Critical Elements Lithium Announces New Positive Feasibility Study for the Rose Lithium Project Generating an After-Tax NPV8% of US$2.2B and an After-Tax IRR of 65.7%

MONTRÉAL, QC / ACCESSWIRE / August 29, 2023 / Critical Elements Lithium Corporation (TSX-V:CRE)(OTCQX:CRECF)(FSE:F12) ("Critical Elements" or the "Corporation") is pleased to announce the results of a new Feasibility Study on the Rose Lithium-Tantalum project ("Rose" or the "Project") in Eeyou Istchee James Bay, Québec.

The management of Critical Elements, with its new highly qualified technical team led by Yves Perron as Vice President of Engineering, Construction and Operations, brings a deep level of knowledge and expertise to the engineering process (particularly in mining operations, process, environment, design, estimation and project control). This new study replaces the Feasibility Study announced by the Corporation on June 13, 2022. Noteworthy changes include: (i) the increased indexation of industrial construction prices, (ii) the addition of certain process equipment to increase operational reliability and (iii) the addition of the scope change of the Project by incorporating the construction of our own 500-worker camp 4 km from the mine site. The new camp has been added to reduce the execution risk and timeline as this is vital to having the workers' accommodation ready in time as we increase the speed of the construction phase. The new 500-room camp includes both temporary and permanent sections (approximately 250 rooms for each section).

Jean-Sébastien Lavallée, Chief Executive Officer of the Corporation, said: "We are very pleased to announce the results of the new Definitive Feasibility Study at Rose to provide the updated economics of the Project. The study reaffirms the substantial value of Rose - amongst the backdrop of higher input costs and the decision to build our own 500-worker camp - to establish Critical Elements as a reliable, high-quality supplier of lithium. Thank you to our engineers, management team and local stakeholders for their diligent efforts and our shareholders for their continuous support."

Highlights

• Expected 17-year mine life
• Average production Year 2-17: 157,706 tonnes of chemical grade 5.56% spodumene concentrate
• Average production Year 2-17: 46,059 tonnes of technical grade 6.16% spodumene concentrate
• Average production Year 2-17: 580 tonnes of tantalum concentrate
• Average operating costs: US$81,30 per tonne milled, US$587 per tonne of concentrate (all concentrate production combined)
• Estimated initial capital cost: US$471 million (before working capital)
• Average gross margin: 78.8%
• After-tax NPV_8% of US$2,195 million, after-tax IRR of 65.7%
• Anticipated construction time: 21 months to start of production
• Average price assumptions of US$4,699 per tonne technical grade lithium concentrate, US$2,162 per tonne chemical grade lithium concentrate and US$150 per kg tantalum pentoxide (Ta₂O₅)

The Rose Lithium-Tantalum Project is 100%-owned by Critical Elements. The Corporation's market strategy is to enter the lithium market with a low-risk approach. The completion of the Feasibility Study on the spodumene plant is the first step to entering the market and establish the Corporation as a reliable high-quality lithium supplier. The low-risk approach is characterized by simple open-pit mining and conventional lithium processing technologies.

Critical Elements has consistently sought to advance the wholly-owned Rose Lithium-Tantalum Project in a low-risk manner. To this end, the Corporation has completed a new Feasibility Study with a conservative spodumene concentrate price deck, as well as capital and operating cost estimates reflective of current market conditions. The new Feasibility Study incorporates a standard truck and shovel open-pit mining operation and conventional lithium processing technologies. The Project will produce technical grade spodumene concentrate for the glass and ceramics industry and chemical grade spodumene concentrate for conversion for use in batteries for e-mobility, as well as a tantalite concentrate.

The mine will excavate a total of 26.3M tonnes ore grading an average of 0.87% Li₂O and 138 ppm Ta₂O₅ after dilution. The mill will process 1.61M tonnes of ore per year to produce an annual average of 203,765 tonnes of technical and chemical grade spodumene concentrates and 580 tonnes of tantalite concentrates. The ore is contained in several parallel and continuous shallow dipping pegmatite dykes outcropping on surface. The ore zones are open at depth and a future underground operation is possible.

