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Siddharth Rajeev, B.Tech, MBA, CFA

August 9, 2018

Ultra Lithium Inc. (TSXV: ULI / FSE: QFB) - Initiating Coverage: Diversified Portfolio of Lithium Assets

Sector/Industry: Junior Resource www. ultralithium.com

Market Data (as of August 9, 2018) Investment Highlights Current Price C$0.18  Ultra Lithium Inc. (“ULI”, “company”) holds a diversified portfolio of lithium Fair Value C$0.49 projects. Its current portfolio includes five brine lithium properties covering over 25,000 hectares in Catamarca province, Argentina, one hard rock lithium Rating* BUY property in Ontario Canada, and one brine lithium property in Nevada, U.S. Risk* 5  The projects in Argentina are located close to the relatively underexplored Salar 52 Week Range C$ 0.15 - C$ 0.80 de Antofalla. In 2016, Albermarle (NYSE: ALB), the world’s largest lithium Shares O/S 70,598,582 producer, entered into an agreement to explore Salar de Antofalla, which we Market Cap C$ 12.71 mm believe reflects the region’s prospects. Current Yield N/A  A sampling program conducted by ULI in 2017, on one of its five projects, returned lithium values between 14 ppm and 1,270 ppm lithium, with low P/E (forward) N/A magnesium / lithium ratios. P/B 3.7 x  The company is conducting geophysical surveys on three of its five projects, and YoY Return 5.9 % expects to commence a drill program in Q4-2018. YoY TSXV -8. 5%  The 100% owned Georgia Lake project holds a spodumene type hard rock *see back of report for rating and risk definitions. lithium deposit. Exploratory short drill holes in 2017 intersected 1.42% lithium * All figures in C$ unless otherwise specified. oxide over 5 meters in one hole.  A unique aspect of ULI is its relationship with a technology partner in China, which claims to have a proven economically viable, and environmentally friendly process, to manufacture battery-grade lithium carbonate.  Management, the board, and key investors, own approximately 56% of the total outstanding shares – aligning their interest with investors.  We are initiating coverage on ULI with a BUY rating and a fair value estimate of $0.49 per share.

Risks  The value of the company is highly dependent on lithium prices.  The company’s projects in Argentina are in early stages.

 Exploration and development risks.  The company’s projects in Argentina do not have a NI 43-101 compliant resource estimate.  Exchange rate risks.

 2018 Fundamental Research Corp. “15+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT

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Background The company was incorporated in Vancouver, BC, in November 2004, as a numbered company. Its name was changed a few times - to Argentor Resources Ltd. in July 2005, to Jantar Resources Ltd. in January 2006, and to the current name of Ultra Lithium Inc. in August 2009. The team is currently headed by CEO, Dr. Weiguo Lang, B.Eng., D.Eng., and Vice President, Exploration, Afzaal Pirzada, M.Sc. (Geology), P.Geo. Both of them joined the company in 2016. Dr. Lang is the single largest individual shareholder with 10.09 million shares, or 14.3% of the total outstanding shares. Since 2016, the company has significantly expanded its portfolio and currently holds a geographically diversified portfolio of lithium exploration and development assets. The current portfolio includes five brine lithium properties covering over 25,000 hectares in Catamarca Province, Argentina, one hard rock lithium project in Ontario Canada, and one brine property in Nevada, U.S. In addition to the project portfolio, the company has a Memorandum of Understanding (MOU) with a Beijing, China based technology firm that uses selective separation methods, through crystallization processes, to produce battery grade lithium carbonate. Lithium samples from ULI’s projects will be tested for trial production of lithium carbonate. If the tests are successful, we believe ULI has the potential to transform into a vertically integrated lithium company, and significantly differentiate itself within the junior lithium resource sector.

Overview of Lithium is primarily extracted from two sources: hard-rock (spodumene) deposits and brine- Lithium based deposits. Lithium hard rock deposits are commonly found in spodumene bearing Deposits pegmatite mineral deposits. The chart below outlines notable hard rock lithium deposits in the world:

Source: Golden Dragon Capital

Lithium brines are accumulations of saline groundwater that contain dissolved lithium. Although brine deposits are typically of lower grade, brine mining is a significantly cheaper alternative to hard rock mining. The chart below outlines notable lithium brine deposits.

