Lithium Ionic Moves to Shield US$1.45 Billion Bandeira From Emerita's Claim

• Lithium Ionic filed a Statement of Defence, Crossclaim and Counterclaim with the Ontario Superior Court of Justice on November 2, 2026.
• The company denies that Emerita Resources has any interest in Bandeira and is seeking dismissal of its claims with costs.
• Emerita disclosed in 2021 and 2022 that it had relinquished the Falcon Project, parts of which now form Bandeira.
• Lithium Ionic has commenced a third-party claim against 4 current and former Emerita directors.
• Bandeira carries an estimated post-tax net present value at an 8% discount rate of US$1.45 billion at a base-case price of US$2,212 per tonne for spodumene concentrate.

Company Overview

Lithium Ionic (TSXV: LTH | OTC: LTHCF | FSE: H3N) is a Canadian lithium development company advancing its 100%-owned Bandeira Lithium Project in Minas Gerais, Brazil, a region known as the "Lithium Valley." Its goal is to become a near-term producer of spodumene concentrate.

Lithium Ionic's Response to the Emerita Claim

On November 2, 2026, Lithium Ionic filed a Statement of Defence, Crossclaim and Counterclaim with the Ontario Superior Court of Justice in response to the claim Emerita Resources Corp. filed on July 29, 2026. Emerita's claim relates to mineral rights in Minas Gerais formerly known as the Falcon Project, over which Emerita held an option from Falcon Metais Ltda. Portions of those mineral rights now form part of Bandeira.

Lithium Ionic denies that Emerita has any interest or entitlement to an interest in Bandeira and seeks dismissal of its claims with costs. Emerita relinquished any interest in the mineral rights as of December 2020 and confirmed it had done so in public disclosure throughout 2021 and 2022.

Chief Executive Officer of Lithium Ionic, Blake Hylands, traces Bandeira's value to the work Lithium Ionic's shareholders funded after the relinquishment:

"Emerita relinquished the Falcon Project, and repeatedly confirmed that relinquishment in public disclosure. Lithium Ionic's shareholders subsequently funded the exploration, technical studies and development work that transformed these mineral rights into the advanced-stage Bandeira Lithium Project we have today. Our Statement of Defence outlines our position that Emerita has no interest in Bandeira, and we intend to vigorously defend the Company's rights and the value created for our shareholders. While this matter proceeds through the courts, our focus remains firmly on advancing Bandeira toward a final investment decision, supported by a strengthened balance sheet and substantial progress across engineering, procurement and project development."

Timeline of the Mineral Rights

In December 2020, Falcon Metais assigned the mineral rights to MGLIT Empreendimentos Ltda., months before Lithium Ionic's predecessor was incorporated. On May 27, 2021, Emerita disclosed that it had relinquished the Falcon Project and was winding down its Brazilian subsidiaries to focus on Spain.

LI-Ionic Inc., Lithium Ionic's predecessor, was incorporated in July 2021, acquired MGLIT in October 2021, and completed its first capital raise in December 2021. Emerita repeated the relinquishment disclosure in filings in August 2021 and January 2022 and has never publicly retracted or corrected them.

Lithium Ionic went public in May 2022, with its ownership of the project publicly disclosed. On April 9, 2026, the Ontario Securities Commission issued a Statement of Allegations naming Emerita and certain individuals as respondents. Lithium Ionic is not a respondent, and the commission has not sought any orders against the company.

Lithium Ionic's Defense Positions

For more than 2 years after it claims to have exercised its option in 2018, Emerita did nothing to formalize the interest it now asserts, in Lithium Ionic's account. It conducted no exploration, filed no transfer applications, paid no transfer or permit fees, and registered no interest with Brazilian regulators. As recently as April 9, 2026, Emerita described Falcon as a "legacy project" that was "previously assessed as having no relevance to the Company's go-forward strategy."

Since 2022, Lithium Ionic's shareholders and financing partners have provided more than $170 million to advance Bandeira. Emerita now seeks an interest in a project with an estimated post-tax net present value at an 8% discount rate of US$1.45 billion at a base-case price of US$2,212 per tonne for spodumene concentrate. Lithium Ionic maintains that Emerita contributed no capital or development work, and that Emerita knew or ought to have known the circumstances behind its claim before the May 2022 go-public transaction. The alleged breaches occurred before Lithium Ionic's arm's-length public shareholders invested.

Crossclaim, Counterclaim & Third-Party Claim

Lithium Ionic filed a crossclaim against certain individual defendants alleging breach of fiduciary duty, negligence, and negligent and/or fraudulent misrepresentation, and seeking contribution and indemnity. It also filed a counterclaim against Emerita alleging negligent and/or fraudulent misrepresentation in its historical public disclosures about Falcon.

The third-party claim names 4 current and former Emerita directors whom Emerita has not sued: Marilia Bento, Michael Jones, Joaquin Merino-Marquez, who is Emerita's current interim chief executive officer, and Catherine Stretch. Bento, Merino-Marquez, and Stretch formed the majority of Emerita's board when it relinquished Falcon in December 2020, and all 4 approved the filings announcing the relinquishment, Lithium Ionic alleges. Its primary position is that those disclosures were accurate. If Emerita proves otherwise, Lithium Ionic seeks contribution and indemnity from the 4 directors, together with damages for misrepresentation.

Hylands points to the industry-wide reliance on public ownership records:

"Mineral rights are sold or relinquished in our industry, often when early-stage ground has seen little exploration work and its value is unproven. It is the companies that go on to explore and develop that ground, and the investors who fund them, that create the value. If the company that develops the ground can be negatively impacted years later for decisions made by parties with a prior interest, it creates significant uncertainty for investment and development across the mining sector. Developers and their investors must be able to rely on the public ownership record and on the disclosures companies make themselves. Lithium Ionic relied on Emerita's own public disclosure when it raised capital and invested it in Bandeira."

Bandeira Development Since 2022

Lithium Ionic has completed more than 60,000 meters of drilling at Bandeira since 2022, growing measured and indicated resources to 27.3 million tonnes at 1.34% lithium oxide. Its 2025 optimized definitive feasibility study outlines an 18.5-year mine life and a post-tax internal rate of return of 61% at the same base-case price.

Engineering is well advanced, and surface rights, hydroelectric power arrangements, and construction-phase water access are secured. Binding 5-year take-or-pay offtake agreements with Yahua Group and Grand Chen cover a combined 170,000 tonnes per annum of spodumene concentrate, with US$20 million of prepayment facilities.

Next Steps

Lithium Ionic is preparing to mobilize for construction as soon as the necessary permits are received, as it advances Bandeira toward a final investment decision. Near-term priorities are completing detailed engineering, advancing equipment and construction contracts, progressing project financing, and preparing for site earthworks and underground mine entrance development.

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