Mr. Trent Mell reports

ELECTRA SIGNS TERM SHEET WITH ONTARIO FOR C$17.5 MILLION AS PART OF C$100 MILLION COBALT REFINERY INVESTMENT

Electra Battery Materials Corp. has signed a term sheet for $17.5-million in proposed funding from Invest Ontario, an agency of the government of Ontario, to support construction of its cobalt sulphate refinery in Temiskaming Shores. Once operational, the facility will be the first in North America dedicated to producing battery-grade cobalt sulphate.

"We are focused on completing North America's first cobalt sulphate refinery and unlocking the jobs and economic activity that come with it," said Electra chief executive officer Trent Mell. "We are grateful for the support from Invest Ontario, which will help accelerate construction and reinforces confidence in the strategic importance of our project. Establishing a domestic supply of battery-grade cobalt is essential to reducing reliance on foreign-controlled supply chains, safeguarding economic and energy security, and ensuring that Canada plays a leading role in the global energy transition."

Once completed, Electra's refinery will produce 6,500 tonnes of battery-grade cobalt sulphate annually, enough to support production of up to one million electric vehicles per year. With over 90 per cent of the global cobalt sulphate supply currently originating from China, Electra will stand out as one of the few producers with no ties to foreign entities of concern. The facility will play a critical role in reinforcing Canada's battery material supply chain and reducing reliance on foreign sources.

"Under the leadership of Premier Ford, our government is building a strong, self-reliant economy that integrates Northern Ontario's vast mineral wealth with Southern Ontario's manufacturing might," said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. "Electra's investment in Temiskaming Shores will establish an integral link in the province's critical mineral processing supply chains and fuel the next stages of Ontario's leadership in electric vehicle battery manufacturing."

The refinery is expected to deliver lasting economic benefits through long-term job creation and increased industrial capacity in the region, including more than 50 new jobs at the facility. The project also supports Ontario's clean energy transition and electric vehicle manufacturing ecosystem, while reinforcing Canada's leadership in sustainable resource development.

The Ontario commitment forms part of an estimated $100-million investment to complete refinery construction, which includes inflation and other adjustments to the project's 2023 cost estimate. This new funding replaces a previously announced $20-million (U.S.) strategic corporate investment (Sept. 10, 2024). The funding is part of a historic trilateral package of government support, following the U.S. Department of Defence's $20-million (U.S.) award in August, 2024, and continuing discussions with the government of Canada (March, 2025). With all contributions, Electra's potential government funding totals approximately $48-million (U.S.) ($64-million). To support the financing plan, Electra has launched a comprehensive restructuring, targeting an approximately 60-per-cent reduction in convertible debt and a $30-million (U.S.) equity raise.

The refinery complex will serve as the foundation for future growth initiatives, supporting Electra's plans to produce other battery materials, to strengthen the resiliency of the North American supply chain. In 2023, the company operated a plant-scale battery recycling demonstration plant at its refinery complex, recovering lithium, nickel, cobalt and other critical minerals from batteries. Electra has recently commenced a feasibility-level engineering study to build a battery recycling refinery adjacent to its cobalt refinery. The company is also contemplating a second cobalt sulphate facility in Becancour, Que., and a strategically located North American nickel sulphate plant.

The term sheet signed with Invest Ontario expresses an intent to work toward completing definitive documentation but does not constitute a binding agreement. While discussions between the parties are continuing, there is no guarantee or assurance that final agreements will be reached and funding will be provided to the company.

About Electra Battery Materials Corp.

Electra is a leader in advancing North America's critical mineral supply chain for lithium-ion batteries. Currently focused on developing North America's only cobalt sulphate refinery, Electra is executing a phased strategy to onshore critical mineral refining and reduce reliance on foreign supply chains. In addition to establishing the cobalt sulphate refinery, Electra's strategy includes nickel refining and battery recycling. Growth projects include integrating black mass recycling at its existing refining complex, evaluating opportunities for cobalt production in Becancour, Que., and exploring nickel sulphate production potential in North America.

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