Mr. Al Kroontje reports

LITHIUM CHILE PROVIDES CORPORATE UPDATE ON ARIZARO TRANSACTION AND STRATEGIC INITIATIVES

Lithium Chile Inc. has provided its stakeholders with an update on recent developments affecting the company.

Arizaro project proposed sale

Effective Oct. 20, 2026, Lithium Chile entered into an amending and extension agreement with China Union Holdings Ltd. (CUH) pertaining to the proposed sale of the Arizaro project in Argentina. The agreement extends the term of the previously announced definitive agreements for a period of 60 days and provides for an additional 60-day extension if the parties reasonably expect that two significant conditions precedent to closing are expected to be obtained: (i) termination of the review by the Foreign Investment Review and Economic Security division of Investment Canada (FIRES); and (ii) receipt of Offshore Direct Investment (ODI) approval from the government of the People's Republic of China.

The amended agreement removes the previous exclusivity restrictions and associated fees relating to alternative transactions, providing Lithium Chile with greater flexibility to evaluate other opportunities while continuing to pursue completion of the proposed sale. The company remains subject to certain notice and information obligations to CUH concerning alternative transactions, as described in the company's Oct. 21, 2026, news release.

Credit facility and working capital deficit

On Oct. 20, 2026, Lithium Chile entered into an agreement for a $2.5-million credit facility with a company controlled by a director of Lithium Chile. The credit facility is intended to strengthen the company's near-term liquidity position and provide management with additional financial flexibility to advance its corporate objectives and evaluate opportunities to enhance shareholder value.

The company's current working capital deficit is estimated at approximately $1.7-million. Subject to TSX Venture Exchange approval and the applicable terms of the credit facility, the financing is expected to support the company's continuing corporate activities while management pursues strategic initiatives.

Joint venture terminations

Eramet has notified the company that it has chosen to terminate the previously announced joint venture pertaining to the Llamara/Molle Verde salar in Chile. Documentation finalizing the termination was completed on Oct. 23, 2026.

Effective Dec. 31, 2025, Monumental Energy Corp. terminated its joint venture with the company pertaining to the Laguna Blanca salar in Chile.

Going forward and future updates

Lithium Chile remains focused on advancing the proposed Arizaro transaction with CUH while actively evaluating opportunities to strengthen its financial position and maximize value for shareholders.

The company and CUH continue to engage directly with representatives of Canada's Foreign Investment and Economic Security branch regarding the outstanding Canadian regulatory review, while CUH continues its efforts to secure ODI approval from the government of the People's Republic of China.

The recent amendment to the CUH agreement provides Lithium Chile with greater strategic flexibility to consider alternative transactions and potential partnerships while the parties continue working toward closing the proposed sale. In parallel, it is management's intention to evaluate financing opportunities and strategic partnerships in support of the advancement of the company's compelling lithium assets in Argentina and Chile.

Lithium Chile remains committed to protecting shareholder interests by pursuing strategic alternatives and opportunities that provide long-term value to the company and its stakeholders.

Further updates will be provided as material developments occur.

MI 61-101 considerations clarification

The company advises that an incorrect exemption from the requirements of Multilateral Instrument 61-101 was included in its news release dated Oct. 21, 2026. The contents of the Oct. 21, 2026, news release titled "NI 61-101 Considerations" is replaced by the following:

"As an insider of the company indirectly participated in this transaction, it is deemed to be a related party transaction as defined under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The credit facility is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(a) and 5.7(1)(a)) as neither the fair market value of the credit facility nor the fair market value of the common shares to be issued to the lender, exceeds 25 per cent of the company's market capitalization. The Credit Facility was unanimously approved by the board of directors of the company, excluding the director and officer of the company who is related to the lender, who abstained from voting. The lender currently holds nil common shares and nil convertible securities of the company."

We seek Safe Harbor.