#1ASX ANNOUNCEMENT terials Raw materi Li chemicals Li 12 August 2020 Lithium Australia corporate presentation Lithium AustraliaN Recycling Lithium Australia NL (ASX: LIT; 'the Company') wishes to advise of the release of its August 2020 corporate presentation, which is attached at the end of this announcement. KEY POINTS ■ ■ ■ ◉ ■ Worldwide, battery and battery mineral market fundamentals strong and growing. Potential for increase in cash flow from recycling subsidiary Envirostream Australia (90% Company owned). Potential for strong sales of energy-storage systems by Soluna Australia (50% Company owned). Lithium Australian has significant battery-technology IP, so is well-placed to establish a vertically integrated production chain; potential for materials from spent lithium-ion batteries, spodumene fines rejected during conventional processing and lithium micas (mine waste) to be used as feed in production of new lithium-ion batteries. Vertical integration the key to reducing process steps in battery production – Company technologies have potential to deliver lower-cost products and accelerate adoption of energy solutions that reduce humanity's global carbon footprint and protect fragile ecosystems. Lithium Australia already processing spent lithium-ion batteries to resurrect the cathode materials within. Company technology recognised by Australian federal government through award of three substantial research grants to progress advanced battery capabilities. Batteries ACN: 126 129 413 ASX: LIT Level 1 675 Murray St West Perth WA 6005 PO Box 1088 West Perth WA 6872 Phone +61 (0) 8 6145 0288 Fax +61 (0) 8 9475 0847 [email protected] Lithium-au.com Authorised for release by the Board. Adrian Griffin Managing Director Mobile +61 (0) 418 927 658 [email protected] Media contacts Adrian Griffin, Lithium Australia NL Kevin Skinner, Field Public Relations Barry Woodhouse CFO and Company Secretary Mobile +61 (0) 438 674 259 Barry [email protected] 08 6145 0288 | +61 (0) 418 927 658 08 8234 9555 | +61 (0) 414 822 631 ASX ANNOUNCEMENT Lithium Australia Page 1#2069 000000 materials Raw Li chemicals Lithium AustraliaNL Recycling Lithium Australia ~ offering diversified exposure to the burgeoning battery industry ASX: LIT 1 August 2020 Batteries Copyright 2020, Lithium Australia NL#3Disclaimer Lithium AustraliaNL This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in that jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in that jurisdiction. This presentation does not constitute financial product advice and has been prepared without taking into account the recipients' investment objectives, financial circumstances or particular needs, and the opinions and recommendations in this presentation are not intended to represent recommendations to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include, among others, the risk of adverse or unanticipated market, financial or political developments. Certain statements contained in this presentation, including information as to the future financial or operating performance of Lithium Australia NL (ABN 29 126 129 413) ('the Company') and its projects, are forward-looking statements. Such forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies, involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements, and may include, among other things, statements regarding targets, estimates and assumptions in respect of commodity prices, operating costs and results, capital expenditures, ore reserves and mineral resources and anticipated grades and recovery rates and are, or may be, based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. The Company disclaims any intent or obligation to update publicly any forward- looking statements, whether as a result of new information, future events or results or otherwise. The words 'believe', 'expect', 'anticipate", "indicate', 'contemplate', 'target', 'plan', 'intends', 'continue', 'budget', 'estimate', 'may', 'will', 'schedule' and other, similar expressions identify forward-looking statements. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward- looking statements. Such factors include, but are not limited to: competition; mineral prices; ability to meet additional funding requirements; exploration, development and operating risks; uninsurable risks; uncertainties inherent in ore reserve and resource estimates; dependence on third- party smelting facilities; factors associated with foreign operations and related regulatory risks; environmental regulation and liability; currency risks; effects of inflation on results of operations; factors relating to title to properties; native title and Aboriginal heritage issues; dependence on key personnel, and share-price volatility. They also include unanticipated and unusual events, many of which it is beyond the Company's ability to control or predict. COMPETENT PERSON'S STATEMENT The information in this report that relates to reporting of Exploration Results is based on and fairly represents information and supporting documentation prepared by Adrian Griffin, a member of the Australasian Institute of Mining and Metallurgy. Mr Griffin, who is a shareholder in and managing director of the Company, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration. He is qualified as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Griffin consents to the inclusion in this report of the matters based on information in the form and context in which it appears. NL 2 August 2020 Copyright 2020, Lithium Australia NL#4Contents Overview Company business units Company business structure Providing ethical, sustainable inputs to the battery industry 456N Raw material Lichemicals Lithium Australia NL Recycling Batteries Abbreviations ANSTO AU$ Company, the EV Australian Nuclear Science and Technology Organisation Australian dollars Lithium Australia NL Co-operative Research Centres Project DLG Battery Co. Ltd (China) Envirostream Australia Pty Ltd End-of-life Environmental, social and governance principles Energy-storage system(s) Electric vehicle Electronic waste Financial year Intellectual property Lithium cobalt oxide Lithium ferro phosphate Lithium Australia Lithium Australia NL Lithium-ion battery Lithium oxide Lithium phosphate CRC-P Enhancing investment opportunities for shareholders Developing, diversifying and commercialising in 7 DLG Envirostream a fragmented supply chain Six-month share price performance Corporate snapshot Recycling 8 EOL 9 ESG principles 10 ESS Focusing on a cleaner, greener future 11 e-waste FY Battery consumption ~ global 12 IP Potential for battery recycling ~ global 13 LCO Potential for battery recycling ~ Australia 14 LFP Envirostream mixed-battery recycling 15 LIB Envirostream business model 16 Li₂O Refining recycled battery products 17 Li3PO4 Rationale for investing in battery recycling LP 18 M Batteries Advancing LFP battery technology Soluna battery storage for renewable energy VSPC cathode-powder manufacture Chemicals Sustainable processing technologies The LieNA® process Raw materials MMD 19 Mt 22 20 Mtpa NCM 21 POM Sn Tin 22 tpa 23 Soluna R&D VSPC Resource and exploration portfolio 24 WA 3 August 2020 Lithium phosphate Million Mixed-metal dust Million tonnes Million tonnes per annum Nickel cobalt manganese Placed on market Tonnes per annum Soluna Australia Pty Ltd Research and development VSPC Ltd Western Australia Copyright 2020, Lithium Australia NL#5Business units ~ Offering diversified exposure to the battery industry Li Global resource + exploration portfolio. Raw mater chemicals Lithium AustraliaNL Recycling Recycling of spent batteries and re-birthing of energy metals to enhance sustainability. 4 Batteries Low-energy extraction of lithium from hard- rock sources - no roasting necessary. Production of advanced battery cathode powders + sale of energy-storage systems in Oceania. August 2020 Copyright 2020, Lithium Australia NL#6Business structure ~ Designed for sustainability Raw material Lichemicals Lithium Australia NL Recycling Lithium Australia NL ('Lithium Australia' or 'the Company') offers the ultimate in recycling solutions for the battery industry, as well as a safe, efficient approach to renewable energy storage. The Company's patent-protected battery manufacturing technologies focus on sustainability, to: ■ maximise resource utlisation; ■ minimise environmental desecration, and ■ reduce the number of process steps from mine pit to product and back again. Lithium Australia' (ASX: LIT) 100% NL 50% 90% 100% Batteries 5 100% 100% Raw materials division Li chemicals division VSPC Soluna Australia Exploration LieNAⓇ for fine spodumene Batteries - China ESS sales - Australia Battery recycling Envirostream Australia Trilithium Erzgebirge GmbH Saxony resources SiLeachⓇ for Advanced lithium mica cathode Energy-metal refining powder Cathode regeneration August 2020 Copyright 2020, Lithium Australia NL#7Providing ethical, sustainable inputs to the battery industry Raw materia chemicals Lithium Australia NL Recycling Batteries Lithium Australia occupies a unique niche, that of a diversified and vertically integrated lithium mining and battery technology company supplying a range of solutions designed for a seamless transition from: ■ the extraction