2018 Fundamental Research Corp. “15+ Years of Bringing Undiscovered Investment Opportunities to the Forefront” www.researchfrc.com PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORT

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Source: Golden Dragon Capital

The chart below demonstrates how lithium hard rock and brine deposits are processed into end-products:

How Lithium Hard Rock and Lithium Brine are Processed

Source: Golden Dragon Capital

The chart below shows the cost of relatively low cost of brines versus hard rock deposits around the world. Brine versus mineral concentrate operations

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Potential for Argentinian brines are located in the “lithium triangle”, defined by high-altitude and salt flats Lithium in that lies between Chile, Bolivia and Argentina. The lithium triangle is estimated to hold over Argentina 50% of the world’s lithium resources.

Lithium Triangle

Source: Economist

According to the U.S. Geological Survey (USGS), Argentina ranks fifth in terms of global lithium reserves, or 12.5% of the total. Chile currently boasts the world’s largest reserves of lithium. In 2017, Chile was estimated to have 46.9% of the worlds lithium reserves, over double that of China, which is estimated to have the second largest lithium reserves.

Source: U.S. Geological Survey, FRC

In response to increasing demand, global lithium production has trended higher, with supply spiking upwards between 2009 and 2012, and again between 2015 and 2017. Lithium production has historically been dominated by Chile or Australia, with Australia claiming the title of largest lithium producer in 2017. Argentina is the third largest producer accounting for

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12.7% of global production, behind Australia (43.4%) and Chile (32.8%), in 2017. Argentina’s production grew at a rate of 6.2% p.a. from 2007 to 2017.

Source: U.S. Geological Survey, FRC

Lithium production in Argentina experienced a significant increase in 2016 (as shown in the chart above) primarily due to a change in government , which introduced several initiatives to increase foreign investment. According to BMI Research, Argentina’s production is expected to overtake Chile’s production driven by a strong project pipeline and a supportive government.

Argentina’s two major producers are the Salar de Hombre Muerto (dominated by FMC Corporation / NYSE: FMC) and Salar de Olaroz (dominated by Orocobre / ASX: ORE). The table below shows typical grades:

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Source: Lithium Today

ULI’s ULI has option agreements to acquire a 100% interest in five brine lithium properties Argentine covering over 25,000 hectares in Catamarca province, Argentina. Projects

Data Source: Company

Project Location

Source: www.mapcarta.com

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All five properties are located within the main lithium-bearing region of South America, in the Altiplano Puna plateau (Puna), which is approximately 2,000 km long by 300 km wide area with an average elevation of 3,500 m. The projects are located approximately 40 km west of Salar de Hombre Muerto, and within, or very close to, the Salar de Antofalla, which is approximately 150 km long and 6 km wide, at elevations of 3,900 m.

Location of Antofalla relative to the Salar de Hombre Muerto

Source: www.mapcarta.com

Salar de Antofalla is relatively less explored, but its geological characteristics are similar to other well-known salars in the region where lithium and potash are found. In 2016, Albermarle (NYSE: ALB), the world’s largest lithium producer, entered into an agreement with Bolland Minera S.A. for rights to a lithium project in Antofalla. Sources indicate that Bolland had drilled 56 boreholes over 265 square km and defined a resource of 83Mt of potash (KCl) grading 6,400mg/l, and 2.22Mt of lithium (11.8Mt LCE) grading 350mg/l. Albermarle believes its project has the potential to be the largest lithium resource in Argentina. ULI’s Amelia property occupies the northern part of Salar de Antofalla. The following image shows ULI’s projects relative to Albermale and FMC’s projects.

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ULI’s Projects

Source: Company The following section presents brief summaries of the company’s projects in Argentina.

