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Continued strategic, operational and partnership progress in Q2 driving the Clearwater Project toward commercialization
E3 Lithium Ltd. (TSXV: ETL,OTC:EEMMF) (FSE: OW3) (OTCQX: EEMMF), "E3", "E3 Lithium" or the "Company," a leader in Canadian lithium development, filed its unaudited consolidated financial statements for the three-month period ended June 30, 2026, and the accompanying Management Discussion and Analysis ("MD&A") on SEDAR ( www.sedarplus.ca ).
"The second quarter of 2026 built on the momentum established earlier in the year, with continued execution across our technical, strategic, and organizational priorities," said Chris Doornbos, CEO & Chair of E3 Lithium. "We successfully commissioned Phase 2 of our Demonstration Facility, confirmed funding of up to $36.5 million from Natural Resources Canada, progressed strategic partnership with Germany's TKMS, advanced our European market access strategy, and further strengthened our leadership team as we move closer to construction. Taken together, the quarter reflected disciplined execution across every pillar of our strategy, partnerships, technical de-risking, growth strategy, and leadership, as we advance Clearwater toward commercial production."
Key Highlights During Q2 2026
Signed Teaming Agreement with TKMS to Support Critical Minerals Supply
- In April 2026, E3 entered into a Teaming Agreement with Germany's TKMS, a leading provider of naval vessels, surface ships, and submarines, establishing a strategic framework to support the Canadian Patrol Submarine Project ("CPSP"), with potential financial contribution to E3 aligned with Canada's Industrial and Technological Benefits ("ITB") policy.
Commenced and Successfully Commissioned Phase 2 of the Demonstration Facility
- During the quarter, E3 completed its well pair development and commissioned Phase 2 of the Demonstration Facility. The Company's reservoir production test confirmed lithium concentrations of 75.8 mg/L and a steady-state flow rate of 1,400 m³/day, independently validated and consistent with brine chemistry across the Clearwater and greater Bashaw District.
Provided an Update on the Company's Strategic Growth and Direction for Long-Term Value Creation
- In May 2026, E3 outlined its long-term growth strategy, reaffirming the Clearwater Project as its top priority, targeting Stage 1 production of 12,000 tonnes of lithium carbonate per year with potential to scale to 150,000 tonnes annually. The Company also initiated a strategic review of its non-core Garrington District asset (5.0 million tonnes LCE M&I resource) and outlined plans to pursue global development opportunities and battery vertical integration, including potential cathode partnerships.
Welcomed Tom Gear as Chief Operating Officer
- In June 2026, E3 appointed Tom Gear as Chief Operating Officer, bringing nearly three decades of large-scale industrial development and operations experience including senior roles at MEG Energy and Suncor.
Executed Contribution Agreement Underpinning up to $36.5 Million in Federal Support
- On June 8, 2026, E3 executed its contribution agreement confirming up to $36.5 million in non-repayable funding through Natural Resources Canada's ("NRCan") Global Partnerships Initiative ("GPI"). The funding covers 75% of the Company's approximately $48 million project to complete Phase 3 of the Demonstration Facility and the Clearwater Project Feasibility Study.
Significant Undrawn Government Grants of $51.3 million
- As of June 30, 2026, the Company had $51.3 million of undrawn Government grants which will support E3's ongoing activities, including completion of the Demonstration Facility, as the Company advances toward FID and commercialization.
Key Highlights Subsequent to Q2 2026
Canadian Government Confirmed TKMS as Preferred Bidder for CPSP
- Subsequent to the quarter, the Canadian Government confirmed TKMS as the preferred supplier for the CPSP.
Advancing European Market Strategy Through Collaboration Agreement with Tees Valley Lithium
- On July 9, 2026, E3 entered into a non-binding Collaboration Agreement with Tees Valley Lithium Ltd. ("TVL"), a wholly owned subsidiary of Alkemy Capital Investments plc. This agreement establishes a framework for E3 to utilize TVL's UK refinery to convert lithium carbonate produced from its Clearwater Project into battery-grade lithium hydroxide, contemplating up to 50,000 tonnes over an initial 10-year term to support European offtake relationships.
E3 expects continued advancement of its Clearwater Project throughout 2026. Key priorities include ongoing operations and developing the final phase of the Demonstration Facility, advancing the Feasibility Study, and continuing engagement with strategic partners, potential offtake counterparties, and government stakeholders as it advances Clearwater Project commercialization and evaluates broader opportunities across the battery supply chain.
Additionally, the Company's Board of Directors (the "Board") has approved the grant of incentive stock options ("Options"), restricted share units ("RSUs"), and performance share units ("PSUs") to certain directors, officers, and new employees of the Company in accordance with the Company's Omnibus Equity Incentive Plan (the "Plan") and subject to the policies of the TSX Venture Exchange. The Company granted an aggregate of 2,390,000 Options to purchase common shares of the Company ("Shares"), comprised of Options exercisable to acquire up to 1,940,000 Shares granted on August 7, 2026 at an exercise price of $1.07 per Share, and Options exercisable to acquire up to 450,000 Shares granted on August 14, 2026 at an exercise price of $1.08 per Share, in each case exercisable for a period of five years from the date of grant and vesting of 25% on each of the first, second, third and fourth anniversaries of the date of grant. The Company also granted an aggregate of 570,000 RSUs, vesting over periods ranging from one to four years from the date of grant, as determined by the Board for each recipient and an aggregate of 166,000 PSUs (which may be settled through the issuance of up to a maximum of 249,000 Shares upon vesting assuming achievement of all maximum performance multipliers), which will vest upon achievement of the following performance goals during a 24-month performance period:
- Successful completion of phase 2 of the demonstration facility;
- Completion of Clearwater project to shovel ready;
- Continued financing, including grant funding, of the Company.