of primary lithium raw materials (hard-rock, clays and brines), to ■ the production of components for lithium-ion batteries ('LIBs'), ■ the sale of LIBS by way of battery energy-storage systems, and ■ the recycling of all types of batteries (including LIBS) and electronic waste ('e-waste'). Lithium Australia has recycled raw materials from spent LIBS to successfully generate new cathode-active materials and subsequently new LIBS, effectively 'closing the loop' on the energy-metal cycle. In collaboration with ANSTO (i.e. Australian Nuclear Science and Technology Organisation, located in Lucas Heights, New South Wales), the Company developed its LieNAⓇ technology, an advanced caustic conversion process for the extraction of lithium from spodumene waste (fine and low-grade materials that otherwise get discharged to tailings by conventional spodumene concentrate producers). Australia's federal government is co-funding a LieNAⓇ pilot plant, scheduled for construction in 2020. The Company's innovative intellectual property ('IP') has been acknowledged by the Australian federal government, which has awarded it a number of grants. - Company subsidiary Envirostream Australia Pty Ltd ('Envirostream') - located in Melbourne, Victoria – is the nation's only fully integrated facility for the recycling of end-of-life ('EOL') batteries, including LIBs, in order to supply components for the creation of new LIBS, as well as copper, aluminium, plastic and scrap steel, plus micro-nutrients for potential use in fertilisers. 6 August 2020 Copyright 2020, Lithium Australia NL#8Enhancing investment opportunities for shareholders Raw material Lichemicals Lithium Australia NL Recycling Batteries The Company is currently focusing on near-term revenue from those of its business units closest to generating income; i.e. Soluna Australia Pty Ltd ('Soluna') and Envirostream. Soluna (50% Lithium Australia) is anticipating positive cash flow by December 2020, after: ■ receipt of approvals for its energy-storage system ('ESS') products from Australia's Clean Energy Council; ■ orders for its residential ESS being received and installations commenced, and ■ strong interest in battery ESS from both retail and commercial sources. Envirostream (90% Lithium Australia) expects significant revenue growth in the 2021 financial year, as a result of: commodity prices strengthening since March 2020; ▪ new copper and aluminium recovery circuits being commissioned; battery collection initiatives being expanded to strengthen revenue; ▪ off-take agreements for recycled alkaline battery dust (zinc oxide and manganese oxide) being negotiated. Reduction in Company outgoings ◉ Activity in capital-intensive business units affected by travel bans decreased. ■ Cash reserve as at 30 June 2020 = $3.7 million. ■ Significant research and development ('R&D') tax refunds expected in the coming six months. 7 August 2020 Copyright 2020, Lithium Australia NL#9Developing, diversifying and commercialising in a fragmented supply chain Raw material Lichemicals Lithium Australia NL Recycling KEY POINTS ◉ Worldwide, the battery and battery mineral market fundamentals remain strong and are growing. ■ Lithium Australia retains significant battery IP and has a broad technological understanding of the battery supply chain as a whole. The Company is therefore well placed to establish a vertically integrated production chain, one with the potential to take waste materials (from EOL batteries, conventional spodumene processing and lithium micas) through to the production of LIBS. ■ Vertical integration is the key to reducing the number of process steps required in battery production. Lithium Australia's technologies have the potential to deliver lower-cost products to consumers while accelerating the adoption of energy solutions that reduce humanity's global carbon footprint and desecration of the environment. ■ The Company is already processing EOL LIBS to resurrect the cathode materials within, using proprietary technologies for which R&D continues. Lithium Australia's efforts to date have been recognised by the Australian federal government with the awarding of three substantial research grants that will progress the nation's advanced battery capabilities. ■ Lithium Australia's aim, that of providing an ethical and sustainable supply of materials to the battery industry, could also enhance energy security at a national level. 8 August 2020 Batteries Copyright 2020, Lithium Australia NL#10Six-month share price performance 9 <-LIT Zoom 5D LIT volume 1M 3M 6M YTD 1Y 5Y S MAX From 07 Feb 2020 To 07 Aug 2020 سد ..