ANNUAL INFORMATION FORM FOR THE FISCAL YEAR ENDED …€¦ · nemaska lithium inc. annual information form for the fiscal year ended june 30, 2018 issue date: october 10, 2018

NEMASKA LITHIUM INC.

ANNUAL INFORMATION FORM

FOR THE FISCAL YEAR ENDED JUNE 30, 2018

Issue Date: October 10, 2018

TABLE OF CONTENTS

1. PRELIMINARY COMMENTS AND FORWARD-LOOKING STATEMENTS ......................................... 2

2. CORPORATE STRUCTURE ......................................................................................................................... 2 2.1 NAME, ADDRESS AND INCORPORATION ................................................................................... 2 2.2 INTERCORPORATE RELATIONSHIPS ........................................................................................... 2

3. GENERAL DEVELOPMENT OF THE BUSINESS ..................................................................................... 3 3.1 THREE-YEAR HISTORY ................................................................................................................... 3 3.2 FISCAL YEAR ENDED JUNE 30, 2016 ............................................................................................. 8 3.3 FISCAL YEAR ENDED JUNE 30, 2017 ............................................................................................. 9 3.4 HIGHLIGHTS FOR THE TWELVE-MONTH PERIOD ENDED JUNE 30, 2018

AND UP TO THE DATE OF THIS ANNUAL INFORMATION FORM ........................................ 11 3.5 OTHER HIGHLIGHTS FOR THE TWELVE-MONTH PERIOD ENDED JUNE 30, 2018

AND UP TO THE DATE OF THIS ANNUAL INFORMATION FORM ........................................ 13

4. DESCRIPTION OF THE BUSINESS .......................................................................................................... 16 4.1 GENERAL .......................................................................................................................................... 16 4.2 DESCRIPTION OF THE MINERAL PROPERTIES ........................................................................ 16 4.3 RISK FACTORS ................................................................................................................................ 59

5. DIVIDENDS AND DIVIDENDS POLICY ................................................................................................. 74

6. GENERAL DESCRIPTION OF THE CAPITAL STRUCTURE ................................................................ 74 6.1 COMMON SHARES .......................................................................................................................... 74 6.2 WARRANTS ...................................................................................................................................... 75 6.3 COMPENSATION OPTIONS ........................................................................................................... 75 6.4 STOCK OPTIONS ISSUED UNDER THE STOCK OPTION PLAN .............................................. 75

7. MARKET FOR SECURITIES ...................................................................................................................... 78 7.1 MARKET ............................................................................................................................................ 78 7.2 TRADING PRICE AND VOLUME ................................................................................................... 79

8. DIRECTORS AND OFFICERS ................................................................................................................... 79 8.1 NAME, OCCUPATION AND SECURITIES HOLDING ................................................................. 79 8.2 CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS ............................ 85

9. LEGAL PROCEEDINGS AND REGULATORY ACTIONS ..................................................................... 87

10. TRANSFER AGENT AND REGISTRAR ................................................................................................... 87

11. INTERESTS OF EXPERTS ......................................................................................................................... 87

12. MATERIAL CONTRACTS ......................................................................................................................... 88

13. ADDITIONAL INFORMATION ................................................................................................................. 88

2 Annual Information Form

1. PRELIMINARY COMMENTS AND FORWARD-LOOKING STATEMENTS

The information in this Annual Information Form is dated as at June 30, 2018, unless indicated otherwise.

All dollar amounts in this Annual Information Form refer to Canadian dollars, unless otherwise indicated.

This Annual Information Form may contain or incorporate by reference forward-looking statements about

the objectives and strategies of Nemaska Lithium Inc. (the “Corporation”) as well as management's

expectations regarding its future growth, financial position and results of operations and the

Corporation’s activities. These statements are forward-looking because they are based on assumptions

about future economic conditions and courses of action that will be undertaken by the Corporation. These

statements are subject to a number of risks and uncertainties (please refer to section “Risk Factors”)

which may cause actual results to differ materially from those contemplated by the forward-looking

statements. The Corporation believes that the expectations reflected in these forward-looking statements

are reasonable. However, there is no guarantee that the Corporation’s expectations in this regard will

prove to be accurate and the reader must not unduly depend on them. The forward-looking statements are

made on the date of this Annual Information Form and, except if the applicable legislation requires it, the

Corporation has no intention of updating them nor does it assume the responsibility to do so.

2. CORPORATE STRUCTURE

2.1 Name, Address and Incorporation

The Corporation was incorporated under the Canada Business Corporations Act (the “CBCA”) by articles

of incorporation on May 16, 2007 under the name “James B Resources Inc.” and its French version

“Ressources James B inc.” On November 5, 2008, the Corporation filed articles of amendment in order to

change its name for “Nemaska Exploration Inc.” and its French version “Exploration Nemaska Inc.” On

November 22, 2011, the Corporation filed articles of amendment in order to change its name for

“Nemaska Lithium Inc.” and in order to allow the directors of the Corporation to appoint one or more

additional directors in accordance with the provisions of subsection 106(8) of the CBCA.

