Canada Province of Québec District of Montréal

CANADA SUPERIOR COURT PROVINCE OF QUÉBEC (Commercial Division) DISTRICT OF MONTRÉAL ______

No.: 500-11-049079-151 IN THE MATTER OF THE RECEIVERSHIP OF:

QUÉBEC LITHIUM INC., QLI MÉTAUX INC., RB ENERGY INC. AND SIROCCO MINING INC. Debtors -and- KSV KOFMAN INC. Receiver/Petitioner -and- HALE CAPITAL PARTNERS, L.P. -and- INVESTISSEMENT QUÉBEC, a legal entity having a place of business at 600, de La Gauchetière Street West, Suite 1500, Montréal, Québec H3B 4L8 -and- 9554661 CANADA INC., a corporation having a place of business at 130 Adelaide Street, Suite 3420, Toronto, Ontario M5H 3P5 -and- 2242974 CANADA INC. (formerly CONSTRUCTION PROMEC INC.), a corporation having a place of business at 1300 Saguenay Street, Rouyn-Noranda, Québec, J9X 7C3 -and- 9190-5778 QUEBEC INC., a corporation having a place of business at 82, 10th Avenue West, Amos, Québec, J9T 1W8 -and- 3391612 CANADA INC., a corporation having a place of business at 105, R.R. 2, Barraute, Québec, J0Y 1A0

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-and- LES STRUCTURES GB LTÉE, a corporation having a place of business at 105 Montée Industrielle-et-Commerciale, Rimouski, Québec, G5M 1A8 -and- 2985080 CANADA INC., a corporation having a place of business at 138 Chemin des Boisés, Val- d'Or, Québec, J9P 4N7 -and- CONSTRUCTION NORASCON INC., a corporation having a place of business at 1705, Route de l'Aéroport, CP 370, Amos, Québec J9T 3A7 -and- J.Y. MOREAU ÉLECTRIQUE INC., a corporation having a place of business at 160 boul. Industriel, Rouyn-Noranda, Québec, J9X 5C1 -and- 2950-0519 QUÉBEC INC., a corporation having a place of business at 160 boul. Industriel, Rouyn- Noranda, Québec J9X 6T3 -and- WSP CANADA INC., a corporation having a place of business at 1600 René-Lévesque West, 16th Floor, Montréal, Québec, H3H 1P9 -and- CONSTRUCTION P.B.M. INC., a corporation having a place of business at 835 av. de Granada, Rouyn-Noranda, Québec, J9X 7B3 -and- LES INDUSTRIES BLAIS INC., a corporation having a place of business at 155 Industriel Blvd., Rouyn-Noranda, Québec, J9X 6P2 -and-

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BREMO INC. (doing business as REMATECH DIVISION BREMO), a corporation having a place of business at 214 Route 138, Saint-Augustin-de- Desmaures, Québec, G3A 2X9 -and- DYNAMITAGE CASTONGUAY LTÉE, a corporation having a place of business at 5939 Joyal Street, Sherbrooke, Québec, J1N 1H1 -and- 9222-0201 QUÉBEC INC. (formerly LOCATION DUMCO INC.), a corporation having a place of business at 890 LaSalle Street, Malartic, Québec, J0Y 1Z0 -and- 9208-1777 QUÉBEC INC., a corporation having a place of business at 590 3rd Avenue, Barraute, Québec, J0Y 1A0 -and- LES HUILES H.L.H. LTÉE, a corporation having a place of business at 218 McDougall Street, Maniwaki, Québec, J9E 1V6 -and- PETER SECKER, residing at 80, Front Street East, Suite 718, Toronto, Ontario, M5E 1T4 -and- RICHARD P. CLARK, residing at 1281 St. West Cordova, Suite 3001, Vancouver, British Columbia, V6C 3R5 -and- L. SIMON JACKSON, residing at 2025 – 53rd Avenue West, Vancouver, British Columbia, V6P 1L3 -and- KEVIN ROSS, residing at 1819 Avenue Creelman, Vancouver, British Columbia, V6J 1B7

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-and- KATHY LOVE, residing at 8824 Finch Court, Burnaby, British Columbia, V5A 4K5 -and- KERRY KNOLL, residing at 39, Astor Avenue, Toronto, Ontario, M4G 3M1 -and- IAN MCDONALD, residing at 401, Bay Street, Suite 2010, Toronto, Ontario, M5H 2Y4 -and- STÉPHANE BERTRAND, residing at 410 de Saint- Malo Street West, Montreal, Québec, H9C 2P6 -and- ALESSANDRO BITELLI, residing at 4002 Loraine Avenue, North Vancouver, British Columbia, V7R 4B8 -and- BRENDAN PIDCOCK, residing at 971 Hampshire Road, North Vancouver, British Columbia, V7R 1V1 -and- ROTHSCHILD INC., a corporation having a place of business at 1251 Avenue of the Americas, New York City, New York, 10020, United States of America -and- SGS CANADA INC., a corporation having a place of business at 66 Wellington Street West, Suite 4100, Toronto, Ontario, M5K 1B7 -and- SCHYAN EXPLORATION INC. / EXPLORATION SCHYAN INC., a corporation having a place of business at 203-370 Steeles Avenue West, Thornhill, Ontario, L4J6X1 -and-

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THE REGISTRAR FOR THE LAND REGISTRY OFFICE FOR THE REGISTRATION DIVISION OF ABITIBI, 262, 1st Avenue East, Amos, Québec, J9T 1H3 -and- THE REGISTRAR OF THE PUBLIC REGISTER OF REAL AND IMMOVABLE MINING RIGHTS, 5700, 4th Avenue West, C 320, Québec City, Québec, G1H 6R1 -and- THE REGISTRAR OF THE REGISTER OF PERSONAL AND MOVABLE REAL RIGHTS, 1 Notre-Dame Street East, Suite 7.07, Montréal, Québec, H2Y 1B6 Mis-en-cause ______

APPLICATION FOR APPROVAL OF AN ASSET PURCHASE AGREEMENT AND FOR THE ISSUANCE OF A VESTING AND ASSIGNMENT ORDER (Section 243 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3)

TO THE HONOURABLE JUSTICE MARTIN CASTONGUAY OR TO ONE OF THE HONOURABLE JUDGES OF THE SUPERIOR COURT, SITTING IN COMMERCIAL DIVISION IN AND FOR THE JUDICIAL DISTRICT OF MONTRÉAL, THE RECEIVER/PETITIONER RESPECTFULLY SUBMITS AS FOLLOWS:

I. INTRODUCTION

A. Relief sought

1. KSV Kofman Inc. is the court-appointed receiver of Québec Lithium Inc. (“QLI”), QLI Métaux Inc. (“QLIM”), RB Energy Inc. (“RBE”) and Sirocco Mining Inc. (“Sirocco” and, collectively with QLI, QLIM and RBE, the “Debtors”), as more fully described in section IV of this Application (the “Petitioner” or the “Receiver”).

2. The Petitioner respectfully seeks approval of this Honourable Court to sell all of the Purchased Assets (as this term is defined in paragraph 107 of this

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Application) of the Debtors and issuance of a vesting and assignment order in connection therewith. More specifically, the Petitioner hereby seeks the issuance of an order in the form and substance of the draft order filed in support hereof as Exhibit P-1.

3. This Application should be read in conjunction with the First Report to the Court of the Receiver dated June 13, 2016 (the “Receiver’s Report”).

B. Corporate structure of the Debtors

4. The Debtors are affiliated companies, as appears from an organizational chart illustrating the basic corporate structure of the Debtors and their subsidiaries, filed in support hereof as Exhibit P-2.

5. RBE is a public company formed under the Canada Business Corporations Act, and is a successor of Canada Lithium Corp. (“CLC”), as appears from the REQ report filed in support hereof as Exhibit P-3. RBE was established to pursue the acquisition, exploration, development and mining of mineral resource properties in Canada and internationally. As of the date hereof, the shares of RBE are not listed on any stock exchange.

6. RBE currently has 16 current and former direct and indirect subsidiaries, including co-Debtors QLI, QLIM and Sirocco:

(a) QLI is a company incorporated pursuant to the laws of the Province of Québec, as appears from the REQ report filed in support hereof as Exhibit P-4. QLI’s primary asset is a lithium mine and chemical processing facility located in La Corne, Québec (the “Lithium Project”).

