Mr. Adrian Hobkirk reports

175% INCREASE IN LITHIUM RESOURCE

With the completion of a 10-hole resource expansion drill program, and evaluation of the results by Groundwater Insight Inc. (GWI) of Halifax, N.S., Canada, Lithium South Development Corp. has noted a 175-per-cent increase in the total lithium brine resources at the Hombre Muerto North (HMN) lithium project, located in Salta province, Argentina.

The resource is a combination of the in situ contained lithium at the Alba Sabrina, Natalia Maria and Tramo claim blocks. The total resource has increased from 571,000 tonnes to 1,583,100 tonnes LCE (lithium carbonate equivalent) at an average grade of 736 milligrams per litre (mg/L) lithium (Li), with a low average magnesium (a brine contaminant) to lithium ratio of 3.27. The updated lithium resource estimate is summarized by each claim block in the table entitled "Lithium South's updated lithium resource estimate summarized by claim block," relative to a 500 mg/L cut-off.

Fernando Villarroel, company chief operating officer and project manager, is quoted: "We are very pleased with our new updated lithium resource at the HMN Li project. The quality of the brine has exceeded our expectations."

Next steps

A technical report is now being completed by GWI and is anticipated to be published within the 45-day requirement. The report will provide details on the resource and overall project.

A pumping well and hydraulic testing program is in progress, to support production well field design. In addition, permitting and evaporation test work is in progress.

Adrian F. C. Hobkirk, company president and chief executive officer, is quoted: "We are very excited to be able to increase our total LCE resource by such a wide value. With the increase in overall resource, we look forward to developing a larger mining plan."

Resource estimate methodology

The resource estimate was prepared in accordance with the guidelines of National Instrument 43-101 and uses best-practice methods specific to brine resources. This approach relies on drilling and sampling methods, utilized during two drilling programs, that yield depth-specific chemistry and specific yield measurements of the brine host rock. Dr. Mark King, PhD, FGC, PGeo, of GWI provided technical oversight of the resource estimate.

Data collected during the two drilling programs and used in the mineral resource development included the following:

• Completion of 3,695 metres of drilling (2,849 m of diamond drilling, 45 m of tricone drilling and 801 m of rotary drilling) in 14 boreholes, which includes:
  • Alba Sabrina: 1,842 m of diamond drilling in 10 core holes;
  • Natalia Maria: 326 m of diamond drilling in one core hole and 45 m of drilling in one tricone borehole;
  • Tramo: 681 m of diamond drilling in two core holes and 801 m of rotary drilling in two boreholes, completed during the 2018 drilling program.
• The diamond holes were cored with HQ. Samples were collected by packer method, from discrete intervals. Samples were also collected from observation wells constructed after borehole completion, using PVC screen and casing.
• The rotary wells were completed as pumping wells with PVC piping. These wells were pumped for 24 hours, to clean and develop prior to sampling.
• A total of 79 core samples were collected from the diamond drill holes and analyzed for specific yield.
• A total of 118 brine samples and 46 QA/QC (quality assurance/quality control) samples were collected from the drill holes and, of these, a total of 88 unique brine samples were used to calculate the resource estimate, including:
  • 86 depth-discrete samples were collected from the diamond drill holes during drilling using conventional packer techniques (both single and double packer). One sample was excluded from the resource estimate data set due to suspected contamination.
  • 32 composite samples were collected from the wells upon completion of development and/or during pumping tests. Repeat sample locations were averaged, and composite samples from locations with discrete-level samples were excluded from the resource estimation data set, resulting in three unique composite sample locations, representing three long-screen wells.

Measured, indicated and inferred mineral resource zones in the current mineral resource estimate were classified based on a borehole spacing method, with semi-variogram analysis used to support minimum borehole spacing. The borehole spacing method is a widely used and industry-accepted approach for resource zone classification.

The resource zone has a total area of 1,542 hectares, which includes:

• Alba Sabrina: 1,064 hectares;
• Natalia Maria: 95 hectares;
• Tramo: 383 hectares.

