Mr. Steve Cochrane reports

LITHIUM CHILE EXECUTES BINDING LETTER OF INTENT FOR THE SALE OF ITS ARIZARO PROJECT

Lithium Chile Inc., on Dec. 16, 2024, executed a binding letter of intent (LOI) with an arm's-length party for the sale of Lithium Chile's 80-per-cent interest in the Arizaro project, marking a transformative milestone for the company and its shareholders.

Transaction highlights:

• Proposed sale: The buyer will acquire an 80-per-cent interest in the Arizaro project via the purchase of the company's wholly owned Argentinian subsidiary, Geo Inversiones Mineras S.A.
• Transaction value: The purchase price is $180-million (U.S.) (approximately $250-million (Canadian)), to be paid in cash at closing, representing a substantial premium to the company's current trading price.
• Closing conditions: Completion of the transaction remains subject to certain conditions, including:
  • Satisfactory completion of a second round of due diligence by the buyer;
  • Government and regulatory approvals and consents, including that of the TSX Venture Exchange, which includes shareholder approval;
  • Completion of definitive agreements pertaining to the sale. The signatory to the definitive agreements will be the buyer or a company controlled by the buyer.
• Exclusivity period: The LOI provides a 90-day exclusivity period.

The buyer is a large, Asian-based company founded over two decades ago. The buyer is a diversified enterprise with significant interests in mining, renewable energy and technology sectors. Engaged in both domestic and international operations, the buyer is focused on the exploration and development of essential resources. The buyer is also the controlling shareholder of an Asian-listed public company (PubCo). The company has conducted financial due diligence on PubCo, and expects PubCo, and therefore the buyer, has the financial strength and capability to successfully complete the proposed purchase of the company's subsidiary, although there can be no assurance that the buyer has the financial strength and capability to complete the transaction.

Lithium Chile previously owned an 80-per-cent stake in the Arizaro project via its wholly owned subsidiary, Argentum Lithium S.A. On Dec. 13, 2024, the company shifted this ownership to a newly established subsidiary, Geo Inversiones Mineras S.A. This move was made to separate its other Argentinian property, Block IV, from the Arizaro project.

Steve Cochrane, president and chief executive officer, commented, "Closing of this transaction will unlock the tremendous value of the Arizaro asset for the benefit of all Lithium Chile shareholders." He continued: "We will be able to deliver a substantial cash dividend to our shareholders all the while retaining our other significant assets in Argentina and Chile. I would like to extend my thanks to our stakeholders for their continued support while we proceeded with our strategic process."

Next steps

Subject to closing, the sale proceeds will position the company to pursue growth opportunities across its extensive portfolio of lithium assets in Chile and Argentina while rewarding shareholders with a tangible return on their investment. Immediately after closing, it is Lithium Chile's intention to distribute the majority of the net proceeds from the sale to its shareholders via a special dividend. The buyer has concluded its first round of financial due diligence, which was followed up with field due diligence over the past month involving a team of technical and financial representatives who attended the Arizaro salar and Lithium Chile's Salta offices in Argentina. Both parties have agreed to work diligently to finalize the definitive agreements to affect closing. Lithium Chile plans to issue a comprehensive news release detailing the transaction progress and specifics as soon as further updates become available.

In accordance with the agreement with Ventum Financial Corp., a financial advisory fee of 1.0 per cent of the total enterprise value will be payable in cash, immediately upon the successful completion of the transaction.

About Lithium Chile Inc.

Lithium Chile is an exploration company with a portfolio of 11 properties spanning 106,136 hectares in Chile and 29,245 hectares on the salar de Arizaro in Argentina. The company has successfully advanced its Arizaro project with the completion of the National Instrument 43-101-compliant resource report, preliminary economic assessment and prefeasibility study, which are all accessible on SEDAR+ under Lithium Chile's profile.

Lithium Chile's common shares are listed on the TSX Venture Exchange under the symbol LITH and on the OTCQB under the symbol LTMCF.

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