(b) QLIM is a company incorporated pursuant to the laws of the Province of Québec, as appears from the REQ report filed in support hereof as Exhibit P-5. QLIM’s sole remaining role is to guarantee certain obligations subscribed by QLI (described in section V of this Application). QLIM has no business operations, assets or employees.

(c) Sirocco is a company incorporated pursuant to the laws of British Columbia, as appears from the British Columbia Company Summary report filed in support hereof as Exhibit P-6. Sirocco was established as a holding company to pursue the acquisition, exploration, development and mining of mineral resource properties internationally, in particular the production of iodine in the Aguas Blancas Project in Chile (the “Aguas Blancas Project”).

7. The Debtors maintain their separate property and assets, and were treated on a consolidated basis herein and in the CCAA Proceedings (as defined in section III of this Application) for administrative purposes only.

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II. THE DEBTORS’ BUSINESS AND AFFAIRS

A. The Lithium Project

8. The Lithium Project is located near La Corne, Québec, approximately 60 kilometres north of the city of Val d’Or, and consists of 12 contiguous claims covering approximately 405 hectares.

9. The Lithium Project is expected to produce battery-grade lithium carbonate to meet the rapidly growing needs of the portable consumer electronics industry, electric and hybrid-electric vehicles and storage solutions.

10. The Lithium Project had as many as nearly 250 employees. However, the process of bringing it into full production was delayed, and as a result, QLI has yet to generate any significant revenue from operations.

11. As of October 14, 2014 (being the date on which the Debtors commenced the proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”) described at paragraphs 21 and following of this Application), QLI had invested approximately $350 million in the Lithium Project over the course of three years of development.

12. The Lithium Project was a significant employer in the La Corne area and the lay-off of the employees had a substantial impact on the community, as appears from an article posted on Radio-Canada’s website filed in support hereof as Exhibit P-7.

B. The Aguas Blancas Project

13. Atacama Minerals Chile S.C.M. (“AMC”) is a company incorporated pursuant to the laws of Chile and is an indirect wholly-owned subsidiary of Boron Chemicals Holdings Ltd. (“Boron”), a corporation governed by the laws of Antigua and Barbuda, itself a direct wholly-owned subsidiary of Sirocco.

14. AMC’s primary business is the operation of the Aguas Blancas Project, located in the Atacama Desert, approximately 1,600 km north of Santiago, Chile. Production commenced in 2001.

15. In response to difficult market conditions, AMC reduced its production in late 2013, and decreased its work force through a series of layoffs.

16. AMC currently has 246 employees, of which 144 are unionized and engaged in the operation of the Aguas Blancas Project. AMC also relies on consultants to carry on some of its operational activities and to provide certain administrative services.

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17. As of October 14, 2014, on a net basis, RBE and its predecessor companies had invested approximately $130 million in the Aguas Blancas Project over the course of 20 years.

18. As described in paragraphs 66 and following hereof, Boron’s shares are pledged in favour of Tewoo (as this term is defined in paragraph 63 of this Application) to guarantee the payment of the Tewoo Loan (as this term is defined in paragraph 63 of this Application).

C. Dormant Subsidiaries of Sirocco

19. As appears from the organizational chart (Exhibit P-2), Sirocco has various other direct and indirect foreign subsidiaries (the “Dormant Subsidiaries”) in addition to Boron and AMC. These Dormant Subsidiaries were incorporated for intercompany financing purposes and for three exploration projects in foreign jurisdictions:

(a) A project in Mauritania (conducted by Sand Metals (Mauritanie) Sarl, “SMM” below);

(b) A gold exploration project in the Ivory Coast (conducted by Sirocco Gold CDI SARL, “SGCDI” below); and

20. SMM and Atacama Brazil have been wound up and hold no assets. The other Dormant Subsidiaries are holding or inactive companies, except for Chempro Finance Ltd. (“Chempro”), which provided intercompany financing to AMC, as more fully described in paragraph 72 of this Application.

III. CCAA PROCEEDINGS (FILE NUMBER 500-11-047560-145)

A. The Initial Order

21. On October 14, 2014, this Honourable Court issued a limited stay order followed by the issuance of an Amended and Restated Initial Order on October 15, 2014, followed by the issuance of a Second Amended and Restated Initial Order on October 29, 2014 (the “Initial Order”) pursuant to the CCAA in respect of the Debtors, as appears from the Initial Order filed in support hereof as Exhibit P-8 en liasse.

22. The Debtors sought protection under the CCAA notably due to an ongoing liquidity crisis and an inability to meet their obligations as they became due. The CCAA proceedings were meant to, inter alia:

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(a) provide the Debtors with the necessary stability to pay their obligations as they became due and owing post-filing;

(b) maintain key contracts;

(d) implement refinancing efforts through debtor in possession (DIP) financing; and

(e) seek bids for a sale of or investment in some or all of the business and assets of the Debtors.

23. Pursuant to the Initial Order, inter alia:

(a) KPMG Inc. was appointed as monitor of the Debtors (the “Monitor”);

(b) a stay of proceedings was ordered until November 13, 2014;

(c) the Debtors were authorized to enter into a DIP Loan Agreement (as defined in paragraph 24 of this Application) with Hale Capital Partners, L.P. (the “Interim Lender”);

(d) certain priority charges were created over the Debtors’ assets, ranking in priority to all other encumbrances over the Debtors’ assets (including legal hypothecs arising from the construction or renovation of the Debtors’ immovables) except for certain encumbrances expressly specified in paragraph 47 of the Initial Order. These priority charges, as between them with respect to any property to which they apply, ranked as follows:

(i) first, an administration charge for an aggregate amount of $1,000,000 (the “Administration Charge”);

(ii) second, an interim lender charge for an aggregate amount of $22,000,000 (the “Interim Lender Charge”);

(iii) third, a directors’ charge for an aggregate amount of $1,500,000 (the “Directors’ Charge”);

(iv) fourth, a Key Employee Retention Program (“KERP”) charge for an aggregate amount of $760,000 (the “KERP Charge” and, collectively with the Administration Charge, the Interim Lender Charge and the Directors’ Charge, the “CCAA Charges”);

(e) the Debtors were ordered to conduct a sale and investor solicitation process on terms to be approved by the Court.

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B. DIP Loan Agreement

24. Pursuant to the Initial Order, the Debtors and the Interim Lender entered into a DIP Loan Facility Agreement (the “DIP Loan Agreement”), which provided an interim non-revolving facility in the principal amount of US$13,000,000 (the “Interim Financing Facility”), as appears from the DIP Loan Agreement filed in support hereof as Exhibit P-9.

25. The Interim Financing Facility was meant to fund the ongoing expenditures of the Debtors during their restructuring process.

26. The Interim Financing Facility was made available to the Debtors as follows:

(a) a first tranche in an amount of US$6,000,000 on October 15, 2014;

(b) a second tranche in an amount of US$1,500,000 on December 18, 2014; and

27. Pursuant to the DIP Loan Agreement, all amounts owing to the Interim Lender were to be repaid on April 15, 2015.

28. As of May 2016, the amount owed to the Interim Lender is approximately US$16,000,000.

C. SISP and Sales Advisor

29. On November 13, 2014, this Honourable Court rendered an order (a copy of which is filed in support hereof as Exhibit P-10) (the “SISP Order”) which, inter alia:

(a) extended the stay period until April 30, 2015;

(b) approved a Sale and Investor Solicitation Process, filed in support hereof as Exhibit P-11 (the “SISP”), which provided, inter alia, for the manner in which some or all of the assets of the Debtors would be made available for sale; and

(c) authorized the engagement of Rothschild Inc. as the Debtors’ financial advisor and investment banker (the “Sales Advisor”).

30. The SISP contemplated a two-phase process:

(a) first, non-binding letters of intent would be delivered to the Debtors.

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(b) second, bidders who met certain criteria would be invited to submit binding offers. These would be reviewed with a view to select a successful bid to be pursued and submitted to the Court for approval.

