Mr. Dirk Harbecke reports

ROCK TECH LITHIUM COMPLETES FINAL ENGINEERING STUDY BEFORE CONSTRUCTION OF ITS GUBEN LITHIUM CONVERTER AND MANDATES DEUTSCHE BANK AS PLACEMENT AGENT

Rock Tech Lithium Inc. has reached a significant milestone in the preparation of construction of its lithium hydroxide converter and refinery plant in Guben, Germany, with the completion of the front-end-loading Stage 3 study (FEL3). The study includes detailed specifications for construction, commissioning, start-up and operation, along with purchase-ready major equipment cost estimates. The study was finalized by the company's German subsidiary Rock Tech Guben GmbH in collaboration with engineering partner AFRY AB, paving the final way for the project's construction phase. The profitability has been estimated to have a posttax net present value (8 per cent) of 1,194 million euros ($1,246-million (U.S.)) -- an increase of 43 per cent compared with the previous bankable project study. Additionally, Rock Tech has appointed Deutsche Bank AG as placement agent for the company's converter-related financing.

Remarks and summary of the study results

With finalization of the FEL3 study, basic engineering is completed, and the project is prepared to move to construction phase, including final procurement negotiations and detailed engineering design.

The FEL3 study estimates the project's profitability at a posttax NPV (8 per cent) of 1,194 million euros ($1,246-million (U.S.)) -- an increase of 43 per cent compared with the bankable project study. In particular, the increased long-term price assumptions of analysts for lithium hydroxide, caused by the continued forecast of very high demand, led to a higher basis for the margin calculations.

The FEL3 results in a much more accurate cost estimate with a variance of only plus or minus 10 per cent (AACE Class 2) and is based on existing definite offers of mainly European suppliers and service providers supporting purchase-ready major equipment cost estimates. Despite this enhanced accuracy, it can be clearly noted that capital expenditures remain stable and only increase by 4 per cent, mainly due to inflation.

Execution planning and basic engineering are composed for all plant areas. Efforts involved significantly increased levels of basic engineering deliverables and the preparation of cost estimates. Metallurgical testwork, which was in progress at the time of the BPS publication, has been completed and was provided for expert review and interpretation by industry specialists.

Completion of these tasks has allowed for finalization of plant equipment selection and flow sheets. Lithium recovery assumptions made in the BPS have proved to be accurate with no changes required to production assumptions. A forward metallurgical testing work plan has been developed, which will perform final optimizations, including bench and pilot scale testing, with material from the selected spodumene concentrate supplier. A competitive tendering process has been kicked off, with the assistance of an independent expert, to appoint an engineering, procurement and construction management (EPCM) partner for project execution.

Rock Tech is also pleased to announce that it has selected Deutsche Bank as a highly experienced placement agent with a proven record in major equity financings.

"We are very pleased to have partnered with Deutsche Bank, a leading global investment bank, to lead our equity raising and partnership activities for the converter financing. The completion of our latest detailed engineering study further substantiates the profitability and attractiveness of our project, and we are confident the next months will yield strong financing partnerships," Sonja Rossteuscher, Rock Tech's chief financial officer, said.

Rock Tech's lithium hydroxide converter and refinery plant in Guben, Germany, is planned for a production capacity of 24,000 tonnes of battery-grade lithium hydroxide monohydrate per year. It is going to be able to process spodumene concentrates from various origins, be it from the company's own mineral project Georgia Lake, Ontario, Canada, or, for example, from Australia. Rock Tech obtained the first partial permit (TG1) issued by the Brandenburg State Office for Environment in March, 2023. The permit allows start of construction for all non-process buildings and site infrastructure, and approves the general plant layout and functions for the spodumene to lithium hydroxide conversion. The company submitted the second partial permit (TG2) in November, 2022, and expects approval by fourth quarter 2023. Targeted start of commissioning remains on track for fourth quarter 2025, with first battery-grade LHM being produced in first quarter 2026.

Key metrics

Key economic results of the FEL3 are reported herein.

Cost estimates

The FEL3 initial capital costs have increased by 4 per cent in euro terms compared with the BPS as the last published study phase 3. Improvements to the capital expenditure estimate include improved engineering completed during the FEL3, more developed construction planning and a refined understanding of freight requirements, all of which served as the basis for the FEL3 estimate and support a Class 2 level of certainty.

The further engineering process, to be done in close co-ordination with an EPCM contractor, will provide opportunities to further derisk the capex estimate by highlighting key areas where further negotiation with preferred suppliers will yield improved results. It is planned that the procurement team will work in conjunction with the selected financing groups to ensure a high level of confidence can be obtained from supplier pricing. This will allow the company to make the final investment decision in the second half of 2023.

About Rock Tech Lithium Inc.

Rock Tech is a cleantech company with operations in Canada and Germany on a mission to produce lithium hydroxide for electric vehicle batteries. The company plans to build lithium converters at the doorstep of its customers to guarantee supply chain transparency and just-in-time delivery, beginning with the company's proposed lithium hydroxide merchant converter and refinery facility in Guben, Germany. To close the most pressing gap in the clean mobility story, Rock Tech has gathered one of the strongest teams in the industry. The company has adopted strict environmental, social and governance standards, and is developing a proprietary refining process aimed at further increasing efficiency and sustainability. Rock Tech plans to source raw material from its wholly owned Georgia Lake spodumene project located in the Thunder Bay mining district of Ontario, Canada, as well as procuring it from other responsibly producing mines. In the years to come, the company expects to also source raw material from discarded batteries. Rock Tech's goal is to create a closed-loop lithium production system.

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