ASX Suspension Looms as Lithium Energy Pursues Operational Scale

Context of Suspension and Strategic Pivot

Following the disposal of its main undertaking, the Solaroz Lithium Project in Argentina, Lithium Energy Limited (ASX – LEL) faces a trading suspension on the ASX. The exchange requires the company to demonstrate sufficient operational scale in its new resource projects before reinstatement. Since receiving US$26 million from the first tranche of the Solaroz sale in April 2025, Lithium Energy has actively repositioned itself by acquiring new assets and ramping up exploration activities.

New Project Acquisitions and Exploration Highlights

Lithium Energy has secured a 51% interest in the Capricorn Gold-Copper Belt Project in Queensland, a district-scale asset surrounding the historic Mt Morgan gold mine. Re-assaying of historical drill cores at the Upper Nine Mile Creek prospect has revealed significant base metal mineralisation consistent with a hybrid volcanic massive sulphide (VMS) and porphyry system, including intercepts of 6.2m at 1.58% copper and 5.41% zinc, and 14.1m at 1.12 g/t gold with associated silver and gallium.

Complementing this, geophysical surveys funded partly by the Queensland Government’s Collaborative Exploration Initiative have been completed at the Bajool porphyry copper-molybdenum prospect, with results pending. Lithium Energy plans extensive fieldwork and drilling to test multiple targets across the Capricorn project.

In the graphite sector, Lithium Energy acquired the Mt Dromedary Graphite Project from NOVONIX Limited, adjoining its existing Burke Graphite Project. Combined, these projects hold a substantial high-grade graphite inventory exceeding 4 million tonnes of contained graphite, with grades above 14% total graphitic carbon (TGC). The company is preparing infill drilling and metallurgical test work to upgrade resources and advance feasibility studies.

White Plains Lithium Brine Project – US Expansion and Encouraging Results

In the United States, Lithium Energy’s 100%-owned White Plains Lithium Brine Project in Utah has undergone detailed geophysical surveys, including passive seismic and magnetotelluric methods. These have delineated a basin structure with two aquifers, a shallow upper aquifer and a deeper aquifer approximately 200 meters below surface. Shallow auger sampling across the project area confirmed lithium concentrations up to 100 mg/l in brines, supporting the potential for significant lithium brine mineralisation. The company plans further drilling to test deeper aquifers.

Battery Anode Material (BAM) Manufacturing Strategy

Lithium Energy is advancing a vertically integrated strategy to produce battery anode material (BAM) from its graphite resources. The plan includes constructing a BAM pilot plant in Queensland to process graphite concentrate from the Burke and Mt Dromedary deposits into spherical purified graphite (SPG) and coated SPG (CSPG), key components for lithium-ion batteries. This pilot plant will support product qualification and marketing efforts essential for securing offtake agreements. The company aims to leverage operational synergies and economies of scale by combining its graphite assets.

Financial Position and Outlook

Following the tranche 1 Solaroz sale receipt of approximately A$40 million, Lithium Energy holds a strong cash position of about A$38.4 million at quarter end. The company incurred exploration and corporate expenses totaling around A$3.4 million during the quarter, reflecting active advancement of its projects. Lithium Energy continues to engage with the ASX regarding reinstatement conditions and is focused on demonstrating sufficient operational scale through ongoing exploration and development activities.