GRD.V · 2023-07-26 12:00:00

Grounded Lithium Announces Robust Investment Metrics in Preliminary Economic Assessment for the Kindersley Lithium Project

Economic Studies

Grounded Lithium Announces Robust Investment Metrics in Preliminary

Economic Assessment for the Kindersley Lithium Project

CALGARY, AB

July 26, 2023

/CNW/ - (TSXV: GRD) (OTCQB: GRDAF) - Grounded Lithium Corp. ("

GLC

" or the "

Company"

) is pleased to announce the results

of our preliminary economic assessment ("

PEA

") on the first phase 11,000 tonnes per year of battery-grade lithium hydroxide monohydrate ("

LHM

") production

from the Kindersley Lithium Project ("

KLP

"). We anticipate development of additional phases at the KLP motivated largely by the compelling commercial merits of

the economics of the PEA.

Phase 1 KLP Highlights:

Generates an after-tax internal rate of return ("IRR") of 48.5% using a realized sales price of USD

$25,000

/tonne of LHM (flat for the duration of

the model) and an after-tax USD

$1.0 billion

net present value ("NPV") at an 8% discount rate, on a capital investment of USD

$335 million

;

Payout of initial capital costs is only 3.7 years inclusive of lead time design and construction of 1.5 years. We anticipate future KLP phases will be

materially financed via internally generated cash flow;

Initial capital estimate of USD

$335 million

(including USD

$45 million

for contingencies) delivers a capital intensity of USD

$30,500

/tonne of LHM

for our initial 11,000 tonnes per year project, one of the lower capital intensities of North American lithium from brine projects;

All-in operating costs are anticipated to be USD

$3,899

per tonne of LHM, or USD

$42.9 million

annually;

Only 24 of our current 300 sections of lithium rights will be developed in Phase 1 of the KLP. The balance of the sections will support the

development of subsequent phases of the KLP; and

Phase 1 infrastructure investment is expected to underpin capital and operating cost efficiencies for all future phases.

"Grounded is pleased to have achieved another significant milestone in less than three years from incorporation," commented

Gregg Smith

, President and CEO.

"The independent economic results of Phase 1 of the KLP compare favourably within the lithium mining industry from a CAPEX and OPEX perspective and we

believe the results of the PEA bode well for critical future steps, including securing strategic partnerships, off-take agreements, and capital formulation for a

commercial project. We now focus our corporate attention on the completion of a field pilot with Koch Technologies Solutions' ("

KTS

") extraction process, while at

the same time undertaking certain field activities to provide higher certainty on our resources leading to a pre-feasibility study."

Project Summary

The economic analysis of the PEA is based on the following main assumptions:

realized sales price of USD

$25,000

per tonne of LHM;

annual production of 11,000 tonnes per year of LHM;

commerciality of KTS' Li-Pro

™

lithium extraction technology;

minimal prefiltering expenditures due to the absence of hydrocarbons and H

large diameter wellbores to mitigate pressure loss due to friction and permit installation of large volume electrical submersible pumps; and

estimated operating and capital costs for the project based on the most current industry data available inclusive of recent strong inflationary pressures on

facilities and labour.

The PEA is based on the expected first phase of production at the KLP which is derived from the mineral resource estimate for the KLP set out in Company's NI

43-101 technical report titled, "

NI 43-101 Technical Report: Resource Assessment of the Kindersley Lithium Project in

Saskatchewan, Canada

for Grounded

Lithium Corp.

(As of

March 15, 2023

)

" (the "

Technical Report

") which is available on SEDAR at

www.sedarplus.com

All values reported are in USD unless otherwise noted. The Company will file the PEA on SEDAR (

www.sedarplus.com

) within 45 days of this press release. The

PEA presents data provided by several leading experts in their respective fields, namely Sproule Associates Limited, Grey Owl Engineering, Codeco - Vanoco

Engineering Inc., Tundra Engineering Inc. and Fracture Modeling Inc.

