James Bay Lithium Project Update Confirms Strong Project Economics

BRISBANE, Sept. 25, 2023 - Allkem Ltd. (ASX |TSX: AKE) ("Allkem" or the "Company") is pleased to announce a project update for its wholly owned James Bay Lithium Project ("James Bay" or the "Project") located in Québec, Canada. This update builds on the recently announced Mineral Resource update (11 August 2023) and the prior feasibility study ("FS") results released on 21 December 2021.

HIGHLIGHTS

• Updated Feasibility Study confirms a robust, high-value hard rock lithium operation utilising renewable hydropower

• Material ~108% increase in pre-tax Net Present Value ("NPV") to US$2.9 billion with a strong internal rate of return and short payback period

Project Details

• Recently announced Total Mineral Resource of 110.2 Mt at 1.30% Li₂O, including 54.3 Mt at 1.30% Li₂O in the Indicated Category, and 55.9 Mt at 1.29% Li₂O in the Inferred Category with further drilling planned to test possible extensions to mineralisation
• Ore Reserve of 37.3 Mt at 1.27% Li₂O provides a long life, low cost spodumene operation and remains in line with permitting considerations
• Average annual production of 311 ktpa of spodumene concentrate with an 18.8-year mine life
• Shallow, near-surface mineralisation ideal for open cut mining with a low life-of-mine ("LOM") strip ratio of 3.6:1
• 2 Mtpa process plant design remains unchanged from 2021 FS, producing a 6.0% Li₂O spodumene concentrate with operational flexibility to produce a 5.6% Li₂O spodumene concentrate
• Very similar process design and flowsheet to that already successfully employed at Mt Cattlin
• Low-cost, sustainable source of hydropower now installed to site
• Strong relationships with the Cree Nation of Eastmain, Cree Nation Government and all stakeholders

Project Financials

• Increase of the capital cost estimate ("CAPEX") to US$381.5 million, representing a 33.8% increase on the December 2021 FS, in line with inflationary conditions
• Cash operating costs (FOB Montreal) of US$407 per tonne of 5.6% Li₂O concentrate also reflecting inflationary conditions
• Pre-tax NPV of US$2.9 billion at an 8% discount rate and post-tax NPV of US$1.7 billion reflecting an increase in lithium price assumptions and market outlook
• Pre-tax Internal Rate of Return ("IRR") of 62.2% and pre-tax payback period of 1.4 years
• Post-tax Internal Rate of Return ("IRR") of 45.4% and post-tax payback period of 1.7 years

Project Execution

• Detailed engineering and procurement activities progressed at 80% supporting the updated cost estimate and bringing the project ready for approximately 19 months of construction once provincial authorisation is obtained
• Impact and Benefit Agreement ("IBA") discussions and Provincial Environmental and Social Impact Studies Review (COMEX) are in final stages
• Further carbon studies and initiatives underway to align the project to Allkem's target of net-zero emissions by 2035

Managing Director and Chief Executive Officer, Martin Perez de Solay commented

"The Feasibility Study Update results confirm the exceptional value that will be generated for all stakeholders through the development of this project. Inflationary impacts on operating and capital costs are within expectations and as seen at other projects, however the project economics remain strong with an increase of more than 100% in the pre-tax NPV to US$2.9 billion reflecting an increase in lithium price assumptions and market outlook.

"Pleasingly, there remains significant potential for this resource to grow as we conduct further drilling to test extensions of the recently upgraded resource of 110 million tonnes."

PROJECT BACKGROUND

The Project is located in northern Québec, approximately 130 km east of James Bay and the Cree Nation of Eastmain community as illustrated in Figure 1. The Company is proposing to develop a spodumene mine located adjacent to the Billy Diamond Highway (formerly the James Bay Highway) which provides access to key infrastructure in the region.

The Company has updated the Feasibility Study and technical report in accordance with NI 43-101 and S-K 1300 guidelines, in preparation for the proposed merger between the Company and Livent.

GEOLOGY & MINERALISATION

The Project is in the northeastern part of the Superior Province and lies within the Lower Eastmain Group of the Eastmain greenstone belt. This area predominantly consists of amphibolite grade mafic to felsic metavolcanic rocks, metasedimentary rocks and minor gabbroic intrusions.

