Alpha Lithium Corporation announced the results of an updated Preliminary Economic Assessment for its wholly owned Tolillar lithium brine project in the Salta Province of Argentina. This recent PEA is an update to last month?s PEA, which now includes additional resources identified less than one month ago. This PEA provides an independent, third-party economic assessment of the potential value of Tolillar, based on the latest estimation of lithium resources.

The PEA evaluated a 25,000 tonnes per annum commercial-scale operation to produce battery-grade lithium carbonate chemicals. Importantly, the study does not include the planned 25,000 tpa second phase expansion. Instead, the Company opted for a update to the previous PEA, simplifying and dramatically accelerating the report?s delivery time, which will be more useful for the Company?s ongoing and expanded strategic review process The PEA was prepared by Ausenco Chile Limitada (?Ausenco?), a global engineering firm, experienced in the lithium industry.

Ausenco has prepared multiple economic assessments and feasibility studies, specifically for, but not limited to, South American lithium brine extraction companies over the past several years. In addition to being DLE and production process experts, Ausenco?s knowledge was invaluable for assessing current and conservative operating and capital costs, which incorporated the latest global cost estimates. All values are reported in US dollars, unless otherwise noted.

References to CAD have been converted at 1.35 x USD. Economic Analysis and Summary: Lithium chemicals produced from brines are almost universally less expensive than those produced from hard rock, giving brine operations a significant competitive advantage. Specifically, the Tolillar project benefits meaningfully from the following: Immediate proximity to (10-15 km from) Livent?s Fenix Project, which has produced approximately 20,000 tpa of lithium carbonate chemicals for over two decades.

Tolillar will dramatically benefit from the existence of a national high-grade highway (6 km away) connecting the project to supplies and services, a nearby (6 km) high-pressure natural gas pipeline with existing capacity, nearby (90 km) 3-phase power, and nearby (90 km) international rail lines. A significant freshwater discovery on the north, south and west sides of the Tolillar salar, with the western discovery being capable of supporting a major lithium chemicals plant, on its own. A proven DLE-based production process, built upon a process that has been tested and utilized for over two decades in Argentina.

Alpha?s production technology has been developed by an expert team with unmatched, hands-on, DLE and production experience. Being the sole owner of the Tolillar salar eliminates potential conflicts or competition for production, fresh water, equipment, and personnel. The Discounted Cash Flow Model, generated independently by Ausenco, with an outside consultant providing tax estimate advice, demonstrates an attractive economic result from the potential production of lithium carbonate chemicals from the Tolillar project.

As a result, the Company expects to continue construction of its 120 tpa pilot plant, which will provide the necessary data to support the design and feasibility study for the 50,000 tpa lithium carbonate chemicals plant envisioned by Alpha. The PEA NPV results take into account royalties that are specifically applicable to the Tolillar project. Alpha has a strong technical team with extensive lithium experience leading its efforts in Argentina.

Total estimated initial capital costs are $776.6 million for the first phase (25,000 tpa) of lithium carbonate chemicals. Contingency costs are estimated at 30% of total direct and indirect costs. Capital costs for the second phase (a second 25,000 tpa) are not included in this PEA analysis; however, management expects those to be approximately 35% lower than the capital costs for the first phase by utilizing economies of scale.

To expedite the completion of this PEA, management elected to utilize Ausenco?s previous capital estimates for a 25,000 tpa lithium chemicals plant. The additional of a second 25,000 tpa phase was considered, but Ausenco could not commit to completing a PEA that included a full-scale 50,000 tpa production scenario within the time constraints of Alpha?s enhanced strategic review process. The estimated operating costs are current as of First Quarter 2023 and reflect 100% year-on-year cost increases in some cases, such as for chemical reagents, which dramatically increased due to ongoing COVID-19 related global supply chain constraints.

Management supports the use of potentially temporarily inflated costs and believes the cost estimates are appropriately conservative in light of many reported cost overruns in the industry. Finally, the second largest cost center is ?Energy,? accounting for 18% of the total operating cost.

Alpha management has previously investigated and utilized solar power to provide energy to similar and larger projects in the past; however, solar power was not incorporated into the PEA at this time. Utilization of solar power should dramatically decrease the estimated operating cost. Lithium Markets and Price: Alpha consulted industry experts at Global Lithium LLC for estimates of long-term market and pricing dynamics.

Recently, the price of lithium carbonate has been volatile, ranging from $5,000/tonne in 2018 to over $80,000/tonne in China?s spot market in 2022, before moderating in 2023. Even during the most recent period of spot market volatility, long-term contract prices outside of China remained relatively constant in the $60,000/tonne range, on average, through April 2023. For estimating future cash flows from new projects, Global Lithium LLC and Alpha recommended a conservative approach, using a price significantly below (approximately 50% of) the upper end of the expected long-term marginal cost curve, yielding conservative project economics that leave room for significant upside.

While most forecasters do not forecast prices beyond 2030, Global Lithium LLC recommended using a price of $22,500/tonne from 2031 to 2035 and a price of $23,500/tonne from 2036 and beyond. The PEA is based upon brine grades across the company?s Measured, Indicated and Inferred Mineral Resources only. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

There is no certainty that the Tolillar project envisioned by the PEA will be realized. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.