Mr. Steven Cochrane reports

LITHIUM CHILE PROVIDES SHAREHOLDER UPDATE FOLLOWING INVESTMENT CANADA ACT NOTICE

Lithium Chile Inc. is providing shareholders with an update following its Aug. 17, 2026, announcement that the company and China Union Holdings Ltd. had received a notice pursuant to Subsection 25.2(1) of the Investment Canada Act (the ICA) in connection with the proposed sale of all of the outstanding shares of Argentum Lithium S.A. to China Union.

1) Lithium Chile and China Union remain committed to closing the transaction

Following receipt of the notice, representatives of Lithium Chile and China Union, together with their respective legal advisers, met to discuss the notice and assess the legal, regulatory and transactional alternatives available to them.

The company believes this is an important message for its shareholders: The transaction has not been abandoned; both parties remain firmly committed to closing the transaction and are actively co-ordinating their respective resources and options to achieve that outcome.

2) Lithium Chile continues to challenge the jurisdictional basis for the review

Lithium Chile continues to maintain the position set out in its Jan. 7, 2026, correspondence to Innovation, Science and Economic Development Canada (ISED) that the proposed sale of Argentum does not constitute an investment in a Canadian business contemplated by Subsection 25.1(c) of the ICA.

The transaction involves the sale of all outstanding shares of Argentum, an Argentine corporation whose sole asset is a 62.2-per-cent interest in another Argentine corporation, ARLI S.A., that owns and operates the Argentine mineral project, Arizaro, located in Salta province, Argentina.

• Argentum does not carry on all or any part of its operations in Canada;
• Argentum does not maintain a place of operations in Canada;
• Argentum does not employ individuals in Canada in connection with its operations;
• Argentum does not own assets in Canada used in carrying on its operations.

On that basis, Lithium Chile continues to believe that the sale of Argentum falls outside the jurisdiction contemplated by the applicable provisions of the ICA.

The company intends to advance that position and, together with its advisers, evaluate all courses of action available to it.

3) Timing of the notice and regulatory certainty

Lithium Chile believes the timing of the notice raises serious concerns regarding regulatory certainty, procedural fairness and the ability of shareholders to rely on a transparent regulatory process.

The company announced the transaction on Dec. 22, 2025, and pro-actively notified ISED on Jan. 7, 2026, outlining its position that the sale of Argentum fell outside the applicable provisions of the ICA. More than seven months then passed without response or indication of a review, while Lithium Chile continued to meet its continuous disclosure obligations through repeated public updates.

That regulatory silence became material to both the company and its shareholders. Investors were entitled to assess the transaction, buy or sell shares, and make investment decisions based on the public record and the reasonable understanding that no ICA review had been initiated.

Lithium Chile believes there must be a reasonable point at which a Canadian public company and its shareholders can rely on the absence of regulatory action, particularly where the regulator has been pro-actively notified and the company has continued to make transparent public disclosure throughout the process.

Allowing the market to rely on that disclosure for more than seven months before intervening creates precisely the type of uncertainty that continuous disclosure obligations are intended to prevent. The consequences extend beyond Lithium Chile, creating uncertainty for shareholders and transaction counterparties and undermining confidence in the predictability of Canada's capital markets.

Lithium Chile intends to raise these concerns through the appropriate channels as part of its response.

4) Lithium Chile is evaluating all available alternatives

While Lithium Chile and China Union remain focused on completing the transaction as presently contemplated, the company is also evaluating alternative structures that could achieve Lithium Chile's objective of monetizing its interest in the Arizaro project while complying with all applicable laws and regulatory requirements.

The regulatory uncertainty also affects Lithium Chile's broader business plans, including the intended reinvestment of transaction proceeds into its other high-potential projects in Chile, which may now be delayed pending resolution of the ICA process.

Steve Cochrane, president and chief executive officer of Lithium Chile, commented: "Our message to shareholders is straightforward: China Union remains committed to this transaction, Lithium Chile remains committed to this transaction, and we are working together to determine the most effective path forward.

"We were transparent from the beginning. We publicly disclosed the transaction, pro-actively notified the federal government, clearly explained our jurisdictional position and continued to keep our shareholders fully informed as the transaction progressed.

"After receiving no response for more than seven months, we are understandably concerned by the timing of this notice and the uncertainty it creates for our shareholders. We intend to vigorously defend our position while at the same time evaluating every lawful alternative available to us to complete the transaction."

The company will provide further updates regarding the transaction and the ICA process as material developments occur.

About Lithium Chile Inc.

Lithium Chile is an exploration company with a portfolio of 11 properties spanning 106,136 hectares in Chile and 29,245 hectares on the Salar de Arizaro in Argentina. The company has successfully advanced its Arizaro project with the completion of a National Instrument 43-101-compliant resource report, a preliminary economic assessment and a prefeasibility study, which are all accessible on SEDAR+ under Lithium Chile's profile.

We seek Safe Harbor.