The pegmatites delineated on the property to date are oriented in a generally parallel direction to each other and are separated by barren host rock of sedimentary origin (metamorphosed to amphibolite facies). They form irregular dikes attaining up to 60 m in width and over 300 m in length. The pegmatites crosscut the regional foliation at a high angle, striking to the south-southwest and dipping moderately to the west-northwest.

Spodumene mineralisation at James Bay is coarse grained, high grade and outcrops along strike, supporting excellent recoveries, low strip ratio and open cut mining. No significant deleterious lithium mineralisation has been identified to date.

In 2023, new pegmatite dykes were discovered to the NW of known mineralisation which were incorporated into the Inferred Category of an updated Mineral Resource announced on 11 August 2023.

RESOURCE & RESERVE ESTIMATE

The Mineral Resource and Ore Reserve estimates set out below have been prepared in accordance with the?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (JORC), the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (2019). Mineral Resources and Ore Reserves are classified using the JORC Code. The confidence categories assigned under the JORC Code were reconciled to the confidence categories in the CIM Definition Standards. As the confidence category definitions are the same, no modifications to the confidence categories were required.

Although Ore Reserves are referred to in this announcement, they are analogous to Mineral Reserves as described in NI 43-101 Standards for Disclosure. Competent Persons (JORC) are analogous to Qualified Persons (NI 43-101).

Mineral Resource Estimate

An updated Mineral Resource Estimate ("MRE") was announced on 11 August 2023 and was based on a total of 104,000 m of drilling and channelling from 655 drill holes, with a drill hole database cut-off date of 19 May 2023. This updated MRE includes an additional 37,500 m of drilling conducted since the previous feasibility study.

The resource estimation work was completed by SLR Consulting (Canada) Ltd. ("SLR"), an independent consulting firm based in Toronto, Canada. The pegmatite dykes have been classified based on a 40 m to 50 m spacing for Indicated Mineral Resources, and approximately an 80 m spacing for Inferred Mineral Resources.

The tonnages and grade of the updated Mineral Resource are shown in Table 1.

Table 1: James Bay Mineral Resource Estimate - Effective date 30 June 2023

Notes:

1. The Independent Competent Person, as defined by the JORC Code 2012, responsible for the preparation of this MRE is Mr. Luke Evans, P.Eng, a full-time employee of SLR. Mr. Evans is a member of L'Ordre des Ingénieurs du Québec, a Recognised Professional Organisation defined by the JORC Code 2012. The effective date of the mineral resource is the 30^th June 2023 (erroneously identified as Aug. 9, 2023 in the earlier news release).
2. The Mineral Resource Estimate has been reported within a conceptual pit shell at a cut-off grade of 0.50% Li₂O
3. The Mineral Resources are Inclusive of Ore Reserves.
4. The conceptual pit shell used to constrain the MRE has been defined using a spodumene concentrate price of US$1,500 per tonne, an exchange rate of CAD:US$ of 1.33, a total ore-based cost of CAD33.92 per tonne, a mining cost of CAD4.82 per tonne, a concentrate transport cost of CAD86.16 per tonne, and a metallurgical recovery of 70.1%.
5. The statements of Mineral Resources conform to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2012 edition.
6. Mineral Resources are not Mineral Reserves, as they do not demonstrate economic viability.
7. The Competent Persons are not aware of any problem related to the environment, permits or mining titles, or related to legal, fiscal, socio?political, commercial issues, or any other relevant factor that could have a significant impact on this MRE.
8. The number of tonnes has been rounded to the nearest 100,000 tonnes, with any discrepancies observed in the totals due to rounding effects.
9. All tonnages reported are dry metric tonnes.

Ore Reserve Estimate

The Ore Reserve of 37.3 Mt at an average grade of 1.27% Li₂O was prepared by SLR and remains virtually unchanged since the previous feasibility study (Table 2).

