Mr. Steven Cochrane reports

LITHIUM CHILE DELIVERS POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR THE ARIZARO PROJECT IN ARGENTINA

Lithium Chile Inc. has released the results of its preliminary economic assessment (PEA) for the production of lithium carbonate from its Salar de Arizaro lithium brine project in the Salta province of Argentina. The PEA provides an independent economic assessment of the potential of Arizaro, based upon the lithium resources outlined in the July, 2023, resource estimate.

Arizaro PEA highlights:

• Pretax net present value (NPV) of $1.8-billion (U.S.);
• LOM (life of mine) average Li2CO3 (lithium carbonate) price of $21.396 per tonne;
• After-tax NPV of $1.1-billion;
• Pretax internal rate of return (IRR) of 29.3 per cent;
• After-tax IRR of 24.1 per cent;
• PEA mine and processing plant produces 25,000 LCE (lithium carbonate equivalent) LOM over 19.1 years;
• Pretax initial capital payback period 3.5 years, after-tax payback of 3.6 years;
• Average LOM annual pretax cash flow over operating period: $329-million, annual after-tax cash flow: $229-million;
• Initial capital costs (capex -- capital expenditures) estimated at $823-million;
• Operating cost (opex -- operating expenditures) estimated at $5,197/tonne LCE.

The PEA was completed by Ausenco Chile Ltda. in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The assessment includes and demonstrates that the Arizaro project has the potential of a 25,000-tonne-per-annum (tpa) commercial-scale operation to produce battery-grade lithium carbonate.

Under the leadership of Steve Cochrane, president and chief executive officer, and Jose de Castro Alem, president of South America, Lithium Chile has achieved key milestones which has culminated in the successful completion of the PEA. Mr. Cochrane remarked: "The filing of this technical report is another important milestone. These results support our view that the Arizaro project has the potential to be a world-class producer of lithium carbonate. We are excited about continued advancement of this project -- a continuing journey of near-term enhancement opportunities that have already been identified."

Mr. de Castro, Lithium Chile's president, South America, says: "We are very proud of our entire Argentinian team, whose previous unique experience in starting up other lithium projects has worked in creating real value for all stakeholders in the Arizaro project, including communities in which we work, as well as all shareholders of Lithium Chile. We have achieved in less than two years this important step and we are confident in advancing quickly to eventual production."

Economic analysis and summary

Initial capital costs

The cost estimates include the initial investment and sustaining capital for a lithium concentration plant with an annual capacity of 25,000 tonnes LCE.

Operating costs

The most relevant cost under operating cost is reagent consumption (50.8 per cent) followed by energy (16.6 per cent). Both costs add up to $85.7-million (U.S.), representing 67.5 per cent of the operating direct costs.

Cash flow analysis

The economic analysis was performed assuming an 8-per-cent discount rate. Cash flows have been discounted to the beginning of the construction on Jan. 1, 2025, assuming that the project execution decision will be made and major project financing would be carried out at this time. The pretax net present value discounted at 8 per cent (NPV 8 per cent) is $1.846-million (U.S.), with a pretax internal rate of return (IRR) of 29.3 per cent and payback period of 3.5 years. On an aftertax basis, the NPV at an 8-per-cent discount is $1.1-billion (U.S.) with an IRR of 24.1 per cent and payback period of 3.6 years.

Sensitivity

Sensitivity analysis that was conducted on the Arizaro project revealed that the project is most sensitive to changes in lithium carbonate price and, to a lesser extent, to initial capital costs, operating costs and sustaining capital requirements.

Cautionary statement: The reader is advised that the PEA summarized in this news release is intended to provide only an initial, high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions, and the use of both indicated and inferred mineral resources. Inferred mineral resources are too speculative to be used in an economic analysis except as allowed for by National Instrument 43-101 in PEA studies. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the Arizaro project envisioned by the PEA will be realized.

Unique project advantages

The Arizaro project enjoys certain unique advantages, which support a rapid development schedule, and low capital and operating costs:

• The process selection considers the incorporation of a direct lithium extraction (DLE) stage. DLE processes have shorter start up and ramp up times, mainly due to the smaller infrastructure requirements and the ability to be designed with a modular concept. This modularity allows for incremental expansion, enabling a faster ramp up to meet increasing demand. Additionally, the crucial aspect of brine's chemical composition homogeneity further enhances the efficiency and effectiveness of the process. With consistent brine composition, DLE operations achieve more predictable and reliable lithium recovery rates, enabling better production capacity planning and meeting demand requirements with confidence. Over all, integrating DLE into the process proves to be a strategic choice, streamlining operations and ensuring a reliable supply of lithium.
• Multiple opportunities to enhance project economics through optimization and further engineering have already been identified.
• More than 60 technology combinations were studied during PEA and trade-off permits, to optimize main sustainability variables, water and energy usage, water basin balance, reagent usage, and capex and opex.
• Major discovery of lithium brines in the basin and major metallurgical testing, including best possibilities for water and energy usage.
• Unique technical team with operation, projects and production experience.
• Initial production water aquifer identified and permitting under way.

Qualified person and quality assurance/quality control statements

Leandro Sastre is a geology professional with over 20 years of experience in the international mining sector. He has worked extensively throughout Latin America with a focus on Argentina, Chile and Peru. Mr. Sastre has reviewed and approved the scientific and technical content of this news release.

About Lithium Chile Inc.

Lithium Chile is an exploration and lithium resource company with a property portfolio consisting of 111,978 hectares in Chile and 20,800 hectares in Argentina.

The company will be filing an updated NI 43-101 report with an indicated resource of 1,737,000 metric tonnes of LCE and inferred resource of 1,583,000 metric tonnes of LCE from its Salar de Arizaro, Argentina, project. The phase 2 development program on the Salar de Arizaro is under way, with results to be included in an updated NI 43-101 report which will be filed on SEDAR+ when completed.

Lithium Chile also owns four properties, totalling 21,329 hectares, that are prospective for gold, silver and copper. Exploration efforts are continuing on Lithium Chile's Carmona gold/silver/copper property, which lies in the heart of the Chilean megaporphyry gold/ silver/copper belt.

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