No RSUs or PSUs will vest earlier than one year from the date of grant.
ON BEHALF OF THE BOARD OF DIRECTORS
Chris Doornbos, CEO & Chair
E3 Lithium Ltd.
About E3 Lithium
E3 Lithium is a development company with a total of 21.2 million tonnes of lithium carbonate equivalent (LCE) Measured and Indicated 1 as well as 0.3 Mt LCE Inferred mineral resources 2 in Alberta. The Clearwater Pre-Feasibility Study outlined a 1.13 Mt LCE proven and probable mineral reserve with a pre-tax NPV(8%) of USD 5.2 Billion with a 29.2% IRR and an after-tax NPV(8%) of USD 3.7 Billion with a 24.6% IRR 1 .
1: The Clearwater Project NI 43-101 Pre-Feasibility Study, effective June 20, 2024, identified 16.2 Mt LCE (measured and indicated) and is available on the E3 Lithium's website ( www.e3lithium.ca/technical-reports/ ) and SEDAR+ ( www.sedarplus.ca ).
2: The mineral resource NI 43-101 Technical Report for the Garrington District Lithium Resource Estimate, effective June 25, 2025, identified 5.0 Mt LCE (measured and indicated) and 0.3 Mt LCE (inferred) and is available on the E3 Lithium's website ( www.e3lithium.ca/technical-reports/ ) and SEDAR+ ( www.sedarplus.ca ).
Unless otherwise indicated, Chris Doornbos, P. Geo., Chief Executive Officer and a Qualified Person under National Instrument 43-101, has reviewed and approved the technical information contained on this news release.
Forward-Looking and Cautionary Statements
This news release includes certain forward-looking statements as well as management's objectives, strategies, beliefs and intentions or forward-looking information within the meaning of applicable securities laws. Forward-looking statements are frequently identified by such words as "believe", "may", "will", "plan", "expect", "anticipate", "estimate", "intend", "project", "potential", "possible" and similar words referring to future events and results. Forward-looking statements are based on the current opinions, expectations, estimates and assumptions of management in light of its experience, perception of historical trends, and results of the PFS, but such statements are not guarantees of future performance. In particular, this news release contains forward-looking information relating to: E3's plans to advance the Clearwater Project toward commercial production and a Final Investment Decision ("FID"); the timing and completion of Phase 3 of the Demonstration Facility; the advancement and completion of the Clearwater Project Feasibility Study; the Company's plans to draw on its undrawn government grants, including the $51.3 million available as of June 30, 2026, to support its ongoing activities, including completion of the Demonstration Facility; the use and sufficiency of the up to $36.5 million in non-repayable funding from Natural Resources Canada's Global Partnerships Initiative ("GPI") to complete Phase 3 of the Demonstration Facility and the Clearwater Project Feasibility Study; the anticipated total cost of approximately $48 million for the Phase 3 and Feasibility Study project, and the expectation that GPI funding will cover 75% of such costs; the anticipated benefits to E3 arising from its Teaming Agreement with Germany's TKMS, including any potential financial contribution and its alignment with Canada's Industrial and Technological Benefits ("ITB") policy; the strategic collaboration between TKMS and E3 following the Canadian Government's confirmation of TKMS as the preferred bidder for the Canadian Patrol Submarine Project ("CPSP"), and any resulting benefits to E3; the potential outcomes of the non-binding Collaboration Agreement with Tees Valley Lithium Ltd. ("TVL"), including the contemplated conversion of up to 50,000 tonnes of lithium hydroxide over an initial 10-year term, and E3's ability to support offtake relationships in the European market; E3's plans to continue engagement with strategic partners, potential offtake counterparties, and government stakeholders; E3's plans to evaluate broader opportunities across the battery supply chain; and the continued advancement of the Clearwater Project throughout 2026.
In preparing the forward-looking information in this news release, the Company has applied several material assumptions, including, but not limited to, that any additional financing needed will be available on reasonable terms; the exchange rates for the U.S. and Canadian currencies will be consistent with the Company's expectations; that the current exploration, development, environmental and other objectives concerning the Demonstration Facility can be achieved and that its other corporate activities will proceed as expected; that general business and economic conditions will not change in a materially adverse manner and that all necessary governmental approvals for the planned activities on the Demonstration Facility will be obtained in a timely manner and on acceptable terms.
All forward-looking information (including future-orientated financial information) is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, the effectiveness and feasibility of emerging lithium extraction technologies which have not yet been tested or proven on a commercial scale or on the Company's brine, risks related to the availability of financing on commercially reasonable terms and the expected use of proceeds; operations and contractual obligations; changes in estimated mineral reserves or mineral resources; future prices of lithium and other metals; availability of third party contractors; availability of equipment; failure of equipment to operate as anticipated; accidents, effects of weather and other natural phenomena and other risks associated with the mineral exploration industry; the Company's lack of operating revenues; currency fluctuations; risks related to dependence on key personnel; estimates used in financial statements proving to be incorrect; competitive risks and the availability of financing, as described in more detail in our recent securities filings available under the Company's profile on SEDAR+ ( www.sedarplus.ca ). Actual events or results may differ materially from those projected in the forward-looking statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these forward-looking statements except as required by applicable law.
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E3 Lithium - Investor Relations
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587-324-2775
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