الاستسلل Raw material 0.07 Li chemicals Lithium Australia NL Recycling 0.07 0.06 0.06 17. Feb 2. Mar 16. Mar 30. Mar 13. Apr 27. Apr 11. May 25. May 8. Jun 22. Jun 6. Jul 20. Jul 3. Aug August 2020 0.05 0.05 0.04 0.04 0.03 OM Price Volume Batteries Copyright 2020, Lithium Australia NL#11Corporate snapshot ASX-listed: tickers LIT, LITCF, LITO Adrian Griffin (Managing Director) More than 40 years' experience in the mining industry in project identification, develop- ment and financing, as well as oversight of integrated mining and processing facilities. Particular expertise in processing technol- ogies. Currently identifying unconventional sources of lithium (including mine waste) and developing the technology to process these and more conventional feedstocks such as spodumene. Focused on the downstream production of LIB components and the recycling of EOL batteries and e-waste to recover the energy metals within, to position the Company as a vertically integrated lithium miner, producer of lithium processing technology, manufacturer of battery components, purveyor of battery ESS and developer of battery recycling technology, thereby covering every facet of the lithium value chain. 10 George Bauk (Non-executive Chairman) Expert in specialty and battery metals, project management, stakeholder engagement, marketing and financing. Bryan Dixon (Executive Director) Specialist in acquisitions, feasibility, corporate finance, project develop- ment and operations. August 2020 Raw material Lichemicals Lithium Australia NL Recycling Batteries Price (AU$) as at 7 August 2020 $0.068 Market capitalisation (AU$) $42 M Shares outstanding (LIT) 612 M Partly paid shares (unpaid $0.0499) 172 M Listed $0.05 $0.20 options 89 M Cash position at 30/06/20 (AU$) $3.7 M Debt convertible note $1.5 M* *Net of collateral shares. Top shareholders - 7 August 2020 15.8% JP Morgan Nominees 6.3% Citicorp Nominees Pty Ltd 2.7% Acuity Capital 2.5% DLG Holdings Ltd 2.1% Adrian Christopher Griffin 2.2% Copyright 2020, Lithium Australia NL#12Focusing on a cleaner, greener future Raw material Li chemicals Lithium Australia NL Recycling Batteries Although the world's love affair with portable devices is undiminished, many countries are moving away from fossil fuels and embracing the concept of electric vehicles ('EVs') powered by battery packs ... and as a result e-waste is accumulating. In fact, the volume of spent LIBS worldwide will grow to something like 7 million tonnes per annum ('Mtpa') within the next 20 years. To avoid the mountains of toxic waste this could create, the recycling of spent LIBS is not just an option, it's imperative! Most (not enough!) of the LIBS currently recycled are from electronic devices and are of the lithium cobalt oxide (i.e. LCO) type. But with sales of EVs on the rise, the need to recycle their spent battery packs - the dominant chemistry being nickel cobalt manganese (i.e. NCM) of the '622' type (lithium + 6 parts nickel + 2 parts cobalt + 2 parts manganese) – is becoming a matter of urgency. The Telegraph Britain faces 'waste battery mountain' as electric car use surges WINE WWW WASTE MANAGEMENT WORLD" - The Lithium Battery Recycling Challenge Increasing oil prices, demand for urban vehicles, megacities and focus on sustainable transportation have kickstarted a substantial trend towards automotive electrification such as hybrids and electric vehicles (EVs). Estimates suggest that by 2020, EVs are likely to account for more than 7% of the global transportation market. The Guardian The rise of electric cars could leave us with a big battery waste problem MOTHERBOARD VICE Today's Electric Car Batteries Will Be Tomorrow's E-Waste Crisis, Scientists Warn DEEP DISCHARGE FINANCIAL TIMES Rise of electric cars poses battery recycling challenge China's booming electric vehicle market is about to run into a mountain of battery waste 11 August 2020 Copyright 2020, Lithium Australia NL#13Battery consumption global With all types of EVs gaining popularity worldwide, it's worth considering that, typically, even a 'light' passenger EV contains roughly 300 kilograms of battery cells. In fact, around 50% of current LIB demand can be attributed to the emergence of EVs, and that figure is rising at around 18% per annum. ESS for industrial and domestic applications are also a significant driver of LIB demand. That said, not only is the quest for the raw materials needed to create LIBS deleterious for large areas of the Earth, including fragile ecosystems, but clogging the environment with EOL LIBS is also not 'clean and green'. Phasing out fossil fuels is not enough. All those EOL LIBS - containing valuable energy metals as well as toxins harmful to the environment – must be recycled, not - discarded as most currently are, if 'clean green' technologies are to benefit the planet. 