Laguna Verde Brine Lithium Property, Argentina ULI acquired the Laguna Verde project from an unrelated party in August 2017. This project covers 7,569 ha, and has three mining licenses. It is located 40 km to the west of Salar de Antofalla.

Mining licenses Laguna Verde I and II have had historical sulphate mining operations that covered 1,536 ha of this salar. ULI conducted a sampling program (47 samples were collected from two rounds of sampling) in 2017, which gave lithium values in the range of 14 ppm to 1,270 ppm, potassium values of 262 ppm to 15,800 ppm, magnesium values of less than one ppm to 7,920 ppm with a Mg/Li ratio of less than 1 to 13. We believe the low magnesium to lithium ratios are promising. Low magnesium content is critical for lithium production as additional steps are required to reduce the magnesium content.

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Round 1 Sample Location and Lithium Values (in ppm)

Round 2 Sample Location and Lithium Values (in ppm)

Source: Company

The 2017 program also indicated a strong correlation between lithium values and brine density. Management estimates that the potential source of lithium is hydrothermal movement of lithium through a system of faults. Evidence of hydrothermal activity on the property include circular depressions and altered volcanic rocks. The company has identified a fault structure which is currently considered a possible source of lithium in the brine.

In April 2018, ULI announced receipt of permits from the Mining Department of Catamarca Province to conduct exploration work. The permit includes ground geophysical surveys and trial lithium concentration processing. ULI contracted Beijing Technology and Engineering Co., Ltd. (BETEC) from China to complete 82.60 line-km of Gravity and Time Domain Electromagnetic (TDEM) surveys on its Laguna Verde, La Borita, and Amelia properties. Upon completion of the geophysical survey, the company intends to pursue a diamond drill program.

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On August 7, 2018, ULI announced the completion of its ground geophysical survey at Laguna Verde, which covered a 32.1 square kilometer area. Although detailed results of the survey are yet to be announced, the company did disclose that an initial interpretation of results shows the Laguna Verde basin catchment area is approximately 711.8 square kilometers.

Laguna Verde Catchment Area (shown in red outline)

Source: Company

On July 17, 2018, the company announced commencement of bench scale evaporation testwork on brine samples from Laguna Verde. Approximately 4,000 litres of samples have been shipped to the company’s laboratory in Salta, Argentina. We consider this an important step as the samples will undergo recovery analysis, and evaporation tests, to assess the viability of producing lithium economically.

La Borita Brine Lithium Project, Argentina

In June 2017, ULI entered into an option agreement to acquire a 100% interest in the La

Borita lithium brine property located in the Antofagasta region. As per the agreement, ULI

has to pay approximately US$55k (paid), and US$1 million in four equal quarterly payments

after 1 year. The property is subject to a 2.5 % royalty.

The property covers approximately 3,000 ha across four mining licenses named: 17 de Junio,

Fenix, Betito, and Guayracocha. The project is located 15 km to the east of Salar de

Antofalla, and 100 km southwest of the Salar del Hombre Muerto. It is road accessible, and is

well situated, with a port located 500 km to the west.

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Project Location

Source: Company

The property was historically explored for base metals (primarily copper). Previous work, including drilling / sampling / geophysical survey, and indicate a small resource (non NI43- 101 compliant) of 1.7 Mt at 1% - 2% copper. The most recent exploration work was conducted by Mariana Resources (acquired by Sandstorm / TSX: SSL in 2017) during 2010- 13. Their work included five holes (1,785 m). ULI has acquired brine sample assay results of one of these holes. The program returned values of 227 ppm lithium with a low magnesium to lithium ratio (2,235 ppm potassium and 850 ppm magnesium) from a hole drilled 650 m below surface.

In September 2017, ULI tested samples from three historical deeper drill holes, and by digging shallow holes down to a depth of up to one meter below surface. Key highlights of this program are presented below:

 Hole LB002 - 220 milligrams per liter (mg/L) lithium, 1140 mg/L magnesium, 423 mg/L boron and 1790 mg/L potassium.

