Bradda Head Lithium Ltd Announces Unaudited Interim Results for the 3 and 9 months

Bradda Head Lithium Ltd

("Bradda Head", "Bradda", or the "Company")

Unaudited Interim Results for the three and nine months ended 30 November 2022

Bradda Head Lithium Ltd (AIM:BHL), the North America-focused lithium development group, is pleased to announce that it has today published its unaudited financial results for the three and nine months ended 30 November, 2022 and the Management's Discussion and Analysis for the same period

Both of the above have been posted on the Company's website www.braddaheadltd.com and are also available on SEDAR at www.sedar.com.

Financial and operational highlights for the third quarter

• Commenced an updated Mineral Resource Estimate ("MRE") based on a 1,200m sonic drill programme at Basin East ("BE"), with the updated resource being announced post period end on January 16, 2023.
• The updated MRE added 65 kt of LCE to the Mineral Resource, for an updated total LCE content of 371 kt.
• Drilling continued at the San Domingo pegmatite project, with lithium-bearing minerals being identified in the first hole at this programme, including spodumene and lepidolite.
• Completed an initial soil sampling programme covering an initial 3km², identifying a potential >3km lithium-bearing trend and highly-prospective follow-up drill targets.
• Cash balances and total assets stood at US$ 10,603,037 and US$ 19,584,569 respectively.
• On November 10, 2022, completed a dual listing on the TSX-Venture Exchange.

Ian Stalker, Chairman of Bradda Head, commented:

"The third quarter of the financial year has been very busy for the Company. Drilling continued at our San Domingo pegmatite asset, with lithium-bearing minerals being identified in the first drill hole. Post quarter end, the Company also updated its Mineral Resource Estimate at Basin East and highlighted the significant exploration potential that remains within this large, mineralised location. The pace of development will continue through the final quarter and into the next financial year, and we look forward to updating our shareholders as we receive the exploration results."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information please visit the Company's website:www.braddaheadltd.com

For further information, please contact:

About Bradda Head Lithium Ltd.

Bradda Head Lithium Ltd. is a North America-focused lithium development group. The Company currently has interests in a variety of projects, the most advanced of which are in Central and Western Arizona: The Basin Project (Basin East Project, and the Basin West Project) and the Wikieup Project.

The Basin East Project has an Indicated Mineral Resource of 21.2 Mt at an average grade of 891 ppm Li and 3.5% K for a total of 100 kt LCE and an Inferred Mineral Resource of 73.3 Mt at an average grade of 694 ppm Li and 3.2% K for a total of 271 kt LCE. In the rest of the Basin Project SRK has estimated an Exploration Target of between 300 to 1,300 Mt of material grading between 600 to 850 ppm Li which is equivalent to a range of between 1 to 6 Mt LCE. The Group intends to continue to develop its three phase one projects in Arizona, whilst endeavouring to unlock value at its other prospective pegmatite and brine assets in Arizona, Nevada, and Pennsylvania. All of Bradda Head's licences are held on a 100% equity basis and are in close proximity to the required infrastructure. Bradda Head is quoted on the AIM of the London Stock Exchange with the ticker of BHL, on the TSX Ventures exchange with a ticker of BHLI, and on the US OTCQB market with a ticker of BHLIF.

Management discussion and analysis for the three and nine-month period ended November 30, 2022

This management's discussion and analysis ("MD&A") reports on the operating results and financial condition of the Company for the three and nine months ended November 30, 2022, and is prepared as of January 27 ,2023. The MD&A should be read in conjunction with Bradda Head Lithium Limited's (the "Company" or "Bradda Head") unaudited consolidated financial statements for the three and nine months ended November 30, 2022, and the audited annual consolidated financial statement for the years ended February 28, 2022, and February 28, 2021, and the notes thereto which were prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar amounts referred to in this MD&A are expressed in United States dollars except where indicated otherwise.

Overview

Bradda Head Lithium Limited was incorporated on October 28, 2009, in the British Virgin Islands under the British Virgin Islands Companies Act with registered number 1553975 with the name Copper Development Corporation. On October 5, 2015, the Company changed its name from Copper Development Corporation to Life Science Developments Limited, and on April 18, 2018, the Company changed its name to Bradda Head Holdings Limited. On September 15, 2021, the Company changed its name to Bradda Head Lithium Limited.