12 Passenger EV battery August 2020 Raw materiale Lichemicals Lithium Australia" Recycling Batteries ENERGY STORAGE Li-ion battery system Battery energy storage Copyright 2020, Lithium Australia NL#14Potential for battery recycling ~ global 2 - Placed on market (‘POM') versus EOL. POM worldwide, annual, tonnes 17,500,000 14,000,000 10,500,000 7,000,000 3,500,000 Raw material EOL worldwide, tonnes, by application 3,000,000 2,250,000 1,500,000 750,000 0 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Portable Heavy EV UPS/back up | Personal mobility Industrial Light EV IESS Maritime Circular Energy Storage Research and Consulting Lichemicals Lithium Australia NL Recycling 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Portable Heavy EV UPS/back up I Personal mobility Industrial Maritime I Light EV IESS [Source: Circular Energy Storage, 2020.] Batteries Currently, only 9% of the 300,000 tpa of LIBs discarded worldwide are made available for recycling. By 2030, this figure could rise to 2.5 Mtpa of EOL LIBS, an alarming figure if recycling rates remain as they are. 13 August 2020 Copyright 2020, Lithium Australia NL#15Potential for battery recycling ~ Australia ■ In Australia right now the battery recycling rate is also very low. ■ With respect to Australian EOL batteries, around 22,000 tpa¹ are available for recycling, although most are not. ■ Volumes of Australian EOL batteries are expected to exceed 106,000 tonnes per annum ('tpa') and 218,000 tpa by 2035 and 2040 respectively1. ■ On that basis, and quite aside from crucial environmental considerations, the value of the contained metal in EOL LIBS in Australia alone could be as much as AU$3 billion per annum by the year 20362. tonnes 700 000 600 000 500 000 400 000 300 000 200 000 100 000 2012-13 1 Battery Stewardship Council Report 'Australian Battery Market Analysis', June 2020. 2 King, S. et al, 2018. CSIRO Report EP181926: Lithium Battery Recycling in Australia. August 2020 Raw material Projected Australian battery end-of-life arisings to 2050. 0 2014-15 2016-17 2018-19 2020-21 2022-23 2024-25 2026-27 Handheld (<5 kg) BESS & EV 2028-29 2030-31 2032-33 2034-35 2036-37 2038-39 2040-41 2042-43 2044-45 [Source: BSC report: 'Australian Battery Market Analysis', June 2020.] Lead acid (25 kg) 2046-47 2048-49 Li chemicals Lithium Australia NL Recycling Batteries 14 Copyright 2020, Lithium Australia NL#16Envirostream mixed-battery recycling Raw material Li chemicals Lithium Australia" Recycling Batteries Envirostream, Australia's only mixed-battery recycling facility, is at the forefront of innovation in sustainable battery-processing methods, having developed safe and innovative management solutions to what could soon become two of the world's most pressing environmental issues: the problematic sourcing of energy metals for LIBS and the effective management of toxic battery waste. The newly expanded Envirostream plant has now been commissioned. Designed and built in-house, and based on international best practice and sustainability, it currently has a feed capacity of 3,000 tpa. The Envirostream facility can efficiently sort, shred and separate all types of spent batteries. In the case of EOL LIBS, all the active components – cobalt, nickel, lithium and graphite – are recovered as a mixed metal dust (MMD'). Importantly, more than 90% of LIB mass is recycled, with the MMD exported to South Korea to be further refined into feed for new LIB manufacture. The plant also generates copper, aluminum, scrap steel and plastic, all of which are returned to the manufacturing sector. - - Through partnerships with LG Chem and Milwaukee, among others, Envirostream recently added 50 more points to its battery collection network and is in discussions with national battery retailers regarding efficient EOL recycling. Lithium Australia and Envirostream are thus strongly positioned to capitalise on the rollout of a national stewardship programme for all batteries. Scheduled for introduction in 2020, that programme comes in the wake of Victoria's ban (July 2019) on EOL batteries being consigned to landfill. Together, Lithium Australia and Envirostream aim to 'close the loop' on the energy-metals cycle. 