Table 2: James Bay Ore Reserve - Effective date 30 June 2023

Notes:

1. The Independent Competent Person, as defined by the JORC Code 2012, responsible for the preparation of the Ore Reserve estimate is Mr. Normand Lecuyer, P.Eng., an employee of SLR. Mr. Lecuyer is a member of L'Ordre des Ingénieurs du Québec (License No. 34914), a Recognised Professional Organisation defined by the JORC Code 2012. Effective date of the estimate is June 30^th, 2023.
2. Ore Reserves are estimated using the following metal prices (Li₂O Conc = US$ 1,500/t Li₂O at 6.0% Li₂O) and an exchange rate of CAD/US$ 1.33.
3. A minimum mining width of 5 m was used.
4. A cut-off grade of 0.62% Li₂O was used.
5. The bulk density of ore is variable, is outlined in the geological block model, and averages 2.7 g/cm³.
6. The average strip ratio is 3.6:1.
7. The average mining dilution factor is 8.7% at 0.42% Li₂O.
8. Numbers may not add due to rounding

Details of data collection and resource and reserve estimation techniques, methodology and material assumptions are provided in the JORC Table 1 checklist set out in Appendix A.

MINING AND PROCESSING

Mining

Mine engineering was performed by SLR and a summary of the key physicals are displayed in Table 3 below.

Table 3: Summary of LOM Physicals for an estimated 19-year mine life

The pegmatite deposit will be mined by conventional open pit methods. All material will require drilling and blasting and will be removed using mining excavators and haul trucks. The preliminary pit design extends approximately 2km NW/SE along the strike of the pegmatite mineralisation and has an average width of 500 m. The design is divided into three pits with depths of 160 m, 170 m and 260 m.

Mining is scheduled to achieve low waste stripping in the initial years with a gradual increase later in the mine life. The average strip ratio for the LOM plan is 3.6:1. Waste rock will be hauled to multiple Waste Rock and Tailings Storage Facilities ("WRTSF") and run of mine ("ROM") feed material will be hauled to the ROM pad, located to the northeast of the pits.

Figure 2 is based on the preliminary mine plan / LOM schedule and shows the mine plan tonnages by year with pre-strip activities commencing two years prior (Y-2 and Y-1) to first production (Y1). Mining covers 19 years of production with 132.7 Mt of waste rock, and 37.3 Mt of ROM feed material for a total of 170.0 Mt of material mined.

In the pre-production period, the ROM material generated will be stockpiled for processing during production years. Site preparation including tree clearing, grubbing and peat/topsoil removal will occur during the Project construction phase.

Figure 2: Annual mined material and stripping ratio

Surface mining equipment requirements are based on mining 10 m benches. Conventional excavator and truck fleet will be sized to meet the planned tonnage requirements to feed the concentrator at 2Mtpa. Haul trucks are required to transport tailings from the plant to the proposed waste rock and dry stacked tailings stockpile areas.

Processing

Process Plant engineering was performed by Wave International ("Wave"), an Australian-based engineering company with global development experience.

The process design is based on an annual throughput of 2Mt of ore to produce a final product grade of 6.0% Li₂O, with operational flexibility to produce a concentrate grade of 5.6% Li₂O. The selected process incorporates a similar flowsheet to the Mt Cattlin Mine and is based on crushing and dense medium separation ("DMS").

Processing involves a conventional three-stage crushing circuit, followed by a DMS plant (Figure 3). Similar to Mt Cattlin, crystal sizes are coarse and therefore grinding and flotation methods are not necessary, contributing to low operating costs. Other sub processes include:

• Dewatering and dry stack tailings disposal system (combined with waste rock disposal);
• Water, air and ancillary services; and
• Spodumene concentrate stockpile and dispatch system

The ROM ore will be fed to a three-stage crushing plant consisting of a primary jaw crusher, a secondary crusher and tertiary crusher. Prior to feeding the DMS cyclones, the material will be mixed with a ferrosilicon slurry, which acts as a densifying medium to enhance the gravity separation of the spodumene. The process flowsheet is illustrated in Figure 3 below.

Figure 3: James Bay process flowsheet

Final Product Grade

Metallurgical test work was conducted by SGS Canada Inc. and Nagrom to determine optimal plant operating recoveries. For a final spodumene concentrate grading 5.6% Li₂O, modelling indicates that a recovery of 69.6% in the early years and 66.9% in later operating years is a reasonable assumption.

In line with this market demand, project economics are based on the production and sale of a 5.6% Li₂O final product grade. This product grade yields higher recoveries and revenues associated with higher concentrate production.

James Bay will produce an average of 311 ktpa of spodumene concentrate for 19 years and retains ultimate flexibility to produce final product grade consistent with market and customer demand. Allkem's final product specification will ultimately be determined in consultation with its customers.

