Valjevo Project Update to the Mineral Resource Estimate Revision 2

Home , Jadar (Drina), Jadar (Serbia), Kolubara District, Ljig, State Road 27 (Serbia), Valjevo

Document No. RPT-20605-0001

Samuel Engineering Euro Lithium – Valjevo Project Updated Mineral Resource Estimate Project No. 210220605

19 November 2020

Stantec Consulting International LLC 3133 West Frye Road, Suite 300 Chandler, Arizona 85226 USA Table of Contents

1.0 INTRODUCTION ...... 1 1.1 Introduction ...... 1

2.0 PROJECT BACKGROUND ...... 1 2.1 Property and Location ...... 1 2.2 Local Infrastructure ...... 3 2.3 Climate and Physiography ...... 4

3.0 GEOLOGY AND MINERALIZATION ...... 4 3.1 Property Geology ...... 4 3.2 Deposit Type ...... 5 3.3 Exploration ...... 5 3.4 Drilling ...... 5 3.5 Sample Preparation and Analysis ...... 6

4.0 MINERAL RESOURCE ESTIMATE ...... 7 4.1 Database ...... 7 4.2 Data Verification...... 8 4.3 Mineralization Domain Interpretation ...... 8 4.4 Borate Zone ...... 10 4.5 Borax Zone ...... 10 4.6 Block Model Mineralized Zone Determination ...... 11 4.7 Compositing ...... 11 4.8 Grade Capping ...... 12 4.9 Variography...... 12 4.10 Block Modeling ...... 12 4.11 Bulk Density ...... 15 4.12 Mineral Resource Classification ...... 15

4.13 Li2CO3 Equivalent Cutoff Calculation ...... 16 4.14 Mineral Resource Estimate ...... 16 4.15 Confirmation of Mineral Resource Estimate ...... 17

5.0 CONCLUSIONS AND RECOMMENDATIONS ...... 21

6.0 REFERENCES ...... 23

Samuel Engineering Euro Lithium – Valjevo Project – Updated Mineral Resource Estimate Document No. RPT-20605-0001 – Valjevo Project Update to the Mineral Resource Estimate, Revision 2 \\us0310-ppfss01\workgroup\2102\active\210220605\report\rpt_20605-0001_valjevo-proj-min-rsrc-est\rpt_20605-0001_valjevo-proj-min-rsrc-est_2.docx Table of Contents Appendices A Drill Hole Location Map B Upper Zone Wireframe C Li Zone and Main Zone Wireframes D Visible Borax in Valjevo Core E Probability Plots for Li Composites F Probability Plots for B Composites G Section A – A1 – Vertical Section Through Block Model Showing Drill Holes and Grade Distribution H Section B – B1 – Vertical Section Through Block Model Showing Drill Holes and Grade Distribution I Extents of Modeled Mineralized Zones with Indicated Area J Recommended Target Area K Extents of Indicated Area with Recommended Drill Hole Locations

1.0 INTRODUCTION

1.1 Introduction

In July 2020, Samuel Engineering approached Stantec Consulting International LLC (Stantec) with an opportunity to update the initial Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA) (P&E Mining Consultants, Inc. [P&E], 2020) for Euro Lithium Inc.’s (Euro Lithium) mineral deposit near Valjevo, Serbia (the Valjevo Project). The Valjevo Project contains four of the critical raw materials (CRM) as defined by the European Commission’s Critical Raw Materials: Charting a Path towards greater Security and Sustainability (2020). This work is an update to the MRE completed in May 2020, that previously focused on an open pit concept to extract lithium-bearing montmorillonite (swinefordite) clays and borates from the

resource and produce technical-grade lithium carbonate (Li2CO3), and boric acid (H3BO3). After completing a seven-hole (2,045 m) drill program in a targeted area of the mineral deposit in the spring and early summer of 2020, Euro Lithium requested that Samuel Engineering and Stantec update the resource model and assess alternative mining methods for resource extraction. This report outlines the updated MRE and the associated data and procedures used to derive the estimates.

The updated MRE presented herein is reported using Canadian Securities Administrators’ National Instrument 43-101 (NI 43-101) and has been estimated in conformity with the generally accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM’s) Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines (2018). Mineral resources are not mineral reserves and do not have demonstrated economic viability; as such, there is no guarantee that any part of the mineral resource will be converted into a mineral reserve. Unlike the initial MRE (P&E, 2020), the updated MRE includes a portion of indicated resources, though most remains inferred. Confidence in the estimate of a combined indicated and inferred mineral resources is sufficient to apply technical and economic parameters at a PEA level, which enables a preliminary evaluation of potential economic viability. Mineral resources may be affected by further infill and exploration drilling, which may result in increases or decreases in resource estimates in subsequent MREs.

This updated MRE is based on information and data supplied by Euro Lithium and was written by Stantec’s Allan Schappert, Certified Professional Geologist, and Derek Loveday, Professional Geoscientist, both independent Qualified Persons in terms of NI 43-101. The effective date of this updated MRE is 19 November 2020.

2.0 PROJECT BACKGROUND

2.1 Property and Location

The Valjevo Project is comprised of three contiguous exploration licenses: Valjevo, Ljig, and Valjevo North, totaling 274.59 km2 in western Serbia near the town of Valjevo.

Most of work to date has been on the Valjevo exploration license, the principal license of interest. These licenses cover the Neogene sedimentary basins, associated with the Vardar tectonic zone.

Euro Lithium Balkan d.o.o. Valjevo, a wholly owned subsidiary of Euro Lithium, owns the geological exploration rights to the Valjevo Licenses.

The Exploration Licenses are located approximately 80 km southwest of the capital city of Serbia, Belgrade. Valjevo is the principal city in the area and the administrative center of the Kolubara District. Rio Tinto’s Jadar lithium-borate deposit lies about 80 km to the northwest of Valjevo on a similar geologic trend within the Vardar Zone. Figure 1 shows the location of the Valjevo Project relative to the capital city of Serbia, Belgrade.

