Mr. Al Kroontje reports

LITHIUM CHILE ENTERS INTO AMENDING AGREEMENT AND CREDIT FACILITY

Lithium Chile Inc. has provided an update to its stakeholders.

Highlights

Effective Oct. 20, 2026, Lithium Chile and China Union Holdings (CUH) entered into an agreement that amends and extends the definitive agreements with CUH pertaining to the proposed sale of Lithium Chile's project on the Arizaro salar in Argentina.

Lithium Chile has entered into a credit facility agreement with a company controlled by a director that provides for loan advances of up to $2.5-million.

Definitive agreements amendments and extension

The agreement dated effective Oct. 20, 2026, amends the definitive agreements as follows:

1. The drop-dead date has been extended to Dec. 22, 2026. If, on such date, closing of the transaction has not occurred, and neither party has notified the other party in writing that it reasonably believes that the relevant regulatory approvals, including the outbound direct investment ODI filing/approval and the Canadian national security-related review, cannot be obtained within a further extension period, then the drop-dead date will be further extended to Feb. 22, 2027.
2. If, upon the expiry of the new drop-dead date or the further drop-dead date, any key regulatory approval required in connection with closing, or any approval or clearance required under the Investment Canada Act, has not been obtained for reasons not attributable to the purchaser, the $5-million (U.S.) (equivalent) guarantee deposit will be returned to the purchaser.
3. The exclusivity and termination fee provisions contained in the definitive agreements have been modified such that:
   1. Lithium Chile and/or its subsidiaries shall be permitted to contact, communicate and negotiate with third parties in relation to potential alternative transaction(s). Lithium Chile has agreed to provide CUH, on a confidential basis, basic information pertaining to any potential alternative transactions including the principal terms, proposed timetable and the identity of the alternative transaction counterparty.
   2. Prior to the satisfaction, waiver or completion of the closing conditions under the definitive agreements, the sellers may terminate the share purchase agreement for the purpose of pursuing or consummating an alternative transaction by giving CUH 20 business days of prior notice. Upon such termination, neither party shall incur any termination fee or other liability as a result thereof, except where the sellers fail to provide the notifications described above.

All other terms of the share purchase agreement remain unchanged.

Credit facility

The company has entered into a credit facility agreement with a company controlled by a director, which provides the company the ability to draw advances totalling up to $2.5-million. The credit facility matures on Dec. 31, 2027, and bears interest at a rate of 10 per cent per annum. An origination fee for providing the credit facility will be paid in accordance with the policies of the TSX Venture Exchange via the issuance of common shares of the company in an amount equal to 20 per cent of the maximum loan amount at a price of 28 cents per common share, being closing price on the Oct. 20, 2026, credit facility implementation date.

No commissions or finders' fees were paid in respect of the credit facility.

MI 61-101 considerations

As a company related to an insider of the company participated in the transaction, it was deemed to be a related party transaction as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. Neither the company, nor to the knowledge of the company after reasonable inquiry, a related party had knowledge of any material information concerning the company or its securities that has not been generally disclosed. The credit facility is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(c) and 5.7(1)(b)) as it was a distribution of securities for cash and neither the fair market value of the credit facility, nor the consideration received from related parties, exceeded $2.5-million. The credit facility was unanimously approved by the board of directors of the company, excluding the director who is related to the company providing the credit facility, who abstained from voting. The lender currently holds nil common shares of the company and holds nil options.

We seek Safe Harbor.