The Corporation’s head and registered offices are located at 450 de la Gare-du-Palais Street, 1st

Floor,

Québec, Province of Québec, Canada, G1K 3X2.

2.2 Intercorporate Relationships

The following corporate chart is a list of the subsidiaries of the Corporation as of the date of this Annual

Information Form, indicating their jurisdiction of incorporation. All of the shares of such subsidiaries are

held directly by the Corporation.

The Corporation

100% Nemaska Lithium

P1P Inc. (Canada)


Whabouchi Mine Inc. (Canada)


Shawinigan Transformation Inc. (Canada)


All assets of the Corporation and of its subsidiaries are located in the province of Québec and, in

summary, each corporate entity featured in the above chart has the following main assets:

Nemaska Lithium Inc.: intellectual property, computer software & hardware; all shares of the

three subsidiaries and the investments in Monarques Gold Corporation Inc. (MRQ – TSX-V) and

Vision Lithium Inc. (previously ABE Resources Inc.) (TSXV: VIL) (OTC: ABEPF) (“Vision”);

Nemaska Lithium P1P Inc.: equipment and lease required to operate an electrochemical

demonstration plant located in Shawinigan, Québec (the “Phase 1 Plant”) and designed to

produce high purity lithium hydroxide from spodumene concentrate and lithium sulfate; and the

administrative office in Shawinigan, Québec; and

Nemaska Lithium Whabouchi Mine Inc. (“NMX Whabouchi”): mining lease, mining claims,

surface usage leases and exploration and evaluation assets, including site preparation,

Concentrator building, administrative administrative office building and the small dense media

separation (DMS) modular mill;

Nemaska Lithium Shawinigan Transformation Inc. (“NMX Shawinigan”): land and commercial

buildings located in Shawinigan, Québec and relating to the future commercial electrochemical

plant (“Commercial Electrochemical Plant”).

3. GENERAL DEVELOPMENT OF THE BUSINESS

3.1 Three-Year History

Introduction and General Outlook

The Corporation had started its business as a Québec-based resource company performing exploration and

development work on its 100%-owned spodumene deposit known as Whabouchi property and located in

the Eeyou Istchee James Bay Region in the Province of Québec (the “Whabouchi Property” and,

together with the Commercial Electrochemical Plant, the “Whabouchi Project”). Following a feasibility

study initially completed in 2014 and revised in 2016, and a public offering that yielded gross proceeds of

$69 million in July 2016 (the “2016 Public Offering”), the Corporation started construction and

engineering work for its Whabouchi Project.

In parallel, with proceeds of $38 million raised from different sources, the Corporation built and

commissioned its Phase 1 Plant during the second half of 2016 and first quarter of 2017. This Phase 1

Plant, together with a DMS modular mill installed on the Whabouchi Property, allowed the Corporation,

among other things, to qualify its products with a customer. The Corporation had finalized, in May 2016,

the acquisition of the land and existing buildings in Shawinigan, Québec, to locate its Phase 1 Plant and its

Commercial Electrochemical Plant.

The Corporation is henceforth a developing chemical company whose activities will be vertically

integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide and lithium

carbonate. These lithium salts are mainly destined for the fast-growing lithium-ion battery market, which

is driven by the increasing demand for electric vehicles and energy storage worldwide. The Corporation

will operate the mine, one of the richest lithium spodumene deposits in the world, both in volume and

grade, and the concentrator located on the Whabouchi Property (the “Concentrator”). The spodumene

concentrate produced thereat will be processed at the Commercial Electrochemical Plant using a unique

membrane electrolysis process for which the Corporation holds several patents.


With an additional public offering in June 2017 for proceeds of $50 M (the “2017 Public Offering”), the

Corporation was able to pursue construction further at the Whabouchi Property and detailed engineering at

both sites. During almost a year following that 2017 Public Offering, the Corporation’s focus was on

raising project financing for the total required investment for the Whabouchi Project, and then estimated at

$549 million.

In the course of such financing endeavors, and more particularly in light of the thorough technical due

diligence performed by potential creditors/investors, the Corporation determined to have a new feasibility

study for the Whabouchi Project. This determination was also ensuing from the Corporation’s re-

assessment of the current and foreseeable market demands, its discussions with potential clients and its

testing and optimization work of its processes. The study’s results, publicly released in January 2018,

provided for an increased mine life and production profile which in turn increased the required capital

investment to an aggregate $801 million.

During that time, given the fact that the priority has always been set on the Whabouchi Property, no work

was performed the Sirmac lithium project (the “Sirmac Property”), which the Corporation sold in the

beginning of 2018 to Vision, in consideration of a combination of cash, common shares of the buyer and a

royalty.

The Corporation’s vision is to facilitate access to green energy through its products and processes, for the

benefit of humanity; its mission is to become a vertically integrated lithium hydroxide and lithium

carbonate producer and supplier to the emerging lithium battery market that is largely driven by electric

vehicles, cell phones, tablets and other consumer products as well as energy storage. Given the actual and

expected status of the lithium hydroxide and lithium carbonate supply, the Corporation believes it is well

timed to enter that chain of supply.

