Alpha Lithium Files Improved Preliminary Economic Assessment and Provides Update on Strategic Review Process - Seite 2

PEA #2 provides an independent economic assessment of the project’s potential value, based on the lithium resources outlined in the August 2023 Resource Estimate, which defined 3.6 million tonnes of Indicated Lithium Carbonate Equivalent (“LCE”) and 1.4 million tonnes of Inferred LCE. The latest PEA concluded the following:

• US$1.7 billion (C$2.3 billion) after-tax NPV with an 8% discount rate and IRR of 25.6%
• Average Li₂CO₃ price of $23,146 per tonne, over 35 years of production (this price assumption is significantly lower than the last 6 quarters of SQM’s published average sales price achieved, which range from $34,000 to $59,000 per tonne)
• After tax payback period of 3.7 years from start of production
• After tax, cumulative free cash flow of US$8.2 billion ($C11.0 billion) over a 35-year production life
• Initial capital cost (“CAPEX”) of $777 million (includes contingency of $179 million)
• Brine mining and processing cost, excluding Li₂CO₃ transport, (“OPEX”) of $5,172 per tonne
• Cash cost of $5,980 per tonne (includes mining, processing, G&A, transportation, and royalties).
  

Strategic Review Update

Alpha’s robust strategic review process continues to receive significant interest and remains in progress, as discussions with several interested parties continue.

Apart from Alpha’s strategic review process, Tecpetrol formally initiated a hostile bid for all of the issued and outstanding shares of Alpha for a price of $1.24 on June 8, 2023, which is scheduled to expire on Friday, September 22, 2023. Alpha’s board of directors, based on the unanimous recommendation of its Special Committee of independent directors and in consultation with independent experts and external advisors, recommended that Alpha shareholders REJECT the hostile bid, which they collectively and overwhelmingly viewed as opportunistic, and not in the best interests of Alpha or its shareholders. This assessment, particularly given the recent and significantly positive technical progress on Tolillar, has not changed. Alpha can not predict and will not speculate on Tecpetrol's future actions leading up to the bid's expiration, or what Tecpetrol may do if the bid expires, and has no additional updates to provide on this matter.