 Hole LB004 - 176 mg/L lithium, 4690 mg/L magnesium, 336 mg/L boron, and 579 mg/L potassium.

 Hole LBDDH005 (the historic 650 deep well mentioned above) returned lithium values of 215 mg/L, magnesium 983 mg/L, boron 425 mg/L and potassium 1990 mg/L.

Overall, the project is considered to have potential for lithium at depth, as all deeper holes returned significantly higher values. The company has indicated that initial testing by a process engineering firm indicate good potential for faster evaporation and concentration of lithium salts. ULI is planning ground geophysical surveys, pumping tests to determine aquifer

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capacity, and pilot scale evaporation pond construction to produce lithium carbonate/brine concentrate.

Amelia Brine Lithium Property / Archibarca Brine Lithium Property, Argentina In August 2017, ULI entered into an option agreement to acquire a 100% interest in three lithium brine properties located in the Antofagasta region, in the northern part of Salar de Antofalla. Under the terms of agreement, ULI paid approximately US$185k, and has to pay US$1.96 million in eight equal quarterly payments. The property is subject to a 2.5% royalty.

The three properties under the agreement include Amelia, Archibarca and Laguna Verde (see map on page 8).

Amelia includes three mining licenses (Amelia I-III) covering 5,400 hectares. In September 2017, ULI drilled 12 shallow holes down to a depth of one meter. Key results are presented below:

 Lithium values ranged between 2.55 mg/L and 75.5 mg/L, with an average of 31.8 mg/L;  Magnesium values ranged between 36.3 mg/L and 1100 mg/L, with an average of 528.8 mg/L,  Boron ranged between 14 mg/L and 27.5 mg/L, potassium between 15 mg/L and 1,390 mg/L.

Based on these encouraging results, ULI has planned a ground geophysical survey, followed by a drill program.

At Archibarca, four samples taken from this property in 2017 indicated lithium values in the range of <1 ppm to 72.8 ppm, potassium values of 25.9 ppm to 2,090 ppm, magnesium of 9.5 ppm to 1060 ppm, with a Mg/Li ratio of 14.6 to 21.6. As with all of its other properties, ULI has planned ground geophysical surveys, followed by a drill program.

Georgia Lake, The 100% owned Georgia Lake lithium project, located 145 kilometers northeast of Thunder Ontario, Bay, Ontario (16 mineral claims covering 2,416 hectares of land), hosts multiple lithium Canada bearing pegmatite deposits within four noncontiguous claim blocks.

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Source: Company

Many of the claim blocks are easily accessed via logging or service roads from Highway 11, an all-weather road with access directly to Thunder Bay.

The Georgia Lake project is a spodumene type hard rock lithium deposit. The spodumene- bearing pegmatites were discovered in the area in 1955. The project itself covers eight lithium bearing occurrences within the Georgia Lake area. Many of the identified dykes outcrop, and mineralization is at or near surface. However, heavy glacial till may conceal potential outcrops and drilling may show additional mineralized lenses not visible at surface.

A neighboring property, held by Rock Tech Lithium (TSXV: RCK), recently completed an updated resource estimate.

 Measured resource: 1.89 Mt at 1.04% Li2O  Indicated resource: 4.68 Mt at 1.00% Li2O  Inferred resource: 6.72 Mt at 1.16% Li2O

Hydrometallurgical tests on RCK’s property showed potential for production of Li2CO3 with a purity of 99.96% without any process optimization, and a purity of 99.98% with bicarbonate scrubbing.

The property is in a traditional area of interest of five First Nations group. According to management, the groups have indicated their initial support of the project. In 2016-2017, ULI conducted prospecting, mapping, surface sampling, trenching and channel sampling. Results of surface sampling indicated that o ut of 21 rock grab samples, 10 showed over 1% lithium

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oxide, and five samples were with 2% or more lithium oxide, with a maximum value of 2.73% Li2O. The program also returned anomalous values of rare metals. Key highlights of channel sampling are shown below:

 1.1% Li2O over 2.29 m with Be 243 to 251 ppm, Nb 51 to 66.4 ppm, Rb 752 to 972 ppm and Ta 34.8 to 69.2 ppm.  1.07% Li2O over 1 m with Be 259 to 293 ppm, Nb 42.4 to 66 ppm, Rb 703 to 1270 ppm and Ta 27.3 to 52.7 ppm.  1.15% Li2O over 3 m with Be 262 to 315 ppm, Nb 49 to 62 ppm, Rb 535 to 1090 ppm and Ta 29.8 to 43.6 ppm.