Table 1 – Summary Economics

Description

Value

Units

Value

Units

Average Annual Production (LHM)

11,000

tonnes/year

12,125

tons/year

Average Annual Production (LCE)

9,685

tonnes/year

10,676

tons/year

Project Life

years

Foreign Exchange (FX)

0.75

ratio

1.33

ratio

Total Capital Cost (CAPEX)

447,323

CAD$M

335,492

USD$M

Annual Operating Expenditure (OPEX)

57,188

CAD$M

42,891

USD$M

OPEX per tonne LHM

5,199

CAD/tonne

3,899

USD/tonne

LHM Commodity Price

33,333

CAD/tonne

25,000

USD/tonne

Average Annual Revenue

366,592

CAD$M

274,944

USD$M

Economic Indicators

Before-Tax

(Btax)

Units

After-Tax

(Atax)

Units

Net Present Value (NPV@8%)

1,819,507

CAD$M

1,309,860

CAD$M

Net Present Value (NPV@8%)

1,364,630

USD$M

982,395

USD$M

Internal Rate of Return (IRR)

58.2

48.5

Payout (PO)

3.5

years

3.7

years

Profitability Index (PI@8%)

5.1

ratio

3.9

ratio

Note 1: The PEA is a preliminary cost estimate and includes inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under National Instrument 43-101

–

Standards of Disclosure for Mineral Projects

NI 43-101

"). There is no certainty the results of the KLP outlined by the PEA will be realized.

Capital Costs

Table 2 – KLP Capital Cost Summary

($ thousands)

Total

CAD

Total

USD

Wellfield

Drilling

$ 31,051

$ 23,289

Completion

17,280

12,960

Pipelines

55,782

41,836

Subtotal

$ 104,113

$ 78,085

Central Processing Facility

Infrastructure

$ 238,754

$ 179,066

Planning, Engineering, Legal & Administration

14,922

11,192

Construction & Commissioning

29,844

22,383

Subtotal

$ 283,520

$ 212,640

Contingency

$ 59,689

$ 44,766

TOTAL

$ 447,322

$ 335,492

Given the operating conditions, the capital intensity for the KLP is forecasted to be materially lower than some of the other operations in the industry. Capital

efficiency is vitally important in projects of this size and the leverage that accrues to project stakeholders due to industry leading capital efficiency ratios directly

impact rates of return. These capital estimates will be further refined as the Company moves toward the pre-feasibility and bankable feasibility milestones. These

estimates represent a Class 5 engineering cost estimate. We do expect modifications to these estimates with the completion of more precise and detailed

engineering.

Operating Costs

Table 3 – KLP Operating Cost Summary

Annual OPEX in $ thousands per year

OPEX in $ per metric tonne LHM

Annual OPEX

CAD/yr

Annual OPEX

USD/yr

OPEX

CAD/tonne

LHM

OPEX

USD/tonne

LHM

Personnel

$ 6,250

$ 4,688

$ 568

$ 426

Electric Power

13,626

10,220

1,239

929

Reagents and Consumables

21,218

15,914

1,929

1,447

Maintenance and Servicing

7,839

5,879

713

534

Product Transport & Disposal

2,555

1,916

232

174

Direct Operational Expenditures

$ 51,489

$ 38,617

$4,681

$3,511

Indirect Operational Expenditures

$ 2,528

$ 1,896

$230

$172

Land Fess, Taxes, Other

$ 3,172

$ 2,379

$288

$216

TOTAL

$ 57,188

$ 42,891

$5,199

$3,899

Total operating costs of USD

$42.9 million

per year, or USD

$3,899

per tonne of LHM, are broken out by each major project step and are inclusive of direct and

indirect costs. The majority of the operating costs are associated with reagents required within the system and power consumption. For purposes of the PEA, we

assumed that sufficient power can be secured from the existing grid structure. However, as we advance the KLP towards commercialization, there is the potential

to construct owner secured power options such as a cogeneration unit. This would represent an additional capital charge offset by the benefit of stable,

predictable, cost-efficient power supply. Excess power generated from such a unit could be sold into the existing power market to partially offset the operating

costs.