Figure 1: Valjevo Project Location

The approximate center of the Valjevo Project lies at latitude 44.28° N, longitude 20.02° E, or universal transverse mercator grid zone 34T, 421,800 m E and 4,903,440 m N. These licenses cover the widest portions of a roughly east-west trending structural trough associated with the Vardar Zone. Most of the exploration work completed to date has been done on the Valjevo License. Figure 2 shows the location of the three exploration licenses in relation to Belgrade.

Figure 2: Location of the Valjevo Exploration Licenses

2.2 Local Infrastructure

The Valjevo Project benefits from significant local resources and well-developed infrastructure. Belgrade, the largest city and capital of Serbia with a population of over 1.40 million and an international airport, is located approximately 80 km northeast of the Valjevo Project. The city of Valjevo is located immediately west of the Valjevo Project and has an urban population of 59,073. Valjevo is the largest city in the Kolubara District; its major industries include water bottling, munitions, and cellulose-based manufacturing. The municipality of Valjevo is primarily comprised of industrial and agricultural land uses.

The landscape in the Valjevo valley is primarily medium-intensity, subsistence agricultural land with fringing woodland, scrubland, and riparian areas. Agricultural land includes hay meadows, orchards, crop land, pastures, and subsistence garden areas. The Valjevo License areas are characterized by a relatively flat river valley cutting through low, rounded hills. To the north and the south, the Valjevo basin is bordered by hills having about 200 m of relief.

Minimum elevations on the Valjevo Licenses are ~150 masl, rising locally to over 400 m in portions of the extreme southern and eastern borders.

The Valjevo Project is serviced by a significant all-weather paved road network linking Valjevo and Belgrade. A major rail line runs parallel to the main paved highway that carries both passenger service and freight between Belgrade and Valjevo and continues south through Montenegro to Bar on the Adriatic coast. Power, water, and natural gas are readily available to the property area. A national power line parallels the railroad corridor that transverses much of the northern portion of the Valjevo license. Communications are excellent. Euro Lithium’s Valjevo field office has good internet, landline phone service, and mobile phone coverage. Euro Lithium rents an 8,500 ft2 warehouse in Divci, a town on the eastern outskirts of Valjevo, that is used as a field office and drill core handling and storage facility.

The local infrastructure, business community, and population of the region are well-equipped to service mining and exploration activities. The Kolubara District has significant coal mining operations. RB Kolubara is a Serbian coal mining operation headquartered at Lazarevac, Kolubara District, roughly 35 km from the city of Valjevo. RB Kolubara currently processing 30 Mt of lignite per year from a nearby open pit mine.

2.3 Climate and Physiography

The climate of the Valjevo area is typical of south-central Europe and is suitable for year-round exploration, development, and mining. Average January temperatures are 0.6 °C and average July temperatures are 21.9 °C, with annual precipitation of 787.7 mm. The Valjevo Licenses are characterized by flat river valleys cutting through low, rounded hills. The Valjevo basin is at an elevation of approximately 150 m, is bordered by hills with about 200 m of relief and is drained by tributaries of the Danube River. Near-surface groundwater resources are important in the region and are often used for public and private water supplies.

3.0 GEOLOGY AND MINERALIZATION

3.1 Property Geology

The Valjevo Project is underlain by Neogene sedimentary basins mapped by the Yugoslavia geological survey to contain brackish marine and continental sediments. Pelitic sediments accumulated in several semi-interconnected basins along the Vardar Zone which represent the suture associated with the closure of the Tethys Sea and the resultant subduction and volcanism. The Vardar Zone extends from northern Iran through Bosnia, where it is truncated by Alpine formations and buried by Pliocene sediments.

Sedimentary basins along the Vardar Zone are interpreted to have formed as "pull-apart" structures. In the Valjevo-Ljig area, basins are modeled primarily from gravity data as variably shaped anomalies with gravity lows that have an east-west elongation.

The basins of potential economic interest are those that contain continental, lacustrine sediments of Neogene age. Lake beds that formed in a closed basin setting, in association with active volcanism, created the conditions for entrapment within concentrating waters of volatile elements.

The Valjevo basin is an undisturbed, flat-lying basin containing significant lithium (Li), boron (B), magnesium (Mg), and strontium (Sr) mineralization. Present minerals include lithium-bearing

montmorillonite (swinefordite) clays, sodium borates such as borax (Na2B4O7 10H2O), sodium

calcium borates such as probertite (NaCaB5O9 5H2O) and ulexite (NaCaB5O6 5H2O), sodium

borosilicate borates such as searlesite (NaBSi2O5(OH)2), and pseudomorphs of calcite after borate minerals. Li and B mineralization seems to be restricted to a section of lacustrine beds of variable lithologic composition, having a combined maximum thickness of about 75 m. The borate mineralization encountered to date has been found to be very low in arsenic (As).

3.2 Deposit Type

Neogene Li and B deposits of the type explored in western Serbia are typically found in tectonically active zones associated with deep-seated faulting along the Vardar Zone. The deposits are considered to have formed from hydrothermal fluids associated with volcanic activity and granitoid intrusions. The deposits accumulated in shallow water lacustrine and mud flat environments in basins developed nearby calc-alkaline volcanic centers. Lake beds that formed in a closed basin setting, in association with active volcanism, created the conditions for entrapment within concentrating waters of volatile elements. Both Li and B are concentrated in fluids derived from mineral springs or alteration of tuff beds. Through digenesis during burial, crystalline evaporite deposits formed and are stratigraphically associated with lacustrine sediments, air-fall tuffs, and travertine. The deposit model for the Valjevo Project is similar to Rio Tinto’s Jadar Deposit. Both deposits have a similar genesis; however, they subsequently evolved with differing diagenetic processes and do not contain all the same mineral species.

3.3 Exploration

Euro Lithium and its predecessor company LithiumLi have conducted exploration and core drilling programs for the Valjevo Project since 2011. Geological mapping has been found to be a good guide to the presence of permissive Neogene strata and has allowed inference of buried prospective sections. Surface geochemical sampling returned significant Li and B anomalies only in pelitic rocks. Gravity surveys have been found to be useful in visualizing basin geometry and relative thickness of sedimentary sections.