The Company has one business segment, being mineral exploration. The Company is focused on appraising and developing lithium mining projects within North America and currently has interests in a variety of projects in the United States.

Corporate and Exploration Highlights

Exploration Highlights

Set forth in this section is a description of the Company's material mineral projects. All scientific and technical data contained in this MD&A has been reviewed and approved by Joey Wilkins, B.Sc., P.Geo., who is Head of North American Operations at Bradda Head and a Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").

Arizona Sedimentary Hosted Lithium Projects

Basin Project

Geological consultants, SRK Consulting (UK) ("SRK"), commenced an updated Mineral Resource Estimate based on a 1,200m sonic drill programme at Basin East ("BE"). This is planned as an interim update whilst we prepare to drill at Basin East Extension ("BEE") and Basin North ("BN"). The programme consisted of infill and expansion drilling (14 holes total, 8 infill and 6 expansion). The initial results from the programme showed that mineralization is open to the north at BE, as well as the west and northwest as previously identified.

Permitting efforts continued at Basin for permission to drill at BEE and BN. Permission was awarded on May 2, 2022 to drill at BN, with final permitting at BEE still in progress. Efforts now are focused on ensuring that we access the areas with as little disturbance as possible, with an expected drilling start date at BN during Q1 2023.

Permitting is ongoing for the Plan of Operations permit at Basin West ("BW") and Basin West Extension ("BWE"), and we expect a decision on this in the second half of 2023. This is for an 80-hole drill programme to test the resource potential at the c.11km² area covered by BW and BWE.

Wikieup Project

Analysis is ongoing at Wikieup for a follow-up drill programme in 2023, building on the initial sonic drill programme which finished in early 2022.

Arizona Pegmatite District

San Domingo Project

Progress at the first diamond core scout programme at San Domingo continued over the quarter, with good progress seen after an initially mixed start due to adverse weather conditions over the Arizona monsoon season. The Company has now moved assay labs to SGS Canada Inc, following excessive delays (up to 17 weeks) from the previous lab. As a result, assays are expected to be received in a more consistent manner from now.

Visible lithium-bearing minerals were identified in the first hole at this programme, including spodumene and lepidolite. To confirm mineralogy, X-ray Diffraction ("XRD") was carried out on 8 samples from the intersections, identifying spodumene and lepidolite in all holes.

The commencement of drilling followed positive results from a recent SRK 3D mapping exercise, increasing potential pegmatite outcrops by 190%. Following this, Bradda Head increased its staked claims at San Domingo by 75% (press release dated 08 August 2022). This first programme is expected to be finished in late January/early February 2023, with final assays expected back before the end of March 2023.

In late November, the Company released the results from a soil sampling programme, covering c.11% of the San Domingo pegmatite claims in Arizona. Results identified highly prospective follow-up lithium targets over a 3km²+ strike, with the same elemental signatures that have been seen at known lithium mineralisation locations globally. The soil geochemistry suggests that the pegmatite swarm is largely of the lithium-caesium-tantalum (LTC) mineralisation type, the most significant for lithium deposits and what is commonly associated with economic occurrences of lithium and tantalum. LCT-type pegmatites are found in the Western Australian pegmatite district, like Tianqi and Albemarle's joint-venture Greenbushes lithium mine.

Bradda Head carried out the soil sampling programme covering just under 3km² of the northern claim block at San Domingo to support future drill hole targeting and to better understand our 23km² pegmatite district in Arizona. Importantly, ratios present in the soils of elements associated with pegmatites and lithium mineralization highlight targets for potential follow-up. The maps below show the areas of interest and, crucially, demonstrate a 9km² NE-SW trend, which may continue through the remainder of the San Domingo 20km² of claims and state MEPs in Arizona, which have not had detailed soil sampling.

Alongside the current drill programme, a follow-up field observation, soil sampling, and channel sampling programme is now underway across the full 23km² San Domingo pegmatite district.

Nevada Lithium Brine Projects

Wilson Project

Planning is in place for an initial drill programme during the first half of 2023, with the Company lining up a hydrogeological specialist to review the project before drilling commences.