Sensitivity Analysis

Table 4 – Economic Sensitivity Summary (USD)

OFAT Sensitivity Analysis - CAPEX

($ thousands)

Low Case

CAPEX -40%

USD

Low Case

CAPEX -20%

USD

Base Case

CAPEX

USD

High Case

CAPEX +20%

USD

High Case

CAPEX +40%

USD

CAPEX

$ 201,295

$ 268,394

$ 335,492

$ 402,590

$ 469,689

NPV@8% - Btax

$ 1,473,192

$ 1,418,999

$ 1,364,630

$ 1,310,615

$ 1,256,423

NPV@8% - Atax

$ 1,067,559

$ 1,025,042

$ 982,395

$ 940,007

$ 897,328

IRR (%) - Btax

IRR (%) - Atax

OFAT Sensitivity Analysis - OPEX

($ thousands)

Low Case

OPEX -40%

USD

Low Case

OPEX -20%

USD

Base Case

OPEX

USD

High Case

OPEX +20%

USD

High Case

OPEX +40%

USD

OPEX

$ 25,735

$ 34,313

$ 42,891

$ 51,469

$ 60,047

NPV@8% - Btax

$ 1,498,577

$ 1,431,692

$ 1,364,630

$ 1,297,922

$ 1,231,037

NPV@8% - Atax

$ 1,080,176

$ 1,031,350

$ 982,395

$ 933,698

$ 884,872

IRR (%) - Btax

IRR (%) - Atax

OFAT Sensitivity Analysis - LHM Price

($ thousands)

Low Case

LHM Price -40%

USD

Low Case

LHM Price -20%

USD

Base Case

LHM Price

USD

High Case

LHM Price +20%

USD

High Case

LHM Price +40%

USD

LHM Price per tonne

$ 15

$ 20

$ 25

$ 30

$ 35

NPV@8% - Btax

$ 576,730

$ 970,769

$ 1,364,630

$ 1,758,846

$ 2,152,885

NPV@8% - Atax

$ 406,465

$ 694,876

$ 982,395

$ 1,270,172

$ 1,557,821

IRR (%) - Btax

IRR (%) - Atax

A table similar to Table 4 expressed in Canadian dollars can be found on the Company's website. A detailed future pricing study for lithium chemicals was not

completed for the PEA. The average price used for future sales of battery-quality LHM was developed by reviewing pricing data generated from reliable sources

as reported in publicly disclosed data collected from peer companies. The future average selling price of USD

$25,000

/tonne for LHM is consistent with that used

in publicly released economic assessments of other lithium projects in recent history. Current spot pricing for battery-grade lithium products average greater than

USD

$40,000

/tonne, therefore the potential upside leverage to KLP economics is noteworthy.

Sensitivities demonstrate that the KLP is expected to provide torque to the upside upon any potential future increase in underlying commodity prices. With the

demand for critical minerals expected to exceed world supply, the low-cost structure of the KLP is expected to provide elastic returns to the upside. The low-cost

structure of the KLP was a key determinant in the Company focusing on the KLP area, since during downturns in commodity cycles, low-cost operations provide

projects with improved price resilience.

About Grounded Lithium Corp.

GLC is a publicly traded lithium brine exploration and development company that controls approximately 4.2 million metric tons of lithium carbonate equivalent of

inferred resource over our focused land holdings in

Southwest Saskatchewan

as of the effective date of the Technical Report. The Company's PEA reports a

Phase 1 NPV

after-tax of

US$1.0 billion

with an after-tax internal rate of return of 48.5%. GLC's multi-faceted business model involves the consolidation,

delineation, exploitation and ultimately development of our opportunity base to fulfill our vision to build a best-in-class, environmentally responsible, Canadian

lithium producer supporting the global energy transition shift. U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on

https://www.otcmarkets.com/

Qualified Persons and Technical Report

Scientific and technical information contained in this press release has been prepared under the supervision of

Doug Ashton

, P.Eng.,

Suryanarayana Karri

, P.

Geoph.,

Alexey Romanov

, P. Geo. and

Meghan Klein

, P. Eng.,

Dean Quirk

, P.Eng.,

Jeffrey Weiss

, P.Eng.,

Chad Hitchings

., P.L. Eng., and

Michael Munteanu

P.Eng., each of whom is a qualified person within the meaning of NI 43-101.

