Allkem to acquire strategic lithium tenement in exchange for Borax

Allkem Limited (ASX|TSX: " Allkem ," the Company ") advises it has entered into a binding and conditional Heads of Agreement (" HOA ") to transfer Borax Argentina S.A (" Borax ") to Minera Santa Rita S.R.L (" MSR ") and to acquire the María Victoria lithium tenement from MSR in return (the " Proposed Transaction ").

HIGHLIGHTS

• Allkem will acquire 100% of the strategic lithium tenement of María Victoria located north of the Olaroz Lithium Facility (" María Victoria Tenement ") and in exchange transfer to MSR all of the shares in the Borax holding companies and US$14 million cash ¹ for employee and rehabilitation liabilities
• Conditions precedent to completion of the Proposed Transaction include transfer of certain lithium tenements and royalties from Borax to Allkem in return for borate extraction rights (usufructs) in favour of MSR, completion of due diligence by Allkem on the Maria Victoria Tenement and receipt of required internal and third party approvals

Transaction details

Under the Proposed Transaction Allkem will transfer to MSR all of the issued shares in the two Borax holding companies and US$14 million cash. In return, MSR will transfer to Allkem (or its nominee) 100% ownership of the Maria Victoria Tenement, as described in more detail below. All employees of Borax will continue to be employed by MSR.

Conditions precedent to completion include:

• The transfer by Borax to Allkem (or its nominee) of lithium tenements and associated lithium royalties held in the Cauchari, Olaroz and Hombre Muerto salars (" Allkem Property Transfers ")
• Allkem granting to Borax certain borate usufructs over the properties the subject of the Allkem Property Transfers (on customary industry terms), with Allkem retaining a right to repurchase those usufruct rights in the future; and
• Finalisation of satisfactory due diligence by Allkem on the Maria Victoria tenement, finalisation and signing of definitive agreements reflecting the terms of the HOA and obtaining all required internal, third party and regulatory approvals
  

Allkem will, subject to receipt of necessary third party and regulatory approvals, also retain a portion of the gas capacity that Borax is entitled to from the Fenix and La Puna gas pipelines to be available for its Sal de Vida project.

Subject to satisfaction of the conditions precedent, completion of the Proposed Transaction is expected to occur in Q4 CY2022.

Managing Director & CEO, Martin Perez de Solay says:

"The acquisition of the Maria Victoria tenement complements Allkem's existing extensive lithium brine holdings in the region and will allow more efficient development of the Olaroz salar. The exchange of Borax which is a non-core asset allows Allkem to remain focussed on its key aim of delivering growth plans of increasing lithium production threefold by 2026 and maintaining 10% of global market share in the longer term ² ."

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1} To be funded from Allkem cash reserves
² For further detail, refer to Allkem's ‘March 2022 Quarterly Activities Report' released to ASX/TSX on 14 April 2022

María Victoria Tenement

The Maria Victoria Tenement covers approximately 1,800 ha and is located in the northern part of the Salar de Olaroz, approximately 10km from Allkem's Olaroz Lithium Facility in the Jujuy Province (Figure 1).

Figure 1 is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/531d5374-7bc9-4f00-b002-f77e434afd2b

Borax Argentina S.A

Borax is located in the Salta Province and includes the Tincalayu and Sijes Mining Operations and processing capacity at Camp Quijano. It was acquired by Allkem from Rio Tinto PLC in 2012 and is the only boron producer in South America, producing a wide range of refined products and relatively unique boron minerals and chemicals.

Minera Santa Rita S.R.L

MSR is an Argentinian family-owned company dedicated to the extraction, production and international commercialisation of borates, its derivatives and other mining specialties. The MSR group has a global customer portfolio, supplying products for applications in agricultural, industrial, chemical and pharmacological industries.

This release was authorised by Mr Martin Perez de Solay, CEO and Managing Director of Allkem Limited.

IMPORTANT NOTICES

This investor ASX/TSX release ( Release ) has been prepared by Allkem Limited (ACN 112 589 910) (the Company or Allkem ). It contains general information about the Company as at the date of this Release. The information in this Release should not be considered to be comprehensive or to comprise all of the material which a shareholder or potential investor in the Company may require in order to determine whether to deal in Shares of Allkem. The information in this Release is of a general nature only and does not purport to be complete. It should be read in conjunction with the Company's periodic and continuous disclosure announcements which are available at allkem.co and with the Australian Securities Exchange ( ASX ) announcements, which are available at www.asx.com.au .

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Forward Looking Statements
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