Intellectual Property and Patents

The Corporation has obtained Canadian Patent No. 2,871,092, Australian Patent No. 2013252439 and US

Patent Nos. 9,677,181 and 10,066,305 that relate to its proprietary process for preparing high purity

lithium hydroxide as well as Canadian Patents Nos. 2,905,197; 2,928,227; 2,940,027 and 2,964,148;

Australian Patent Nos. 2014339706, 2014231593; Chilean Patent No. 55.597; European Patent No. 3 060

699; Japanese Patent No. 6368347; and US Patent No. 10,036,094 that specifically protects improvements

of the electrolysis membrane process for preparing lithium hydroxide. The Corporation has also obtained

Canadian Patent Nos. 2,874,917 and 2,928,224; US Patent Nos. 9,382,126 and 9,890,053; European

Patent no. 2 855 735; Japanese Patent No. 6335316 and Australian Patent No. 2013270412 that relate to

its proprietary process for preparing high purity lithium carbonate. The Corporation now has a patent

portfolio comprised of 10 different patent families that relate to its proprietary processes for preparing

lithium hydroxide and lithium carbonate as well as to improvements thereof. In addition to the above-

mentioned patents, the Corporation has 51 pending patent applications in 11 different jurisdictions (AU,

CA, CL, CN, HK, EP, IN, JP, KR, US, PCT).

Objectives

The Corporation’s main commercial business objectives, subject to receiving, on a timely manner, the

remainder of the proceeds raised under its $1.1 billion project financing package (the “Project Financing

Package”), are to commence spodumene concentrate production at its Whabouchi Property during the

second half of the 2019 calendar year and to start producing lithium salts at its Commercial

Electrochemical Plant during the second half of the 2020 calendar year. In particular, the main objectives


that the Corporation expects to accomplish from the date of this Annual Information Form and up to the

next 12 to 18 months are, in no particular order, to:

operate the Phase 1 Plant on a continuous basis to convert lithium sulfate solution into lithium

hydroxide and also to convert spodumene concentrate from the Whabouchi Property and produce

lithium hydroxide and lithium carbonate samples, which samples will be provided to the

Corporation’s customers for qualification and evaluation, and which samples shall meet such

customers’ specifications;

sign all such documents and perform all such actions as are necessary and required in order to

fulfill all conditions precedent to receive (i) the second tranche payment of US$75 million

pursuant to the US$150 million Stream Agreement (the “Stream Agreement”) with Orion Mine

Finance II LP (“Orion”), and (ii) the proceeds from the US$350 million offering of senior secured

callable bonds (the “Bond Offering”);

perform all such actions as are necessary or useful to ensure the Corporation remains in full

compliance with the Stream Agreement and the agreed terms under the Bond Offering and dated

May 29, 2018 (the “Bond Terms”);

report publicly, along with the dissemination of its quarterly financial results, on the evolution of

the Whabouchi Project compared to its construction schedule and budget;

build the Whabouchi mine and the Concentrator, such that spodumene concentrate production

start during the second half of the 2019 calendar year;

build the Commercial Electrochemical Plant to start producing, during the second half of the 2020

calendar year, high purity lithium hydroxide and lithium carbonate from spodumene concentrate

originating from the Whabouchi Property; and to continue converting lithium sulfate solution

supplied by a customer;

enter into a satisfactory amended & restated supply agreement with FMC Corporation (“FMC”) to

postpone the start of supply period and reschedule certain deadlines;

enter into a satisfactory amendment to its supply agreement with Johnson Matthey Battery

Materials Ltd. (“JM”) to extend various deadlines;

perform all such actions as are necessary or useful to see that its obligations under its supply

agreements with its other clients will be met in accordance with the terms thereof; and

hire and retain management, operations, technical, administrative and support personnel in respect

of the foregoing.

Progress at the Phase 1 Plant

The Corporation has continued operating its Phase 1 Plant, designed to produce high purity lithium

hydroxide from spodumene concentrate and lithium sulfate. Since February 2017, the Phase 1 Plant is

producing battery grade lithium hydroxide solution from lithium sulfate provided by JM and, since

September 2017, the Phase 1 Plant is also able to process spodumene concentrate coming from the bulk

sample done at the Whabouchi Property during the first 8 months of the calendar year 2017.

During the twelve-month period that ended June 30, 2018 and up to the date of this Annual Information

Form, the following work was done:


Engineering, installation, commissioning and operation of the calcination and acid baking section;

continued delivery of lithium hydroxide in solution to JM for a cumulative total to date of about

47 tonnes produced from lithium sulfate solution;

delivery of lithium hydroxide in solution to JM for a total of about 13 tonnes produced from the

conversion of spodumene concentrate that was produced at the Whabouchi Property;

production of the first kilos of lithium hydroxide monohydrate; and

purchase order sent to the supplier for the small-scale drying equipment in order to produce

lithium hydroxide monohydrate.

Progress at the Commercial Electrochemical Plant



Engineering work for the procurement of major equipment completed (i.e. Electrolysis, Flash

calciner, LHM, LSM, SARC, Acid bake Kiln);

engineering for the procurement of other equipment is progressing as per schedule;

engineering for the early demolition contracts completed

optimization and testing of key elements of the flow sheet;

hiring of key operation and support personnel;

demolition of the non-required existing buildings by the former owner has been completed in June

2018; and

site preparation for the installation of the flash calciner is progressing as planned.