15 August 2020 Copyright 2020, Lithium Australia NL#1716 Material Process output Battery types Waste Envirostream business model Raw material Li chemicals Lithium Australia NL Recycling Batteries EV & hybrid vehicles 1 3 Electronics Power tools Energy storage systems Power generation NiCd Lithium (Li-ion) Nickel metal Alkaline Nickel hydride (NiMH) cadmium (NiCd) ↓ On-shore battery processing ENVIROSTREAM PROCESS Specialist cadmium processor Lead acid Specialist lead acid processor (in Australia) Steel Copper Aluminium Mixed metal compound EXPANDING THE BUSINESS Envirostream began commissioning its expanded facility in early 2020 and by the end of June 110 tonnes of EOL LIBS had been processed. The 2020 financial year('FY') generated AU$0.8 million in revenue. This figure is expected to grow significantly in the 2021 FY, with: commodity prices strengthening since March '20; ■ new copper and aluminum recovery circuits being commissioned, and ■ off-take agreements for recycled alkaline-battery dust (zinc oxide and manganese oxide) being negotiated. Already, then, Envirostream's LIB recycling capacity is improving the sustainability of the battery industry: ■ reducing the amount of toxic materials relegated to landfill; ■ establishing sustainable supply chains for energy metals (including nickel and cobalt), and ☐ helping minimise the environmental impacts of exploring for and mining new resources. And that's just the beginning! August 2020 Copyright 2020, Lithium Australia NL#18Refining recycled battery products Raw material Lichemicals Lithium Australia NL Recycling Batteries REFINING SUCCESSES Together with ANSTO and using MMD recovered by Envirostream as a feed source, the Company has produced high- quality lithium phosphate ('LP') (> 99.9% Li3PO4). Lithium ferro phosphate ('LFP') battery cathode material was then synthesised from the LP at the VPSC Ltd ('VSPC' - 100% Company owned) cathode-powder pilot plant in Brisbane, Queensland. VSPC subsequently manufactured coin-cell LIBS using the LFP, then tested those batteries. Test results indicated that battery-cell performance was comparable to that of similar types of LIBS manufactured using commercial-grade lithium carbonate. Also in conjunction with ANSTO, the Company has recovered base metals as mixed sulphides (a high-value intermediate product) from Envirostream's MMD. THE COMBINED BUSINESS Lithium Australia will provide Envirostream with the processing technology that allows it to transition from a battery collection and separation entity to an integrated business capable of refining its MMD in-house to produce higher-value products. 100% 50% 0% Process metal recoveries using Company technologies. 90.0% 90.0% 85.0% ■Co ■Ni Overall process recoveries. 17 August 2020 Copyright 2020, Lithium Australia NL#19Rationale for investing in battery recycling. Raw material Li chemicals Lithium Australia NL Recycling Batteries Company subsidiary Envirostream is a first-mover business, being the only Australian entity able to recover MMD from EOL LIBS. Envirostream has established a comprehensive and constantly expanding network for the collection and recycling of all types of EOL batteries in Australasia. ■ Lithium Australia has developed proprietary process technology that reduces the steps required to manufacture cathode powder for new LIBS from the MMD recovered by Envirostream from EOL LIBS. Already, ever-increasing amounts of EOL LIBS are creating a global disposal problem collectively, Lithium Australia and Envirostream consider a real opportunity on several fronts. ◉ - one that, ■ The Lithium Australia/Envirostream alliance aims to facilitate - and greatly enhance - a circular battery economy by establishing an ethical and sustainable supply of battery materials while concomitantly reducing negative impacts on the environment from mining and EOL battery disposal. ■ There is strong traction from both governments and battery producers/retailers for an Australian stewardship programme to support EOL battery recycling. Envirostream has signed non-disclosure agreements with sundry potential partners for the establishment of additional recycling facilities within Australia, as well as offshore. In line with the Company's commitment to sound environmental, social and governance (i.e. ESG) principles, Lithium Australia and Envirostream have formed a battery recycling business ideally positioned to dominate the collection, refining and re-birthing of energy metals within Australia and beyond. 