31. In turn, the Sales Advisor would provide, inter alia, consultation and assistance pursuant to the terms of the SISP, which included assistance to the Debtors in:

(a) the implementation of the SISP;

(b) the preparation of a confidential information memorandum, financial model and other marketing materials for the SISP;

(d) identifying and approaching potential bidders; and

(e) structuring, evaluating and negotiating a potential transaction.

32. The Sales Advisor reached out to 245 inshore and offshore potential investors for the Lithium Project, including mining companies, speciality chemical and metal companies, mining focused investment vehicles, private equity firms with mining interests and potential debt capital partners.

33. The Aguas Blancas Project was also marketed as part of the SISP, in view of a potential stand-alone transaction or a potential combined transaction with the Lithium Project.

34. However, the SISP did not generate any viable offers, given, inter alia, that:

(a) lithium is a niche market that necessitates important capitalization;

(b) most private equity firms were only interested in purchasing some of the debt, as opposed to operating the Lithium Project or the Aguas Blancas Project;

(d) the Aguas Blancas Project had sustained significant losses;

(e) the Lithium Project had never fully operated and requires a very large investment to bring it to production; and

(f) environmental considerations at the Lithium Project mine site required material due diligence.

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35. The SISP Order provided that the payment of all of the Sales Advisors’ Fees (as defined in the SISP Order) in respect of a Transaction or upon the closing of a Transaction (as the term “Transaction” is defined in the SISP Order) would, subject to certain exceptions indicated in the SISP Order, rank in priority to the payment of any secured creditor of the Debtors but second in priority to the Administration Charge and the Interim Lender Charge (the “Sales Advisor Priority”).

D. Failure of the SISP

36. In accordance with the SISP, final Binding Offers (as defined in the SISP) were required to be submitted by no later than March 27, 2015. However, as at that date, no Qualified Offers (as defined in the SISP) were received.

37. As a result, discussions were reengaged with certain interested parties by the Debtors, through the Sales Advisor, with a view to receiving one or more Qualified Offer(s) (as defined in the SISP) by April 14, 2015. However, these additional efforts did not generate any Qualified Offers.

38. On April 15, 2015, the Debtors delivered a notice to the Sales Advisor terminating the Sales Advisor’s engagement effective April 30, 2015, as appears from the Fifth Report of the Monitor, KPMG Inc. dated April 16, 2015, a copy of which is filed in support hereof as Exhibit P-12.

39. Consequently, on April 17, 2015, this Honourable Court rendered an order (a copy of which is filed in support hereof as Exhibit P-13) which, inter alia:

(a) approved the termination of the SISP; and

(b) extended the stay period until May 29, 2015.

40. Meanwhile, seeing that the Interim Financing Facility had matured on April 15, 2015 and that the Debtors had not repaid the amounts due (US$14,093,907 as at April 28, 2015), the Interim Lender sought to enforce the Interim Lender Charge, terminate the CCAA proceedings and appoint a receiver.

IV. RECEIVERSHIP UNDER THE BIA (FILE NUMBER 500-11-049079-151)

41. On May 8, 2015, this Honourable Court rendered two orders, filed in support hereof as Exhibit P-14 and Exhibit P-15 respectively (collectively, the “Receivership Orders”), to, inter alia:

(a) terminate the CCAA proceedings;

(b) appoint Duff & Phelps Canada Restructuring Inc. (“D&P”) to act as receiver of the Property (as this term is defined in paragraph 45 of this Application) of the Debtors until (i) the sale of all the Property or (ii) the

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issuance of any order by the Court terminating the mandate of the receiver; and

(c) create a charge in favour of the Receiver, the Receiver’s attorneys and other advisors, for an aggregate amount of $500,000 (the “Receiver’s Administration Charge”).

42. On June 30, 2015, D&P was acquired by KSV Kofman Inc. (“KSV”) and, pursuant to an Order of the Ontario Superior Court of Justice issued on July 10, 2015 in file number CV-15-11025-00CL, filed in support hereof as Exhibit P-16, D&P’s ongoing mandates were transferred to KSV, including acting as receiver in these proceedings.

43. As per the Receivership Orders, the Property (as this term is defined in paragraph 45 of this Application) is still charged with:

(a) the CCAA Charges, provided that:

(i) the Administration Charge attaches only to the monetary retainers in possession of Counsel for the Debtors, the Debtors’ advisors, the Monitor or counsel for the Monitor;

(ii) subject to certain conditions including payment in full of the Interim Financing Facility, the amount payable under the KERP is $232,500;

(b) the Sales Advisor Priority, however no amount is due to the Sales Advisor; and

44. Pursuant to the Receivership Orders, the Receiver was invested with all powers necessary to interest or solicit one or several potential buyers of all or any part of the Property (as this term is defined in paragraph 45 of this Application).

45. The “Property” includes all Debtors’ present and future assets, rights, undertakings and properties of every nature and kind whatsoever, and wherever situated, including all proceeds thereof but excluding (i) the Retained Amount (as defined in the Receivership Orders); (ii) the QLI Vacation Pay Reserve (as defined in the Receivership Orders), (iii) the monetary retainers paid by the Debtors to the Monitor, the Monitor’s counsel, the Debtors’ counsel and the Debtors’ directors’ counsel and (vi) the LC Cash Collateral (as defined in the Receivership Orders).

46. As such, in accordance with the Receivership Orders, the Receiver is to petition this Honourable Court for authorization to sell all or any part of the Property

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outside of the ordinary course of business, upon finding a purchaser and pursuant to the conditions it deems reasonable in the circumstances.

V. OTHER INDEBTEDNESS

A. Overview

47. As described in greater detail below, the Debtors have, in addition to the Interim Financing Facility which has a balance of approximately US$16,000,000 as of May 2016, an aggregate balance of approximately $75,000,000 in outstanding principal under a bank debt facility (the “Senior Debt Facility”) assigned to Investissement Québec (“IQ”) and secured against certain of the Debtors’ assets (together, the “Financing Facilities”).

48. In addition to the Financing Facilities, and as further described below:

(a) RBE issued unsecured convertible debentures (the “Debentures”), with an outstanding balance at September 30, 2014 of $27,500,000 and $15,900,000 which are to mature in 2018;

(b) QLI has advances and outstanding loans of US$10,000,000 and $3,000,000 pursuant to the Tewoo Loan and IQ Loan respectively (as defined and described in sections D and F hereof respectively); and

49. As more fully described below, AMC has also incurred secured and unsecured indebtedness in connection with its operation of the Aguas Blancas Project.

B. Senior Debt Facility with IQ

50. On April 4, 2012, CLC (amalgamated into RBE) and QLI, as borrowers, and Bank of Nova Scotia ("BNS"), as administrative agent and lead arranger, entered into a credit agreement for a loan of a maximum amount of $75,000,000, (as amended, the "Credit Agreement") for the purpose of establishing the Senior Debt Facility to finance the construction of the Lithium Project, as appears from a copy of the Credit Agreement, filed with amendments thereto in support hereof as Exhibit P- 17 en liasse. The lenders under the Senior Debt Facility were BNS, Caterpillar Financial Services Limited ("CFSL") and the Commonwealth Bank of Australia (collectively with BNS and CFSL, the "Senior Lenders").