INFRASTRUCTURE

Waste Rock and Tailings Storage facility engineering was performed by WSP Ltd. ("WSP") and site infrastructure engineering was performed by G Mining Services Inc.

Mine Infrastructure

The site infrastructure will include:

• ROM pad
• Crushed ore covered stockpile
• Four Waste Rock Tailings Storage Facilities
• Overburden and peat storage area ("OPSF")
• Two Water Management Ponds and Plant Water Management Pond
• Contact water ditches and non-contact diversion water ditches
• Fine and coarse tailing bins
• Spodumene concentrate warehouse
• Explosive storage building

The ROM stockpile and spodumene concentrate warehouse will be located adjacent to the process plant. All storage areas were selected to minimise their environmental impact. A surface drainage network will be built to divert non-contact water from the ROM pad and stockpile, WRTSF, OPSF stockpiles and process plant. The same strategy will be used to manage the surface water run-off (contact) for all disturbed land.

Supporting Infrastructure & Logistics

The following infrastructure facilities are planned for the Project:

• 69 kV main-substation
• Laboratory building
• Accommodation camp
• Workshop and reagent buildings
• Storage and communication facilities
• Distribution facility for heating
• Potable water and sewage treatment plants
• Effluent water treatment plant

The process plant and supporting infrastructure will predominantly be powered by Hydro-Québec's 69 kV overhead distribution system. An overhead distribution line extension has been built to the plant substation from the 69 kV line (L-614) located 10km south of the Project site. The 69 kV power supply is limited by a capacity of 8 MVA due to the sensitivity of the network and distance from the substation.

The Project is also accessible all year-round via the paved Billy Diamond Highway which allows oversized haul trucking to and from site, including the town of Matagami, located 382 km south of the Project. Matagami is connected to a major railway, the Canadian National Railway network, allowing future production to be railed to various locations in North America or any port along the Saint Lawrence River for international shipment.

The Eastmain airport is located 130 km from site and will be used to transport staff and contractors from major centres in southern Québec. Discussions are underway with Transport Canada about necessary upgrades required to create more regular aerial services to support future operations. Fuel and accommodation are also available at the "Relais Routier Km 381" Truck Stop, a sizeable facility, located adjacent to the Project site.

FINANCIAL PERFORMANCE

Capital and Operating Costs

Capital and operating cost forecasts were completed by SLR, GMS and Wave, incorporating engineering undertaken by other contributors.

The total initial project development capital expenditure ("CAPEX") is estimated to be US$381.5 million. The CAPEX forecast has been prepared to reflect optimised site layouts, mine scheduling, plant and equipment design, supply and installation. The estimate is detailed in Table 4 and includes processing, mine equipment purchases, infrastructure, contingency and other direct and indirect costs. Deferred CAPEX is also required during operations for additional equipment purchases, a truck shop bay addition, and mine civil works. A pre-production cost of US$29.5 million has also been estimated in addition to the initial CAPEX which comprises of costs associated with overburden and waste stripping, and building the initial inventory for commissioning and startup of operations.

Operating costs ("OPEX") are estimated to be US$407 per tonne of concentrate (FOB Montreal). OPEX includes mining, processing, general and administrative services and concentrate transportation as detailed in Table 4.

Sustaining capex is estimated at US$151M for the life of mine of the Project.

Table 4: Capital Cost Estimates and Operating Cost Estimate

Note: The totals above may not add up due to rounding errors

Since the release of the Feasibility Study in 2021, work undertaken has improved the accuracy of the capital and operating costs, particularly in relation to mining, processing, and concentrate transport costs. The key observations include:

• Increased labour rates throughout all trades (reflecting market conditions)
• Increased mechanical and electrical equipment costs (based on firm price bid received)
• Increase in Hydro-Quebec powerline costs (reflecting market conditions)
• Increase in accommodation and transport costs (reflecting market conditions)
• Increase in fuel-associated cost (unit cost reflecting market conditions)

Spodumene Pricing Forecast

Lithium has diverse applications including ceramic glazes, enamels, lubricating greases, and as a catalyst. Demand in traditional sectors grew by approximately 4% CAGR from 2020 to 2022. Rechargeable batteries dominate lithium usage which accounted for 80% of demand in 2022, with 58% attributed to automotive applications. Industry consultant, Wood Mackenzie ("Woodmac") estimates growth in the lithium market of 11% CAGR between 2023-2033 for total lithium demand, 13% for automotive, and 7% for other applications.

