Infinity Lithium Interim Report For The Half-Year Ended 31 December 2022

Infinity Lithium (ASX:INF) is pleased to present its Half Year Report.

Directors’ Report

Your Directors present their report on Infinity Lithium Corporation Limited (the ‘Company’ or ‘Infinity’) and its controlled entities (together the ‘Consolidated Entity’) in conjunction with the Financial Report for the half-year ended 31 December 2022 (the ‘reporting period’).

Directors

The names of Directors in office at any time during or since the end of the period are:

• Mr Adrian Byass Non-Executive Chairman

• Mr Ryan Parkin Managing Director/CEO

• Mr Remy Welschinger Non-Executive Director

• Mr Jon Starink Executive Director

• Mr Ramón Jiménez Serrano Executive Director (appointed 6 September 2022)

Directors have been in office since the start of the reporting period to the date of this report unless otherwise stated.

Principal Activities and Significant Changes in Nature of Activities

The principal activities of the Consolidated Entity during the reporting period was exploration and evaluation of the Consolidated Entity’s lithium assets and progression of the integrated lithium chemicals conversion plant. There were no significant changes in the nature of the Consolidated Entity’s principal activities during the reporting period.

Operating Results

The consolidated loss of the Consolidated Entity after providing for income tax amounted to $2,385,000 (31 December 2021: $4,154,000).

Review of Operations

Business Activities

San José Lithium Project:

Mining Licence & EIA Permitting Process Initiated

The process of submitting an Exploitation Concession application was initiated in advance of the Contentious Administrative Court in Cáceres’ (‘CAC’, or ‘the Court’) decision on the status of the Investigation Permit Valdelflorez (‘PIV’) with the lodgement of the ‘Initial Document’ to the Dirección General de Industria, Energía y Minas (General Directorate of Industry, Energy and Mines) and Dirección General de Sostenibilidad (General Directorate of Sustainability) in Extremadura.

The purpose of the Initial Document is to request that the environmental body formulate an Environmental Impact Assessment Scoping Document (‘ESIA’) in advance of the commencement of the ordinary Environmental Impact Assessment procedure. The ESIA will provide the basis on which the direct Exploitation Concession application will be prepared. Refer to ASX Announcement 3 October 2022 for further details.

Permitting Strategy Clarified by Investigation Permit Rulings

In December 2022, Infinity through its wholly owned subsidiary Extremadura New Energies, advised that it will advance submissions for the lodgement of a direct exploitation concession following the determination by the CAC to uphold the cancellation of the PIV.

The CAC’s decision provided clarity on the pathway to the lodgement of an Exploitation Concession Application and the Company’s permitting strategy remains on course following the initiation of the permitting process at the invitation of regional and local authorities through the lodgement of the Initial Document.

The Regional Government of Extremadura had publicly acknowledged the potential for the Project Joint Venture (‘JV’) entity Technologia Extremeña Del Litio S.L. (‘TEL’) to apply for a direct Exploitation Concession through the submission of an Exploration Permit application. The Company and TEL maintain subsequent and sequential rights to the Project as detailed in ASX announcement 19 July 2021. The avenue to lodge an Exploitation Concession Application is available under Spanish Mining Law with the technical and economic viability of the San José deposit already demonstrated. Refer to ASX announcement 22 December 2022.

Subsequent to period end, the Court ratified the correct granting of Investigation Permit Ampliación Valdeflórez (‘PIAV’) which upheld the position of both Extremadura New Energies and the Industrial, Energy and Mining Management Service of the Regional Government of Extremadura.

The Court’s judgement clarified the General Urban Development Plan of Cáceres facilitates the utilisation of certain areas within PIAV in which the urban land classification allows “extraction activity” and the industrial development of the proposed lithium hydroxide conversion facility. The Court had recently determined other areas within an adjacent area to the PIAV did not allow for extractive activity and the disturbance of the surface based on land classification under the General Urban Development Plan of Cáceres (see ASX announcement 22 December 2022).

The decision reinforced compliance under General Urban Development Plan of Cáceres for Extremadura New Energies’ disturbance of the surface areas required for the decline portal within the PIAV area, adjacent to the resource area, and undertake subsurface activities to access the lithium bearing deposit (subject to environmental and mining licences being granted following the assessment of the Exploitation Concession Application).

The Company will now further advance its submission for the lodgement of a direct Exploitation Concession Application (see ASX announcement 22 December 2022). The CEO of Extremadura New Energies, Ramón Jiménez, stressed that "the decision of the Cáceres court ratifies the urban planning compatibility of the work in the Valdeflórez expansion area and supports the option chosen for the exploitation concession application".

Infinity Assumed Administrative Control of the San José Lithium Project

In October 2022, the Company moved to solely control the San José Lithium Project (‘San José’, or ‘the Project’) JV entity TEL through the finalisation of payment obligations to JV partners Valoriza Mineria S.L.U. (‘VM’) under the novated JV agreement. The Company retains the right to move to 100% Project ownership through the exercise of an upfront call option of between €2 million and €4 million dependent on timing of acquisition. Refer to ASX announcement 3 October 2022 for further details.

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