Highlights of four short holes in 2017 are presented below:

 Drill Hole ULI-17-01 intersects 1.11% Li2O over 4 m from 1 m below surface at Niemi Pegmatite  Drill Hole ULI-17-02 intersects 1.08% Li2O over 5 m from 1 m below surface at Newkirk Pegmatite  Drill Hole ULI-17-03 intersects 0.76% Li2O over 1 m from 5 metres below surface at MNW Pegmatite  Drill Hole ULI-17-04 intersects 1.42% Li2O over 5 metres from 1 m below surface at Lucky Lake Pegmatite

The company recently received an exploration work permit on the property. Management’s plans include stripping and channel sampling to explore extensions of known pegmatites, diamond drilling to confirm their continuity in the subsurface, and bulk sampling to evaluate the viability of small scale trial production of lithium oxide concentrate.

South Big In 2010, ULI had entered into an agreement to acquire a 100% interest in the South Big Smoky Valley Smoky Valley project for a total of approximately $170k in cash and shares. In December Brine Lithium 2016, the company entered into an option agreement with Metron Capital Corp. (TSXV: Project, MCN), granting MCN the right to acquire certain mineral claims in the project. MCC is Nevada, U.S. required to make cash and share payment over a three-year period. On May 15, 2017, ULI entered into an option agreement with United Lithium Corp (CSE: UTL) granting UTL the right to acquire certain other mineral claims for cash and share payments over three years.

The project is located in Esmeralda county, 26 km north of Albemarle Corp.’s Silver Peak mine in Clayton Valley, Nevada - the only lithium producer in North America. Silver Peak has been producing lithium from brines since 1966. The project is also 310 km from Tesla’s (Nasdaq: TSLA) Gigafactory.

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Project Location

Source: Company

According to the company, previous gravity surveys have identified structures favorable for evaporite accumulation and traps, which are typically signs of mineral rich brines. In 2014, ULI completed a ground geophysical survey, followed by a drill program in 2015. The results confirmed the presence of lithium in a sedimentary system.

The optionees conducted exploratory soil and groundwater sampling in 2018. ULI’s core focus is on the Argentinian projects and Georgia Lake.

In January 2018, ULI announced a Memorandum of Understanding (MOU) with Cadavisa Technology Technology Corporation (CTC) of Beijing. CTC is a related entity of the Chemical Partnership Engineering College of Tsinghua University. CTC has developed a proprietary process that

uses selective separation methods, through crystallization processes, to produce battery grade

lithium carbonate. According to CTC, they have completed several production tests with both

spodumene and brine lithium materials, and the technology has been proven to be

economically viable and environmentally friendly. CTC is currently constructing a plant in

China with a capacity of 25,000 tonnes/year battery grade lithium carbonate.

Under the terms of MOU, ULI will send spodumene and brine samples to CTC for trial production of lithium carbonate. Subject to the successful completion of this phase, ULI and CTC will evaluate the viability of entering into a definitive agreement which may include the

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use of CTC’s technology for processing ULI’s spodumene and brine lithium materials, as well as investments in joint projects. If successful, we believe this relationship will give ULI a significant edge over its peers, allowing it to transform into a vertically integrated lithium company.

Upcoming The following highlights management’s key plans for the next 12 months: Catalysts  Georgia Lake property - 3,000 m drilling, metallurgical testing, resource estimation and preliminary economic assessment.  Bulk sampling at Georgia Lake to see the viability of small scale trial production of lithium oxide concentrate.  Argentina projects - complete geophysical surveys on three of the five properties, complete evaporation testwork, and commence drilling at Laguna Verde in Q4-2018.  Pilot scale evaporation testwork at Laguna Verde.  Testing of ULI’s spodumene and brine samples by CTC.