Eureka Project

Planning is in place for an initial drill programme during 2023, and the Company lining up a hydrogeological specialist to review the project before drilling commences

Corporate Highlights

On 13 April 2022, the Company announced the completion of a successful fundraise. Aggregate gross proceeds of US$ 12,304,100 was raised, issuing 73,195,560 new ordinary shares, at a price of £0.135 each. Investors who participated in the raised also received one warrant for each ordinary shares, with an exercise price of £0.21. The warrants expire two years after being issued.

Issuance of Stock Options

On 20 April 2022, the Company announced that is awarded a total of 9,200,000 options to acquire ordinary shares (the "Options") at an exercise price of £0.18 to management and certain Board members. Options for management and directors, are subject to the following conditions:

- Options issued in three equal traches, with the initial tranche vesting immediately;

- Are exercisable for a period of five years from date of issue; and

- The options issued to each participant should lapse upon any participant no longer being an employee or connected person remunerated by the Company.

Directors included in the award are detailed in the table below:

Selected Financial Information

The following table sets forth selected financial information with respect to the Company for the years ended February 28, 2022, and February 28, 2021. The selected financial information has been derived from the audited financial statements for the periods indicated. The following should beread in conjunction with the said financial statements and related notes that are available on the Company's website - www.braddaheadltd.com.

The annual financial statements and interim financial statements are presented in US dollars and are prepared in accordance with IFRS, See "Summary Financial Data" and "Currency Information".

MANAGEMENT DISCUSSION AND ANALYSIS: Q3 2022

Introduction

This interim Management Discussion and Analysis (the "interim MD&A") should be read in conjunction with the unaudited condensed interim financial statements of the Company for the three and nine months ended November 30, 2022, and the audited financial statements for the year ended February 28, 2022 and related notes. This MD&A is made as of January 27, 2023.

Results of Operations for the nine-months ended November 30, 2022

The Company's net loss after tax for the nine-month period to November 30, 2022 was US$ 3,074,862, compared to US$ 2,705,148 for the comparative period ended November 30, 2021. The major expenses for the three and nine-periods ended November 30, 2022 were operational expenses incurred on the Company's exploration projects, and are broken down in the respective projects as follows:

During this time period, the Company incurred and capitalised exploration expenditures of US$1,728,158, compared to US$ 719,097 for the comparative nine-month period to November 30, 2021.

The capitalied exploration costs for the three and nine-periods ended November 30, 2022 have been allocated amongst the Company's exploration projects in approximately the following amounts:

* Note the negative amount for Wikieup is due to the transfer of the drilling contractor deposit from deferred mining and exploration costs to the Deposits Receivable balance sheet account.

The exploration expenditures have been primarily costs associated with drilling, assaying, resource and mining consultants, metallurgical testing, environmental studies, project team fees, acquisition of new leases, and annual renewal of existing leases.

General and administrative expenses for the nine-month period to Novemebr 30, 2022 totalled US$ 4,242,520 , compared to US$ 1,690,543 for the comparative period to November 30, 2021. General and administrative expenses are broken down as follows:

During the nine-month periods to November 30, 2022 and November 30, 2021, there have been no changes in financial performance or other elements that relate to non-core buisness activities and operations.

Cash flows

During the nine-month period ended November 30, 2022, the Company had net cash inflows of US$ 4,531,077, compared to inflows of US$ 5,536,420 during the comparative nine-month period to November 30, 2021. The cashflows for the two periods are shown below:

Liquidity and Capital Resources

As at November 30, 2022 the Company had cash and cash equivalents of US$ 10,603,037, and a working capital surplus of US$ 9,697,220. As of February 28, 2022, the Company had cash and cash equivalents of US$ 7,327,303, and a working capital surplus of US$ 6,327,624.

Outstanding Share Data

As of November 30, 2022, the following securities were outstanding:

The Company's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Company includes cash and cash equivalents, equity attributable to equity holders comprised of contributed equity, reserves and accumulated losses. In order to maintain or adjust the capital structure, the Company may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the Company.

The Company monitors capital based on cash flow requirements for operational, exploration and evaluation expenditures. The Company has no debt or other borrowings as at the date of this Application. The Company will continue to use capital market issuances to satisfy anticipated funding requirements.

The availability of equitycapital, and the price at which additional equity could be issued, is dependent upon the success ofthe Company's exploration activities, and upon the state of the capital markets generally. Additional financing may not be available on terms favourable to the Company or at all. If the Company does not receive future financing, it may not be possible for the Company to advance the exploration and development of its mineral exploration properties. If the Company is not able to fund these minimum expenditures, it may not be able to maintain part or all of its mineral exploration property interests. See "Risk Factors".

