NZ-AU: James Bay Lithium Project Update Confirms Strong Project Economics

Lithium One (subsequently acquired by Galaxy Lithium (Canada) Inc.) drilled a total of 102 diamond drill holes for 13,487 m on a pattern ranging between 50 m and 60 m spacing. Drill holes were for the most part inclined towards the southeast to intersect the spodumene mineralization perpendicular to the dyke geometry. Drill hole diameter was NQ.

The 2008/2009 drill hole collars were initially surveyed by handheld GPS, and subsequently resurveyed using RTK by Galaxy Lithium Canada in 2017. A total of 84 out of 102 drill holes were located and resurveyed by RTK.

Downhole survey methods for the 2008 drilling are unknown, however downhole surveying in 2009 was conducted at 3 m intervals using a REFLEX Flexit tool.

2009/2010 Channel Sampling – Lithium One

Surface outcrops of pegmatite were channel sampled in 2009 and 2010 using a dual-blade diamond saw to ensure consistent widths during cutting. A total of 53 channel samples were collected for a combined length of 810 m. Channel lengths ranged from 2 m to 41 m, and sampling was conducted on 1.5 m intervals. Channel samples were terminated at the contact with surrounding lithologies.

2017 Resource Definition Drilling – Galaxy Lithium (Canada) Inc.

Galaxy Lithium (Canada) Inc. conducted a program of infill and extensional diamond drilling in 2017 with 157 holes drilled for a total meterage of 33,339 m. Drill hole diameter was NQ. All drill hole collars were resurveyed using a RTK method. Downhole surveys were recorded every 3 m using a multi-shot camera (REFLEX EZ-TRAC).

2017/2018 Geotechnical and Metallurgical Drilling – Galaxy Lithium (Canada) Inc.

Galaxy Lithium (Canada) Inc. conducted a program of diamond drilling in 2017 and 2018, with 102 holes drilled for a total meterage of 10,900 m. Drill hole diameter was HQ for metallurgical drill holes, and NQ for the remaining geotechnical holes.

2021 – 2023 Sterilisation, Exploration and Resource Delineation Drilling – Galaxy Lithium (Canada) Inc.

Galaxy Lithium (Canada) Inc. conducted two programs of diamond drilling during the winter of 2021/2022 and 2022/2023, with 231 holes drilled for a total meterage of 43,600 m. Drill hole diameter was NQ and drilling was undertaker by Major Drilling. All drill hole collars were resurveyed using a RTK method by an independent land surveyor. Downhole surveys were recorded every 3 m using a multi-shot camera (REFLEX EZ-TRAC) or a gyroscope.

Drilling campaigns between 2008 and 2018 were conducted by Chibougamou Drilling using either NQ or HQ drilling diameters. Triple tubing was not necessary as the rock is fresh and highly competent starting from the base of the overburden. Recoveries were excellent (> 95%).

Drilling campaigns conducted between 2021 and 2023 were carried out by Major Drilling using NQ drill diameter.

Exploration and resource definition drill holes vary in depth from 50 m to 300 m, with the occasional deep exploration hole up to 500 m depth.

Metallurgical drill holes are HQ diameter and vary in depth between 10 m and 105 m.

Geotechnical and sterilisation drill holes are NQ diameter and are generally 70 m to 120 m deep.

Drill core was stored in wooden core boxes and delivered to the core logging facility at the camp twice daily by the drill contractor. The drill core was first aligned and measured for core recovery by a technician, followed by RQD measurements. Due to the hardness of the pegmatite units, the recovery of the drill core was generally very good, averaging over 95%. The core was then logged, and sampling intervals were defined by the geologist. Before sampling, the core was photographed using a digital camera and core boxes were marked with box number, hole ID, and aluminium tags indicating “from” and “to” measurements. All drill holes were logged in full.

Sample intervals were marked by appropriately qualified geologists. Two sample tags were placed at the beginning of each sample interval, while a third copy remained in the sample booklet along with the associated “from” and “to” information recorded by the geologist.

A geo-technician was responsible for core cutting and for preparing the samples for dispatch to the preparation laboratory – Table Jamésienne de Concertation Minière in Chibougamau (TJCM). Assay samples were collected on half-core sawed lengthwise using a diamond saw; the remaining half was replaced in the core box for future reference. Quarter core duplicates were collected frequently.

