Activity Report for the Quarter Ended September 2022

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 September 2022 (“Quarter”, “Reporting Period”), including subsequent events that might have a significant impact between 30 September 2022 and the date of issuance of this Report.

HIGHLIGHTS

• The consolidation of ownership of the Maricunga Lithium Brine Project by way of a three-party all-scrip merger with our JV partners – MSB SpA (owner of 31.31% of Maricunga) and Bearing Lithium (17.14%) – advanced as planned during the quarter and is expected to close during November.
  • An EGM of shareholders has been called for the 28th of October 2022 to seek approval of the consolidation transaction.
  • The consolidation will significantly de-risk the project’s funding and create a simple and transparent investment vehicle.
  • The outcome is expected to boost returns to LPI’s current shareholder base by lifting their proportionate ownership from 51.55% to 57.9% of the Maricunga Project.
• MSB continues with its project financing process, which is being assisted by Treadstone and Canaccord. Several expressions of interest in relation to debt and equity funding have been received, which are being reviewed by LPI management and Canaccord. The process will progress as expected during the upcoming months.
• Significantly increased tenement holdings in Western Australia, to become the largest coverage in the Greenbushes Region and adding to the region profile by acquiring additional exploration tenements in the Eastern Goldfields, WA.
• Demerger and subsequent listing of the Western Australia holding company to be deferred until Q1 2023 with the consolidation of MSB taking precedent and was a prerequisite to the demerger.
• Successful raise of $AU25m through a single tranche placement to institutional, sophisticated and professional investors. Funds will be primarily used to progress and accelerate the development of the Maricunga project.

CONSOLIDATING 100% OWNERSHIP OF MARICUNGA

The consolidation of ownership of the Maricunga Lithium Brine Project by way of a three-party all-scrip merger with our JV partners – MSB SpA (owner of 31.31% of Maricunga) and Bearing Lithium (17.14%), advanced as planned during the quarter and is expected to be closed during November.

An EGM of LPI shareholders has been called for 28th October 2022 to seek approval of the consolidation transaction.

Highlights of the MSB ownership Consolidation are as per below:

• LPI to consolidate 100% ownership of the Maricunga brine project, by way of a three-party all-scrip merger with its JV Partners MSB SpA (owner of 31.31% of Maricunga) and TSXV listed Bearing Lithium (17.14%).
  
• The Transactions increase the current LPI shareholders’ proportionate interest in Maricunga from the current 51.55% to ~57.9%.1
• The consolidation will significantly de-risk the project’s funding and create a simple and transparent investment vehicle.
• Consideration will be paid in LPI shares thereby allowing the shareholders of the JV Partners to retain exposure to the NPV8 US$1.4b Project.2
• The Transactions have been unanimously endorsed by the Boards of LPI, Bearing and MSB SpA, with the LPI Board (other than Mr Martin Borda who abstained due to him being the ultimate controller of MSB SpA) recommending that LPI shareholders vote in favour of the Transactions at the upcoming shareholder meeting.
• To affect the transaction, LPI will issue approximately 161.6m ordinary LPI shares to MSB SpA as consid- eration for LPI merging with MSB SpA’s wholly-owned subsidiary, a newly formed Delaware limited liability company called SALAR BLANCO LLC (SBD), that will hold MSB SpA’s 31.31% interest in Maricunga; and
• To merge with Bearing, LPI will issue 0.70 ordinary LPI shares for every Bearing common share on issue and for every Bearing option or Bearing warrant that is exercised following completion of the Bearing Transaction. The maximum number of LPI shares the Company may issue under the Bearing Transaction is 94.5m.

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