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Transactions with Related Parties

The Company has conducted transactions with officers, directors and persons or companies related to directors or officers and paid or accrued amounts as follows:

Edgewater Associates Limited ("Edgewater")

During the nine-month period ended November 30, 2022, Directors and Officers insurance was obtained on an arms-length basis from Edgewater, which is a 100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke are Directors of both the Company and MFG.

During the period, the premium payable on the policy was US$ 49,318 (year ended February 28, 2022: US$ 44,303), of which US$ 32,122 was prepaid as at the period end (February 28, 2022: US$ 11,076).

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions affect the carrying value of assets, and impact decisions as to when exploration and development costs should be capitalized or expensed.

As at November 30, 2022, the Company had incurred capitalised exploration expenditures, including capitalised licence and permit costs, of US$ 8,167,270. Changes in management's judgment as to the prospective nature, assessment of the existence or otherwise of economically recoverable reserves, technical feasibility and/or commercial viability of the relevant tenements and the Company's intentions with respect to the relevant tenements, could affect the assessment of the recoverable amount.

The Company regularly reviews its estimates and assumptions: however, actual results could differ from these estimates and these differences could be material.

Condensed Interim Consolidated Statement of Comprehensive Income

for the period ended November 30, 2022

The accompanying notes are an integral part of these consolidated interim financial statements.

Condensed Interim Consolidated Statement of Financial Position

as at November 30, 2022

The accompanying notes are an integral part of these consolidated interim financial statements.

These condensed interim consolidated financial statements were approved by the Board of Directors on January 27, 2023 and weresigned on their behalf by:

Denham Eke

Director

Condensed Interim Consolidated Statement of Changes in Equity

for the period ended November 30, 2022

The accompanying notes are an integral part of these consolidated interim financial statements.

Condensed Interim Consolidated Statement of Changes in Equity

for the period ended November 30, 2022 (continued)

The accompanying notes are an integral part of these consolidated interim financial statements.

Condensed Interim Consolidated Statement of Cash Flows

for the period ended November 30, 2022

The accompanying notes are an integral part of these consolidated interim financial statements.

1 Reporting Entity and basis of preparation

Bradda Head Lithium Limited (the "Company")is a company domiciled in the British Virgin Islands. The address of the Company's registered office is Craigmuir Chambers, Road Town, Tortola, British Virgin Islands. The Company and its subsidiaries together are referred to as the "Group".

The Company is a lithium exploration Group focused on developing its projects in the USA.

These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the last annual consolidated financial statements as at and for the year ended February 28, 2022 ("last annual financial statements"). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

The financial information in this report has been prepared in accordance with the Company's accounting policies and in consistency with the last annual financial statements. Full details of the accounting policies adopted by the Company are contained in the financial statements included in the Company's annual report for the year ended February 28, 2022, which is available on the Group's website:www.braddheadltd.com, and on SEDAR at www.sedar.com. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended February 28, 2022.

2 General and administrative

The Group's general and administrative expenses include the following:

3 Deferred mine exploration costs

The schedule below details the exploration costs capitalised to date:

The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful development and commercial exploitation or sale of the respective area of interest, as well as maintaining the assets in good standing. The Group assessed the DMEC relating to areas for which licenses and permits are held, for impairment as at November 30, 2022. The Board concluded that no facts and circumstances have been identified which suggest the recoverable amount of these assets would not exceed the carrying amount and, as such, no impairment was recognised during the period.

During the year ended February 28, 2022, an impairment charge of US$ Nil was recognised.

4 Exploration permits and licences

The schedule below details the exploration permit and licence costs capitalised to date:

The Group assessed the carrying amount of the licences and permits held for impairment as at November 30, 2022. The Board concluded that no facts and circumstances have been identified which suggest the recoverable amount of these assets would not exceed the carrying amount and, as such, no impairment was recognised during the period.

During the year ended February 28, 2022, an impairment charge of US$ 230,230 was recognised as a result ofproject licences and permits that were not renewed.

5 Investment in subsidiary undertakings

As at November 30, 2022 and February 28, 2022, the Group had the following subsidiaries:

* Held directly by the Company. All other holdings are indirectly held through Bradda Head Limited

The condensed interim consolidated financial statements include the results of the subsidiaries for the full interim period from March 1, 2022 to November 30, 2022, and up to the date that control ceases.