Over the life of mine, the open pit will excavate a total of 182.4M tonnes of waste rock and 10.9 M tonnes of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.

Table 1 Rose Key FS Results

Property

The Rose property is located in northern Québec's administrative region, on the territory of Eeyou Istchee James Bay. It is located on Category III land, on the Traditional Lands of the Eastmain Community, approximately 40 km north of the Cree village of Nemaska. The latter is located approximately 300 km north-west of Chibougamau.

The Rose property is accessible by road via the Route du Nord, usable all year round from Chibougamau. The mine site can also be reached by Matagami, via Route 109 and Route du Nord. Figure 1 displays the regional location of the project. The project is located 80 km south of Goldcorp's Éléonore gold mine and 45 km north-west of Nemaska's Whabouchi lithium project and 20 km south of Hydro Québec's Eastmain-1 hydroelectricity generating plant. The Nemiscau airport services the region's air travel needs. The Rose property site is located 50 km by road from the Nemiscau airport.

The Rose property comprises 473 claims spread over a 24,654-ha area. Geologically, the Rose property is located at the north-east end of the Archean Lake Superior Province of the Canadian Shield.

Figure 1 Rose Property Location

Reserve Estimate

A Mineral Reserve Estimate for 17 mineralized zones was prepared during this study. The estimation assumed the production of a chemical grade spodumene concentrate with a price of US$20 per kg Li₂O and a tantalite concentrate with a price of US$130 per Kg of Ta₂O₅. The recoveries were fixed at 85% and 64% for lithium and tantalum, respectively. The grade-recovery curve used for resource estimate, which became available after the mineral reserves were evaluated, was verified and found to have little influence on the reserve estimate. The production of a higher value technical grade spodumene concentrate was not assumed in the reserve estimate.

Based on compilation status, metal price parameters, and metallurgical recovery inputs, the effective date of the estimate is August 1^st, 2023.

The estimate was prepared in accordance with CIM's standards and guidelines for reporting mineral resources and reserves.

Table 2 displays the results of the Mineral Reserve Estimate for the Rose Project at the CA$44.80 NSR per tonne cut-off for the open-pit scenario.

Table 2 Mineral Reserve Estimate

• The Independent and Qualified Person for the Mineral Reserve Estimate, as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Project ("NI 43-101"), is Simon Boudreau, P.Eng, of InnovExplo Inc. The effective date of the estimate is August 1^st, 2023.
• The model includes 17 mineralized zones.
• Calculations used metric units (metres, tonnes and ppm).
• The number of metric tons was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Rounding followed the recommendations in NI43‑101.
• InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the Mineral Reserve Estimate.

Resource Estimate

The current Mineral Resource Estimate ("MRE") is primarily based on changes made to the net smelter return ("NSR") parameters, supported by new assumptions concerning metal prices and the creation of potentially mineable shape to constrain the MRE for the potential underground extraction scenario. No changes to the interpretation and interpolation parameters were deemed necessary. The mineral resource model for the current MRE is based largely upon the model generated for the 2011 PEA.

The effective date of the estimate is August 1^st, 2023, based on compilation status, metal price parameters, metallurgical recovery inputs and creation of the constraining volume.

Given the density of the processed data, the search ellipse criteria, the drill hole density and the specific interpolation parameters, the Qualified Persons is of the opinion that the current MRE can be classified as Indicated and Inferred resources. The estimate was prepared in accordance with CIM's standards and guidelines for reporting mineral resources and reserves.

Table 3 displays the results of the MRE for the Rose Project using CA$31.40 NSR/t cut-off for the open-pit potential extraction scenario and CA$121.12 NSR cut-off for the underground potential extraction scenario.

Table 3 Mineral Resource Estimate