Mr. Cameron Taylor reports

ROK RESOURCES ANNOUNCES PRELIMINARY ECONOMIC ASSESSMENT RESULTS FOR THE VIEWFIELD LITHIUM BRINE PROJECT

Rok Resources Inc., as a 25-per-cent shareholder and manager of operations of Hub City Lithium Corp. (HCL), has released the highlights of Hub City Lithium's preliminary economic assessment (PEA) on the Viewfield lithium brine project, Saskatchewan. The PEA outlines the estimated production of battery-quality lithium carbonate equivalent (LCE) over a 23-year period, which represents an estimated pretax internal rate of return (IRR) of 55 per cent and a pretax net present value (NPV) of $1-49 billion (U.S.), at an 8-per-cent discount rate.

Preliminary economic assessment highlights:

• Pretax $1.49-billion (U.S.) NPV, at an 8-per-cent discount rate;
• Pretax IRR of 55 per cent, which represents a payout duration of 2.1 years;
• Total capital expenditures (capex) of $571-million (U.S.), inclusive of both direct and indirect capital costs, including $52-million (U.S.) in contingency;
• All-in operating costs (opex) of $3,319 (U.S.) per tonne LCE, $40-million (U.S.) annually, including all direct and indirect costs;
• Twenty-three-year project-life producing a total of 282,090 tonnes of battery-grade lithium carbonate, an average of 12,175 tonnes LCE per year;
• Weighted average lithium concentrations of 128 milligrams per litre (mg/L) from seven target zones over the project life (range of 84 mg/L to 259 mg/L); and
• PEA encompasses approximately 11,000 net hectares, or 14 per cent of Hub City Lithium's lands in Southern Saskatchewan.

"We are very encouraged by the results of a best-in-class preliminary economic assessment that highlights Hub City Lithium's resource quality," commented Cameron Taylor, chief executive officer and chairman of Rok. "We are very excited to be moving forward with the project development work in 2024, as we progress on the path to a commercial pilot, and continue to advance efforts to optimize value creation for Rok and its shareholders."

Project development

The PEA encompasses 11,000 net hectares of land at the Viewfield project area, representing 46 per cent of Hub City Lithium's Viewfield landholdings and only 14 per cent of Hub City Lithium's total landholdings in Southern Saskatchewan.

The development plan employed in the PEA has been broken into three distinct units:

1. Wellfield: Includes all production wellbores, disposal wellbores and pipeline networks.
2. Direct lithium extraction (DLE): Includes infrastructure related to prefiltration and DLE operations. Koch Technology Solutions (KTS) was the DLE technical partner selected for the PEA.
3. Concentration, refining and conversion (CRC): Includes all infrastructure downstream of DLE required to refine and convert lithium chloride eluent into battery-grade LCE. Saltworks Technologies was the CRC technical provider selected for the PEA.

Based on production testing and fluid analysis conducted by HCL in 2023 in the Viewfield project area, in addition to publicly available lithium testing throughout the area, it is expected to see lithium grades of 84 mg/L to 259 mg/L in the seven target members of the Duperow within the PEA lands. Over the life of the project, an average weighted concentration of 128 mg/L has been estimated.

Exploitation of the resource will occur in two production stages via multileg horizontal wellbores. All project capital (minus end-of-life capex) is allocated at the beginning of the project, with production estimated to commence in Q1 2027:

• Stage 1: Wymark C, D and E (years 1 to 7):
  • These zones are the shallowest and highest concentration (160 mg/L to 259 mg/L) zones and will be produced first through to depletion;
  • Average LCE output during stage 1 is 18,850 tonnes per year, with average opex of $2,332 per tonne (U.S.).
• Stage 2: Wymark A and B, and Saskatoon A and B (year 8 onward):
  • These zones are lower concentration (84 mg/l to 145 mg/L) and will be exploited after depletion of Wymark C, D and E;
  • Average LCE output during stage 2 is 10,200 tonnes per year, with average opex of $4,166 per tonne (U.S.).

Note: A recovery factor of 50 per cent of total lithium in place was estimated for the PEA.

A total of 36 multileg production wells will be drilled to exploit seven target members of the Duperow, in addition to 30 vertical disposal wells to dispose of spent brine and process water. A network of underground pipelines will be constructed to transport the large water volumes from the wellheads to a DLE site for extraction and concentration to lithium chloride, and from there the eluent will be transported via pipelines to a CRC site for refining and conversion into battery-grade LCE. A total of five DLE sites and two CRC sites will process a daily average of 62,000 cubic metres/day of brine, resulting in an average output of 12,175 tonnes per year of battery-grade LCE.