6 Trade and other receivables and advances and deposits

Non-current

Current

7 Trade and other payables

8 Plant and equipment

8 Plant and equipment (continued)

9 Share premium

Authorised

The Company is authorised to issue an unlimited number of nil par value shares of a single class.

10 Equity settled share based payments

The cost of equity settled transactions with certain Directors of the Company and other participants ("Participants") is measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the Black-Scholes option pricing model.

During the nine-month period ended November 30, 2022, outstanding fees due to directors totaling US$ Nil were settled by the issue of shares (28 February 2022: US$Nil)

Options and warrants

The total number of share options and warrants in issue as at the period end is set out below.

10 Equity settled share based payments (continued)

The amount expensed in the income statement has been calculated by reference to the fair value at the grant date of the equity instrument and the estimated number of equity instruments to vest after the vesting period.

The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment plans issued during the period are as follows:

April 2022 options

Terms of the issued options are as follows:

- 9,200,000 options have been granted and are subject to the three independent vesting conditions for 1/3 of the entitlement, relating to the successful fund raising in respect of the Group's operational budget, commencement of a drilling program in respect of the San Domingo project and resolution of certain Wickieup project title claims. All un-exercised options expire after a period of 5 years from grant date. It is assumed that options are exercised within 5 years from date of grant. The applied volatility is based on historical volatility.

April 2022 supplier warrants

Terms of the issued warrants are as follows:

- As part of the fundraise completed during April 2022, certain service providers of the Company received warrants for services rendered. As a result, 3,244,331 warrants have been issued. All un-exercised warrants expire after a period of 2 years from grant date. It is assumed that warrants are exercised within 2 years from date of grant. The applied volatility is based on historical volatility.

11 Warrants

The cost of equity warrants granted during the period are measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the Black-Scholes option pricing model.

During the nine-month period ended November 30, 2022, the Company awarded warrants to investors who participated in the fundraise completed during April 2022.

The total number of warrants in issue as at the period end is set out below.

The fair value applied to the shareholder warrants has been classified as a financial liability. At period end, the warrant liability has been re-measured to fair value, with a corresponding entry to profit and loss of US$ 3,711,264 (period ended November 30, 2021: Nil) within Warrant Fair Value Re-Measurement.

Reconciliation of warrant liability fair value:

11 Warrants (continued)

April 2022 shareholder warrants

As part of the fundraise completed during April 2022, all participating shareholders received a warrant on 1:1 basis for shares acquired. As a result, 73,195,560 warrants have been issued. All un-exercised warrants expire after a period of 2 years from grant date. It is assumed that warrants are exercised within 2 years from date of grant. The applied volatility is based on historical volatility.

12 Basic and diluted loss per share

The calculation of basic profit per share of the Company is based on the loss for the period of US$ 3,074,862 (nine-month period to November 30, 2021: loss of US$ 2,052,489) and the weighted average number of shares of 379,122,544 (at November 30, 2021: 147,618,936) in issue during the period.

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares such as warrants and options. An adjustment for the dilutive effect of share options and warrants in the current period has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive, due the Company recognising a loss for the period.

13 Related party transactions and balances

Edgewater Associates Limited ("Edgewater")

During the nine-month period ended November 30, 2022, Directors' and Officers' insurance was obtained on an arms-length basis through Edgewater, which is a 100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke are Directors of both the Company and MFG.

During the period, the premium payable on the policy was US$ 49,318 (year ended February 28, 2022: US$ 44,303), of which US$ 32,122 was prepaid as at the period end (February 28, 2022: US$ 11,076).

14 Commitments and contingent liabilities

The Group has certain obligations to expend minimum amounts on exploration works on mining tenements in order to retain an interest in them, equating to approximately US$ 415,454 during the next 12 months. This includes annual fees in respect of licence renewals. These obligations may be varied from time to time, subject to approval and are expected to be filled in the normal course of exploration and development activities of the Company.

15 Events after the reporting date

On 21 December 2022, the Company awarded 500,000 ordinary share options each to Euan Jenkins and Alex Borrelli, independent non-executive directors of the Company.

ENDS

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SOURCE:Bradda Head Lithium Limited