18 August 2020 Copyright 2020, Lithium Australia NL#20Advancing LFP battery technology Raw material Li chemicals Lithium Australia NL Recycling Batteries Australia is the world's largest market for residential ESS. The South Australian government, for example, has offered subsidies for the installation of 40,000 energy-storage units in that state, while in Western Australia ('WA') plans are afoot for the government to establish 25,000 remote energy- storage facilities at the fringes of existing power grids. Lithium Australia is a great advocate of LFP battery chemistry for ESS, for reasons of both safety and performance. LFP batteries are remarkably versatile and ideally suited to ESS designed for use in Australia, where factors such as safety, efficiency at high ambient temperatures and minimal service requirements are paramount. LFP batteries demonstrate the following attributes. ◉ Superior operational life (typically twice the number of duty cycles of other LIB chemistries). ■ Excellent safety credentials. ◉ High charge and discharge rates without thermal runaway (low fire risk). ■ A wide operating temperature range (ideal for Antipodean ESS applications). ▪ Low supply chain risk and reduced environmental impact (no nickel or cobalt required). ▪ Lower cost, in that they contain materials that are readily available (again, no nickel or cobalt). The absence of unsustainable/conflict metals - cobalt in particular - in LFP batteries also makes them a wise choice in terms of national energy security, reducing the potential for supply-chain disruptions that can arise when materials are sourced from politically unstable regions or fragile ecosystems where mining can lead to sensitive environmental issues. 19 August 2020 Copyright 2020, Lithium Australia NL#21Soluna battery storage for renewable energy Lithium Australia acquired a 50% ownership interest in Soluna in recognition of the unparalleled opportunity created by rapid growth in the Australian ESS market. At present, Soluna provides solutions for renewable energy storage, along with technical support and customer service, only within Australia but plans are afoot to expand in due course. Soluna's range of LFP-battery ESS offers superior safety and performance in energy-storage applications. Already, Soluna is experiencing strong indications of demand for battery energy storage from both the residential and industrial sectors. As noted on page 7, Soluna has received approvals for its residential ESS products for use in Australia and is in receipt of initial orders. Installations have now commenced. Soluna is also launching a new range of larger-scale ESS into the Australian market and is negotiating with a number of industrial clients to install hybrid power management systems that incorporate Soluna LFP batteries. SOLUNA Raw material Li chemicals Lithium Australia NL Recycling SOLUNA SOLAR POWER BANKS SOLUNA Batteries SOLUNA EL·L 20 20 August 2020 Copyright 2020, Lithium Australia NL#22VSPC cathode-powder manufacture Raw materiale Lichemicals Lithium Australia NL Recycling Batteries VSPC has spent 16+ years developing nano-powders, primarily for use in batteries. Its unique, nanotechnology-based cathode-powder production process is broadly applicable to most LIB chemistries. VSPC assets include: ■ its R&D facility in Brisbane, Queensland, Australia; ☐ intellectual property, including three families of patents, and agreements to produce/commercialise cathode materials within China. As noted on page 17, VSPC technology can harness LP as a cathode-powder precursor, potentially reducing the number of process steps required to create new LIBS from the application of Company-developed extraction technologies to feed sources such as MMD recovered from Envirostream's recycling of EOL LIBS. Battery manufacturers in China and Japan have been testing VSPC cathode powders during the past two years. In China, that has led to a commercial arrangement with DLG Battery Co. Ltd ('DLG') to commercialise an LFP product for the battery market in that country. Subject to performance hurdles being met, DLG will grant VSPC preferred supplier status for the LFP powders DLG uses in its battery production. VSPC has been acknowledged by the Australian federal government by way of a grant to investigate the use of lower-cost materials (including recycled EOL battery products) in the manufacture of new LIBS, as well as with funding to develop an ‘advanced nano-engineered battery for fast-charging catenary-free trams'. 