3.4 Drilling

Over several campaigns between 2011 and 2020, a total of 32 holes (11,535.1 m) have been drilled by Euro Lithium and predecessors on the Valjevo License, and five holes (1,898.5 m) have been drilled on the adjacent Ljig License. In addition, there were five holes (1,391.4 m) drilled on the Valjevo License area by Rio Tinto in 2003.

All holes drilled between 2011 and 2020 on the Valjevo License encountered significant levels of Li and B mineralization within pelitic sediments. Mineralization occurs in an approximate 75 m thick unit of tuffaceous sediments, ranging from claystone to siltstone to fine sandstone at depth of 240 m to 315 m from surface, with an average depth of approximately 275 m. Li mineralization as currently recognized remains open, constrained only by distribution of host lithologies. The thickest sections of continuous Li mineralization drilled to date on the Valjevo License is 62 m at

0.574% Li2CO3 equivalent in hole VBN-012.

In July 2019, drill hole VBN-025 intercepted a 35 m mineralized zone with an average grade of

13% B2O3 from 251.8 m to 286.80 m that included a layer of water-soluble sodium borates (borax). This drill hole and four neighboring drill holes form the basis of the borax zone discussed later in this report. To compliment this drill hole, Euro Lithium completed a seven-hole (2,045 m) drill program around VBN-025 in the spring and early summer of 2020, each intercepting above-average borate mineralization. Results of the seven-hole drill program around VBN-025 are indicated in the following list.

• VBN-032 from 260.00 m to 298.00 m (38 m) of 9.11% B2O3.

• VBN-031 from 250.00 m to 270.00 m (20 m) of 12.07% B2O3.

• VBN-030 from 268.00 m to 302.00 m (34 m) of 8.89% B2O3.

• VBN-029 from 264.00 m to 295.00 m (31 m) of 7.62% B2O3.

• VBN-028 from 224.00 m to 248.00 m (24 m) of 7.69% B2O3.

• VBN-027 from 237.00 m to 263.00 m (26 m) of 10.28% B2O3.

• VBN-026 from 255.00 m to 286.00 m (31 m) of 12.97% B2O3.

• VBN-025 from 251.80 m to 286.80 m (35 m) of 13.00% B2O3.

3.5 Sample Preparation and Analysis

Euro Lithium’s geologists carried out rock quality designation logging, color photography, and lithological logging for the Valjevo Project. Sample intervals were determined at the time of logging and sent for diamond sawing. Typically, only pelitic rock sections, of presumed lacustrine origin were sampled. Visually non-mineralized pelitic sections are normally sampled at 3 m intervals. Samples with visible mineralization are selected based on lithology and mineralogy, and 1 m thickness. QA/QC procedures were incorporated into the 2018 to 2019 Valjevo drilling program by Euro Lithium, including the routine insertion of blanks, standards, coarse reject, and pulp duplicates. Blanks and standards were inserted at a rate of 1 in 21 samples and crush and pulp duplicates were analyzed at a rate of 1 in 42 samples.

HQ core is sawn to produce a quarter split, which is sent for analysis. The NQ core is cut in half, with one half sent for analysis. Samples are transported by Euro Lithium to either ALS Minerals in Romania or Serbia, or SGS Laboratories in Serbia and Turkey. Chain of custody is continuous under the charge of Euro Lithium personnel, from the drill site to the relevant ALS Minerals or SGS Laboratories.

Upon receipt at the respective laboratory, samples are bar-coded, weighed, air-dried (<60 °C), then crushed and pulverized. An inductively coupled, plasma atomic emission spectroscopy (ICP-AES) suite is run on all samples sent for analysis.

If core samples are found to be visually mineralized by the logging geologist, in addition to the ICP-AES suite, whole rock analysis (WRA) is run for 13 major oxides.

Total Li and B is determined by multiple acid digestion, a Hydrological Consultants Inc. wash, and an X-ray fluorescence spectroscopy, while B is analyzed by fusion with sodium hydroxide and ICP-AES.

ALS Minerals and SGS Laboratories are internationally respected laboratories, independent of Euro Lithium, who have developed and implemented strategically designed processes and a global quality management system which is used at each of their locations. These processes meet all requirements of the applicable standards set by the International Organization for Standardization (ISO) / International Electrical Commission (IEC) 17025:2017 and ISO 9001:2015. All ALS Minerals and SGS Laboratories geochemical hub laboratories are accredited to ISO / IEC 17025:2017 for specific analytical procedures.

4.0 MINERAL RESOURCE ESTIMATE

4.1 Database

All drill hole data were provided in the form of Excel data files by Euro Lithium. The Vulcan® Version 2020 (Vulcan) database for this MRE, compiled by Stantec, consisted of 32 drill holes totaling 11,535.1 m, all of which intersected the mineralization domain wireframes used for the updated MRE. A drill hole plan is shown in Appendix A. During drill hole logging, Euro Lithium collected samples proximal and within the mineralized zones and assayed for Li, B, Mg, Sr, and 32 other elements. Li, B, Mg, and Sr have been defined as CRM by the European Commission report (Critical Raw Materials Resilience European Commission, 2020). The other assayed elements do not show significant amounts of arsenic, selenium, or other deleterious materials.

The Vulcan database contained assays for Li and B with calculated values for Li2CO3, B2O3, and H3BO3. The basic statistics of all raw assays for the elements that are currently of economic interest are presented in Table 1.

Table 1: Valjevo Assay Database Summary

Variable Li % B % Number of Samples 3,224 3,224 Minimum Value 0.003 0.003 Maximum Value 0.169 9.060 Mean 0.055 0.575 Median 0.048 0.053 Variance 0.001 1.317 Standard Deviation 0.034 1.148 Coefficient of Variation 0.614 1.995

All drill hole survey and assay values are expressed in metric units, with grid coordinates in the Serbian Gauss Kruger (Balkan Zone 7) system.