Geological and resource models

Geological and resource models were developed in the numerical modelling software Feflow. Geology was interpreted from diamond drilling core and rotary borehole logging within the Alba Sabrina, Natalia Maria and Tramo claim blocks. Publicly available data were used to support modelling outside of the HMN Li project properties. Nine geological units were identified within the Alba Sabrina, Natalia Maria and Tramo claim blocks:

• Interlayered fine and coarse sediments: Compact to unconsolidated clay, silt and sand, including recent alluvial fans, that occur within all three claim areas.
• Interbedded halite and sediments: Interbedded crystalline to sandy halite, compact to poorly consolidated sand and compact clay, occurring within the Natalia Maria and Tramo claim blocks.
• Basalt: Dark grey basalt flows confined to the Alba Sabrina claim block -- the basalt flows range from highly vesicular, to amygdaloidal, to massive, with minor to pervasive fracturing.
• Halite: Halite-dominated sequences with interbeds of clastic sediments that occur within the Natalia Maria and Tramo claim blocks.
• Upper-middle sediments: Poorly consolidated to unconsolidated sand within the Alba Sabrina claim block.
• Conglomerate: Matrix-supported polymictic conglomerate with subangular to subrounded clasts ranging from two millimetres to 15 centimetres in a silt to medium-grained sand matrix, occurring in the Tramo claim block.
• Compact halite: A thick unit of massive, low-permeability compact halite with minor clastic layers occurring at depth in the Natalia Maria claim block.
• Brecciated quartzite: Brecciated to pervasively fractured quartzite with clay-rich fracture fill and variable iron staining, occurring within the Alba Sabrina claim block.
• Quartzite: Unaltered, -ow permeability quartzite, interpreted as Paleozoic-aged Falda Cienaga formation, that occurs within the Alba Sabrina claim block.

The compact halite and quartzite units are classified as hydrogeological basement for this stage of resource estimation, and do not contribute to the current resource.

A total of 79 core samples collected during the two drilling programs were submitted to GeoSystems Analysis Inc. in Tucson, Ariz., United States, to estimate specific yield using the rapid brine release (RBR) extraction method. The cores were also analyzed for bulk density, total porosity and field water capacity. The specific yield values used for each geological unit in the current resource estimate, the percentage of resource in each unit and a comparison with the specific yield values used for the previous resource are summarized in the table entitled "Specific yield values for the current resource and comparison with the previous 2018 resource."

The brine data were interpolated using an ordinary kriging method directly within Feflow. In addition to the 88 unique brine sample locations, brine data from publicly available data sets were used to inform the brine grade outside of the HMN Li project properties. These outside values provide a more fulsome view of brine chemistry in the salar at large, but have minimal influence in the interpolated grades on the HMN Li project claims.

Brine sample analysis and QA/QC

The brine samples collected during the recent (2022 to 2023) drilling program were analyzed at Alex Stewart International (ASI) in Mendoza, Argentina. ASI is an ISO 9001:2008 and ISO14001:2004 accredited laboratory.

Brine samples were analyzed with the following methodologies: ICP-OES (inductively couple plasma optical (atomic) emission spectrometry) to quantify boron, barium, calcium, iron, lithium, magnesium, manganese, potassium, sodium and strontium; an argentometric method to assay for chloride; a gravimetric method to analyze for sulphate and total dissolved solids; a volumetric analysis for the evaluation of alkalinity; and a pycnometer to determine density.

A systematic quality assurance and quality control program included the following: a reference sample was inserted into the sample stream at a frequency of approximately one in 10 samples; a low-range reference sample (essentially a field blank) was inserted at a frequency of approximately one in 10 samples; and a field duplicate sample was inserted into the sample stream at a frequency of approximately one in 10 samples. In addition, a program of laboratory duplicate sampling was conducted by ASI, and two sets of independent field duplicate samples were collected by the qualified person (QP).

Dr. King, PhD, FGC, PGeo, of Groundwater Insight, is the qualified person for this work, as such term is defined by National Instrument 43-101. Dr. King has extensive experience in salar environments and has been a QP on numerous lithium brine projects, ranging from early exploration to production. Dr. King is independent from the company, and has reviewed and approved the technical information mentioned in this press release. A technical report prepared in accordance with NI 43-101 in support of the resource estimate will be filed on SEDAR+ and on the company's website within 45 days.

About Lithium South Development Corp.

Lithium South owns 100 per cent of the Hombre Muerto North lithium project located in Salta and Catamarca provinces, Argentina, the heart of the lithium triangle. The Hombre Muerto salar has a history of lithium production, with Livent Corp. in operation for over 25 years, in an area just south of the HMN project. The HMN project is surrounded by a $4-billion (U.S.) lithium development under construction by POSCO (Korea) and the Sal de Vida project under development by Allkem. Lithium South has delineated an NI 43-101-compliant 1,583,100 tonne lithium carbonate equivalent (LCE) resource on the Alba Sabrina, Natalia Maria and Tramo claim blocks, three of five non-contiguous blocks that make up the HMN Li project. The company is now transitioning from being a lithium explorer to becoming a lithium developer.

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