Alpha Lithium Files Directors’ Circular Recommending Shareholders Reject Tecpetrol’s Hostile Stink Bid - Seite 2

Adjusting for the Company’s cash balance, Tecpetrol values the Tolillar project at $150 million (which, as described above, is significantly below precedent transaction multiples), and appears to assign no value to the Hombre Muerto project (to which an equity research analyst assigned a “nominal [value of] US$75M” prior to results from initial drilling).

On multiple occasions, Tecpetrol has indicated that it has “an ability to improve the financial terms” of its offer. However, despite admitting the offer could be improved, Tecpetrol instead elected to proceed with its “Stink Bid.”

Reason 2 – Alpha has received an inadequacy opinion from PI Financial Corp. (“PI Financial”)

PI Financial has delivered a written opinion to the Special Committee that, as of June 21, 2023, the consideration offered to Alpha shareholders under the Hostile Offer is inadequate, from a financial point of view, to Alpha shareholders. Tecpetrol is not a shareholder of Alpha and has elected NOT to become an Alpha Lithium shareholder, as of June 22, 2023.

Reason 3 – Tecpetrol is attempting to subvert an active and ongoing Strategic Review

The Board, through the Special Committee and consistent with its fiduciary duties, is evaluating a broad range of options as part of an expanded strategic review, including continuing with the active and ongoing sale process for its Tolillar asset, which began on December 1, 2022 (the “Sale Process”). Additionally, Alpha is exploring a possible corporate transaction (collectively, the “Strategic Review”).

Alpha has attempted, unsuccessfully, to engage with Tecpetrol within the Sale Process, based on market-standard practices and agreements; even seeking to accommodate Tecpetrol’s desire to acquire the entire Company. Tecpetrol repeatedly refused to engage constructively. By launching the Hostile Offer, Tecpetrol is attempting to disrupt the ongoing Sale Process and acquire Alpha at the lowest price possible, frustrating the efforts of the Company to obtain appropriate value for Alpha shareholders.

In connection with the Strategic Review, the Company has recently begun to explore interest with various parties in a corporate-level transaction and will consider various strategic alternatives, which may include, but are not limited to, possible change of control transactions or asset sales with one or more third parties (including a spin-off of certain assets or the separate sale of core assets), partnerships with strategic or financial partners or remaining independent and pursuing Alpha’s existing strategy as a stand-alone entity. The Board believes that Alpha is well-positioned and its unique lithium assets are highly attractive to other parties in addition to Tecpetrol.