The Corporation expects that the construction, installation and pre-operation verification at the

Commercial Electrochemical Plant will take about 24 months from the date of this Annual Information

Form.

Progress at the Whabouchi Property



Completing production of about 1,050 tonnes of spodumene concentrate averaging 6.25% Li2O

were produced at the mine site with the DMS modular mill that started in April 2017. About 15

tonnes of flotation concentrate averaging 6.2% Li2O were produced at SGS in Lakefield, Ontario.

A balance of about 125 tonnes of fines at an average grade of 4.6% Li2O; 3,600 tonnes of fines at

an average grade of 1.3% Li2O as well as about 100 tonnes of middlings at an average grade of

3.8% Li2O produced with the DMS modular mill are stockpiled at the mine site. About 13,000

tonnes of crushed ore it also ready to be processed when the Concentrator is commissioned;

construction of the approximately 17 km hydroelectric transport line from the Nemiscau sub-

station all the way to the sub-station that was also built at the mine site in order to hook the

hydroelectric transport line to the infrastructure, with a successful power-on of main switch yard

on August 18, 2018;


civil works as part of the general site preparation and crushing area;

concrete foundations inside the Concentrator are ongoing;

outside concrete foundations has started;

civil work for Basins 11 and 11N has started;

part of the 4.16 kV electricity distribution on site has started;

continued engineering work, including commercial bid and technical evaluation for key process

equipment;

optimization and testing of key elements of the flow sheet;

hiring of key management, operation and support personnel;

engineering for the procurement of main equipment completed;

engineering for the award of main CSA contracts completed;

3D model showing all disciplines, progressing on supplier's approved design;

operation readiness plan is on-going;

detailed min plan for 3-5 years is being worked out; and

definition drilling on-going in the area of the starter pit.

The Corporation expects that the construction, installation and pre-operation verification at the

Whabouchi Property and the Concentrator will take about 12 to 15 months from the date of this Annual

Information Form.

Technical Reports

On February 23, 2018, the Corporation filed a technical report entitled NI 43-101 Technical Report

feasibility study on the Whabouchi Lithium Mine and Shawinigan Transformation Plant with an effective

date as of November 7, 2017 and an issue date as of February 21, 2018 (the “Technical Report”), the

results of which were announced by the Corporation on January 9, 2018; it was posted on SEDAR at

www.sedar.com.

The Technical Report that was prepared by Maxime Dupéré, P. Geo, Patrick Perez, P. Eng., M. Sc.,

Anthony Boyd, P. Eng., Ph. D., James Anson, P. Eng., Ph. D., Pierre Girard, P. Eng., Dominic Tremblay,

P. Eng., M.A. Sc., Martin Stapinsky, P. Geo., M. Sc., Ph. D., Alain Michaud, P. Eng., Michel Tremblay,

P. Eng. and Rock Gagnon, P. Eng. (the “Authors of the Technical Report”), each of whom is a

“qualified person” and “independent” of the Corporation within the meaning of the NI 43-101. The

Technical Report was prepared in accordance with NI 43-101.

The Corporation had previously filed an updated technical report entitled NI 43-101 Technical Report -

Feasibility Study Update on the Whabouchi Lithium Deposit and Commercial Electrochemical Plant

(Revised), effective as of April 4, 2016, issued on May 19, 2016 and revised on June 8, 2016 concerning

the Whabouchi Project. That previous technical report was filed with regulatory authorities and was

posted on SEDAR on June 8, 2016.

http://www.sedar.com/


So far, the Corporation has financed, in part, its activities and the acquisition of mineral rights forming its

properties by the issuance of common shares of its capital, by the issuance of senior secured obligations

and by the receipt of grants and an upfront payment as aforementioned. These issuances from fiscal years

ended June 30, 2016, 2017 and 2018, and also up to the date of this Annual Information Form are

described below.

3.2 Fiscal Year Ended June 30, 2016

On July 29, 2015, the Corporation received a positive federal environmental assessment decision for the

Whabouchi Project from the Minister of Environment of Canada and, on September 4, 2015, the

Corporation received the certificate of authorization (“CA”) for the Whabouchi Project from the Québec’s

Ministry of Sustainable Development, Environment, Fauna and Climactic Change (“MSDEFCC”),

thereby providing the Corporation with all basic environmental authorizations.

On February 2, 2016, the Corporation had announced the receipt of the first installment of $2,117,969 in

connection therewith, and the second instalment of $2,117,969 was received on June 29, 2016 (see

below). The remaining instalments were scheduled as follows: (i) the third, $4,614,864, will be paid upon

completion of the milestones of the Phase 1 Plant leading to conception, installation, commissioning and

the production of lithium hydroxide from lithium sulfate; (ii) the fourth, $2,732,198, will be paid upon

achievement of producing lithium hydroxide or lithium carbonate from spodumene (expected in Q4 –

2017); and (iii) the fifth, $1,287,000, will be paid upon project completion and acceptance of final report

by the SDTC.