51. Pursuant to the Credit Agreement, the Senior Debt Facility was secured against certain of the Debtors’ assets under various security agreements:

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(a) a General Security and Pledge Agreement dated April 4, 2012 entered into by the borrowers in favor of the administrative agent (the "GSA"), as appears from a copy of the GSA communicated herewith as Exhibit P-18;

(b) a hypothec (the “CLC Hypothec”) dated August 16, 2012, entered into by CLC in favor of BNS, on the universality of CLC's immovable properties and real rights and different movables and movable rights, for an amount of $180,000,000 with interest at the rate of 25% per annum registered at the Register of Personal and Movable Real Rights ("RPMRR") on August 22, 2012 under number 12-0685520-0002, filed in support hereof as Exhibit P-19;

(c) a 25% collateral mortgage demand bond the “CLC Bond”) dated August 16, 2012, for an amount of $150,000,000 issued by CLC to BNS in accordance with the CLC Hypothec, filed in support hereof as Exhibit P-20;

(d) a movable hypothec on a particular claim (the “CLC Pledge”) dated August 16, 2012 issued by CLC to Secured Creditors (as this term is defined in the CLC Pledge), providing that the terms by which the CLC Bond are held by BNS in the name and for the benefit of the Secured Creditors, filed in support hereof as Exhibit P-21;

(e) a hypothec (the “QLI Hypothec”) dated August 16, 2012, entered into by QLI in favor of BNS, on the universality of QLI’s immovable properties and real rights and different movables and movable rights for an amount of $180,000,000 with interest at the rate of 25% per annum registered at the RPMRR under number 12-0685519-0002, at the Public Register of Real and Immovable Mining Rights (“PRRIMR”) under number 54,749 on September 6, 2012 and at the Register of Real Rights of State Resource Development (“RRRSRD”) under number 19,407,539 on September 12, 2012, filed in support hereof as Exhibit P-22;

(f) a 25% collateral mortgage demand bond (the “QLI Bond”) dated August 16, 2012, for an amount of $150,000,000 issued by QLI to BNS in accordance with the QLI Hypothec, filed in support hereof as Exhibit P- 23;

(g) a movable hypothec on a particular claim (the “QLI Pledge”) dated August 16, 2012 issued by QLI to Secured Creditors (as this term is defined in the QLI Pledge), providing that the terms by which the QLI Bond are held by BNS in the name and for the benefit of the Secured Creditors, filed in support hereof as Exhibit P-24;

(h) a hypothec (the “QLIM Hypothec”) dated January 24, 2014, entered into by QLIM in favor of BNS, on the universality of QLIM’s immovable properties and real rights and different movables and movable rights for

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an amount of $180,000,000 with interest at the rate of 25% per annum registered at the RPMRR on January 27, 2014 under number 14- 0057378-0001, filed in support hereof as Exhibit P-25;

(i) a 25% collateral mortgage demand bond (the “QLIM Bond”) dated January 24, 2014 for an amount of $150,000,000 issued by QLIM to BNS in accordance with the QLIM Hypothec, filed in support hereof as Exhibit P-26;

(j) a movable hypothec on a particular claim (the “QLIM Pledge”) dated January 24, 2014 issued by QLIM to Secured Creditors (as this term is defined in the QLIM Pledge), providing that the terms by which the QLIM Bond are held by BNS in the name and for the benefit of the Secured Creditors, filed in support hereof as Exhibit P-27; and

(k) Guarantee and Subordination Agreement dated January 24, 2014 by which QLIM agreed to guarantee QLl's obligations under the Credit Agreement, filed in support hereof as Exhibit P-28.

52. In addition, the Senior Debt Facility was secured by numerous similar security registrations on the PRRIMR.

53. The Senior Debt Facility was also supported by a financial guarantee (the "Guarantee") from IQ, as appears from a copy of the Guarantee filed in support hereof as Exhibit P-29. Pursuant to the terms of the Guarantee, IQ guaranteed 80% (up to $60 million) of the amounts advanced under the Senior Debt Facility.

54. On May 21, 2015, BNS, acting on behalf of the Senior Lenders, required from IQ that the totality of the Guarantee be paid without delay to BNS for the benefit of the Senior Lenders.

55. Following the payment by IQ of the Guarantee, IQ was subrogated in the rights of the Senior Lenders for 80% of the amount advanced under the Senior Debt Facility and its associated sureties.

56. On June 22, 2015, BNS, acting on behalf of the Senior Lenders, the Senior Lenders and IQ entered into an Entente de cession de dettes et de sûretés, a copy of which is filed in support hereof as Exhibit P-30, so that IQ became sole holder and beneficiary of the Senior Debt Facility.

57. As of May 5, 2016, RBE and QLI owed a total outstanding balance of $79,758,417.91 to IQ under the Credit Agreement.

58. Counsel for the Receiver reviewed the security granted to BNS (whose successor is IQ) in connection with the Credit Agreement and has delivered an opinion to the Receiver confirming that, subject to customary assumptions and

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qualifications therein contained, the security is valid and enforceable against QLI’s assets as described in the security documents.

59. The security held by IQ pursuant to the Senior Debt Facility does not cover the shares of Sirocco held by RBE. However, these shares are part of the security held by the Interim Lender under the Interim Lender Charge.

C. Debentures

60. The Debentures were initially comprised of 27,556 and 15,850 convertible unsecured subordinated debentures with a par value of $1,000 and US$1,000, respectively, and with a coupon of 11.0% per annum, payable semi-annually. The Debentures were issued on May 15, 2013 (the "May Debentures") and on July 3, 2013 (the "July Debentures").

61. The May Debentures and the July Debentures mature on June 30, 2018 and July 31, 2018, respectively.

62. As at September 30, 2014, 27,496 of the May Debentures and all of the July Debentures were unconverted.

D. Tewoo Loan

63. On or around September 3, 2013, QLI received a US$5 million advance from QLl's existing off-take partner, Tianjin Products and Energy Resources Development Co., Ltd. (known as "Tewoo") pursuant to the terms of the existing off-take agreement (as amended) and shipping contract between QLI and Tewoo dated November 5, 2012 (the "Tewoo Loan"), a copy of which is filed in support hereof as Exhibit P-31.

64. The first advance of US$5 million was made by Tewoo (the "First Tewoo Advance") against future delivery of finished products from the Lithium Project. The First Tewoo Advance originally carried a simple interest rate of 12% calculated on a monthly basis and was originally due on October 10, 2014, as appears from the Addendum No. 3 to the Tewoo Loan dated June 30, 2014, filed in support hereof as Exhibit P-32.

65. On or around August 20, 2014, RBE and QLI received an additional US$5 million bridge loan financing from Tewoo (the "Second Tewoo Advance"), bringing the aggregate principal amount of the indebtedness owing to Tewoo to US$10 million, as appears from the Addendum also bearing No. 3 dated August 19, 2014 to the Tewoo Loan, filed in support hereof as Exhibit P-33.

66. Upon advancement of this additional US$5 million in funds, the entirety of the US$10 million debt was secured by way of a pledge of all the shares of Boron held by Sirocco (the “Tewoo Pledge”) and a guarantee by Sirocco, as more fully

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appears from the guarantee agreement dated August 19, 2014 (the "Guarantee Agreement"), filed in support hereof as Exhibit P-34.

67. Effective on the date of the Second Tewoo Advance, both the First Tewoo Advance and Second Tewoo Advance (collectively, the "Tewoo Advances") carried a simple interest rate of 8% calculated on a monthly basis, as appears from the Guarantee Agreement.

68. The Tewoo Advances were due November 30, 2014, as appears from the Guarantee Agreement, and remain unpaid to this day.

E. Aguas Blancas Indebtedness and Related Intercompany Loans

69. As a result of the decline in the global iodine markets, AMC’s financial performance has deteriorated in recent years. AMC’s March 2016 internal financial statements reflect negative retained earnings of approximately US$21,500,000.

70. In February 2016, AMC completed a refinancing effort and entered into a credit agreement (the “AMC Credit Agreement”) with a banking syndicate for a principal amount of US$ 25,000,000, comprised of a US$3,000,000 working capital facility and a US$22,000,000 term loan. This agreement allowed for the consolidation of existing loans and the advance of new financing.

71. As at May 2016, AMC was also indebted to various unsecured creditors in the approximate aggregate amount of US$6,000,000.

72. Finally, AMC is indebted for an amount of approximately US$15,000,000 in short- term and US$60,000,000 in long-term intercompany loans to Chempro, plus related accrued interest, and US$1,300,000 in operating advances owing to Sirocco (the “Intercompany Loans”). The Intercompany Loans were established to provide for a tax efficient mechanism by which Sirocco could advance funds to AMC.

73. The Intercompany Loans are subordinated to the advances made to AMC pursuant to the AMC Credit Agreement.

74. The Intercompany Loans remain unpaid to this day.

F. IQ Loan

75. Pursuant to an offer letter dated September 15, 2014, IQ made available to RBE and QLI a short term bridge loan facility in the principal amount of $5 million (the "IQ Loan"), to be advanced in up to five tranches, with the last tranche in the principal amount of $2 million (the "Last Advance") being conditional upon receiving commitments for a $60 million financing (the "Debenture Financing")

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on terms satisfactory to the Senior Lenders, as appears from the offer letter filed in support hereof as Exhibit P-35.