Outlook on We expect Lithium-ion Batteries (LIBs) to be the primary demand driver of lithium. LIB is Lithium the most common rechargeable battery in the market today. In an LIB, lithium is used as the electrolyte, graphite as the anode (negative electrode) and cobalt typically as the cathode (positive electrode). LIB is used in a wide range of electronic equipment, such as mobile phones, laptops, and digital cameras to name a few. However, the biggest growth driver is the use of LIBs in electric vehicles (“EV”)

Declining technology costs are also expected to drive demand for LIBs. The cost of a LIB pack dropped from US$1,000 per kWh approximately six years ago, to the current rate of approximately $350 per kWh.

One of the biggest developments in the battery space was the opening of the gigafactory (a $5

billion Lithium-Ion battery manufacturing facility) by Tesla (NASDAQ: TSLA) in 2016, in

Nevada, U.S. , in partnership with Panasonic (TSE: 6752). In addition to Tesla, several other

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EV (electric vehicles) manufacturers have announced strong projections. The current production capacity of LIBs is approximately 75 GWh globally. However, once Tesla’s gigafactory and the other facilities being built by LG Chem (KRX: 051910), Foxconn (SEHK: 2038), BYD, and Boston Power are completed, the total capacity is estimated to reach 285 GWh by 2020.

The following chart shows that EV car sales are estimated to be approximately 54% of light-

duty vehicle sales by 2040 globally.

The Commodities Research Unit (“CRU”) Group estimates electric car and plug-in hybrid vehicle sales could reach approximately 16 million by 2025 (up from 0.77 million last year), reflecting a CAGR of 40% per annum (“p.a.”) from 2016 to 2025.

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Lithium carbonate is currently trading between US$17,000 and US$19,000 / t in Asia, and approximately US$15,000 / t in in the Americas.

Lithium carbonate – battery grade – prices (US$/t)

The following chart shows that a 300% increase in lithium price will only result in a 2% increase in battery cost.

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The following table shows our estimate of the expected global demand for lithium carbonate from EVs. We estimated this based on Deutsche Bank’s (DB: DBK) projections for EV sales, and our estimate of the required LCE per vehicle (derived from multiple sources).

Source: FRC and Deutsche Bank

Current global annual consumption is approximately 217,000 tonnes, and EVs account for under 20,000 tonnes. As shown in the above table, an expected increase in demand to 108,800 tonnes from EVs implies that the global LCE market will significantly increase over the next decade. According to Roskill, global consumption of LCE will reach 785,000 tonnes by 2025, and the market will be in a deficit of 26,000 tonnes. UBS estimates global consumption to reach approximately 1 Mt per year by 2025.

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Global Demand

Source: UBS

The above demand projections imply that production has to reach capacity to meet demand.

Source: UBS

Management We estimate that management, board, and key investors own approximately 56% of the total outstanding shares. We believe the high equity ownership strongly aligns management and investors’ interests.

Share Ownership

Source: Management Information Circular

Brief biographies of the management team and board members, as provided by the company, follow:

Dr. Weiguo Lang, B.Eng., D.Eng. – Chief Executive Officer and Director Weiguo has over 20 years of experience in the mining, technology and agriculture sectors,

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with a focus on building strategic alliances, joint ventures and financing. He is the Executive Director of a Hong Kong Stock Exchange listed company, Zhongsheng Resources Holdings Limited (Symbol: 2623.HK), primarily responsible for business development and investment. Prior to that, he acted as director for Klondex Mines Ltd., Agro International Inc., Zhongrun (Tianjin) Mining Development Co., Ltd., Ventek Systems Inc. and Q-Net Technologies Inc. Weiguo received his Bachelor Degree in Engineering from Agriculture University of Heilongjiang, and then obtained his Master’s and Doctorate degrees in Engineering from the University of Saskatchewan, Canada.

