will be responsible for building and maintaining a strategic investor relations program, and contributing to the advancement of the company's vision of becoming the leading North American refinery for electric vehicle (EV) battery materials. Ms. Smiles previously served as director of investor relations for Electra until 2019.

"We are excited to welcome Heather back to the team as we continue to negotiate the funding to complete construction of North America's only battery-grade cobalt refinery," said Trent Mell, chief executive officer. "We have reconfigured the leadership team with a focus on the bench strength required to transition the company from developer to operator. At this crucial period of our strategic plan, Heather's skills and history with the company will be a strong asset to the senior leadership team. In addition to investor relations functions, Heather will play an important role in advancing discussions on strategic opportunities and partnerships."

Mr. Mell continued, "Recent tightening of U.S. EV tax credit eligibility to exclude EVs containing components from battery supply chain partners with 25-per-cent-Chinese ownership further increases the need for supply chain onshoring, and Electra is uniquely positioned within North America to meet this need."

Ms. Smiles said: "From inception, the focus for the company has always been to onshore the battery supply chain, and we have evolved over time from mineral exploration to battery materials refining. This is an exciting time to rejoin Electra and see the refinery brought into production. The Canadian cobalt refinery is the first of its kind in North America, unique in its ability to support the domestic EV industry."

Ms. Smiles brings with her nearly 15 years of experience in investor relations, capital markets, strategic planning and communications. She has previously worked with global metals and mining companies, including Electra, Baffinland Iron Mines and Golden Star Resources. She has a proven record working with boards, executive teams and operations, analyzing business situations to develop and implement practical investor and stakeholder programs and strategies.

In accordance with its long-term incentive plan, the company has issued 100,000 stock options. Long-term incentive grants are an important retention and incentive tool for key employees, and a mechanism to align interests with shareholders. The stock options grant holders the right to purchase common shares of Electra at an exercise price of 50 cents and will vest in three equal tranches on the first, second and third anniversary of the grant date over a four-year period. All grants are subject to the approval of the TSX Venture Exchange.

Update on convertible notes

Further to its news release dated Dec. 1, 2023, Electra has received the approval of the TSX-V, as well as warrant holders, to amend the terms of 10,796,054 outstanding common share purchase warrants issued on Feb. 13, 2023, and due to expire on Feb. 13, 2028. The company has entered into a supplemental indenture to effect the amendment with TSX Trust Company, as warrant agent, to the warrant indenture governing the warrants dated Feb. 13, 2023, between the company and the warrant agent. The warrants were issued in connection with a private placement transaction for $51-million (U.S.) in principal amount of 8.99 per cent senior secured convertible notes due February, 2028, that closed on Feb. 13, 2023. When issued, the warrants were exercisable at $2.48 (U.S.) per common share.

Pursuant to the amendment, the exercise price of the warrants was reduced to $1.00 per common share. In addition, the warrants were amended to include an acceleration clause such that the term of the warrants will be reduced to 30 days in the event the closing price of the common shares on the TSX-V exceeds $1.20 for 10 consecutive trading dates, with the reduced term to begin upon release of a press release by the company within seven calendar days after such 10-consecutive-trading-day period. Upon the occurrence of an acceleration event, warrant holders may exercise the warrants on a cash-less basis, based on the value of the warrants at the time of exercise.

The amendment was agreed upon with the warrant holders following constructive negotiations and more closely aligns the terms of the warrants with current market conditions. At the same time, certain pricing adjustment provisions in the notes will not be exercised and, as a result, the notes have not been repriced at a lower exchange rate and no amendments have been made in respect of the debt conversion ratio. As a result, potential dilution in company capitalization has been reduced in the event the notes are converted into equity, while the cash-less exercise feature added to the warrants will serve to concurrently reduce the dilutive effect of future exercises of warrants upon the occurrence of an acceleration event.

About Electra Battery Materials Corp.

Electra is a processor of low-carbon, ethically sourced battery materials. Currently focused on developing North America's only cobalt sulphate refinery and operating a black mass demonstration plant, Electra is executing a multipronged strategy to onshore the electric vehicle supply chain. Keys to its strategy are integrating black mass recycling and nickel sulphate production at Electra's cobalt refinery located north of Toronto, advancing Iron Creek, its cobalt-copper exploration-stage project in the Idaho cobalt belt, and expanding cobalt sulphate processing into Becancour, Que.

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