Historical underinvestment and strong EV demand have created a supply deficit, influencing prices and investment in additional supply. Market balance remains uncertain due to project delays and cost overruns. The market is forecast to be in deficit in 2024, have a fragile surplus in 2025, and a sustained deficit from 2033.

Prices have fluctuated in 2022-2023, with factors like plateauing EV sales, Chinese production slowdown, and supply chain destocking influencing trends. Woodmac notes that battery grade carbonate prices are linked to demand growth for LFP cathode batteries and are expected to decline but rebound by 2031. Lithium Hydroxide's growth supports a strong demand outlook, with long-term prices between US$25,000 and US$35,000 per tonne (real US$ 2023 terms). Chemical grade spodumene concentrate prices are expected to align with market imbalances, with a long-term price forecast between US$2,000 per tonne and US$3,000 per tonne (real US$ 2023 terms).

Allkem has relied on external spodumene concentrate price forecasts provided by Woodmac for this feasibility study update.

PROJECT ECONOMICS

An economic analysis was developed using the discounted cash flow method and was based on the data and assumptions for capital and operating costs detailed in this report for mining, processing and associated infrastructure.

The basis of forecast spodumene pricing was provided by Woodmac for the period 2023 to 2033, with a longer-term price of US$2,107 used from 2033 onwards for 6.0% Li₂O. Adjustments were made to these prices to reflect the 5.6% Li₂O spodumene concentrate to be produced at James Bay based on Allkem experience at Mt Cattlin.

The evaluation was undertaken on a 100% equity basis. The key assumptions and results of the economic evaluation are listed in Table 5 and Table 6 below.

Table 5: Key assumptions utilised in the project economics

¹ Final product grade of 5.6% Li₂O
² Based on Average LOM spodumene price (US$2,022 per t) forecast provided from Woodmac, adjusted for 5.6% Li₂O grade.

Table 6: Summary of Financials over the estimated LOM

Sensitivity Analysis

As displayed in Table 6, the Feasibility Study demonstrates strong financial outcomes with a Post-tax NPV_{8% real} of US$1,687 million and IRR of 45.4%. Figure 4 analyses the impact on NPV when spodumene pricing, operating costs, capital costs, recovery, head grade fluctuate between +/- 20%. The NPV of the project is most sensitive to movements in the price of spodumene and foreign exchange fluctuations, followed by operating costs and development capital costs.

Figure 4: Pre-tax NPV Sensitivity Analysis

ENVIRONMENTAL AND SOCIAL IMPACTS

Environmental and Permitting work packages were performed by WSP Canada Inc., a global professional services and engineering firm with environmental expertise and significant experience in facilitating project approvals and development projects.

Carbon Emissions Management

Allkem is committed to the transition to net zero emissions by 2035 and is progressively implementing actions across the group to achieve this target. Each project within the group will contribute to this target in a different, but site appropriate manner.

As a greenfield project, James Bay has a unique opportunity to build a low carbon operation. The location of the project will provide access to hydro power supplied by Hydro Québec which delivers a significant advance in the overall decarbonisation of the project.

Future studies will focus on opportunities to increase the proportion of sustainable energy available to the project which will further reduce operational carbon emissions. The primary area to be investigated will be the supply of additional hydro power which may allow the potential conversion of the mining fleet and all site facilities away from fossil fuels. Allkem will work with project partners to identify and develop further emissions reduction opportunities within the project supply chain mostly around the availability of battery-power mobile equipment capable of operating in cold weather conditions. Additional studies are also planned to replace petroleum hydrocarbons used for heating during cold winter weather with renewable sources.

Allkem will also engage with the Québec government which has demonstrated a strong commitment for renewable energy with the "2030 Plan for a Green Economy". The goals of this plan are aligned with Allkem's commitment to net zero via the replacement of fossil fuels in transport, buildings and industrial activity. The Québec government has also committed to develop and consolidate energy networks through the territory, particularly for critical and strategic mineral developments.