Afzaal Pirzada M.Sc.(Geology), P.Geo. – Vice President, Exploration Afzaal is a professional geoscientist with over 30 years’ experience in mineral exploration and mining with expertise in lithium and rare metals, graphite, PGE and uranium. Throughout his career, he has managed multiple exploration projects in various jurisdictions across Canada, USA and internationally. He has worked as Project Geologist, VP Exploration, Director and CEO of Adriana Resources, Rock Tech Lithium and various other mining companies. He has discovered one graphite deposit in Quebec, and successfully developed a lithium project in Ontario from early stage exploration to advanced exploration. He is registered as a professional geoscientist with the Association of Professional Engineers and Geoscientists of British Columbia, Canada, authored several NI 43-101 technical and exploration work assessment reports, and has worked as a “Qualified Person” person on mineral exploration projects. He is currently engaged in the exploration of Ultra Lithium’s brine lithium projects in Argentina, and hard rock lithium project at the Georgia Lake pegmatites in Northwestern Ontario, Canada.

Kiki Smith CPA, CGA – Chief Financial Officer Kiki has over 20 years of experience assisting private and public companies in the roles of Accountant, Corporate Controller and CFO in mining, oil and gas, real estate, high technology, food production and investment fund management. She currently provides consulting services in mergers and acquisitions, financial reporting and regulatory compliance to several public and private companies in the resource, food production and investment sectors. Kiki graduated from the University of British Columbia in 1989 with a Bachelor of Arts Degree in Economics. She holds a Certified Professional Accountant designation from the Certified Professional Accountants Association of British Columbia.

Andrew Lee Smith, B.Sc, P.Geo., ICD.D – Independent Director Andrew is a Professional Geologist with over 25 years experience of successfully exploring, developing and operating African and North American base and precious metals mining projects. He also holds Directorships and management positions with a number of other junior exploration companies. Andrew holds a B.Sc in Earth Sciences from the University of Waterloo and is a professional geologist and a member of the Association of Professional Engineers and Geoscientists of British Columbia. He received the Mining Entrepreneur of the Year Award in 1994 from the Quebec Prospectors Association for his role in mine development with Aurizon, and was named Outstanding Alumnus of 2009 by the Science Faculty of the University of Waterloo for his contributions to mineral exploration. In 2015, Andrew competed in the International Corporate Directors Education Program and received the ICD.D accreditation, the only professional designation for Canadian directors recognized

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both nationally and internationally.

Shaoguo Cao, MBA – Chairman, Independent Director Shaoguo is the President of Liten Group Co., Ltd., which he founded in 2002. Liten, is at the forefront of China’s top 100 automobile dealers by revenue and is an innovative private enterprise pioneering the construction and operation of automobile parks. Mr. Cao is also Vice-chairman of the Classic Vehicle Union of China (CVUC), the Chairman of Tsinghua University Wudaokou People’s Bank of China School of Finance Council (Shanghai). He is a representative at the twelfth Provincial People’s Congress of Zhejiang Province. In 2016 he was awarded as one of “30 People of Influence in the Wenzhou Economy”. Mr. Cao received his MBA degree from Tsinghua University.

Our net rating on the company’s management team is 3.6 out of 5.0 (see below).

Source: FRC

The company’s board has three members, of which, two are independent. We believe that the Board of Directors of a company should include independent or unrelated directors who are free of any relationships or business that could materially interfere with the director’s ability to act in the best interest of the company. An unrelated/independent director can be a shareholder. The following table shows our analysis on the strength of the company’s board.

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Strength of Board

Source: FRC

Financials At the end of Q2-FY2018 (ended April 30, 2018), the company had cash and working capital of $1.47 million and $1.43 million, respectively. We estimate the company had a burn rate (cash spent on operating and investing activities) of $40k per month in the first six months of FY2018. The following table summarizes the company’s liquidity position:

Liquidity Position

Data Source: Financial Statements

We estimate the company currently has 5.74 million options outstanding (weighted average exercise price of $0.16 per share) and 2.42 million warrants (weighted exercise price of $0.40 per share) outstanding. At this time, 2.58 million options are in-the-money. The company can raise up to $0.33 million if these options are exercised.