76. The IQ Loan bears interest at a rate of 11.5% per annum and was to be repaid in full out of the proceeds received by RBE on completion of the Debenture Financing with proceeds to RBE of at least $20 million, and in any event, by no later than November 30, 2014.

77. The IQ Loan is secured by a hypothec executed by each of RBE and QLI in favor of IQ on September 16, 2014 on the universality of their respective property for an amount of $5 million with interest at the rate of 25% per annum ("IQ Hypothec") registered on September 16, 2014 (i) at the RRRSRD under registration number 21 054-104; (ii) at the RPMRR under number 14-0861570- 0001; and (iii) the PRRIMR under number 55712, filed in support hereof as Exhibit P-36.

78. On or around September 17, 2014, $3 million of the IQ Loan was advanced to RBE and QLI. As of May 5, 2016, the amount due in connection therewith is $3,987,125.66.

G. Legal Hypothecs and Prior Notices

79. As of mid-May 2016, there are 35 registrations, consisting of legal hypothecs and related prior notices of exercise of hypothecary rights, against the Lithium Project, which are listed in Exhibit P-37 (the “Legal Hypothecs”) for an aggregate claimed amount of $5,829,370.

80. The validity of the claims relating to the Legal Hypothecs, including as to their registration or the existence or quantum of the underlying indebtedness, has not been reviewed by the Debtors or the Petitioner.

H. SGS Proceedings

81. As appears from the record herein, on or about July 31, 2015, SGS Canada Inc. (“SGS”) instituted a Motion for determination of Petitioner’s rights and to instruct the receiver to remit certain assets or sale’s (sic) proceeds to the Petitioner (the “SGS Motion”), a copy of which is filed in support hereof for convenience as Exhibit P-38.

82. SGS is requesting that this Honourable Court order the remittance of certain assets by the Receiver, described in the SGS Motion, that are allegedly SGS’ property (the “Disputed Assets”). As of the date hereof, the SGS Motion has not been heard by this Court.

83. To the extent this Honourable Court determines that any of the Disputed Assets are the property of SGS, which is expressly denied by the Receiver, such assets

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will not be Purchased Assets (as defined in paragraph 107 of this Application) under the Purchase Agreement (as defined in paragraph 105 of this Application).

I. Trade Creditors

84. As at September 30, 2014:

(a) QLI owed an aggregate amount to trade creditors of approximately $21.5 million;

(b) RBE owed an aggregate amount to trade creditors of approximately $800,000; and

85. These amounts remain unpaid as of the date hereof. However, all post-filing obligations of QLI and RBE have been paid.

VI. SALE EFFORTS DURING THE RECEIVERSHIP

86. At the time of the appointment of the Petitioner as Receiver, the situation was as follows:

(a) the Debtors had gone through the CCAA Proceedings, pursuant to which the SISP was put in place and implemented;

(b) the SISP had failed and over 200 employees of QLI had been terminated;

(d) on or about May 21, 2015, IQ replaced the Senior Lenders and became the first ranking secured creditor of the Debtors (subject to any prior ranking charges); and

(e) the Receivership Order was issued at the request of the Interim Lender.

87. In the following months, the following occurred:

(a) the price of lithium increased;

(b) this increase gradually sparked renewed interest in the Lithium Project, particularly since December 2015;

(c) the Interim Lender obtained a detailed report from BBA Inc. (“BBA”), a firm of professional mining consultants, concluding that further capital investments in the approximate range of $150,000,000 to $200,000,000 would be necessary in order to allow the Lithium Project to reopen and

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resume operations at a level that would allow for the extraction of market grade lithium;

(d) it became apparent that any future transaction relating to the Lithium Project would have to take into account the interest of the creditors holding or purporting to hold secured claims on the Lithium Project, namely, inter alia:

(i) the Interim Lender;

(ii) IQ; and

(iii) the holders of the Legal Hypothecs.

88. As a result of the increase in the price of lithium and an increased interest in the Lithium Project, it recently became apparent that:

(a) the value of the assets subject to the Interim Lender Charge would be sufficient to reimburse the advances of the Interim Lender; and

(b) any transaction would likely imply that the Legal Hypothecs would remain on title, inasmuch as their validity and quantum had not yet been determined and the rights of their holders, if any, would have to be preserved (based on the assumption that the value of the Lithium Project was sufficient to cover these eventually determined claims).

89. However, it was also clear from the SISP and discussions with interested parties that an eventual purchaser would have to negotiate the settlement of the secured amounts owed to IQ (the “IQ Debt”) on terms acceptable to it.

90. IQ was of the view that:

(a) although it was important that IQ obtain the best possible business deal in relation to the payment of the IQ Debt in any eventual transaction, it was equally as important that such a transaction result in the reopening and long-term operation of the Lithium Project, to the benefit of all stakeholders, including the employees, suppliers, the region and the Province of Québec generally;

(b) to this end, and in view of the capital investment necessary to allow the operation of the Lithium Project, IQ wished that an eventual transaction would be concluded with a party with:

(i) the financial means to purchase the Lithium Project, and to make the required substantial capital investment in it;

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(ii) the technical expertise and experience required to bring into production and operate the Lithium Project on a long-term basis; and

(iii) experience in operating mining projects.

91. As indicated above, the increase in the price of lithium caused a renewed interest in the Lithium Project.

92. As a result, both the Interim Lender and IQ were approached by and met with numerous parties that showed an interest in the Lithium Project, including parties that had been directed to them by the Receiver.

93. These meetings and exchanges with interested parties, as well as the experience acquired through the SISP (although the Interim Lender was not part of the SISP team) and further technical and financial analysis on the Lithium Project, brought the Interim Lender and IQ to consider the following:

(a) lithium being a niche market, few serious parties would be interested in the Lithium Project, as reflected by the failure of the SISP;

(b) in the SISP, many parties had shown initial interest but no viable offers were received;

(d) some interested parties did not appear to have the means to purchase the Lithium Project, and then to make the required capital investment;

(e) some parties could not satisfy IQ that they have the required technical experience or track record in relation to a project of this nature and scale;

(f) some parties indicated the main features of what they would be ready to offer in the context of an eventual transaction relating to the Lithium Project, which were unacceptable;

(g) some parties asked for information and never gave any indication of an intention to follow through with an eventual transaction; and

(h) all offers were conditional on diligence or financing and given the magnitude of the project, would take a considerable amount of time.

94. On August 24, 2015, IQ representatives met for the first time with representatives of Jilin Jien Nickel Industry Co., Ltd., the ultimate controlling entity of the Purchaser (as defined in paragraph 105), (jointly “Jilin Jien”), a large-scale nonferrous metals enterprise integrated with mining, dressing, smelting and

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chemicals that is mainly engaged in the production and sales of nickel sulfate, nickel matte, electrolytic nickel, nickel hydroxide, nickel chloride, copper sulfate, copper concentrate, sulfuric acid and related materials.

95. Jilin Jien is the second largest nickel producer in China, with over 60 years of operation and is traded on the Shanghai stock exchange with total assets of approximately $4.9 billion.

96. Jilin Jien already has operating experience in Canada, through its wholly-owned indirect subsidiary Canadian Royalties Inc. which has mining operations in Nunavik (the “Nunavik Nickel Mine”).

97. Jilin Jien has invested a total of around $1.5 billion in the acquisition, the construction and the maintaining of the Nunavik Nickel Mine. This included the construction of the most powerful icebreaker on earth, which allows the long-term transportation of the resource from northern Québec to the rest of the world.

98. The Nunavik Nickel Mine, which employed 8 individuals in 2010, now has around 400 employees and 100 contractors working in northern Québec, Val d’Or and Montréal.

99. From September 9, 2015 to December 3, 2015, IQ representatives met on three occasions with Jilin Jien to discuss the structure of a proposed acquisition, the Receivership context and how any acquisition would have to take into account the stakeholders involved in the Debtors’ insolvency.

100. The Interim Lender, with the assistance of the Receiver, met with Jilin Jien on September 24, 2015 and organized a visit of the premises on October 12, 2015.