Regulations and Permitting

The Project is subject to a federal and provincial environmental assessment, which must be consistent with the James Bay and Northern Québec Agreement ("JBNQA"). In January 2023, the federal Minister for the Environment and Climate Change issued federal authorisation for the Project. Allkem is now awaiting the issuance of provincial authorisation by the Government of Québec following completion of the environmental and social impact assessment and review process by the COMEX. Once the ESIA is approved, auxiliary 4 construction permits will be submitted for approval prior to commencing construction at James Bay.

Community Engagement

The Cree Nation community of Eastmain located 130 km east of the Project site is the nearest major community to the site. The Company has a strong working relationship with the Cree Nation of Eastmain and conducts regular and meaningful engagement and consultation with the Cree Nation.

On 18 March 2019, a Preliminary Development Agreement ("PDA") was signed with the Cree Nation of Eastmain, Grand Council of the Cree and Cree Nation Government. The PDA will be replaced by an Impact Benefit Agreement ("IBA"), which is currently being negotiated, before construction is initiated.

Further engagement with the Cree Nation Government and stakeholders, including the communities of Waskaganish and Waswanipi, continue in relation to project updates. The project will create approximately 250 full-time positions in the Eeyou Istchee/James Bay region.

EXECUTION STRATEGY

The Project Execution Strategy has been determined by an integrated team between Allkem, GMS, Wave and selected key contractors. Detailed engineering and procurement activities are 80% complete providing strong support for the updated cost estimate. It is estimated project construction will take approximately 19 months once authorisation is obtained. The majority (+80%) of mobile, fixed mechanical and electrical equipment have been procured. Contractors' selection commenced after engineering was well advanced (above 60%). Key contractors for all disciplines have been selected and final negotiations are in progress. It is planned to integrate contractors into the final stages of the design and planning the construction work with Allkem.

Funding

Funding is expected to be provided through one or more of the following:

• existing corporate cash;
• existing or new corporate debt or project finance facilities;
• cash flow from operations;
• strategic offtake partner(s).

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

IMPORTANT NOTICES

This investor ASX/TSX release (Release) has been prepared by Allkem Ltd. (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.

This Release does not take into account the financial situation, investment objectives, tax situation or particular needs of any person and nothing contained in this Release constitutes investment, legal, tax, accounting or other advice, nor does it contain all the information which would be required in a disclosure document or prospectus prepared in accordance with the requirements of the Corporations Act 2001 (Cth) (Corporations Act). Readers or recipients of this Release should, before making any decisions in relation to their investment or potential investment in the Company, consider the appropriateness of the information having regard to their own individual investment objectives and financial situation and seek their own professional investment, legal, taxation and accounting advice appropriate to their particular circumstances.

This Release does not constitute or form part of any offer, invitation, solicitation or recommendation to acquire, purchase, subscribe for, sell or otherwise dispose of, or issue, any Shares or any other financial product. Further, this Release does not constitute financial product, investment advice (nor tax, accounting or legal advice) or recommendation, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

The distribution of this Release in other jurisdictions outside Australia may also be restricted by law and any restrictions should be observed. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

Past performance information given in this Release is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Forward Looking Statements

This news release contains "forward-looking information" under the provisions of applicable securities legislation. Such forward-looking information is subject to various risks and uncertainties. Forward-looking information in this news release includes, but is not limited to, statements with respect to: (i) the economics and potential returns associated with the Project; (ii) the estimation of ore reserves and mineral resources; (iii) the technical viability of the Project; (iv) the market and future price of spodumene concentrate and other commodities; (v) the ability to work cooperatively with other stakeholders, including local community groups and all levels of government; (vi) projected employment and other social benefits resulting from the Project; and (vii) the results of the Feasibility Study, including statements about future production, mining methods, future operating and capital costs, the projected IRR, NPV, construction timelines, permit timelines and production timelines for the Project. Forward-looking statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performances or achievements expressed or implied by such forward-looking statements, including but not limited to, the risk of further changes in government regulations, policies or legislation; the risks associated with the continued implementation of the merger between Orocobre Limited and Galaxy Resources Ltd., risks that further funding may be required, but unavailable, for the ongoing development of the Company's projects; fluctuations or decreases in commodity prices; uncertainty in the estimation, economic viability, recoverability and processing of mineral resources; risks associated with development of the Company Projects; unexpected capital or operating cost increases; uncertainty of meeting anticipated program milestones at the Company's Projects; risks associated with investment in publicly listed companies, such as the Company; and risks associated with general economic conditions.