On March 23, 2016, the Corporation received the second tranche amounting to $450,000 in relation to the

Technoclimat Grant (of a total of $3 million non-repayable grant as part of the Technoclimat program).

On April 29, 2016, the Corporation announced the purchase of a portable mill for the Whabouchi

Property, to produce concentrate for the Phase 1 Plant and also serve as training facility. The purchase

price for the DMS modular mill consisted of cash consideration of $750,000 and 3,000,000 common

shares of the Corporation, of which 1,500,000 are subject to a 4-month hold period, 750,000 are subject to

an 8-month hold period and 750,000 are subject to a 12-month hold period.

On May 10, 2016, the Corporation had announced the closing of the purchase agreement with Société de

développement Shawinigan for part of the land and the selected existing buildings (the “Shawinigan

Site”) of the former Resolute Forest Products’ Laurentide plant in Shawinigan, Québec. The Shawinigan

Site houses the Phase 1 Plant and the Commercial Electrochemical Plant that will convert spodumene

concentrate into high purity lithium hydroxide and lithium carbonate. The purchase price of $2 million

was paid in two instalments, a first tranche of $300,000 and a second tranche of $1.7 million. The

purchase price was paid in full with the payment of the second tranche in August 2018.

On May 11, 2016, the Corporation had announced the entering into of agreements with JM in connection

with (i) an up-front payment of $12 million in exchange for services and products of the same value from

the Phase 1 Plant, and (ii) a commercial off-take agreement for the supply of lithium salts (collectively,

the “JM Agreements”).

On May 24, 2016, the Corporation announced that it had received the first $5 million tranche from RQ, a

subsidiary of Investissement Québec, acting as a mandatary for the government of Québec. The private

placement with Ressources Québec Inc. (“RQ”) totalling $10 million was announced on March 11, 2016

and was held in escrow until the closing of the JM transaction (announced on May 11, 2016).


On June 29, 2016, the Corporation announced the receipt of the second installment of

$2,117,969 pursuant to the SDTC Grant.

Issuances for Cash Consideration

Between July 1, 2015 and June 30, 2016, 136,000 compensation options were exercised by a broker, at an

exercise price of $0.12 per common share, while during the same period, shareholders exercised

3,911,516 warrants, at an exercise price of $0.18 per common share, 5,537,500 warrants, at an exercise

price of $0.20 per common share, 1,150,000 warrants, at an exercise price of $0.22 per common share,

4,344,265 warrants, at an exercise price of $0.25 per common share, and finally, 3,467,500 warrants, at an

exercise price of $0.28 per common share. Following these exercises, the Corporation received an

aggregate amount of $4,137,859 and issued a total of 18,546,781 common shares.

Between July 1, 2015 and June 30, 2016, consultants, members of the Board and management of the

Corporation exercised 1,055,575 stock options, at an average exercise price of $0.22 per common share.

The Corporation received an aggregate amount of $232,219 and issued a total of 1,055,575 common

shares of the Corporation in relation to such exercise. As a result of these exercises, an amount of

$112,307 was reclassified from contributed surplus to the share capital and warrants.

On March 24, 2016, the Corporation closed a non-brokered private placement with RQ (29,411,765 units

for $10 million) and Nemaska Development Corporation (8,823,530 units for $3 million), for aggregate

gross proceeds of $13 million by the issuance of 38,235,295 units, at a price of $0.34 per unit. Each unit

was comprised of one common share of the Corporation and one-half of one common share purchase

warrant, and each whole warrant entitles its holder to purchase one common share of the Corporation at a

price of $0.48, up to March 24, 2018.

Issuances for Mineral Rights Acquisitions

No issuance for mineral rights acquisitions has been made during the fiscal year ended June 30, 2016.

Other

During the fiscal year ended June 30, 2016, financing fees of $300,482 were paid in connection with the

non-brokered private placement with RQ.

3.3 Fiscal Year Ended June 30, 2017

On July 8, 2016, the Corporation announced the completion of the 2016 Public Offering and its

graduation to the Toronto Stock Exchange (the “TSX”) pursuant to which all of its issued and outstanding

common shares, including the warrants issued under the 2016 Public Offering, commenced trading on the

TSX under the trading symbol “NMX” for the Common Shares and “NMX.WT” for the warrants.

On October 31, 2016, the Corporation announced the entering into of an agreement with FMC pursuant to

which it will provide FMC with 8,000t per year of lithium carbonate beginning in mid-2018 (the “FMC

Agreement”). Further to the JM Agreement, this is the second multi-year supply agreement for the

Corporation.

On November 29, 2016, the Corporation announced the issuance of its first United States patent

(US 9,382,126) that describes its proprietary process of preparing lithium hydroxide and lithium carbonate


using membrane electrolysis, as well as the issuance of its second Canadian patent, CA 2,905,197, which

protects improvements of the electrolysis membrane process for preparing lithium hydroxide. The

technology protected under these patents has been utilized in the Phase 1 Plant.

