Mr. Chris Doornbos reports

E3 LITHIUM APPROACHES COMPLETION OF PHASE 2 OF ITS DEMONSTRATION FACILITY AND OUTLINES PATH TO COMMERCIALIZATION

E3 Lithium Ltd. is approaching completion of phase 2 of its demonstration facility and provided an update on the progress of its Clearwater project toward commercial production.

Phase 2 of the demonstration facility provides the last major piece of data required to complete the design of the commercial facility. The completion of phase 2 will mark an important engineering milestone and enable E3 to confidently proceed with a robust design for a commercial facility. Moving toward a shovel-ready project is the next step in the development toward an operating lithium facility. This major milestone is a compilation of five business drivers. Upon reaching the shovel-ready milestone, E3 will move toward the completion of the project financing to reach final investment decision (FID) for the Clearwater project.

The foundation for each of the five business drivers, outlined below, was established throughout 2025 and has advanced significantly in 2026. Success in accomplishing these will lead to a project that is ready to move through and substantively support the project financing initiative. The goal is to enable the construction of a facility in Alberta to produce approximately 12,000 tonnes of battery-grade lithium carbonate per year, the first stage of E3's commercial operations.

"Clearwater is moving forward on every front towards commercial production: operating a demonstration facility that is derisking our technology at commercial scale, advancing permit applications for our processing facility, engaging with several international offtake partners and receiving strong federal support," said Chris Doornbos, chief executive officer and chair of E3 Lithium. "E3 is designing the Clearwater project exactly as we intend to build it. This methodical and structured discipline reduces construction risk, protects capital and positions Clearwater for an efficient path to commercial production."

Demonstration facility: the foundation of commercial operations

the demonstration facility is E3's most important derisking initiative and a major milestone for the company and the lithium industry in Alberta. Once fully operational across the two components outlined below, it will mark E3's progression from concept to scaled commercial operations. This achievement will also represent the transition from technology development to readiness to scale, a milestone E3 is looking forward to celebrating.

Phase 1 of the demonstration facility was commissioned approximately one year ago and successfully produced battery-grade lithium carbonate using the 30-column DLE (direct lithium extraction) system. Phase 2 involved drilling and operating a full-size producer and injector well pair, designed to the prefeasibility study (PFS) specifications, to test the reservoir and collect data for the Clearwater project's feasibility study. Now nearing completion, phase 2 has confirmed sustained production from the Leduc reservoir, moving more than 60,000 cubic metres to date, validating consistent brine chemistry across the broader resource, and has generated valuable gas-water data to support commercial facility design.

Phase 3 of the demonstration facility will operate in two parts:

1. E3 will restart the 30-column DLE system in Q4 2026, shortly after conclusion of phase 2, aimed at finalizing process optimization and to produce battery-grade lithium carbonate.
2. E3 is in the process of finalizing the design and procurement of a commercial scale DLE column, for an operation start in 2027, aimed at providing robust operational data required by project financiers, strategic partners and offtakers.

Extended operation of phase 3 will provide the opportunity for E3 to train operations staff, continue producing battery-grade lithium carbonate to support offtake and further optimize key process metrics.

Permitting

Permitting is among the longest-lead items for any resource project, and E3 has been pro-active in submitting applications almost one year ago. Between December, 2025, and January, 2026, E3 submitted its Directive 056 facility licence and Environmental Protection and Enhancement Act (EPEA) applications to the Alberta Energy Regulator (AER) for the Clearwater project's CPF (central processing facility), which, once granted, are the critical permits required to build and operate the CPF. E3's demonstration facility, which was fully permitted in September, 2025, operates under the same AER directives as the company's commercial licence application. E3 continues to engage closely with local stakeholders and the regulator throughout the process.

Commercial agreements

The company has signed non-binding memorandums of understanding (MOUs) with international partners, geared toward potential offtake, most remaining commercially sensitive and confidential. Over the past 12 months, the company signed MOUs with Epsilon Cam in India toward offtake, Tees Valley Lithium in the United Kingdom toward tolling for hydroxide conversion and Axens in France toward offtake. E3 continues to advance discussions with various prospective offtake partners, including shipping lithium carbonate for evaluation and product qualification, the step that precedes binding long-term supply agreements. Additional battery-grade lithium produced from phase 3 of the demonstration facility will continue to support offtake discussions.

Financing, strategic partnerships and project financing

Phase 3 of the demonstration facility and front-end engineering design (FEED) are supported by up to $36.5-million in non-repayable funding through Natural Resources Canada's Global Partnerships Initiative (GPI), reflecting E3's focus on efficient capital deployment. In September, 2026, E3 also closed an upsized equity financing of approximately $11.5-million in gross proceeds. The recent capital, along with broad government support, allows E3 to continue progressing its demonstration facility and engineering, the cornerstones of project development toward commercial production.

E3 recognizes its partnership with Germany's TKMS, which was named preferred supplier for the Canadian patrol submarine project (CPSP) earlier this year. E3 is positioned to realize strategic and financial benefits through the program's industrial and technological benefits (ITB) commitments, reiterating the importance of what E3 brings to national and international markets.

E3 is also in continued discussions to explore project financing for construction and operation of the CPF as the Clearwater project progresses toward commercialization. Advancing on demonstration facility, FEED, feasibility study and offtake will support securing project financing. The company is evaluating strategic and diversified financing options to advance the Clearwater project toward a fully financed FID, including strategic capital and project-level debt and equity.

About E3 Lithium Ltd.

E3 Lithium is a development company with a total of 21.2 million tonnes of lithium carbonate equivalent (LCE) measured and indicated mineral resources as well as 300,000 tonnes LCE inferred mineral resources in Alberta, comprising: (a) measured and indicated mineral resources of 16.2 million tonnes LCE at a lithium grade of 75.5 milligrams per litre within its Clearwater project; and (b) measured and indicated mineral resources of 5.0 million tonnes LCE at a lithium grade of 54.0 milligrams per litre and inferred mineral resources of 300,000 tonnes LCE at a lithium grade of 42 milligrams per litre within its Garrington district. The Clearwater prefeasibility study outlined a 1.13-million-tonne-LCE proven and probable mineral reserve at a lithium grade of 75.5 milligrams per litre, with a pretax net present value (discounted at 8 per cent) of $5.2-billion (U.S.) with a 29.2-per-cent internal rate of return and an after-tax NPV (discounted at 8 per cent) of $3.7-billion (U.S.) with a 24.6-per-cent IRR.

Unless otherwise indicated, Chris Doornbos, PGeo, chief executive officer and a qualified person under National Instrument 43-101, has reviewed and approved the technical information contained in this news release.

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