21 August 2020 Copyright 2020, Lithium Australia NL#23Sustainable processing technologies Raw material Lichemicals Lithium Australia NL Recycling Batteries CAPITALISING ON WASTE STREAMS The Company aims to provide the battery industry with more ethically sourced and sustainable critical chemical products. This approach could improve the viability of existing mining operations by extending resource life and minimising the impact on fragile ecosystems, while also enhancing energy security in jurisdictions in which sources of critical battery minerals are scarce or non-existent. LOW-ENERGY PROCESSING OF ALL LITHIUM MINERALS ▪ Lithium Australia's LieNA® technology, a caustic conversion process designed to recover lithium from fine and lower-grade spodumene, operates under conditions like those used to produce alumina from bauxite. The reaction induces a phase change in the spodumene grains, converting them to a readily leachable mineral, sodalite, from which the lithium is easily dissolved and precipitated as LP. Subsequent processing can produce either lithium hydroxide or lithium carbonate as required. ■ Lithium Australia's SiLeach® technology was developed to extract lithium from micas, often considered 'waste' by the mining industry. A fluorine-assisted acid digest, SiLeachⓇ also recovers the lithium as LP. The technology, which has been successfully pilot-tested, has application in the recovery of lithium from tailings generated through the mining of tin, tantalum, tungsten and lithium, as well as certain types of lithium clay deposits. Both the Company's lithium recovery processes have in common the production of LP, which can then be converted to either lithium hydroxide or lithium carbonate or used directly as a raw material for the synthesis of LFP battery cathode powders by VSPC. 22 August 2020 Copyright 2020, Lithium Australia NL#24Process Grade (% Li20) The LieNAⓇ process Raw material Li chemicals Lithium Australia NL Recycling Batteries IMPROVING SUSTAINABILITY, INCREASING LITHIUM RESERVES Spodumene concentrate producers urgently need to enhance their process recovery. Improving spodumene recovery to concentrate from existing levels (between 55% and 75%) by relaxing concentrate particle size and grade targets could extend mine life by 50% with little additional operating cost. This would greatly improve resource utilisation, reduce costs and, importantly, relieve pressure on the environment. 3.0 Achieved recovery rate Zone of reality? Design recovery rate 45 2.5 2.0 20 1.5 1.0 10 55 50 Zone of fantasy? The LieNA® sweet spot 0.5 50 55 60 65 70 75 80 85 Process Plant Recovery (%) 90 The Company has been awarded federal government grant, through its Co-operative Research Centres - Projects (i.e. CRC-P) programme, to build and operate a LieNAⓇ pilot plant at ANSTO. INDUSTRY IMPLICATIONS In WA, spodumene concentrate production will soon eclipse 5 Mtpa, meaning that, notionally, 2-3 Mtpa of spodumene fines could be available to process via LieNAⓇ, producing up to twice the amount of lithium chemicals currently consumed globally! Producers of spodumene concentrate and lithium chemicals are already expressing significant interest in the LieNAⓇ process. 23 August 2020 Copyright 2020, Lithium Australia NL#25Resource and exploration portfolio Lithium Australia's resource and exploration portfolio has the potential to deliver raw materials to its downstream business units in the future. The Company's Sadisdorf lithium-tin project (100% Lithium Australia) is in Germany, one of the fastest growing markets for battery raw materials. The project comprises an historic tin mine in Saxony, a great mining province: ■ JORC 2012 Inferred Mineral Resource - 25 Mt at 0.45% Li₂O; ■ JORC 2012 Inferred Mineral Resource - 3.36 Mt at 0.44% Sn. The Company also has a highly prospective portfolio of projects in premier lithium- caesium-tantalum pegmatite regions within Australia. They include the following. ■ Stanifer (100% Lithium Australia) - located in Western Australia, next to Talison Lithium's Greenbushes hard-rock lithium mine (the world's largest). - ■ Bynoe (100% Lithium Australia) – situated in the Northern Territory, within the Bynoe Pegmatite Field, next to the Finniss project of Core Lithium Ltd (ASX: CXO). Lithium Australia has entered into an agreement to explore the Coates Mafic Intrusive Complex ('Coates'), located close to the recent nickel-copper-platinum group elements discovery of Chalice Gold Mines Ltd (ASX: CHN) at Julimar. The geology at Coates is similar to that at Julimar and is known to host base- and precious-metal anomalies in soils overlying the mafic intrusion. In order to rationalise its asset portfolio, the Company is seeking partners to assist in advancing its non-core exploration assets. 24 August 2020 Raw material Li chemicals Lithium Australia NL Recycling Batteries Copyright 2020, Lithium Australia NL#26CONTACT INFO Lithium Australia NL Level 1, 675 Murray Street West Perth 6005 Western Australia PO Box 1088 West Perth 6872 Western Australia Phone +61 (0) 8 6145 0288 Email: [email protected] www.lithium-au.com