2017/2018 Drilling

Sample intervals were determined based on observations of the lithology and mineralization and were marked and tagged by the geologist. The typical sample length was 1.5 m but varied according to lithological contacts between the mineralized pegmatite and the country rock. In general, one country rock sample was collected from each side of the contact with the pegmatite.

The drill core was split lengthwise; one half was placed in a plastic bag with a sample tag, and the other half was left in the core box with a second sample tag for reference. The third sample tag was archived on site. The samples were then catalogued and placed in rice bags for shipping. Sample shipment forms were prepared on site, with one copy inserted with the shipment and a second copy given to the carrier. One copy was kept for reference.

The samples were transported regularly by contractors’ truck directly to the ALS Canada Ltd – ALS Minerals laboratory in Val-d’Or, Québec. At the ALS facility, the sample shipment was verified, and a confirmation of receipt of shipment and content was sent digitally to the Galaxy project manager.

The sample sizes (half-core, NQ diameter) are appropriate for the style, thickness and consistency of the mineralization at the James Bay Lithium Project.

2021 – 2023 Drilling

Sampling techniques and preparation were consistent with the 2017/2018 drilling campaigns, with sampling lengths reduced to 1 m within pegmatite lithologies.

The pulverized pegmatite core samples were shipped from the TJCM to the COREM Research Laboratory (COREM) in Québec City. COREM was accredited ISO/IEC 17025:2005 by the Standards Council of Canada for various testing procedures on April 30, 2009. The scope of accreditation did not include the specific testing procedures used by COREM to assay lithium (method code B23).

Lithium One also utilized SGS Mineral Services Lakefield Laboratory (SGS) as an umpire laboratory to monitor the reliability of assaying results delivered by the primary laboratory COREM.

At COREM, prepared samples were assayed using three-acid digestion (nitric acid, hydrofluoric acid, perchloric acid) in boiling water. The dissolved sample was analysed by atomic absorption (AA) spectrometry. At SGS, check samples were assayed by sodium peroxide fusion and atomic absorption spectroscopy. At ALS Minerals, prepared samples were assayed using four-acid digestion (perchloric acid, hydrofluoric acid, nitric acid and hydrochloric acid) with ICP-AES finish. Although a four-acid digest is considered a near-total digest, common practice for the analysis of pegmatite material is a sodium-peroxide fusion. Significant verification test work has been undertaken and has demonstrated that the acid digest method is robust, and no bias has been observed when compared to the sodium-peroxide fusion check assays.

Samples from 2008 – 2010 represent roughly 14% of the total meterage of the drilling on the project.

2008 – 2010 QA/QC

Lithium One relied partly on the internal analytical quality control measures implemented by COREM laboratory. Additionally, Lithium One implemented external analytical quality control measures consisting of using control samples (field blanks, in house standards and field duplicates) inserted with sample batches submitted for assaying in 2009 and 2010, and coarse reject duplicate samples in 2008. Standards were non-certified and were custom-made from a bulk sample of the outcropping pegmatite material from the project.

Field duplicates were generated from quarter core samples and inserted every 40 samples.

Total insertion rate for QA/QC in 2008 – 2010 was 4.2%, with an additional 2.6% when including umpire assays.

Although the insertion rate of QA/QC in 2008 – 2010 was below industry standards, subsequent check assays have shown that the assay results are valid. Also, the results from the limited QA/QC undertaken at the time of drilling show no issues.

2017/2018 Assaying

Samples were shipped to ALS Minerals in Val-d’Or for preparation and analyses. The laboratory is accredited ISO/IEC 17025:2005 by the Standards Council of Canada for various testing procedures, however, the scope of accreditation does not include the specific testing procedure used to assay lithium.

Sample preparation involved the sample material being weighed and crushed to 70% passing 2 mm. The ground material was then pulverized to 90% passing 75 microns before being analysed.

At ALS Minerals, prepared samples were assayed for mineralization grade lithium by specialized four-acid digestion and inductively coupled plasma – atomic emission spectrometry (ICP-AES) finish (method code Li-OG63). An approximately 0.4-g sample was first digested with perchloric, hydrofluoric, and nitric acid until dry. The residue was subsequently re-digested in concentrated hydrochloric acid, cooled and topped up to volume. Finally, the samples were analysed for lithium by ICP-AES. The method used has a lower detection limit of 0.005% lithium and an upper limit of 10% lithium.