On December 1, 2016, the Corporation provided an update on its mineral resources estimate following the

completion of its summer 2016 definition diamond drilling campaign, resulting in an increase of (i) total

measured and indicated mineral resources of 36.620 million tonnes (“Mt”) at an average grade of 1.48%

Li2O (from 27.991 Mt at an average grade of 1.57% Li2O), and (ii) total inferred mineral resources of

7.188 Mt at an average grade of 1.37% Li2O (from 4.686 Mt at an average grade of 1.51% Li2O). The

effective date of the mineral resource estimate is November 30, 2016.

On March 14, 2017, the Corporation confirmed the continuous operation of the DMS modular mill at half

its capacity and announced recent results from concentrate composite samples.

On April 3, 2017, the Corporation received from FMC a lump sum payment of US$10 million in

accordance with the FMC Agreement (as amended to extend the timeline to supply FMC with lithium

carbonate by no later than April 1, 2019) and as announced on March 22, 2017.

On May 5, 2017, the Corporation announced that JM had made an early payment of $2 million to the

Corporation (of the final $3 million milestone payment) following receipt of the first shipment of lithium

hydroxide solution in accordance with the commercial off-take agreement with JM for the supply of

lithium hydroxide monohydrate. The final $1,000,000 payment was expected to be made following the

delivery of the second shipment of lithium hydroxide meeting JM’s final lithium hydroxide specifications.

On June 12, 2017, the Corporation announced the entering into of an agreement with a syndicate of

underwriters led by National Bank Financial Inc. (together, the “Underwriters”), under which the

Underwriters had agreed to purchase on a bought deal basis 47,620,000 common shares of the Corporation

at a price of $1.05 per share for gross proceeds of $50 million. The Corporation used the net proceeds for

ongoing development of the mine and the Concentrator as well as the Commercial Electrochemical Plant

and general working capital purposes.

On June 20, 2017, the Corporation announced a second shipment of 3.5 tonnes of lithium hydroxide to

JM, which met JM’s final lithium hydroxide specifications, and provided an update on the Phase 1 Plant

operations. The Phase 1 Plant is now producing lithium hydroxide on a regular basis using lithium sulfate

provided by JM. The Corporation’s proprietary processes have been performing as expected.

Issuances for Cash Consideration

On July 8, 2016, the Corporation closed the 2016 Public Offering, being a brokered short form prospectus

offering for gross proceeds of $69,000,115 by the issuance of 60,000,100 units, which included the

exercise of the over-allotment option in full, at a price of $1.15 per unit pursuant to the short form

prospectus of the Corporation dated July 4, 2016. Each unit was comprised of one common share of the

Corporation and one-half of one common share purchase warrant. Each whole common share purchase

warrant entitles its holder to purchase one common share of the Corporation, at a price of $1.50 per

common share, up to July 8, 2019. The Corporation may accelerate this July 8, 2019 expiry date if the

closing price of the common shares listed on the Toronto Stock Exchange, as applicable, is equal to or

above $2.25 for a period of 20 consecutive trading days.


Between July 1, 2016 and June 30, 2017, 1,475,000 options were exercised by officers, directors and

consultants at prices varying between $0.10 and $0.92, and shareholders exercised 15,457,650 warrants at

prices varying between $0.20 and $0.28 for an aggregate total value of $4,006,705. This resulted in the

Company issuing 16,932,650 common shares. As a result of option exercises, an amount of $257,106 was

reclassified from contributed surplus to the share capital and warrants.

Between July 1, 2016 and June 30, 2017, the Corporation granted 4,225,000 stock options to newly hired

executives and employees, at an average exercise price of $1.23 per common share.

On June 29, 2017, the Corporation completed the 2017 Public Offering, being a brokered short form

prospectus offering for gross proceeds of $50,001,000 by the issuance of 47,620,000 shares at a price of

$1.05 per share pursuant to the short form prospectus of the Company dated June 22, 2017.


No issuance for mineral rights acquisitions has been made during the fiscal year ended June 30, 2017.

Other

Between July 1, 2016 and June 30, 2017, commissions were paid to agents for an aggregate amount of

$7,072,116 and an aggregate number of 3,600,006 broker warrants were issued, collectively entitling the

holders thereof to purchase an aggregate of up to 3,600,006 units of the Corporation, at a price of $1.15

per unit, each being comprised of one common share of the Corporation and one-half of one common

share purchase warrant. Subject to acceleration provisions as described hereabove, each whole common

share purchase warrant is exercisable up to July 8, 2019 to purchase one common share of the Corporation

at a price of $1.50 per common share.

3.4 Highlights for the twelve-month period ended June 30, 2018 and up to the date of this

Annual Information Form

During the fiscal year that ended on June 30, 2018 and up to the date of this Annual Information Form,

major strides were accomplished by the Corporation in order to put in place the necessary financing

structure for the construction and commissioning of the Whabouchi Project as well as dedicated team to

lead construction and commissioning and, thereafter, be ready to conduct operations once construction and

commissioning are completed.

On October 1st, 2018, the Corporation provided, by means of a press release, an update on its construction

project and development timeline for the Whabouchi Project (and reported that, up to that date, no lost

time due to injury occurred during the 149,367 construction and engineering hours worked at both

Whabouchi and Shawinigan Sites).