4.2 Data Verification

Stantec verified the Li and B assay database against the electronic laboratory certificates provided by ALS Minerals in Romania and Serbia, in addition to certificates from SGS Laboratories in Serbia and Turkey. Stantec compared assay values for Li and B in the Vulcan database against the electronic files provided by the assay labs and found no errors in the more than 3,000 intervals checked.

Stantec also checked the updated MRE database by checking for inconsistencies in analytical units, duplicate entries, interval, length, distance values less than or equal to zero, blank or zero-value assay results, out-of-sequence intervals, intervals or distances greater than the reported drill hole length, inappropriate collar locations, survey, and missing interval and coordinate fields. Stantec is of the opinion that the drilling database is suitable for mineral resource estimation.

4.3 Mineralization Domain Interpretation

Five wireframes of mineralization domains were constructed for the updated MRE. Four of these

wireframes were created using a Li2CO3 equivalent cutoff and tempered with lithology and separation of Li-dominant versus B-dominant intervals. Although the evaluation of the existing

and new data indicates B-dominant intervals, the Li2CO3 equivalent grades are retained to allow direct comparisons to the prior MRE (PG&E,2020). Three of the wireframes used a 0.3% cutoff that was originally used in the previous MRE. A fourth wireframe was constructed using a 1.0% B cutoff to constrain a borate zone. The fifth wireframe was created using visual data in the drill

logs to identify visible borax mineralization. The Li2CO3 equivalent value was calculated with the following formula.

Li2CO3 Equivalent Percentage = Li2CO3 + (H3BO3 / 16.26)

The value was based on the following.

• Li2CO3 Price: $10,000/t

• H3BO3 Price: $700/t

• Li2CO3 Process Recovery: 87%

• H3BO3 Process Recovery: 99% • (Li/Li Recovery) / (Borate/Borate Recovery) = ($10,000 / $700) / (87% / 99%) = 16.26

In some cases, mineralization below the Li2CO3 equivalent cutoff value was included for the purpose of maintaining zonal continuity. The wireframes were extended up to 250 m from the nearest drill hole to untested territory.

The previously identified Upper Zone by P&E (2020) is intersected by three holes and limited to the southern limits of the known mineralized area. This zone is near the surface, is projected to outcrop, and may eventually be recoverable by surface mining methods. Depth below surface varies from crop to a maximum of 60 m below surface under a hill. The average thickness is 47 m and the Li grades are lower in the Upper Zone than the two larger (major) zones. Appendix B and Appendix C show plan view and orthorhombic views of each of the mineralized zones.

The major mineralization zones lie nearly horizontal below surface from 240 m to 315 m with an average depth from surface of 275 m. In this updated MRE, the previously identified Lower Zone by P&E (2020) has been split horizontally into two separate zones, a Li Zone and Main Zone. The Li Zone stratigraphically sits above the Main Zone and has little to no contribution from B to

the Li2CO3 equivalent grades in the interval. The Main Zone has higher Li2CO3 equivalent grades than the overlaying Li Zone due to a significant borate contribution. The Li Zone averages 25 m thick and the Main Zone below is 50 m thick for a combined average thickness of 75 m. There is no waste rock parting separating the Li Zone and Main Zone.

The Main Zone is further subdivided into a Li-B Zone, Borate Zone and Borax Zone. These subdivisions are discussed in Section 4.4 and Section 4.5 of this report. The Li Zone modelled has an extent of ~8,000 m in the east / west and ~4,000 m in the north / south direction and was intersected by all drill holes completed to date. The extent of the newly identified Li Zone is several thousand meters to the east and west of the Main Zone and is only limited by the extent of drilling completed to date.

The Main Zone was not intersected in the most easterly and westerly drill holes and therefore has a smaller footprint, measuring approximately 4,000 m by 4,000 m. As the basin is known to extend to the east and west, the Main Zone was expanded one-third of the distance to the Li Zone. The Main Zone was only extended 250 m beyond drill holes to the north and south.

The resulting mineral resource wireframe zones were utilized as constraining boundaries during mineral resource estimation for rock coding, statistical analysis, and compositing limits. The 3D domains are presented in Appendix B and Appendix C.

A topographic surface immediately above the modelled area was provided by Euro Lithium. This was expanded using data points provided by a third-party consultant firm conducting a surface gravity survey for Euro Lithium. The two files were amalgamated to create a topographic (topo) surface covering Euro Lithium’s Valjevo license boundary.

4.4 Borate Zone

Observations of the B grade distribution within the Main Zone has identified a central portion of the Main Zone that contains B grades above 1% B. When viewed in section, these intervals indicate a continuous lens of material with these relatively higher grades of B within the Main Zone. A separate wireframe was created around these higher B grades and used to model the Borate Zone. Lithium grades are not elevated or depressed within the Borate Zone. The material outside of the Borate Zone within the Main Zone is identified in the model as the Li-B Zone.

4.5 Borax Zone

Recently, Euro Lithium geologists relogged all 32 drill holes completed to date. During this exercise, the geologists recorded a visual estimate of the percentage of borax within the interval. Throughout the mineralized zone these values are typically quite low usually below a few percent. However, in five closely spaced holes in the central portion of the defined deposit, there is an interval of high percentage visible borax. Values within sample intervals of 1 m range from 20% borax to as high as 75% borax. Figure 3 shows a section of HQ core (61.1 mm diameter) with visible crystalline borax. Appendix D is photograph of a full core tray with visible borax. Although not a quantitative assessment, these visible borax values were used to identify a separate lens of visible borax. This separate Borax Zone was modeled within the Borate Zone of the Main Zone.

Figure 3: Photo of Crystalline Borax from Drill Hole VBM-025

4.6 Block Model Mineralized Zone Determination

Wireframes were created for each of the mineralized zones using Vulcan software’s stratigraphic grid calc tool. An implicit surface was created at the top and bottom of each mineralized zone and each of these surfaces was clipped to the extent of drilling. The surfaces for each zone were then joined by vertical walls around the limits to create a solid. These solids were used to create the block model and for compositing the assay database.

