Mr. Trent Mell reports

ELECTRA ANNOUNCES US$5 MILLION FINANCING

Electra Battery Materials Corp. has received a non-binding term sheet from the holders of the existing secured notes issued by the company on Feb. 13, 2023, for a financing transaction, which would result in gross proceeds to the company of $5-million (U.S.). These funds will enable the company to initiate certain early works and winter preparations at the Ontario refinery project site in Temiskaming Shores, Ont., as well as being used for general corporate purposes.

"Given our objective of resuming construction shortly upon completing the project financing package, part of our preparations for the final phase of construction of North America's only cobalt sulphate refinery is initiating some early works before winter sets in," said Electra chief executive officer Trent Mell. "This liquidity strengthens our balance sheet as we work to complete this package, and we are grateful for our lenders' ongoing support of our business plan."

"Reducing heavy reliance on China in the EV [electric vehicle] materials supply chain continues to be a focus for North American policymakers," Mr. Mell continued. "Electra's refinery is expected to be the first of its kind in North America, with the potential, when operating at full utilization, to produce enough cobalt sulphate for one million electric vehicles each year."

The financing will consist of the offer and sale of secured convertible notes in the principal amount of $4-million (U.S.) and $1-million (U.S.) of common shares at a price of 54.3 cents per share. The notes will be issued together with 4,545,454 detachable common share purchase warrants entitling the holders to acquire an equivalent number of common shares at a price of $1 per share for a period of 24 months following issuance. The notes will rank pari passu to the existing notes, will bear interest at a rate of 12 per cent per annum, payable quarterly in cash, and will mature on Nov. 12, 2027. The notes will also be guaranteed by substantially all of the company's subsidiaries and will be secured on a first-lien basis by substantially all of the assets of the company and its subsidiaries. At the option of the holder, the notes will be convertible into common shares at an effective conversion price of 62.445 cents per share, representing a 15-per-cent premium to the price of the shares issuable in connection with the financing.

Conversion of the notes and the new warrants will be restricted to the extent it will result in a holder owning more than 9.9 per cent of the outstanding common share capital of the company.

The completion of the financing is subject to a number of conditions and uncertainties, including the completion of customary definitive documentation and receipt of any required regulatory approvals. All securities to be issued in connection with the financing will be subject to restrictions on resale in accordance with applicable securities laws. No finders' fees or commissions are payable in connection with the financing. The term sheet for the financing is non-binding, and there is no guarantee that the company or the holders of the existing notes will complete the financing on the terms described in this release or on any other terms.

In connection with completion of the financing, the holders of the existing notes intend to waive certain existing events of default regarding the non-payment of interest under the existing notes and failure to register the resale of the common shares issuable pursuant to the terms of the existing notes and the existing warrants (as defined as follows) and to defer payment of all outstanding interest amounts until Feb. 15, 2025, at which point all deferred interest amounts will be payable in cash.

Subject to completion of the financing and receipt of any required regulatory approvals, the company also intends to the amend the terms of an aggregate of 10,796,054 outstanding share purchase warrants. The existing warrants were issued in connection with the offering of the existing notes on Feb. 13, 2023, and are currently exercisable at a price of $1 until Feb. 13, 2028.

Under the proposed amendments to the existing warrants, the exercise price will be reduced to 85 cents per share. In addition, the existing warrants will be amended to include a revised acceleration clause such that the term of the existing warrants will be reduced to 30 days in the event the closing price of the common shares on the TSX Venture Exchange exceeds 85 cents by 20 per cent or more for 10 consecutive trading dates, with the reduced term beginning seven calendar days after such 10-consecutive-trading-day period. Upon the occurrence of an acceleration event, holders of the existing warrants may exercise the existing warrants on a cashless basis, based on the value of the existing warrants at the time of exercise, subject to compliance with the policies of the TSX-V.

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, Electra is executing a phased strategy to onshore the electric vehicle supply chain and provide a North American solution for EV battery materials refining. In addition to building North America's only cobalt sulphate refinery, its strategy includes integrating black mass recycling, potential cobalt sulphate processing in Becancour, Que., and exploring nickel sulphate production potential within North America.

We seek Safe Harbor.