As of September 1, 2018, a total of $272.4 million or 31% of the total project budget of $874.7 million,

including contingency, has been committed. The total budget of $874.7 million includes $73.5 million

already invested by the Corporation as at November 30, 2017 and identified as sunk-costs in the 2018

Feasibility Study.


Financing Arrangements

On May 30, 2018, the Corporation completed its overall $1.1 billion (US$849 million) project financing

package comprise of the US$150 million Stream Agreement, equity financing totalling $454 million and

the US$350 million Bond Offering.

Bond Offering

The bonds issued in the aggregate principal amount of US$350 million (about $455 million based on an

exchange rate of $1.00: US$0.77) are USD-denominated with a maturity date of May 30, 2023, unless

called by the Corporation prior to maturity, and bear interest at a rate of 11.25% per annum. Interest is

payable quarterly and in arrears on the relevant interest payment dates in February, May, August and

November of each year, commencing on August 30, 2018.As at the date of this Annual Information Form,

the Corporation had not yet received any amount from the Bond Offering and did not record any financial

liabilities related to these bonds.

Also, there is a condition in the Bond Offering for the Corporation to deposit $40 million from its public

offering closed in May 2018 in a restricted bank account as a project cost overrun facility, for which the

Corporation would have to meet some conditions in order to get approvals to use these funds. The

unutilized portion of this $40 million at the end of the construction will be made available to the

Corporation once the independent engineer (for the bondholders) issues his final report. In the meantime,

this deposit is presented as restricted cash in the consolidated balance sheet.

In relation to the Bond Offering, the Corporation incurred, as at June 30, 2018, financing fees amounting

to $16,665,072 and recorded them as deferred financing costs in the consolidated statements of financial

position. These financing costs will be recorded against the bonds once the Corporation has met all the

requisite conditions since these costs are directly attributable to the bonds. As part of the Bond Offering,

the Corporation paid in advance the first quarterly interest expense on May 30, 2018. This payment covers

the interest expense of $12,689,560 for the months of June, July and August 2018. Consequently, the

Corporation capitalized $4,275,830 in relation to the month of June 2018 in the property, plant and

equipment and recorded interest paid in advance amounting to $8,413,730 for the remaining portion.

Stream Agreement

On April 12, 2018, the Corporation signed a Stream Agreement with Orion where the Corporation will, in

exchange of US$150 million, sell to Orion 14.5% of its production of lithium hydroxide and lithium

carbonate produced at the Commercial Electrochemical Plant (and spodumene concentrate above 300,000

tonnes – collectively, “Stream Products”) at an agreed discount price. Orion's purchase price paid to the

Corporation under the Stream Agreement will be 40% of the sales proceeds of such Stream Products. The

Corporation will act as Orion's agent in the sale of the Stream Products to third-party off-takers. Through

this arrangement, Orion will receive 60% of the sales proceeds from such Stream Products, which will

result in Orion receiving a net portion of approximately 8.7% of the Stream Products sales. The maximum

amount of Stream Products deliverable per year will not exceed the equivalent of 5,000 tonnes of Stream

Products.

On August 23, 2018, the Corporation confirmed that NMX Shawinigan has received a first payment of

US$75 million from affiliates of Orion under the Stream Agreement entered into on April 12, 2018. Such

payment represents the first tranche of the total advance payment equal to US$150 million to be made by

Orion under the Stream Agreement. Consequently, in the first quarter of the fiscal year 2019, the


Corporation will record a liability related to the Stream Agreement and will therefore record the related

deferred financing costs against this liability. The second US$75 million tranche will be payable upon the

satisfaction of certain technical and other customary conditions that can be satisfied until

December 31, 2019.

In relation to this Stream Agreement, the Corporation incurred, as at June 30, 2018, financing fees

amounting to $1,794,965 and recorded them as deferred financing costs in the consolidated statements of

financial position. These financing costs will be recorded against the liability once the Corporation will

meet all the requisite conditions since these costs are directly attributable to the Stream Agreement.

Equity Financing:

On May 30, 2018, the Corporation completed, through a syndicate of underwriters, a $280 million public

offering on a bought deal basis, pursuant to a prospectus supplement dated May 23, 2018 in connection

with the short form base shelf prospectus of the Corporation dated March 29, 2018. This resulted for the

Corporation to issue 280,000,000 common shares at a price of $1.00 per share.

The Corporation completed contemporaneously an $80 million private placement with RQ pursuant to

which the Corporation issued 80,000,000 common shares at a price of $1.00 per share.

Finally, on May 30, 2018, following the closing of the 2018 Public Offering, the private placement with

Ressources Québec and the Bond Offering, the corporation issued to SoftBank Group Corp (“SoftBank”),

83,729,011 common shares at a price of $1.12 per share the for aggregate gross proceeds of $93,776,492

following conversion of 83,729,011 subscription receipts that were issued to SoftBank on April 5, 2018.