Certain data verification, exploration information and other disclosure regarding the mineral resources data contained in this press release is included in the

Technical Report.

Market Support Agreement

The Company has transitioned its market making services to Red Cloud Securities Inc. ("

Red Cloud

").

Red Cloud

will provide these services for trading on

the TSX Venture Exchange ("

TSXV

") in accordance with the TSXV policies, for the purpose of maintaining an orderly market. The Company will engage Red

Cloud on a month-to-month basis for a fee of

$5,000

cash per month.

Red Cloud

and GLC are unrelated and unaffiliated entities.

Red Cloud

will not receive

shares or options as consideration.

Red Cloud

or affiliate(s) of

Red Cloud

currently hold 145,834 common shares and 2,326,137 broker warrants of GLC received

in consideration for services previously performed for GLC. The capital used for market making will be provided by

Red Cloud

Technical Abbreviations and CIM Definition Standards

The disclosure in this news release uses mineral resources and mineral reserves classification terms that comply with reporting standards in

Canada

, and the

mineral resource and mineral reserve estimates are made in accordance with the CIM Definition Standards and NI 43-101.

In this news release, the following abbreviations have the meanings set forth below:

bbls

barrels

bbls/d

barrels per day

kilometres

metres

cubic metres

miles

mg/L

milligram per litre

ppm

parts per million

Forward-Looking Statements

This press release may contain forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. The

opinions, forecasts, projections and statements about future events of results, are forward looking information, forward-looking statements or financial outlooks

(collectively, "forward-looking statements") under the meaning of applicable Canadian securities laws. These statements are made as of the date of this press

release and the fact that this press release remains available does not constitute a representation by GLC that the Company believes these forward-looking

statements continue to be true as of any subsequent date. Although GLC believes that the assumptions underlying, and expectations reflected in, these forward-

looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct. Such statements include, but are

not limited to, statements regarding the NPV of the first phase of production at the KLP, the expected realized sales price of LHM, the capital intensity of the first

phase of production at the KLP, the operating cost and capital cost of the first phase of production at the KLP, the expectation the Company will implement

multiple 10,000 tonnes/year phases of production of LCE on the KLP, the completion of the Company's field pilot, obtaining higher certainty on GLC's resources

leading to a pre-feasibility study, obtaining funding under government programs, securing strategic partnerships, off-take agreements and capital formulation,

supply in the battery mineral market, creating shareholder value, the amount of annual production at the KLP, the commerciality of KTS' Li-Pro

lithium extraction

technology, re-injection of brine in the reservoir, the number of production wells and injector wells on the KLP, the average brine production from each production

well, the drilling of additional production wells and the impact of same on project economics, the project life of the KLP, the pre-treatment required for KLP brine,

the timing of the construction of the field pilot, obtaining power from the grid, constructing owner secured power such as a co-generation unit, the use of

contractors in the process of commercializing the KLP, and GLC's vision of becoming a best-in-class, environmentally responsible, Canadian lithium producer

supporting the global energy transition.

Among the important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those indicated by such forward-looking

statements are: those assumptions listed under "

Project Summary

" above, GLC's expectation that our operations will be in

Western Canada

, unexpected

problems can arise due to technical difficulties and operational difficulties which impact the production, transport or sale of our products; geographic and weather

conditions can impact the production; the risk that current global economic and credit conditions may impact commodity prices and consumption more than GLC

currently predicts; the failure to obtain financing on reasonable terms; the risk that unexpected delays and difficulties in developing currently owned properties may

occur; the failure of drilling to result in commercial projects; unexpected delays due to the limited availability of drilling equipment and personnel; and the other risk

factors detailed from time to time in GLC's periodic reports. GLC's forward-looking statements are expressly qualified in their entirety by this cautionary

statement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts

responsibility for the adequacy or accuracy of this news release.

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SOURCE

Grounded Lithium Corp

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For further information:

Gregg Smith, President & CEO, [email protected]; Greg Phaneuf, SVP Corporate Development & CFO,

[email protected], Phone: 587.319.6220

CO: Grounded Lithium Corp

CNW 07:00e 26-JUL-23

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