Samples from 2017 represent roughly 44% of the total meterage of the drilling on the project.

2017/2018 QA/QC

GLCI relied partly on the internal analytical quality control measures implemented by the ALS Minerals laboratory, which involved routine pulp duplicate analyses. GLCI also implemented external analytical quality control measures including the insertion of control samples (blanks, in house standards and field duplicates) with sample batches submitted for assaying at ALS Minerals in 2017. In 2017, a number of pulp samples were also re-submitted to the SGS laboratory in Lakefield, Ontario for umpire check assays. In 2020, additional pulp samples were resubmitted to Nagrom Analytical, Perth.

Duplicate samples were inserted into each sample series at a rate of one in every 20 samples. Duplicates corresponded to a quarter core from the sample left behind as reference.

Total insertion rate for QA/QC in 2017 was 12.4%, with which increases up to 16.6% when including umpire assays.

The rate of insertion of QA/QC samples in 2017 was much improved compared to 2008 – 2010 period. No biases were identified, and a minor failure was identified in the low-grade standard, which was investigated and no issues were identified.

2021 – 2023 Assaying

Samples were shipped to ALS Minerals in Val-d’Or for preparation and analyses. The laboratory is accredited ISO/IEC 17025:2005 by the Standards Council of Canada for various testing procedures, however, the scope of accreditation does not include the specific testing procedure used to assay lithium.

Sample preparation (code PREP-31A) involved the sample material being weighed and crushed to 70% passing 2 mm, with a riffle split of 250 g pulverized to 85% passing 75 microns before being analysed.

At ALS Minerals, prepared samples were assayed for mineralization-grade lithium by sodium-peroxide fusion and digestion followed by inductively coupled plasma – atomic emission spectrometry (ICP-AES) finish (method code ME-ICP81). The method used has a lower detection limit of 0.001% lithium and an upper limit of 10% lithium.

Samples from 2021 – 2023 represent roughly 42% of the total meterage of the drilling on the project.

2021 – 2023 QA/QC

GLCI implemented external analytical quality control measures including the insertion of control samples (blanks and in house standards) with sample batches submitted for assaying at ALS Minerals at a rate of 1 QA/QC sample for every 9 samples.

A number of pulp samples were also re-submitted to the SGS laboratory in Lakefield, Ontario for umpire check assays.

Total insertion rate for QAQC between 2021 and 2023 was roughly 12% when including umpire assays.

No biases were identified, and two minor blank failures were identified and a re-analysis was requested. The re-analyses returned similar results to the original assays.

In addition, Luke Evans, P.Eng. of SLR Consulting (Canada) Ltd. and the Independent CP for the Mineral Resource visited the site in June 2023 and inspected outcrop, drill core and sampling storage facilities.

It should be noted that the drilling between 2021 and 2023 was managed by independent geological contractors and was conducted by professional geologists registered in the Province of Québec.

Data collection and entry procedures were also reviewed and found to be adequate. Various reanalyses of pulps have shown that there are very immaterial differences between analysing using a standard 4-acid digest and a peroxide fusion for the James Bay lithium deposit.

No clear and consistent biases were defined during investigations into QAQC performances, and any failures were duly investigated and found to be minor. 

Specification of the grid system used.

Quality and adequacy of topographic control.

Downhole surveys were completed using an EZ-TRAC multishot tool provided by REFLEX. Declination (-14.2) was removed to correct the data from magnetic north to geographic north. At the collar, a TN14 tool was used to measure the dip and azimuth of the casing.

Topographic controls are informed by a LiDAR survey completed recently on the project.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

Most of the Main Deposit has been drilled at a nominal spacing of approximately 50 m to satisfy the classification as Indicated Mineral Resources.

No sample compositing has been undertaken.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

The orientation of the dykes is well understood for the remainder of the deposit where outcrop is abundant, and drilling has been oriented perpendicular to the dyke contacts.

Lastly, Luke Evans, P.Eng. of SLR Consulting (Canada) Ltd. and the Independent CP for the Mineral Resource visited the site in June 2023 and inspected outcrop, drill core and sampling storage facilities.

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.
• The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.