101. As a result of these meetings and discussions, the Interim Lender and IQ felt that Jilin Jien:

(a) was showing serious interest in the acquisition of the Lithium Project, with a view to operating the Lithium Project on a long-term basis as soon as possible;

(b) had the financial means to purchase the Lithium Project and to make the necessary substantial capital investment to complete and bring the Lithium Project into operation;

(d) had shown that it had the capacity and experience to operate a mining project of considerable scale located in Canada.

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102. In December 2015, Jilin Jien presented a term sheet to the Petitioner in relation to the purchase of the assets relating to the Lithium Project.

103. In December 2015, Jilin Jien also presented a term sheet to IQ relating to the assumption of part of the IQ Debt.

104. These term sheets were negotiated between the parties and eventually led to:

(a) an asset purchase agreement (as described in paragraph 105); and

(b) an agreement entered into between the Purchaser and IQ in relation to the assumption by the Purchaser of part of the IQ Debt.

VII. PURCHASE AGREEMENT

105. The asset purchase agreement dated May 10, 2016 (the “Purchase Agreement”), a copy of which is filed under seal in support hereof as Exhibit P- 39, has been executed by the Petitioner (the “Vendor”), in its capacity as Receiver of the assets, rights, undertakings, and properties of QLI, RBE and Sirocco, and 9554661 Canada Inc., as purchaser (the “Purchaser”). As explained more fully below, closing of the Purchase Agreement is subject, inter alia, to the approval of this Honourable Court.

106. The transaction described in the Purchase Agreement was conditional upon an agreement between the Purchaser and IQ in relation to the assumption of part of the IQ Debt. The transaction between the Purchaser and IQ was formally approved through a Decree of the Government of Quebec.

107. The salient features of the Purchase Agreement are as follows (in this paragraph, all capitalized terms not otherwise defined herein are as defined in the Purchase Agreement).

(a) The Purchaser will purchase all of the QLI’s assets relating to the Lithium Project owned by QLI and located in La Corne, Québec, other than specified excluded assets, including corporate records, contracts that are not specifically assumed, government authorizations that are used for the Lithium Project and that are not transferrable, all cash and cash equivalents (which will be used by the Receiver to complete the payments and distributions described herein), bank deposits, and short term investments of QLI (the “Non-Purchased Assets”).

(b) The Purchased Assets are described in section 2.1 of the Purchase Agreement and consist of the following:

(i) all immovable property, and all other parcels of real or immovable property used in the Lithium Project;

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(ii) all mining claims, mineral concessions and mining leases of QLI, as well as all other real or immovable property leases granted pursuant to An Act respecting the lands in the domain of the State (Québec) to which QLI is a party;

(iii) all machinery, spare parts, equipment, tools, computers, technology and communication hardware and infrastructure, furniture, furnishings and office equipment owned, used or leased by QLI;

(iv) all automobiles, trucks, trailers and other rolling stock of QLI and used in the Lithium Project;

(v) all inventories of QLI of every kind and nature including all raw materials, work-in-progress, finished goods and operating supplies;

(vi) all accounts receivable, trade accounts and other debts owing or accruing to QLI or Vendor in connection with the Lithium Project and any insurance proceeds;

(vii) certain assumed contracts, in each case, as amended, extended, assigned or otherwise modified;

(viii) all authorizations owned by or issued to QLI or Vendor in connection with the Lithium Project that are transferable, and all pending applications therefor, but only to the extent that such may be conveyed by Vendor (with or without any authorization);

(ix) income tax refunds and other tax refunds or receivables related to the Lithium Project (including QLI's tax credit claims for the years 2012, 2013 and 2014) and taxes paid in advance (including immovable taxes paid in advance related to the Lithium Project);

(x) the books and records;

(xi) all insurance policies in the name of QLI and all rights of QLI under such insurance policies, in each case, to the extent assignable, and all amounts relating to prepaid insurance; and

(xii) any goodwill associated with QLI, but only to the extent that such may be conveyed by Vendor (collectively, the “Purchased Assets”).

(i) the payment of all amounts owed to the Interim Lender, defined in the Purchase Agreement as the ‘Hale Payment’ (the “Interim Lender Payment”);

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(ii) the payment of the aggregate amounts of all outstanding costs and expenses owed to the Vendor in connection with its appointment as Receiver, defined in the Purchase Agreement as the ‘Vendor Payment’; and

(iii) the assumption of the Assumed Liabilities, as defined in the Purchase Agreement.

(d) The Purchase Agreement also contemplates payment by the Purchaser to the Vendor of a deposit in the amount of $2,000,000 (the “Deposit”), which has been paid to and is currently held in trust by the Receiver.

(e) The Assumed Liabilities consist of the following:

(i) a portion of the Senior Debt Facility in accordance with the terms agreed between Purchaser and IQ;

(ii) all liabilities and obligations relating to the Remediation Plan;

(iii) all liabilities and obligations relating to the Purchased Assets arising or accruing after the Closing Date;

(iv) all liabilities and obligations arising or accruing after the Closing Date under the Assumed Contracts which are effectively assigned to Purchaser;

(v) all liabilities and obligations arising or accruing after the Closing Date under the Transferred Authorizations which are effectively transferred to Purchaser;

(vi) all Cure Costs; and

(vii) all liabilities and obligations in respect of Transferred Employees.

(f) The conditions of Closing include the following:

(i) the issuance of a vesting order to be sought by the Receiver which shall:

(A) authorize the Transaction (including the QLI Option and the Sirocco Option);

(B) authorize the Vendor to execute and deliver the Transaction Documents and any ancillary or related documents; and

(C) vest in and to the Purchaser the Purchased Assets, free and clear of and from any and all Liens (other than Permitted Liens).

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(ii) having obtained approvals under the Investment Canada Act and the Competition Act (being respectively defined as the ICA Approval and the Competition Act Approval in the Purchase Agreement).

(g) Under the Purchase Agreement, certain securities and associated registrations (defined as the Permitted Liens under the Purchase Agreement) shall not be affected by the Transaction, including, inter alia, the Legal Hypothecs and the Receiver’s Administration Charge, the whole as appears more fully from the draft order sought herein. As a result, the Receiver is not requesting that the Legal Hypothecs which are presently registered against the Purchased Assets be affected as a result of the vesting order, such that the Legal Hypothecs will continue to charge the Purchased Assets after closing of the Transaction.

(h) The Purchase Agreement grants the Purchaser an option to subscribe for shares in the capital of QLI representing all of the issued and outstanding shares for an exercise price to be determined by the Purchaser and the Receiver, acting reasonably (the “QLI Option”).

(i) The Purchaser may request that the Vendor implement a corporate reorganization relating to certain tax attributes of RBE or QLI prior to purchasing the shares of QLI. The Purchaser is required to indemnify the Vendor in connection with any liabilities resulting from such corporate reorganization.

(j) The Purchase Agreement provides the Purchaser with an option to purchase all of the issued and outstanding shares in the capital of Sirocco for an exercise price of $10,000 (subject to downward adjustment upon occurrence or discovery of a material adverse change in the operations of the Aguas Blancas Project) (jointly with the QLI Option, the “Subscription Options”).This option has no impact on the Tewoo Pledge.

VIII. ASSIGNMENT OF THE SCHYAN AGREEMENT

108. The Purchase Agreement also provides for the assignment of a Mining Claim Transfer and Easement Agreement dated as of February 1, 2010 (as amended, the "Schyan Agreement") between CLC and Schyan Exploration Inc./Exploration Schyan Inc. ("Schyan"), registered at the Mining Register on July 22, 2010 under number 53 517.

109. Under the Schyan Agreement, Schyan transferred to CLC the mining claims bearing numbers 2154987 to 2154993 (the "Schyan Claims"). In consideration of the transfer, CLC agreed to transfer to Schyan all of its rights in and to any non-lithium minerals comprised within the Schyan Claims, and also granted access rights to Schyan in order to develop and mine the non-lithium materials comprised within the Schyan Claims. Schyan granted to CLC a right of first

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refusal in the event Schyan wishes to assign, sell or dispose of, or has received an offer which it is willing to accept for the assignment, sale or disposition of all or part of its interest in the non-lithium minerals comprised within the Schyan Claims.

110. The Schyan Agreement was amended pursuant to an Amendment to Mining Claim Transfer and Easement Agreement registered at the Mining Register on September 24, 2010 under number 53 597, thereby transferring the Schyan Claims from CLC to QLI.