Table 2 shows the volume of each of the block model mineralized zones in comparison to the volume of the wireframe shapes used to create them.

Table 2: Valjevo Wireframes and Block Model Mineralized Zone Volume Checks

Block Volume Volume Triangulation Model (m3) (m3) Zone Upper Zone.00t 87,978,517 Upper 87,988,703 Li Zone.00t 488,143,002 Li Zone 487,846,953 Main Zone.00t 747,357,668 Main 747,675,688

4.7 Compositing

The classical statistics of all wireframe domain constrained assays are presented in Table 3.

Table 3: Classical Statistics of All Wireframe Constrained Assays

Zone Upper Zone Li Zone Main Zone Variable Li % B % Li % B % Li % B % Number of Samples 59 59 275 274 1,455 1,455 Maximum Value 0.075 0.949 0.169 0.936 0.159 9.060 Minimum Value 0.018 0.003 0.024 0.003 0.003 0.015 Mean 0.041 0.379 0.084 0.083 0.077 1.213 Median 0.036 0.430 0.083 0.038 0.076 0.535 Standard Deviation 0.015 0.326 0.026 0.151 0.027 1.468 Variance 0.000 0.106 0.001 0.023 0.001 2.154 Coefficient of Variance 0.370 0.860 0.312 1.815 0.356 1.210

Approximately 65% of the constrained sample intervals were 1 m in length. To regularize the assay sampling intervals for grade interpolation, a 5 m compositing length was selected for the drill hole intervals that fell within the constraints of the above-mentioned mineral resource wireframe zones.

The composites were calculated for Li and B percentages over 5 m lengths starting at the first point of intersection between assay data in the hole and top of the 3D zonal constraint. The compositing process was halted upon exit from the bottom of the constraining shape. Un- assayed intervals and below detection limit assays were set to null and ignored in the compositing process. Composites less than 2.5 m in length were merged with the previous composite. A review of composite grade vs length showed no bias for either Li or B. The composite statistics are summarized in Table 4.

Table 4: Valjevo Composite Summary Statistics

Zone Upper Zone Li Zone Main Zone Variable Li % B % Li % B % Li % B % Number of Samples 32 32 111 111 336 336 Maximum Value 0.068 0.855 0.143 0.747 0.137 5.866 Minimum Value 0.024 0.005 0.038 0.003 0.021 0.003 Mean 0.042 0.389 0.081 0.076 0.077 1.008 Median 0.043 0.476 0.080 0.036 0.075 0.036 Standard Deviation 0.013 0.319 0.022 0.135 0.024 1.217 Variance 0.000 0.102 0.000 0.018 0.001 1.482 Coefficient of Variance 0.303 0.820 0.274 1.765 0.309 1.208

4.8 Grade Capping

Grade capping was investigated on the 5 m composite values in the database within the constraining domains to ensure that the possible influence of erratic high values did not bias the database. Log normal histograms for the Li and B composites were generated for each mineralized zone; the selected resulting graphs are exhibited in Appendices E and F. No capping was required.

4.9 Variography

The wide spacing of most of the drilling to date provides insufficient pairs from neighboring holes for variogram generation.

4.10 Block Modeling

The Valjevo block model was constructed using Vulcan modelling software. The block model origin and block size are tabulated in Table 5. The model consists of separate model attributes for estimated grades of Li percentage, B percentage, and density (t/m3), in addition to mineralized zones and other variables. Table 6 lists the variables in the updated resource model.

Table 5: Valjevo Block Model Definition

Direction Origin Number of Blocks Block Size (m)*

X (Easting) 7,416,500 850 10 Y (Northing) 4,903,000 480 10 Z (Elevation) -400 80 10 Rotation No rotation. *Note: Block size is variable within mineralized zones. Grid coordinates are in the Serbian Gauss Kruger (Balkan Zone 7) system.

Table 6: Valjevo Block Model Variables

Variables Default Type Description Zone waste name Mineralized zone. Li Per -99 double ID^2 Grade (estimated). B Per -99 double ID^2 Grade (estimated).

Li2co3 Eq Per -99 double ID^2 Grade (calculated). NN Li Per -99 double Nearest neighbor grade (estimated). NN B Per -99 double Nearest neighbor grade (estimated).

NN Li2CO3 eq Per -99 double Nearest neighbor grade (calculated). Density -99 double t/m3. Pass -99 integer Run number for ID^2 grade estimation. Class -99 integer Resource classification. No DDH -99 integer Number of DDH used in estimation. No Comparison -99 integer Number of composites used in estimation. Alt_Bearing -99 double Orientation of search ellipse in block. Alt_Plunge -99 double Orientation of search ellipse in block. Alt_Dip -99 double Orientation of search ellipse in block. Den Pass -99 integer Run number for density estimation. NN Pass -99 integer Run number for NN grade estimation.

The block model was constructed using the expanded topographic and the solid wireframe shapes for the Upper Zone, Li Zone, Main Zone, as well as the Borate Zone and Borax Zone within the Main Zone. All blocks above the expanded topographic surface were assigned as air with no mass or grade. All blocks below topo and outside of the mineralized zone were assigned as waste with no grade. All blocks within a mineralized zone were assigned a unique zone code used to estimate grade and density.

Sub-blocking was used in the model for the mineralized zones allowing for blocks from 5.0 m3 down to 2.5 m3 along the wireframe boundary. This allowed for a greater accuracy in the block model along mineralized zone contacts. Furthermore, to reduce the size of the resultant block model, blocks of 50 m3 were formed were possible in the waste zone.

Vulcan’s Grid Calc surfaces that were used to create the wireframe solids had a 25 m2 cell size. Each cell had its own strike and dip to reflect the orientation of the upper and lower surface of the mineralized zone. Using Grid Calc, the orientation angles of the upper and lower surfaces were stored in the closest blocks vertically above and below those surfaces.