As of the time of writing, two net smelter return (“NSR”) royalties remain on the James Bay Lithium Project:

• 0.50% NSR royalty previously held by Gérard Robert, which was subsequently sold to Ridgeline Royalties Inc. Portions of the mineral resources subject to this royalty are located on six claims (claim numbers: 2329097, 2329098, 2238480, 2238478, 2329101 and 2329100) of the James Bay project, although the royalty covers 11 claims in total.
• 1.50% NSR royalty previously held by Resources d’Arianne Inc., subsequently sold to Lithium Royalty Corp. Allkem has the right to buy back 0.5% of the NSR for $500,000 Canadian dollars, reducing the royalty to 1.00%. Portions of the mineral resources subject to this royalty are located on two claims (claim numbers: 2126988 and 2126860) of the James Bay project, although the royalty covers 23 claims in total.

• Acknowledgment and appraisal of exploration by other parties.

Commencing in 1974, SDBJ conducted an exploration program that consisted of geological mapping, systematic sampling and diamond drilling of the mineralized outcrops to evaluate the lithium potential of the property. The mapping defined an area of 45,000 square metres of outcropping spodumene dykes.

The Centre de Recherches Minérales du Québec conducted concentration tests and chemical analyses in 1975. A composite sample of the spodumene pegmatite grading 1.7% Li₂O yielded a spodumene concentrate grading an average of 6.2% Li₂O with a recovery factor of 71%.

LithiumOne acquired the claims in 2007 and embarked on an exploration campaign designed to produce a maiden mineral resource on the property. In 2012, Galaxy Resources Limited merged with Lithium One.

• Deposit type, geological setting and style of mineralization.

The property is underlain by the Auclair Formation, consisting mainly of paragneisses of probable sedimentary origin which surround the pegmatite dykes to the northwest and southeast. Volcanic rocks of the Komo Formation occur to the north of the pegmatite dykes. The greenstone rocks are surrounded by Mesozonal to catazonal migmatite and gneiss. All rock units are Archean in age. 

The pegmatites delineated on the property to date are oriented in a generally parallel direction to each other and are separated by barren host rock of sedimentary origin (metamorphosed to amphibolite facies). They form irregular dykes attaining up to 60 m in width and over 200 m in length. The pegmatites crosscut the regional foliation at a high angle, striking to the south-southwest and dipping moderately to the west-northwest. 

Spodumene is the principal source of lithium found at the Project. Spodumene is a relatively rare pyroxene that is composed of lithium (8.03% Li₂O), aluminium (27.40% Al₂O₃), and silica (64.57% SiO₂). It is found in lithium rich granitic pegmatites, with its occurrence associated with quartz, microcline, albite, muscovite, lepidolite, tourmaline and beryl. 

• A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

• easting and northing of the drill hole collar
• elevation or RL (Reduced Level – elevation above sea level in meters) of the drill hole collar
• dip and azimuth of the hole
• down hole length and interception depth
• hole length.

Most holes are inclined 45 – 70 degrees towards the southeast.

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.
• Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low-grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.
• The assumptions used for any reporting of metal equivalent values should be clearly stated.

Capping is not applied for the purpose of reporting exploration results.

Lower cut-off used for reporting is 0.4% Li₂O%; minimum 4 m true width interval; maximum 2 m of internal waste.

No metal equivalent values are used.

Li% assays have been multiplied by 2.153 to transform them to Li₂O%.

• These relationships are particularly important in the reporting of Exploration Results.
• If the geometry of the mineralization with respect to the drill hole angle is known, its nature should be reported.
• If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).

Due to the sub-optimal angle of intercept between the drilling at the assumed orientation of the pegmatite dykes in the NW Sector, true widths have been estimated at between 60% and 80% of downhole widths.

• Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk sample– size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

An IP survey undertaken in 2020 and 2021 has uncovered potential extensions of mineralization to the east of the property, east of the Billy-Diamond Highway.

Re-assaying of pulps using multi-element sodium-peroxide fusion methods has not returned economic concentrations of tantalum, tin or other elements of economic importance apart from lithium.

• The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).
• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Infill drilling to convert the NW Sector to Indicated category is planned, and also deeper drilling to convert any enclaves of Inferred category within the RPEEE pit shell.

• Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.
• Data validation procedures used.

All data pertaining to the 2022 and 2023 drilling campaigns were managed externally by geological contractors and verified by Allkem personnel for accuracy. 

As part of the data verification process, SLR Consulting (Canada) Ltd. compared assay certificates for all drilling campaigns with the drilling database used in the mineral resource calculation and found no material errors.

• Comment on any site visits undertaken by the Competent Person and the outcome of those visits.
• If no site visits have been undertaken indicate why this is the case.

• Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.
• Nature of the data used and of any assumptions made.
• The effect, if any, of alternative interpretations on Mineral Resource estimation.
• The use of geology in guiding and controlling Mineral Resource estimation.
• The factors affecting continuity both of grade and geology.

Surface diamond drill holes have been logged for lithology, structure, geotechnical, alteration and mineralisation information. 

The lithological logging of pegmatite in combination with the Li₂O, assays, including grain size and mineralogical differentiation, have been used to guide the sectional interpretation of the pegmatites in Leapfrog Geo modelling software. Both an overburden (glacial till) model and a lithological model have been constructed based on lithological logging. 

Due to the consistent nature of the pegmatites identified in the resource area, no alternative interpretations have been considered. 

No further grade-based domaining has been used, and the current pegmatite wireframes include minor intervals of barren pegmatite without spodumene mineralisation.

• The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource

The dykes present as en-echelon orientations, varying in length between 200 m and 400 m, and perpendicular to the strike of the deformation corridor. The dykes have been traced to depths of up to 500 m vertically from surface and are mostly open at depth. 

Dyke width vary between 5 m to 40 m, and sometimes coalesce up to widths of 80 m.

• The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.
• The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.
• The assumptions made regarding recovery of by-products.
• Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).
• In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.
• Any assumptions behind modelling of selective mining units.
• Any assumptions about correlation between variables
• Description of how the geological interpretation was used to control the resource estimates.
• Discussion of basis for using or not using grade cutting or capping.
• The process of validation, the checking process used, the comparison of model data to drillhole data, and use of reconciliation data if available.

Hard boundaries have been used at all domain boundaries for the grade estimation. The pegmatite boundaries have been modelled to honour the geological contacts without consideration for the Li₂O% grades. 

Compositing has been undertaken within domain boundaries at 1.5 m with residuals less than 0.25 m absorbed into the previous composite. 

No top-cutting (capping) has been applied as no statistical outliers were identified. 

Variography has been completed in Leapfrog Edge software on pegmatites grouped by orientation and geographical location. There were insufficient samples to model variograms for each pegmatite dyke independently. 

No assumptions have been made regarding the recovery of any by-products. 

The drill hole data spacing is approximately 50 m in Indicated areas and approximately 80 m in Inferred areas. 

The block model parent block size is 3 m (X) by 5 m (Y) by 5 m (Z), which is considered appropriate for the widths of the pegmatite dykes and the proposed mining selectivity. A sub-block size of 0.75 m (X) by 1.25 m (Y) by 1.25 m (Z) has been used to define the mineralisation edges, with the estimation undertaken at the parent block scale.

• Pass 1 estimations have been undertaken using a minimum of 4 and a maximum of 12 samples into a search ellipse set at approximately half of the variogram range. A 3 sample per drill hole limit has been applied in all pegmatite domains.
• Pass 2 estimations have been undertaken using a minimum of 4 and a maximum of 12 samples into a search ellipse set at approximately 80% of the variogram range. A 3 sample per drill hole limit has been applied in all pegmatite domains.
• Pass 3 and Pass 4 estimations have been undertaken using a minimum of 1 and a maximum of 12 samples into a search ellipse set at 120% to 200% the variogram range, respectively. A 3 sample per drill hole limit has been applied in all pegmatite domains.

The Mineral Resource estimate has been validated using visual validation tools combined with volume comparisons with the input wireframes, mean grade comparisons between the block model and composite grade means and swath plots comparing the composite grades and block model grades by northing, easting and elevation. In addition, the OK grade estimate was compared with ID2 (Inverse Distance squared) and NN (Nearest Neighbour) interpolation methods. 

No selective mining units are assumed in this estimate. 

No correlation between variables has been assumed. 

• Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

• The basis of the adopted cut-off grade(s) or quality parameters applied

The open pit discard cut-off grade was calculated at 0.16% Li₂O, however due to the absence of metallurgical test work on low-grade material, the cut-off was raised to 0.5% Li₂O.

• Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

The mining assumptions/parameters applied to the optimisation for the Mineral Resource were taken from the previous feasibility study (updated parameters were not available at the time) and are:

• Spodumene concentrate (6.0% Li₂O) – US$$1,500 per tonne.
• Li₂O% metallurgical recovery – 70.1%
• Concentrate Transport – US$$86.16 per tonne concentrate
• NSR Royalty – 0.32%
• Processing – CAD$13.23 per tonne ore
• G&A – CAD$13.86 per tonne ore
• Closure + Sust. CAPEX + IBA + Miscellaneous – CAD$6.83 per tonne ore
• Mining Cost – CAD$4.82 per tonne mined

These parameters were subsequently updated for the Ore Reserve to adjust for inflationary pressures since the 2021 FS. This resulted in a marginal increase in the cut-off grade, which remains significantly lower than the 0.5% Li₂O used to report the Mineral Resource. 

US$ exchange rate of 1.33 (CAD:US$) has been applied in the Whittle optimisation. 

Both Inferred and Indicated Mineral Resource classifications have been utilised in the RPEEE optimisation.

• The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

• Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made

No protected zones that would obstruct the award of a future mining lease are present at the project. Allkem received the federal approval of the ESIA in January 2023, and provincial approval is pending.

• Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.
• The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit,
• Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

Bulk Density (g/cm³) = (0.0669 x Li2O %) + 2.603  

Outside the pegmatite wireframes, the mean bulk densities shown in the table below were assigned into the block model by lithology. Overburden was assumed to have a bulk density of 2.2 g/cm3.   

• The basis for the classification of the Mineral Resources into varying confidence categories
• Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).
• Whether the result appropriately reflects the Competent Person’s view of the deposit.

The block classification was based primarily on drill hole spacing, geological and grade continuity and the average distance of composites to a given block. The block classification was subsequently manually modified to ensure a coherent, contiguous classification suitable for mine planning purposes. Within the pegmatite dyke wireframes, the following criteria was used:

• No Measured Mineral Resources were identified.
• Indicated Mineral Resources were identified in areas defined by a nominal drill spacing of 50 m x 50 m.
• Inferred Mineral Resources were identified in areas defined by a nominal drill spacing of 80m x 80m.

The classification reflects the view of the Competent Person. 

• The results of any audits or reviews of Mineral Resource estimates.

The tonnages and grades have been verified in more than one software package.

confidence

• Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate
• The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used
• These statements of relative accuracy and confidence of the estimate should be compared with production data, where available

No geostatistical study has been conducted to quantify accuracy nor confidence within confidence limits (conditional simulation) 

Grade estimates are local on a domain-by-domain basis and drill spacing is sufficient for a local grade estimate suitable as input into mine planning. 

No reconciliation data is available as the deposit is not in production.

• Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.
• Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

The effective date of the Mineral Resource is August 9th, 2023. 

The Ore Reserve for the James Bay Project is estimated at 37.3 Mt, at an average grade of 1.27% Li2O.

The Ore Reserve was prepared by SLR Consulting (Canada) Ltd. (“SLR”) effective as of August 31, 2023.

The Ore Reserve does not include any Inferred Mineral Resources which were classified as waste for reporting purposes.

• Comment on any site visits undertaken by the Competent Person and the outcome of those visits.
• If no site visits have been undertaken indicate why this is the case.

• The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves.
• The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

• The basis of the cut-off grade(s) or quality parameters applied.

• The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e., either by application of appropriate factors by optimization or by preliminary or detailed design).
• The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.
• The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.
• The major assumptions made, and Mineral Resource model used for pit and stope optimization (if appropriate).
• The mining dilution factors used.
• The mining recovery factors used.
• Any minimum mining widths used.
• The way Inferred Mineral Resources are utilized in mining studies and the sensitivity of the outcome to their inclusion.
• The infrastructure requirements of the selected mining methods.

Open pit optimization was conducted in GEOVIA WhittleTM to determine the optimal economic shape of the open pit to guide the pit design process. Optimization parameters are shown below:

A raised cut-off grade was adopted at 0.62% Li2O. The average mining dilution factor is 8.7% at 0.42% Li2O. The LOM metallurgical recovery was assumed at 68.9%.

The equipment requirements are based on mining 10 m benches, including 11-m3 and 6.3-m3 bucket diesel hydraulic excavators (backhoe configuration), and up to nine 100-t rigid frame haul trucks, two 10.7-m^3 front end loaders, two drills, and secondary equipment like track dozers, wheel dozers, graders, and water trucks. Personnel needs are devised on two Fly-In, Fly-Out (FIFO) rosters, peaking at 164 individuals on site in Year 10.  