111. There are no monetary defaults of RBE or QLI under the Schyan Agreement.

112. The Receiver is seeking an order assigning the rights and obligations of QLI under the Schyan Agreement to the Purchaser.

IX. TAX CREDITS

113. On April 14, 2016, an amount of approximately $16,500,000 was paid to the Receiver by Québec tax authorities as a reimbursement of various investment tax credits for fiscal years 2012 and 2013 (the “Tax Credits”).

114. The Tax Credits have been or will be used for the payment of the following:

(a) payment of care and maintenance and other costs incurred since April 14, 2016, including professional fees;

(b) partial payment of the Interim Financing Facility;

(d) payment of the balance owing under the KERP, in the aggregate amount of $232,500 (subject to full payment of the Interim Financing Facility).

X. CCAA CHARGES AND SALES ADVISOR PRIORITY

115. The Receiver is seeking, among the other relief sought in the conclusion hereof, the termination of the CCAA Charges and of the Sales Advisor Priority upon issuance by Petitioner of a certificate (the “Certificate”) confirming the closing of the Transaction (as defined in the Purchase Agreement), as:

(a) there are no amounts owed to the Sales Advisor;

(b) any CCAA Professionals’ Retainers, as referred to in paragraph 20 of the Receivership Order terminating the CCAA proceedings, have been applied by the relevant professionals to their final accounts and the balance was paid to the Receiver, such that the Administration Charge has become moot;

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(d) as of May 8, 2015, all the remaining directors and officers of the Debtors had resigned and their resignation had been duly registered with the relevant corporate authorities on or about July 2015;

(e) the salaries of the 14 remaining employees of QLI have been paid in the normal course since the appointment of the Receiver;

(f) the Receiver is not aware of any claim made or alleged against the directors and officers who were in place after the issuance of the Initial Order; and

(g) the remaining beneficiaries of the KERP will be paid in accordance with the terms of the KERP.

XI. CONFIDENTIALITY

116. The Purchase Agreement contains commercially sensitive information.

117. In the event the transactions contemplated in the Purchase Agreement are not completed, the release of this information in the general public would cause prejudice to the Debtors and the Receiver.

118. Accordingly, the Receiver is requesting this Honourable Court order that the Purchase Agreement be filed under seal until the filing of the Certificate, which will effectively confirm closing of the Transaction.

119. Certain appendices of the Receiver’s Report also contain sensitive information concerning the SISP and ensuing sales efforts. The Receiver is therefore requesting that this Honourable Court order that these appendices be sealed, as more fully appears from the conclusions sought herein.

XII. BEST INTEREST OF THE RECEIVERSHIP, THE CREDITORS AND STAKEHOLDERS GENERALLY

120. It is in the best interest of the receivership, and of the Debtors’ creditors taken as a whole, that this Honourable Court approve the transaction and grant the conclusions sought herein.

121. The efforts to sell the Purchased Assets have been extensive:

(a) The Sales Advisor, a globally recognized and leading investment bank, ran a SISP over approximately five months ended March 2015. The Sales Advisor contacted 245 parties, of which 24 signed a Non-Disclosure Agreement and 7 sent a Letter of Intent. At the end of the process, no firm

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or viable offers were received for the Lithium Project or the Aguas Blancas Project. The Sales Advisor further contacted 22 parties in a second round of canvassing, without any result.

(b) Starting in mid-2015, IQ, the Interim Lender and/or the Receiver had discussions with 26 parties regarding a potential sale of the Purchased Assets. Of these, 7 reviewed technical documentation for the Lithium Project and 5 visited the site in La Corne, Québec. The only party to make a comprehensive offer was Jilin Jien.

122. Throughout the process, several parties raised the possibility of piecemeal transactions, such as a purchase of the Interim Lender’s position or a purchase to liquidate the equipment. Even when they were short of dismantlement, these scenarios did not involve the Lithium Project becoming operational in the short- to medium-term. No offer was received in which a potential purchaser proposed to pay all of the Debtors’ creditors, including unsecured creditors, on an unconditional basis and/or on a basis acceptable to IQ.

123. In addition, several parties stated an interest but had no financial capacity to purchase the Purchased Assets and much less to make the necessary very large investment, currently estimated by BBA to be approximately in the range of $150 million to $200 million, to take the Lithium Project to its production stage. Some parties had the unrealistic expectation that all financing would come from public entities, such as IQ.

124. While some parties may now express some newfound interest for the Purchased Assets and in particular the Lithium Project due to a recent increase in the price of lithium, engaging with a new offeror would involve several additional months of due diligence and negotiation, with substantial cost, with absolutely no guarantee of result and jeopardizing the contemplated Purchase Agreement with Jilin Jien, which itself has taken months to diligence, structure and negotiate.

125. The monthly care and maintenance costs for the Lithium Project are approximately $450,000, before professional fees and capital expenditures necessary to deal with environmental matters at the mine. This results in material value erosion as time passes. There is no source of funding available for these costs, including the substantial capital expenditures which need to be made in the coming months in connection with environmental matters.

126. The Receiver has been advised by QLI employees familiar with environmental matters and consultants that estimated capital expenditures of approximately $300,000 per month are required to address QLI’s ongoing environmental issues at the Lithium Project. These costs need to be funded until an evaporator/crystallizer (“Crystallizer”) can be installed, which is to be a permanent fix for the environmental issues.

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127. The Crystallizer is estimated to cost $30,000,000 and will require up to nine months to deliver and install. Until a Crystallizer is operational, there is a risk that the ongoing preventative measures being undertaken by QLI will not adequately address the water level and treatment issues. This risk increases during the winter and, given the lead time to install the Crystallizer, there is urgency to complete a transaction with a party capable of funding the Crystallizer project.

128. Other capital expenditures may be required if the Crystallizer cannot be installed prior to the next winter, including potentially raising a berm/dam by approximately 1.5 metres, which is estimated to cost $2,500,000.

129. Based on the SISP and other sale efforts to date, the Receiver, IQ and the Interim Lender anticipate that any new interested parties will require significant time to perform due diligence given the complexity of the Lithium Project, including the costs to bring it into production and the assessments required to determine its viability. The Receiver, IQ and Interim Lender are concerned that this additional time would put the Transaction at risk without any certainty that another transaction will be completed.

130. The Purchase Agreement contemplated with Jilin Jien would allow for a restart of the Lithium Project’s operations and make the mine operational in the near future, to the benefit of stakeholders. This is a crucial consideration for the Debtors’ largest lender, IQ, an entity supported by Québec taxpayer dollars which works in the public interest to develop Québec’s economy. IQ, in addition to the Interim Lender, fully supports the contemplated Transaction with Jilin Jien.

131. Restarting the Lithium Project should eventually cause the hiring of several employees, in quality and well-remunerated jobs. This would be very significant for La Corne, Québec, a village of approximately 700 inhabitants, and the Abitibi region, whose economy has been hard hit by a general downturn in commodity prices (as appears from Exhibit P-7).

132. As regards the Aguas Blancas Project, the SISP did not identify any credible offers for the Aguas Blancas Project as the value of the letters of intent submitted were negligible and, in one case, negative.

133. Since that time, iodine markets and AMC’s financial results have deteriorated further. For there to be any value in the Sirocco shares held by RBE, a transaction for the Aguas Blancas would need to generate in excess of US$40 million, being the sum of AMC’s third party obligations (approximately US$31 million) and Sirocco’s guarantee of the US$10 million Tewoo Loan to QLI.