During grade estimation for Li percentage, B percentage, and density (t/m3), the search ellipse for each block was tilted slightly according to the stored orientation angles. The result was grade trends within the mineralized zones that mimicked the orientation of the mineralization in that area.

Although there was only a minor variation from horizontal, the results give a better representation of the distribution of grade in a stratabound deposit. Appendix G and Appendix H show a vertical section approximately running east / west and north / south through the block model, respectively. These sections demonstrating the undulatory nature of the grade trend following the top and bottom surfaces of the mineral zones and indicate the relative locations of the various mineralized zones within the model.

The Li and B percentage grades were interpolated into mineralized zone blocks using an inverse distance squared (ID2) algorithm. Multiple passes were executed for the grade interpolation to progressively capture the sample points to avoid over-smoothing and preserve local grade variability. Grade blocks were interpolated using the parameters in Table 7.

Table 7: Valjevo Block Model Interpolation Parameters

Maximum Across Minimum Maximum Octant Dip Strike Number Dip Number Number Limits Pass Range Range of Range of of Used in (m) (m) Samples (m) Samples Samples Search per Hole 1 300 300 150 2 5 10 Yes 2 300 300 150 2 5 10 No 3 1,000 1,000 500 2 5 10 No 4 3,000 1,000 500 2 5 10 No

The Li2CO3, H3BO3, B2O3 and Li2CO3 equivalent of blocks were manipulated with the following stoichiometric formulas.

• Li2CO3 = Li% * 5.323

• H3BO3 = B% * 5.721

• B2O3 = B% * 3.218

• Li2CO3 Equivalent = (Li% * 5.323) + ([B% * 5.721] / 16.26)

4.11 Bulk Density

A total of 2,571 bulk density measurements were provided by Euro Lithium. The density values were treated as point data and grouped by the mineralized zone they represented. Table 8 details the density data by mineralized zone. The density data was used to estimate density values in the block model within 300 m of two holes, then within 1,000 m of two holes, using an ID2 algorithm.

All un-estimated blocks beyond 1,000 m of two holes were assigned the average of the data for that zone. Waste blocks were assigned a density of 2.171 t/m3, the mean density for all measurements within that zone.

Table 8: Valjevo Density Data by Zone

Zone Waste Upper Li Zone Main Number of Samples 1,850 8 137 576 Maximum Value 3.000 2.160 3.050 3.690 Minimum Value 1.050 1.980 1.800 1.790 Mean 2.171 2.074 2.239 2.171 Median 2.160 2.090 2.250 2.185 Standard Deviation 0.135 0.066 0.140 0.130 Variance 0.018 0.004 0.020 0.017 Coefficient of Variance 0.062 0.032 0.062 0.060

4.12 Mineral Resource Classification

This updated MRE incorporates seven new closely spaced drill holes that were drilled in a previously identified area of the deposit with abnormally higher grades of borates (P&E, 2020). As a test, an octant search criterion was used in the first pass of estimation, requiring at least three holes from different quadrants before an estimation was made. The results of this estimation run were compared with the drill locations in that area. Stantec believes that the data supports an area of indicated resource assurance, and all other blocks outside of this area have been classified as inferred. A plan map showing the drill hole locations and the extent of the indicated area with the mineralized zone limits is attached in Appendix I.

In Stantec's opinion, the drilling, assaying, and exploration work on the Valjevo Project supports this updated mineral resource estimate and indicate a reasonable prospect for eventual economic extraction. This qualifies the work as a mineral resource under the CIM definition standards (2014).

4.13 Li2CO3 Equivalent Cutoff Calculation

Separate base case Li2CO3 equivalent cutoff grades for open pit and underground mining methods were calculated using the following parameters.

• Li2CO3 Equivalent Price US$/tonne: $10,000

• Li2CO3 Equivalent Process Recovery: 87% • Total Mining Cost US$/tonne: $4.78 (Open Pit used for Upper Zone Only) • Total Mining Cost US$/tonne: $15.00 (Underground Mining used for Li Zone and Main Zone) • Process Cost US$/tonne: $19.68 • General & Administration Cost US$/tonne Processed: $1.05

• Open Pit Li2CO3 Equivalent Cutoff = ($4.78 + $19.68 + $1.05) / ($10,000 x 87%) = 0.29% (Use 0.30%)

• Underground Li2CO3 Equivalent Cutoff = ($15.00 + $19.68 + $1.05) / ($10,000 x 87%) = 0.41% (Use 0.40%)

The difference in mining costs of $4.78/t for open pit versus $15.00/t for underground is the primary factor impacting the calculated cutoff grades for the two mining methods presented in this report.

4.14 Mineral Resource Estimate

The mineral resource estimate was derived from applying Li2CO3 equivalent cutoff value to the block model and reporting the resulting tonnes and grades for potentially mineable areas. For the

Upper Zone an open pit cutoff of 0.30% Li2CO3 equivalent is applied. For the Li Zone and Main

Zone below an underground cutoff of 0.40% Li2CO3 equivalent for the Li Zone and Main Zone is applied.

Stantec considers the mineralization of the Valjevo Project to be potentially amenable to open pit, underground, in-situ, and hydraulic bore hole mining for economic extraction. The resulting pit

constrained the mineral resource estimate at the appropriate Li2CO3 equivalent cutoff is tabulated in Table 9.

