Activity Report for the Quarter Ended June 2023

Lithium Power International Limited (ASX:LPI) (“LPI” or “the Company”) is pleased to provide shareholders with an overview of quarterly activities for the period ending 30 June 2023. (“Quarter” or “Reporting Period”).

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HIGHLIGHTS

• Sale completed for LPI’s wholly-owned Australian subsidiary, Western Lithium Ltd (WLI), to Albemarle Lithium Pty Ltd.
• Deal for 100% of WLI’s shares, with proceeds comprising all cash-for- shares amounting to A$30 million.
• Subdued capital market conditions and an attractive cash offer from Albemarle led LPI’s board to decide that the sale would provide better value and less risk to shareholders.
• The sale provides significant balance sheet strength as financing progresses for the development of our flagship Maricunga lithium brine project in Chile.

CORPORATE UPDATE

A$30 MILLION CASH SALE OF WESTERN LITHIUM

LPI announced during the Quarter the completion of the sale of its wholly owned Australian subsidiary, Western Lithium Ltd (WLI), to Albemarle Lithium Pty Ltd (an Australian subsidiary of Albemarle Corporation).

As announced in June, the transaction involved the sale of 100% of WLI’s shares and comprised all cash-for-shares amounting to A$30 million, subject to a customary price adjustment to reflect WLI’s liabilities at completion. About A$29 million of the total consideration had been received by 3 July 2023.

The sale provides significant, non-dilutive, balance sheet strength to support the financing process of LPI’s flagship Maricunga lithium brine project in Chile, as the Company moves towards its construction phase. It also provides the immediate realisation of value for the WLI assets.

All Western Australia granted tenements, and those under application, are listed in the Mining Tenements Held table at the end of this report. Completion of the WLI transaction occurred after quarter end, so these will be removed from subsequent quarterly reports.

COMMENTARY ON CHILE’S LATEST LITHIUM POLICY INITIATIVES

LPI commented during the reporting period on the effect of the Company’s Maricunga lithium brine project of the new Chilean National Lithium Policy (“NLP” or the “Policy”). The NLP was released on the evening of 20 April 2023 (Chile time) by the Chilean President, Gabriel Boric.

It outlines plans for the implementation of lithium exploration and exploitation policies that are intended to bring Chile back to the forefront of global lithium production as demand is fuelled by the global megatrend towards electrification. LPI, and its subsidiary Minera Salar Blanco, have been in constant dialogue with the Chilean government and private institutions that have participated in the Policy’s development.

The Policy does not constitute a nationalisation of the lithium industry in Chile. Its objective, as clarified by the Mining Minister, is to set the conditions and parameters for the country to have a more active involvement and provide higher financial returns in a strategic industry. This is particularly the case for lithium resources that are located on concessions already owned by the Chilean State on the Atacama Salar. The NLP also seeks to accelerate the development of new projects.

Even though the Policy focus is primarily concentrated on the huge lithium resource within the Atacama Salar, LPI wishes to clarify some core elements as they relate to the Company’s Maricunga project and assets:

• The Maricunga Stage One project is fully permitted for construction. Its Environmental Permit (“EIA”) was approved in 2020 by the Servicio de Evaluación Ambiental (“SEA”), and ratified in 2022 by the Committee of Ministers of the Chilean Government. All objections submitted by third parties were rejected. It also obtained in 2018 the necessary Chilean Nuclear Energy Commission (“CCHEN”) permit, which allows LPI to export lithium products from Chile.
• LPI’s Maricunga Stage One development serves as an example regarding the inclusion of communities, environmental and technical aspects mentioned on the new Policy. It incorporates all social and community agreements as an integral part of the environmental permit. It is one of the few projects in Chile with a comprehensive indigenous consultation process. The Company has been pro-active in promoting community participation over the long-term.
• The Maricunga project has established broad ranging, sustainable development initiatives, which set a unique and complete ESG profile. LPI’s corporate vision aims to make the Maricunga Project one of the first lithium operations globally to achieve carbon neutrality.
• The Company confirms that its wholly-owned subsidiary, Minera Salar Blanco (“MSB”), is the sole owner of the property and concessions regarding both Stage One and Stage Two of the Maricunga Project. There are no current legal processes challenging that position. This is fundamentally different from operations in the Atacama Salar, where the state-owned company, CORFO, is the owner of the properties and concessions. CORFO then leases these concessions to the operators in Atacama for a set period.
• The Maricunga Stage One concessions, because of their pre-1979 Old Code status, do not require a CEOL (Special Lithium Operation Contract) for exploitation. The Stage One project is shovel ready and is awaiting finalisation of its financing to begin construction.
• It is important also to clarify that a CEOL does not provide any claim to ownership over the area included under a CEOL contract. CEOLs explicitly establish that holders have no rights to enter the area, or execute any activity, exploration or exploitation, without previous negotiation with the owners of the mining concessions.
• LPI embraces the possibilities for future public-private alliances, as declared by the NLP, for the development of Stage Two for the Maricunga project. That involves its post-1979 or New Code concessions. The Company will continue to work closely with the Chilean Government to transform the Maricunga Stage Two project into the first example of a public-private alliance under the parameters established by the new Policy.

With the release of the NLP, and its official clarification, the foundations are set for the development of the Chilean lithium industry. LPI understands that it will be recognised as Chile’s next lithium producer, through its wholly-owned MSB. The Board and Management have been active in the lead up to the release of the policy, and have engaged with the Mining Ministry, Foreign Affairs Ministry, Invest Chile and indigenous communities. LPI expects to continue working with the public sector to jointly participate in developing the lithium industry in Chile.

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