• The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.
• Whether the metallurgical process is well-tested technology or novel in nature.
• The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.
• Any assumptions or allowances made for deleterious elements.
• The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.
• For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

The metallurgical process is well understood and well tested in the industry.

Both SGS and Nagrom received bulk samples of 14,690kg and 400kg respectively. These samples were considered representative of the ore body as a whole.

Gravity separation test work on a single composite sample and crushing particle size were undertaken by SGS Canada Inc. (“SGS”) and Nagrom resulted in improved recovery and final product grade. These tests were deemed representative.

Full-scale plant performance of Mt Cattlin and other Australian operations were compared to the James Bay test work data. A final recovery scale-up factor of 0.85 for the early years and 0.82 for the mid/later years was adopted.

Metallurgical test work was conducted by SGS Canada Inc. and Nagrom to determine optimal plant operating recoveries. For a final spodumene concentrate grading 5.6% Li₂O, modelling indicates that a recovery of 69.6% in the early years and 66.9% in later operating years is a reasonable assumption

• The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterization and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

In 2017, various studies were undertaken to update a former data collection from 2011 to obtain necessary baseline information required to assess the Project’s impacts as part of the ESIA. Other complementary baseline studies were conducted in 2019 and 2020. 

The four main lithologies, namely barren pegmatite, gneiss, banded gneiss and mafic volcanic/basalt are considered Non-Potential Acid Generating (“Non-PAG”). Some metal leaching that exceeded the criteria applicable for resurgence to surface water (RES) was encountered during the first weeks of testing, but all metals complied with the RES criteria after week 14.

• The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labor, accommodation; or the ease with which the infrastructure can be provided or accessed.

• 69 kV main-substation
• Administrative and laboratory building
• Operations camp
• Workshop and reagent buildings
• Propane storage and distribution facility
• Diesel storage and distribution facility
• Truck-shop including a wash-bay
• Cold dome warehouse for the storage of critical parts
• Water treatment plant (effluent)
• Potable water treatment plant
• Sewage treatment plant
• ROM pad and stockpile
• Crushed mineralized material stockpile
• Four Waste Rock and Tailings Storage Facilities (“WRTSFs”)
• Overburden and Peat Storage Area (“OPSF”)
• Two Water Management Ponds (“WMPs”) and a Plant Water Management Pond
• Contact water ditches and non-contact diversion water ditches
• Fine and coarse tailing warehouse building
• Spodumene concentrate warehouse facility
• Emulsion and explosive storage and distribution facility

The Eastmain airport (130 km from site) will be used to transport workers from southern Québec. The Project lands, subject to mining claims are easily accessed by the Billy Diamond Highway.

The process plant and supporting infrastructure will be powered by Hydro-Québec’s 69 kV overhead distribution system. The 69 kV transmission line is relayed through Hydro-Québec’s Muskeg substation and ultimately fed by the Némiscau substation located roughly 100 km southwest of the Project site. An overhead distribution line extension was built to the plant substation from the 69 kV line (L-614) located 10km south of the Project site. The 69 kV power supply is limited by a capacity of 8 MVA due to the sensitivity of the network and distance from the supplying substation

• The derivation of, or assumptions made, regarding projected capital costs in the study.
• The methodology used to estimate operating costs.
• Allowances made for the content of deleterious elements.
• The source of exchange rates used in the study.
• Derivation of transportation charges.
• The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.
• The allowances made for royalties payable, both Government and private.

Transportation charges of the concentrate from the Mine to Matagami by truck and from Matagami to Trois-Rivières by rail, were based on quotations from road and railway transporters.  The forecasting of revenues was based on a market study done by a specialized firm and internal research.  Royalties have been calculated for the mine production plan based on known agreements and preliminary estimates from IBA discussions.

Exchange rate used is CAD 1.33/US$, based on long-term forecasts. Treatment and refining charges are not applicable as spodumene is sold on an open market with clear pricing.  

The capital expenditure (“CAPEX”) for Project construction, including processing, mine equipment purchases, infrastructures and other direct and indirect costs is estimated and summarized in the table below and are based on information in-hand at the detailed engineering stage of the Project.

The total initial project CAPEX including an 6.2% contingency is estimated at US$ 381.5M. Deferred and Sustaining CAPEX is required during operations for additional equipment purchases, a truck shop bay addition, and mine civil works.