Table 9: Valjevo Mineral Resource Estimate

Li Li2CO3 Li2CO3 B B2O3 B2O3 H3BO3 H3BO3 Li2CO3 Li2CO3 Class Mt % % Kt % % Kt % Kt Equivalent Equivalent % Kt

Upper Zone – Open Pit Cutoff Grade Li2CO3 Eq % > 0.3 Inferred 128 0.045 0.240 306 0.319 1.027 1,310 1.825 2,329 0.350 447

Li Zone - Underground Cutoff Grade Li2CO3 Eq % > 0.4 Indicated 16 0.081 0.431 68 0.269 0.866 136 1.539 242 0.525 83 Inferred 553 0.086 0.458 2,532 0.055 0.177 979 0.315 1,740 0.477 2,638

Main Zone – Underground Cutoff Grade Li2CO3 Eq % > 0.4 Li-B Subzone Indicated 113 0.080 0.426 482 0.416 1.339 1,514 2.380 2,692 0.571 646 Inferred 1,272 0.084 0.447 5,688 0.408 1.313 16,703 2.334 29,696 0.590 7,506 Borate Subzone Indicated 48 0.070 0.373 179 2.969 9.554 4,600 16.986 8,177 1.419 683 Inferred 181 0.072 0.383 695 2.566 8.257 14,966 14.680 26,607 1.286 2,331 Borax Subzone Indicated 4 0.076 0.405 16 4.340 13.966 563 24.829 1,002 1.934 78 Main Zone Total Indicated 165 0.077 0.410 677 1.255 4.040 6,677 7.182 11,870 0.851 1,407 Inferred 1,453 0.083 0.439 6,383 0.677 2.179 31,670 3.874 56,303 0.677 9,837 Total Resource Indicated 181 0.077 0.412 745 1.170 3.764 6,813 6.692 12,113 0.823 1,490 Inferred 2,134 0.081 0.432 9,221 0.494 1.591 33,958 2.829 60,372 0.605 12,922 Notes: 1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. 2. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. 3. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration. 4. The mineral resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

4.15 Confirmation of Mineral Resource Estimate

To check the block model results, a second estimation was executed using a simple nearest neighbor method. The comparative results of the ID2 and nearest neighbor estimates are shown in Table 10.

Table 10: Valjevo Block Model ID2 and Nearest Neighbor Comparison

Inverse Distance2 Nearest Neighbor

Li2CO3 NN Li NN Li2CO3 Region Tonnes Li % B % Tonnes NN B % Equivalent % Equivalent Upper 113,205,459 0.042 0.409 0.362 113,205,459 0.042 0.399 0.359 Zone Li Zone 554,155,581 0.080 0.058 0.447 554,155,581 0.080 0.052 0.445 Main 1,373,710,847 0.079 0.867 0.712 1,373,710,847 0.080 0.867 0.715 Zone Total 2,041,071,888 0.077 0.622 0.621 2,041,071,888 0.078 0.620 0.622

As an additional check, comparisons of composite mean grades with the global inverse distance calculated mean grades in the block model are presented in Table 11.

Table 11: Valjevo Mineralized Zone Average Grade Comparison of Composites with Block Model

Composites Block Model

Zone Li % B % Li % B % Upper Zone 0.042 0.389 0.042 0.422 Li Zone 0.077 0.076 0.080 0.046 Main Zone 0.081 1.008 0.079 0.736

The comparison above shows the differences between the block model estimates and the

composites for Li and Li2CO3 were minor, while the B and B2O3 average grades of the block models were lower than the composites used for the grade estimations. These are most likely due to the smoothing by the grade interpolation process. The block model values are more representative than the composites due to 3D spatial distribution characteristics of the block models.

The total tonnage and average grade sensitivity at increasing Li2CO3 equivalent cutoff grade (COG) within the mineralized zones are illustrated in Figure 4 for the Upper Zone, Figure 5 for the Li Zone and Figure 6 for the Main Zone.

Figure 4: Upper Zone Average Grade and Tonnage Sensitivity Chart

Figure 5: Li Zone Average Grade and Tonnage Sensitivity Chart

Figure 6: Main Zone Average Grade and Tonnage Sensitivity Chart

5.0 CONCLUSIONS AND RECOMMENDATIONS

The Valjevo Project deposit has been successfully explored to the extent that both indicated and inferred mineral resources have been defined. Stantec identified a Li-only zone in drill holes previously included as part of an overall mineralized zone. The identification of this zone has resulted in the expansion of the overall inferred mineral resource extent both to the west and east of the deposit. The mineralized zone stratigraphically below the Li Zone, the Main Zone, has also been further subdivided into a Li-B Zone, Borate Zone and Borax Zone following observations on the exploration data. These additional mineralized zones will be enhancing the selective mining opportunities for optimal resource extraction into the future.

A recommended target study area (shown in Appendix J) should be considered for initial mining of the Main Zone. This target area has been selected based on elevated grades and quantity of supporting exploration data, relative to other areas of the deposit. Each of the concentric zones are based on a block model grade shells created at 2.75%, 3.00%, 3.50%, and 4.00% B. The estimated mineral resources within the recommended target area are outlined in Table 12.

Table 12: Target Area Mineral Resource Estimates

Incremental Grade Shell Results

Li2CO3 Region Class Tonnes Li % B % B2O3 % Equivalent %

B% 4.0 Target Indicated 7,874,121 0.083 4.465 14.368 2.014 B% 4.0 Target Inferred 2,173,446 0.088 4.274 13.754 1.975 B% 3.5 Target Indicated 13,300,489 0.085 3.768 12.124 1.774 B% 3.5 Target Inferred 6,732,282 0.084 3.748 12.059 1.766 B% 3.0 Target Indicated 7,623,035 0.073 3.275 10.540 1.549 B% 3.0 Target Inferred 22,500,441 0.079 3.274 10.537 1.578 B% 2.75 Target Indicated 3,642,736 0.072 2.902 9.338 1.388 B% 2.75 Target Inferred 18,518,665 0.076 2.909 9.360 1.428 Indicated 32,440,381 0.080 3.724 11.984 1.736 Total Inferred 49,924,834 0.079 3.246 10.446 1.565

Feasibility-level mine planning within the target area would require additional exploration drilling to collect core samples for Li and B grades, rock density measurements, and geotechnical and metallurgical test work. Ten (10) additional diamond cores holes are recommended to increase the confidence in the mineral resource within and surrounding the target area. The proposed drill hole locations are indicated in red in Appendix K. If the proposed drilling program is successful, the current indicated resource extents for the Main Zone might be expanded to the boundary shown in Appendix J, and part of the target area resource may be upgraded to a measured level of assurance. The estimated cost (US$) for the proposed infill drilling program is shown in Table 13.