Forward-looking statements are made as of the date hereof and, subject to any continuing obligation under applicable law or relevant listing rules of the ASX/TSX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this Release to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statements are based. Nothing in this Release shall under any circumstances (including by reason of this Release remaining available and not being superseded or replaced by any other Release or publication with respect to the subject matter of this Release), create an implication that there has been no change in the affairs of the Company since the date of this Release.

Competent Person Statement

The information in this announcement that relates to Mineral Resources is based on information compiled and supervised by Luke Evans, P.Eng, a Competent Person who is a member of L'Ordre des Ingénieurs du Québec (License No. 105567). Mr. Evans is a full-time employee of SLR Consulting (Canada) Ltd. Mr. Evans has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Evans consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to the Ore Reserves is based on information compiled by Mr. Normand Lecuyer, P. Eng., a Competent Person who is a Member of L'Ordre des Ingénieurs du Québec (License No. 34914), a Recognised Professional Organisation included in a list posted on the ASX website from time to time. Mr Lecuyer is an employee of SLR Consulting (Canada) Ltd. Mr Lecuyer has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Lecuyer consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Technical information relating to the Company's James Bay project contained in this release is derived from, and in some instances is an extract from, the technical report entitled "James Bay Project - Feasibility Study Update" (Technical Report) which has been reviewed and approved by Luke Evans, P.Eng. (SLR Consulting (Canada) Ltd.) as it relates to property, geology, drilling, sampling, exploration, QA/QC and mineral resources: Joel Lacelle, P. Eng. (G-Mining Services Inc.); as it relates to site infrastructure and capital cost estimate: Normand Lecuyer, P. Eng. (SLR Consulting (Canada) Ltd.); as it relates to mining methods, mining cost, mining opex, financial modelling and economic analysis: Jeremy Ison, P.Eng. (Wave International); as it relates to mineral processing and related infrastructures: Darrin Johnson, P. Eng. (WSP Canada Ltd.); as it relates to waste rock and tailings management related infrastructures: Joao Paulo Lutti, Eng. (WSP Canada Ltd); as it relates to water management infrastructures: Pierre Groleau Eng. (WSP Canada Inc.); as it relates to environmental and permitting in accordance with National Instrument 43-101 - Standards for Disclosure for Mineral Projects. The Technical Report will be available for review under the Company's profile on SEDAR at www.sedar.com.

JORC Code 2012 and NI 43-101 Standards of Disclosure Commentary

There are differences in terminology from the JORC Code compared to the CIM Definition Standards. The term "Ore Reserves" in the JORC Code is substantially equivalent to "Mineral Reserves" using the CIM Definition Standards, and the term "Proved Ore Reserves" in the JORC Code is substantially equivalent to "Proven Mineral Reserves" using the CIM Definition Standards.

The only relevant reporting differences are that National Instrument 43-101 - Standards of Disclosure for Mineral Projects reporting requirements require each category of Mineral Reserves (Ore Reserves) and Mineral Resources to be reported separately, and do not permit Inferred Mineral Resources to be added to other Mineral Resource categories. Consequently, Measured and Indicated Mineral Resources have been reported separately from Inferred Mineral Resources. Ore Reserves reported herein are classified in a manner consistent with the requirements of the JORC Code. The JORC Code differs from CIM in that it permits Ore Reserves to be estimated as inclusive of marginally economic material and diluting material (including Inferred) delivered for treatment or dispatched from the mine without treatment, and on the basis that such material does not materially contribute to the economic assessment of any study. It should be noted that Ore Reserves for the James Bay project do not include any Inferred Mineral Resources.

While NI 43-101 restricts the inclusion of inferred material in an economic analysis it does permit for Resources and Reserves to be classified and reported in accordance with acceptable foreign standards, including the JORC Code.

Not for release or distribution in the United States

This announcement has been prepared for publication in Australia and may not be released to U.S. wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction, and neither this announcement or anything attached to this announcement shall form the basis of any contract or commitment.

APPENDIX A - JORC 2012 TABLE 1 DISCLOSURE

Section 1: Sampling Techniques and Data

Section 2: Reporting of Exploration Results

Section 3: Estimation and Reporting of Mineral Resources - James Bay Lithium Project

Section 4: Estimation and Reporting of Ore Reserves - James Bay Lithium Project
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

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