Capital costs

The anticipated capital costs are as shown in the associated table.

Operating costs

The anticipated operating costs are as shown in the associated table.

Sensitivity analysis

The economic sensitivities are as shown in the associated table.

Lithium pricing and production

A detailed future pricing study for lithium carbonate was not completed for this PEA. A constant price of $20,000 (U.S.) per tonne of battery-grade lithium carbonate was chosen by reviewing publicly available pricing data and peer-released economic assessments of similar lithium resources. Certain industry peers have used a constant price of $25,000 (U.S.) per tonne LCE in PEAs released over the last 12 months, however in light of current global pricing for lithium, Hub City Lithium selected a base case of $20,000 (U.S.) per tonne, with price sensitivities included at plus/minus 20 per cent.

Taxes and royalties

The PEA outlines the taxes based on both the Canadian federal government and the province of Saskatchewan. The Saskatchewan corporate income tax rate is 12 per cent. The basic Canadian federal corporate tax rate is 38 per cent of the company's income and 28 per cent after federal tax abatement. After all tax holidays, the company's net federal tax rate is 15 per cent, with a total combined tax rate of 27 per cent.

The majority of the Viewfield project area is on Crown land and is subject to Crown royalties. Within the province of Saskatchewan, the Crown royalty rate is estimated at 3 per cent, with a one-year royalty holiday for each facility hub. The balance of the Viewfield project area is subject to freehold royalties, which commercial terms vary based on individual lease agreements.

Mineral resource estimate incorporated into PEA

The following sets forth the total inferred resource incorporated into the PEA:

• Viewfield phase 1 total inferred resource net to Hub City Lithium is 692,288 tonnes LCE;
• Concentrations in the seven target zones of the Duperow range from 84 mg/L to 259 mg/L, with a weighted concentration of 128 mg/L;
• Wymark D tested 259 mg/L, the highest recorded concentration to date in Canada.

Viewfield project area -- Q1 2024 field pilot

Subsequent to the press release dated Dec. 5, 2023, Hub City Lithium completed its treatability study with Koch Technology Solutions, whereby 1,000 litres of feed brine from the Viewfield project area was tested for compatibility with KTS DLE technology. The study was done in preparation for a DLE field pilot (one of the first in Canada) on the Hub City Lithium well that previously tested 259 mg/L of lithium. The pilot, scheduled to begin in Q1 2024, will treat Viewfield brine and convert it into a highly concentrated lithium chloride eluent. It is expected to run for three months to four months and will operate 24/7, processing approximately 6,500 litres to 9,000 litres of feed brine per day.

Quality assurance and qualified persons

The preliminary economic assessment was prepared by Sproule Associates Ltd. with the assistance of the contractors outlined below. All contractors completing the report are qualified persons as defined by National Instrument 43-101 and are independent of the company. The National Instrument 43-101 PEA report will be filed on SEDAR+ within 45 days.

Sproule Associates: Sproule is a global energy consulting and advisory firm that helps companies, investors and governments minimize risk and optimize business decisions. Meghan Klein, PEng, is the senior manager, engineering, at Sproule and a qualified person for the PEA.

Red Tree Exploration Inc.: Red Tree Exploration is an independent geological consulting company with experience in oil and gas, lithium, and helium evaluations. Trevor Else, PGeo, is a qualified person for the PEA and the president of Red Tree Exploration.

Koch Technology Solutions: Koch Technology Solutions is a technology licensing business, a part of Koch Engineered Solutions. KTS creates value for its customers across a growing portfolio of technologies, including the polyester value chain, the refining industry and lithium extraction fields. Marc Egbers is a qualified person for the PEA and the director of Li-Pro direct lithium extraction commercial solutions with KTS.

Saltworks Technologies: Saltworks is a team of engineers, scientists and builders focused on the innovation, construction and delivery of full-scale systems to treat industrial waste water and refine lithium into a battery-grade product. Ben Sparrow, PEng, is a qualified person for the PEA and chief executive officer of Saltworks.

Each of Ms. Klein, Mr. Else, Mr. Egbers and Mr. Sparrow are independent qualified persons in accordance with NI 43-101, and have reviewed and approved the technical contents of this news release.

PEA cautionary note

The PEA is preliminary in nature and includes inferred resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty the estimates presented in the PEA will be realized.

About Rok Resources Inc.

Rok is primarily engaged in exploring for petroleum and natural gas development activities in Alberta and Saskatchewan. It has offices located in both Regina, Sask., Canada, and Calgary, Alta., Canada.

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