Table 13: Cost Estimates for Infill Drilling Program

Cost per Number of Estimated Cost Drill Hole Planned Holes

US$50,000 10 US$500,000

6.0 REFERENCES

Canadian Institute of Mining, Metallurgy and Petroleum. 2014. CIM Definition Standards on Mineral Resources and Mineral Reserves.

Canadian Institute of Mining, Metallurgy and Petroleum. 2018. CIM Mineral Exploration Best Practice Guidelines.

European Commission. 2020. Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability. https://ec.europa.eu/docsroom/documents/42849.

P&E Mining Consultants, Inc. 2020. Report No. 376 – Technical Report and Initial Resource Estimate of the Valjevo Lithium-Borate Property, Kolubara District, Serbia. Brampton, Ontario, Canada.

Appendix A Drill Hole Location Map

VBN_009 Drill Hole with DDH Number 3,000 N VBN_028 VBN_029 VBN_030 Outline of Modelled Borate Zone VBN_032 VBN_023 VBN_026 Outline of Modelled Borax Zone N VBN_031 VBN_027 VBN_024 VBN_025

VBN_021 VBN_017 VBN_011 2,000 N VBN_022 Outline of Modelled Main Zone VBN_008 VBN_016 VBN_020 Outline of Modelled Li_Zone VBN_013 VBN_015 VBN_012 VBN_010 VBN_019 VBN_005

1,000 N VBN_018 VBN_004 Outline of Modelled Upper Zone VBN_014 VBN_007

0 N VBN_002 VBN_001 VBN_003 VBN_006 0 E 6,000 E 6,000 3,000 E 3,000 E 4,000 1,000 E 1,000 E 2,000 5,000 E 5,000 7,000 E 7,000 8,000 E 8,000

Appendix B Upper Zone Wireframe

Plan View Orthorhombic View

Appendix C Li Zone and Main Zone Wireframes

Plan View Orthorhombic View N

Li_Zone Main Zone

Appendix D Visible Borax in Valjevo Core

Borax

Appendix E Probability Plots for Li Composites

Note: Linear nature of the graphs, particularly at the top end shows no grade capping required

Appendix F Probability Plots for B Composites

Note: Linear nature of the Main Zone graph, particularly at the top end shows no grade capping required. Upper and Li_Zone are smaller with lower grade Boron and show sporadic results.

Appendix G Section A – A1 – Vertical Section through Block Model Showing Drill Holes and Grade Distribution

A + A1

0 MASL

Li_Zone Borate Zone Section Line Borax Zone Main Zone Li-B Zone

A1 A

-250 MASL

Appendix H Section B – B1 – Vertical Section through Block Model Showing Drill Holes and Grade Distribution

B B1 + +

0 MASL

Li_Zone

Borate Zone Main_Zone Section Line Li-B Zone B1 Borax Zone

-250 MASL

Appendix I Extents of Modeled Mineralized Zones with Indicated Area

VBN_009 Drill Hole with DDH Number 3,000 N VBN_028 VBN_029 VBN_030

N VBN_032 Outline of Modelled Borax Zone VBN_023 VBN_026 VBN_031 VBN_027 Outline of Indicated Area VBN_024 VBN_025 Outline of Modelled Borate Zone

VBN_021 VBN_017 VBN_011 2,000 N VBN_022 Outline of Modelled Main Zone VBN_008 VBN_016 Outline of Modelled Li_Zone VBN_020 VBN_013 VBN_015 VBN_012 VBN_010 VBN_019 VBN_005

1,000 N VBN_018 VBN_004 Outline of Modelled Upper Zone VBN_014 VBN_007

0 N VBN_002 VBN_001 VBN_003 VBN_006 0 E 6,000 E 6,000 3,000 E 3,000 E 4,000 1,000 E 1,000 E 2,000 5,000 E 5,000 7,000 E 7,000 8,000 E 8,000

Appendix J Recommended Target Area

VBN_009 Existing Drill Hole with DDH Number 3,000 N VBN_028 VBN_029 VBN_030 N B% 4.0 Grade Shell VBN_032 VBN_023 VBN_026 VBN_031 B% 3.5 Grade Shell VBN_027 VBN_024 VBN_025 B% 3.0 Grade Shell B% 2.75 Grade Shell VBN_021 VBN_017 VBN_011 2,000 N VBN_022 VBN_008 Outline of Modelled Main Zone VBN_016 VBN_020 VBN_013 VBN_015 VBN_012 Outline of Modelled Li_Zone VBN_010 VBN_019 VBN_005

1,000 N VBN_018 VBN_004 Outline of Modelled Upper Zone VBN_014 VBN_007

0 N VBN_002 VBN_001 VBN_003 VBN_006 0 E 6,000 E 6,000 3,000 E 3,000 E 4,000 1,000 E 1,000 E 2,000 5,000 E 5,000 7,000 E 7,000 8,000 E 8,000

Appendix K Extents of Indicated Area with Recommended Drill Hole Locations

VBN_009 Existing Drill Hole with DDH Number 3,000 N VBN_028 VBN_029 Outline of Modelled Borate Zone N VBN_030 Outline of Modelled Borax Zone VBN_032 VBN_023 VBN_026 VBN_031 VBN_027 VBN_024 VBN_025 Suggested Drill Hole

Present Outline of Indicated Area VBN_021 VBN_017 VBN_011 2,000 N VBN_022 Potential Outline of Indicated Area VBN_008 Outline of Modelled Main Zone VBN_016 VBN_020 VBN_013 VBN_015 VBN_012 Outline of Modelled Li_Zone VBN_010 VBN_019 VBN_005

1,000 N VBN_018 VBN_004

VBN_014 Outline of Modelled VBN_007 Upper Zone

0 N VBN_002 VBN_001 VBN_003 VBN_006 0 E 6,000 E 6,000 3,000 E 3,000 E 4,000 1,000 E 1,000 E 2,000 5,000 E 5,000 7,000 E 7,000 8,000 E 8,000