134. Following the appointment of the Receiver, no party has approached the Receiver, the Interim Lender or IQ with any serious interest for the Aguas Blancas Project and no offers therefor have been received. Given the continued depressed state of iodine markets, the Receiver does not foresee any scenario

NOTICE OF PRESENTATION

TO : SERVICE LIST

AND TO: PETER SECKER 80, Front Street East, Suite 718 Toronto, Ontario, M5E 1T4 AND TO: RICHARD P. CLARK 1281 St. West Cordova, Suite 3001 Vancouver, British Columbia, V6C 3R5 AND TO: L. SIMON JACKSON 2025 – 53rd Avenue West Vancouver, British Columbia, V6P 1L3 AND TO: KEVIN ROSS 1819 Avenue Creelman Vancouver, British Columbia, V6J 1B7 AND TO: KATHY LOVE 8824 Finch Court Burnaby, British Columbia, V5A 4K5 AND TO: KERRY KNOLL 39, Astor Avenue Toronto, Ontario, M4G 3M1 AND TO: IAN MCDONALD 401, Bay Street, Suite 2010 Toronto, Ontario, M5H 2Y4 AND TO: STÉPHANE BERTRAND 410 de Saint-Malo Street West Montreal, Québec, H9C 2P6 AND TO: ALESSANDRO BITELLI 4002 Loraine Avenue North Vancouver, British Columbia, V7R 4B8 AND TO: BRENDAN PIDCOCK 971 Hampshire Road North Vancouver, British Columbia, V7R 1V1 AND TO: 9554661 CANADA INC. 130 Adelaide Street, Suite 3420 Toronto, Ontario, M5H 3P5

CANADA SUPERIOR COURT PROVINCE OF QUÉBEC (Commercial Division) DISTRICT OF MONTRÉAL ______

No.: 500-11-049079-151 IN THE MATTER OF THE RECEIVERSHIP OF:

QUÉBEC LITHIUM INC., QLI MÉTAUX INC., RB ENERGY INC. AND SIROCCO MINING INC. Debtors -and- KSV KOFMAN INC. Receiver/Petitioner -and- HALE CAPITAL PARTNERS, L.P. -and- INVESTISSEMENT QUÉBEC -and- 9554661 CANADA INC. -and- 2242974 CANADA INC. (formerly CONSTRUCTION PROMEC INC.) -and- 9190-5778 QUEBEC INC. -and- 3391612 CANADA INC. -and- LES STRUCTURES GB LTÉE -and- 2985080 CANADA INC. -and- CONSTRUCTION NORASCON INC.

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-and- J.Y. MOREAU ÉLECTRIQUE INC. -and- 2950-0519 QUÉBEC INC. -and- WSP CANADA INC. -and- CONSTRUCTION P.B.M. INC. -and- LES INDUSTRIES BLAIS INC. -and- BREMO INC. (doing business as REMATECH DIVISION BREMO) -and- DYNAMITAGE CASTONGUAY LTÉE -and- 9222-0201 QUÉBEC INC., (formerly LOCATION DUMCO INC.) -and- 9208-1777 QUÉBEC INC. -and- LES HUILES H.L.H. LTÉE -and- PETER SECKER -and- RICHARD P. CLARK -and- L. SIMON JACKSON -and- KEVIN ROSS

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-and- KATHY LOVE -and- KERRY KNOLL -and- IAN MCDONALD -and- STÉPHANE BERTRAND -and- ALESSANDRO BITELLI -and- BRENDAN PIDCOCK -and- ROTHSCHILD INC. -and- SGS CANADA INC. -and- SCHYAN EXPLORATION INC. / EXPLORATION SCHYAN INC. Mis-en-cause -and- THE REGISRAR FOR THE LAND REGISTRY OFFICE FOR THE REGISTRATION DIVISION OF ABITIBI -and- THE REGISTRAR OF THE PUBLIC REGISTER OF REAL AND IMMOVABLE MINING RIGHTS -and-

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THE REGISTRAR OF THE REGISTER OF PERSONAL AND MOVABLE REAL RIGHTS Mis-en-cause ______

LIST OF EXHIBITS

Exhibit P-1: Draft order; Exhibit P-2: Chart illustrating the basic corporate structure of the Debtors; Exhibit P-3: REQ report for RB Energy Inc.; Exhibit P-4: REQ report for Québec Lithium Inc.; Exhibit P-5: REQ report for QLI Métaux Inc.; Exhibit P-6: British Columbia Company Summary report for Sirocco Mining Inc.; Exhibit P-7: Article posted on Radio-Canada’s website regarding the Lithium Project; Exhibit P-8: CCAA Initial Order dated October 14, 2014 rendered by the Honourable Justice Martin Castonguay, J.S.C., followed by the issuance of an Amended and Restated Initial Order on October 15, 2014, followed by the issuance of a Second Amended and Restated Initial Order on October 29, 2014, en liasse; Exhibit P-9: DIP Loan Agreement; Exhibit P-10: Order dated November 13, 2014 rendered by the Honourable Justice Martin Castonguay, J.S.C.; Exhibit P-11: Sale and Investor Solicitation Process; Exhibit P-12: Fifth Report of the Monitor, KPMG Inc. dated April 16, 2015; Exhibit P-13: Order dated April 17, 2015 rendered by the Honourable Justice Martin Castonguay, J.S.C.; Exhibit P-14: Order dated May 8, 2015 rendered by the Honourable Justice Martin Castonguay, J.S.C.; Exhibit P-15: Order dated May 8, 2015 rendered by the Honourable Justice Martin Castonguay, J.S.C.;

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Exhibit P-16: Order of the Ontario Superior Court of Justice dated July 10, 2015 in file number CV-15-11025-00CL; Exhibit P-17 Credit Agreement dated as of April 4, 2012, with amendments thereto, en liasse; Exhibit P-18: General Security and Pledge Agreement dated April 4, 2012; Exhibit P-19: Hypothec dated August 16, 2012, registered at the Register of Personal and Movable Real Rights on August 22, 2012 under number 12-0685520-0002; Exhibit P-20: 25% collateral mortgage demand bond dated August 16, 2012, for an amount of $150,000,000 issued by CLC to BNS in accordance with the CLC Hypothec; Exhibit P-21: Movable hypothec on a particular claim dated August 16, 2012 issued by CLC to Secured Creditors; Exhibit P-22: Hypothec dated August 16, 2012, registered at the RPMRR under number 12-0685519-0002, at the Public Register of Real and Immovable Mining Rights under number 54,749 on September 6, 2012 and at the Register of Real Rights of State Resource Development under number 19,407,539 on September 12, 2012; Exhibit P-23: 25% collateral mortgage demand bond dated August 16, 2012, for an amount of $150,000,000 issued by QLI to BNS in accordance with the QLI Hypothec; Exhibit P-24: Movable hypothec on a particular claim dated August 16, 2012 issued by QLI to Secured Creditors; Exhibit P-25: Hypothec dated January 24, 2014, registered at the RPMRR on January 27, 2014 under number 14-0057378-0001; Exhibit P-26: 25% collateral mortgage demand bond dated January 24, 2014 for an amount of $150,000,000 issued by QLIM to BNS in accordance with the QLIM Hypothec; Exhibit P-27: Movable hypothec on a particular claim dated January 24, 2014 issued by QLIM to Secured Creditors; Exhibit P-28: Guarantee and Subordination Agreement dated January 24, 2014; Exhibit P-29: Financial guarantee from IQ; Exhibit P-30: Entente de cession de dettes et de sûretés dated June 22, 2015; Exhibit P-31: Off-take agreement (as amended) and shipping contract between QLI and Tewoo dated November 5, 2012; Exhibit P-32: Addendum No. 3 to the Tewoo Loan dated June 30, 2014; Exhibit P-33: Addendum No. 3 to the Tewoo Loan dated August 19, 2014;

No: 500-11-049079-151 SUPERIOR COURT ( Commercial Division ) DISTRICT OF MONTRÉAL

IN THE MATTER OF THE RECEIVERSHIP OF : QUÉBEC LITHIUM INC., QLI MÉTAUX INC., RB ENERGY INC. AND SIROCCO MINING INC. Debtors -and- KSV KOFMAN INC. Receiver/Petitioner -and- HALE CAPITAL PARTNERS, L.P., et al. Mis-en-cause APPLICATION FOR APPROVAL OF AN ASSET PURCHASE AGREEMENT AND FOR THE ISSUANCE OF A VESTING AND ASSIGNMENT ORDER (Section 243 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3)

ORIGINAL

Me Martin Desrosiers Osler, Hoskin & Harcourt LLP 1000 De La Gauchetière Street West, Suite 2100 Montréal, Québec H3B 4W5 Notification by e-mail: [email protected] [email protected] Tel: 514.904.8100 Fax: 514.904.8101

Code : BO 0323 o/f: 1164952