Summary of LOM Capital Costs 

Operating costs include mining, processing, general and administrative services, mining, processing and concentrate transportation. The LOM operating cost summary is presented in the table below.

Summary of LOM Cash Operating Costs 

• The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.
• The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

Spodumene concentrate prices were based on WoodMac recommendations and adjusted in the financial model to represent a 5.6% Li₂O product.

Transport and insurance charges were estimated at CAD 141.05.

• The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.
• A customer and competitor analysis along with the identification of likely market windows for the product.
• Price and volume forecasts and the basis for these forecasts.
• For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.

Historical underinvestment and strong EV demand have created a supply deficit, influencing prices and investment in additional supply. Market balance remains uncertain due to project delays and cost overruns. The market is forecast to be in deficit in 2024, have a fragile surplus in 2025, and a sustained deficit from 2033.

Prices have fluctuated in 2022-2023, with factors like plateauing EV sales, Chinese production slowdown, and supply chain destocking influencing trends. BG Carbonates’ prices are linked to demand growth for LFP cathode batteries and are expected to decline but rebound by 2031. Lithium Hydroxide’s growth supports a strong demand outlook, with long-term prices between US$25,000 and US$35,000 per tonne (real US$ 2023 terms). Chemical-grade Spodumene Concentrate’s prices are expected to align with market imbalances, with a long-term price forecast between US$2,000 per tonne and US$3,000 per tonne (real US$ 2023 terms).

Allkem has relied on external spodumene concentrate price forecasts provided by Woodmac for this feasibility study update.

• The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.
• NPV ranges and sensitivity to variations in the significant assumptions and inputs.

For the financial analysis, an average life-of-mine spodumene concentrate price of US$2,022 was calculated based on the WoodMac forecast, adjusted downwards to US$1,921 to represent a 5.6% Li2O final product.  

For the purpose of this analysis, an exchange rate of CAD 1.33 per US$ was applied to convert specific cost estimates from US$ to Canadian dollars. Importantly, no provisions were made to account for inflation, and all monetary values were assessed on a constant 2023 CAD basis, reflecting the base currency utilized in this evaluation.  

The assessment was carried out entirely on a 100% equity basis, and it should be noted that exploration costs are considered outside of this particular project scope. Consequently, any additional study costs related to the project were omitted from the analysis.  

The Feasibility Study demonstrates strong financial outcomes with a Post-tax NPV8% real of US$1,687 million and IRR of 45.4%.  The NPV of the project is most sensitive to movements in the price of spodumene and foreign exchange fluctuations, followed by operating costs and development capital costs.

• The status of agreements with key stakeholders and matters leading to social licence to operate.

Allkem signed a Preliminary Development Agreement (“PDA”) with the Cree Nation of Eastmain, Grand Council of the Cree and Cree Nation Government dated on March 15, 2019. This PDA is to be replaced by an Impact Benefit Agreement (“IBA”), currently under negotiation, before project construction.

Meetings were organized with the Eastmain Cree community to inform and consult stakeholders concerned by this mining development. These meetings were primarily aimed at socioeconomic stakeholders, RE1, RE2, RE3, VC33 and VC35 tallymen, the users of the territory of these traplines, and members of the Eastmain community. RE2 trapline is the most impacted. Meetings were also organized with Waskaganish and Waswanipi where community members, designated senior community officials and tallymen were consulted.

• To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:
• Any identified material naturally occurring risks.
• The status of material legal agreements and marketing arrangements.
• The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

Allkem has not entered into any marketing arrangements for the James Bay Project 

Allkem has received federal authorisation for the Project. Allkem is now awaiting the issuance of provincial authorisation by the Government of Québec, as environmental and social impact assessments have been completed and submitted and under review process by the COMEX. Once the key approvals are obtained, there are a range of other approvals required prior to commencing construction at James Bay.

• The basis for the classification of the Ore Reserves into varying confidence categories.
• Whether the result appropriately reflects the Competent Person’s view of the deposit.
• The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

The Ore Reserve result reflects the Competent Persons view of the deposit.

All Probable Ore Reserves have been derived from Indicated Category Mineral Resources.

• The results of any audits or reviews of Ore Reserve estimates.

• Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.
• The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.
• ·Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.
• It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

Sufficient modifying factors and economic considerations have been applied to the indicated Mineral Resource to declare the Probable Ore Reserve. These modifying factors have been adjusted for inflationary pressure observed since the 2021 feasibility study.