Lithium Ionic Agrees to Sell Salinas Properties to PLS for US$37.5 Million & Retains 2.0% Royalty

Lithium Ionic Corp. has agreed to sell its Salinas group of lithium properties in Minas Gerais, Brazil, including the Baixa Grande lithium resource, to PLS Brasil Mineração Ltda., a wholly owned subsidiary of PLS Group Limited (ASX: PLS), for US$37.5 million in cash. US$30.0 million is payable at closing and US$7.5 million on the earlier of a positive final investment decision at PLS's neighbouring Colina Project and December 31, 2029. Lithium Ionic retains a 2.0% royalty on future spodumene sales from the properties, and the cash is earmarked for construction-readiness work at its Bandeira Lithium Project. Closing is expected within 10 business days.

Company Overview

Lithium Ionic (TSXV: LTH | OTCQX: LTHCF | FSE: H3N) is a Canadian lithium development company advancing its 100%-owned Bandeira Lithium Project in Minas Gerais, Brazil, part of the hard-rock lithium district known as the Lithium Valley. An updated feasibility study completed in September 2025 outlined an 18.5-year underground mining operation producing an average of 177,000 tonnes per year of spodumene concentrate over the life of mine, and the company is targeting near-term production for global battery supply chains. Its ground sits in the same district as Companhia Brasileira de Lítio's Cachoeira lithium mine, and Sigma Lithium's Grota do Cirilo operation.

Terms of the Sale

The transaction covers 10 mineral claims and certain associated assets comprising the Salinas group, for an aggregate cash price of US$37.5 million. US$30.0 million is payable at closing, with the remaining US$7.5 million treated as deferred consideration and payable on the earlier of a positive final investment decision for PLS's Colina Project and December 31, 2029.

The definitive agreement was entered into on August 12, 2026, by Lithium Ionic's wholly owned subsidiaries, Salit Mineração Ltda and Neolit Minerals Participações Ltda, together with their affiliates, and by PLS Brasil Mineração Ltda. Completion is subject to closing conditions customary for a transaction of this nature.

BMO Capital Markets is acting as financial adviser to Lithium Ionic in connection with the transaction. Cassels Brock & Blackwell LLP is acting as Canadian legal counsel, and TozziniFreire Advogados as Brazilian legal counsel.

Retained Royalty on Future Spodumene Sales

Lithium Ionic keeps a royalty over the ground it is selling, held through its subsidiary Neolit Minerals Participações Ltda, and set out in an agreement separate from the purchase agreement. The royalty equals 2.0% of proceeds from the sale of all spodumene extracted from the Salinas mineral rights, net of certain allowable deductions and calculated on a free-on-board basis.

The royalty gives Lithium Ionic continued exposure to any future development of Baixa Grande and to lithium prices. No amounts become payable under it unless spodumene is produced and sold from the properties.

Proceeds Directed to Bandeira

The sale provides non-dilutive capital for Bandeira, which Lithium Ionic owns outright and is advancing towards a construction decision. Proceeds are expected to support early works, procurement, and construction-readiness activities as the company works towards becoming a near-term, low-cost producer of high-quality spodumene concentrate for global battery supply chains.

Chief Executive Officer of Lithium Ionic, Blake Hylands, is direct about what the sale does for shareholders:

"This Transaction crystallizes that value for shareholders without dilution, at a constructive point in the lithium cycle, and the Royalty keeps shareholders exposed to Baixa Grande's potential future development under PLS, one of the largest hard-rock lithium operators in the world. PLS is a natural fit as the acquirer of Baixa Grande, given its neighbouring Colina Project."

District Consolidation Under PLS

PLS is one of the world's largest hard-rock lithium producers, anchored by its Pilgangoora Operation in Western Australia. It entered Brazil's Lithium Valley in early 2025 through an all-share acquisition of Latin Resources Limited, whose Colina Project sits directly adjacent to the Baixa Grande deposit.

The sale places both deposits under one owner, and Baixa Grande is expected to be evaluated for integration with Colina.

Exploration History at Salinas

Lithium Ionic entered the Salinas district in March 2023 and carried out the exploration work that established a spodumene mineral resource at Baixa Grande. The updated resource estimate for the deposit was reported in January 2025.

Next Steps

Lithium Ionic expects the sale to close within 10 business days, with the deferred portion of the purchase price still outstanding after closing.

At Bandeira, the company is working through procurement, early works tendering, and construction readiness ahead of a construction decision.