Considering the early stage nature of its projects, we have valued ULI based on the average Valuation & Enteprise Value (EV) to hectare ratio of juniors. Rating The following table shows a list of juniors primarily focused on brine lithium.

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Source: FRC

Based on an average value of $1,493 per ha, we are initiating coverage with a BUY rating and a fair value estimate of $0.49 per share. We believe we will be in a position to assign a preliminary speculative resource estimate on Laguna Verde once the geophysical survey results are available.

Risks We believe the company is exposed to the following key risks (not exhaustive):

 The value of the company is highly dependent on lithium prices.  The company’s projects in Argentina are in early stages.  Exploration and devel opment risks.

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 The company’s projects in Argentina do not have a NI 43-101 compliant resource estimate.  Exchange rate risks.

As with most junior resource companies, we rate ULI’s shares a risk of 5 (Highly Speculative).

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Fundamental Research Corp. Equity Rating Scale: Buy – Annual expected rate of return exceeds 12% or the expected return is commensurate with risk Hold – Annual expected rate of return is between 5% and 12% Sell – Annual expected rate of return is below 5% or the expected return is not commensurate with risk Suspended or Rating N/A— Coverage and ratings suspended until more information can be obtained from the company regarding recent events.

Fundamental Research Corp. Risk Rating Scale: 1 (Low Risk) - The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.

2 (Below Average Risk) - The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.

3 (Average Risk) - The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.

4 (Speculative) - The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.

5 (Highly Speculative) - The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues, and may rely on external funding. These stocks are considered highly speculative.

Disclaimers and Disclosure The opinions expressed in this report are the true opinions of the analyst about this company and industry. Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctnes s. There is no guarantee that our forecasts will materialize. Actual results will likely vary. FRC and the Analyst do not own shares of the subject company. Fees were paid by ULI to FRC. The purpose of the fee is to subsidize the high costs of research and monitoring. FRC takes steps to ensure independence including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. To further ensure independence, ULI has agreed to a minimum coverage term including an initial report and three updates. Coverage can not be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.

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This report contains "forward looking" statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products/services in the marketplace; acceptance in the marketplace of the Company's new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company's periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter. Fundamental Research Corp DOES NOT MAKE ANY WARRANTIES, EXPRESSED OR IMPLIED, AS TO RESULTS TO BE OBTAINED FROM USING THIS INFORMATION AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OR FITNESS FOR A PARTICULAR USE. ANYONE USING THIS REPORT ASSUMES FULL RESPONSIBILITY FOR WHATEVER RESULTS THEY OBTAIN FROM WHATEVER USE THE INFORMATION WAS PUT TO. ALWAYS TALK TO YOUR FINANCIAL ADVISOR BEFORE YOU INVEST. WHETHER A STOCK SHOULD BE INCLUDED IN A PORTFOLIO DEPENDS ON ONE’S RISK TOLERANCE, OBJECTIVES, SITUATION, RETURN ON OTHER ASSETS, ETC. ONLY YOUR INVESTMENT ADVISOR WHO KNOWS YOUR UNIQUE CIRCUMSTANCES CAN MAKE A PROPER RECOMMENDATION AS TO THE MERIT OF ANY PARTICULAR SECURITY FOR INCLUSION IN YOUR PORTFOLIO. This REPORT is solely for informative purposes and is not a solicitation or an offer to buy or sell any security. It is not intended as being a complete description of the company, industry, securities or developments referred to in the material. Any forecasts contained in this report were independently prepared unless otherwise stated, and HAVE NOT BEEN endorsed by the Management of the company which is the subject of this report. Additional information is available upon request. THIS REPORT IS COPYRIGHT. YOU MAY NOT REDISTRIBUTE THIS REPORT WITHOUT OUR PERMISSION. Please give proper credit, including citing Fundamental Research Corp and/or the analyst, when quoting information from this report.

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