3.5 Other Highlights for the twelve-month period ended June 30, 2018 and up to the date of this

Annual Information Form

On July 26, 2017, the Corporation and JM announced the release of the final $1,000,000 instalment

following receipt and acceptance by the latter of a second shipment of 3.5t of lithium hydroxide from the

Corporation, that met JM's lithium hydroxide specifications, thereby concluding the milestone payments

from JM, with the Corporation having met all the deliverables under the collaboration agreement

announced on May 11, 2016.

On December 4, 2017, the Corporation announced that it has produced 1.5 tonnes of battery grade lithium

hydroxide, made from Whabouchi spodumene concentrate. Independent laboratory analyses confirmed

that the lithium hydroxide produced from its Phase 1 Plant met the specifications of cathode

manufacturers globally. The lithium hydroxide was ready for delivery and was scheduled to be shipped on

the same day to a cathode manufacturer in Québec. Production of lithium hydroxide from Whabouchi

mine concentrate is ongoing at the Phase 1 Plant and additional deliveries of lithium hydroxide will occur

on a regular basis over the months following this announce.

On December 14, 2017, the Corporation announced that the Québec Ministry of Energy and Natural

Resources (“MERN”) has issued a mining lease for the Whabouchi Project in compliance with Section

100 of the Mining Act. This lease comprises the mining and surface rights necessary to exploit the

Whabouchi deposit, and is valid for an initial period of 20 years (expiring October 25, 2037). The lease

can thereafter be renewed every 10 years for the duration of the mining operation. In addition, the

Corporation obtained the required leases for the Occupation of the Domain of the State as per Section 239


of the Mining Act, allowing the use of lands for tailings disposal, Concentrator and ancillary installations,

and other facilities necessary for mining activities.

On December 19, 2017, the Corporation announced that, pursuant to Section 232.1 of the Québec Mining

Act, the Corporation has submitted a rehabilitation and reclamation plan for the Whabouchi Project which

was approved by the MERN in September 2017. This study accounted for costs of all works needed for

the reclamation of a mining site under the Regulation respecting Mineral Substances other than

Petroleum, Natural Gas and Brine. Mine reclamation and closure costs, as approved by the MERN, are

estimated at $9,074,664. Accordingly, the Corporation made the first installment representing 50% of the

reclamation and closure costs. The second installment representing 25% was paid on September 19, 2018,

while the final payment is due in September 2019.

On January 8, 2018, the Corporation announced that it has produced and has made available for pick-up

by its customer, another two (2) tonnes of battery grade lithium hydroxide solution, made from

Whabouchi spodumene concentrate. At that date, the Corporation had delivered three (3) tonnes of lithium

hydroxide solution produced from its Whabouchi spodumene concentrate. The Corporation also reported

that it has received an installment payment of $4,600,000 from Sustainable Development Technology

Canada (SDTC) for having achieved the second milestone in the development of the Phase 1 Plant.

On February 2, 2018, the Corporation announced the closing of the sale of its 100% undivided interest in

the Sirmac Property to Vision, a mineral resource company specializing in the acquisition, exploration and

development of mineral properties. The Sirmac Property consists of 24 mining claims covering a total area

of approximately 1,100 hectares located approximately 180 kilometres North-West of Chibougamau, in

the province of Québec. As part of the consideration payable by Vision, the Corporation received directly

from Vision, on January 31, 2018, an aggregate of 15,000,000 common shares in the share capital of

Vision, at a price of $0.40 per common share, for total consideration of $6,000,000, which represented

19.18% of the currently issued and outstanding common shares of Vision immediately after the

acquisition. The Corporation also received $250,000 in cash and other consideration. Immediately before

the acquisition, the Corporation did not hold any securities of Vision. The Vision shares are presently

being held for investment purposes, and the Corporation may, from time to time and at any time, acquire

additional securities of Vision in the open market, in compliance with applicable securities laws and

reserves the right to dispose of any or all of its Vision securities, at any time and from time to time, and to

engage in any hedging or similar transactions with respect to these securities, depending on market

conditions, the business and prospects of Vision, and other relevant factors.

On April 25, 2018, the Corporation announced the closing of a private placement (the “SoftBank

Placement”) of 88,460,446 subscription receipts (the “Receipts”) at a price of $1.12 per Receipt for

aggregate gross proceeds of $99,075,700, pursuant to an investment agreement (the “SoftBank

Investment Agreement”) entered into with SoftBank on April 5, 2018. Pursuant to the Placement, upon

conversion of the Receipts, SoftBank will acquire up to 9.9% of the Corporation’s common shares. The

gross proceeds from the Placement have been placed in escrow, pending satisfaction or waiver of certain

conditions.

On May 29, 2018, the Corporation announced the signing of a supply agreement for spodumene

concentrate with Hanwa Co., Ltd. acting as agent for General Lithium Corp., the latter having signed the

agreement as intervenor. Under this agreement and through NMX Whabouchi, the Corporation will sell

spodumene concentrate on a take-or-pay basis at a market priced-based formula, at the time of delivery.

The supply period will commence after the construction of the Whabouchi Property and continue up to the

full ramp-up of the Commercial Electrochemical Plant.


On July 3, 2018, the Corporation announced the signature of an agreement providing for the supply of

battery grade lithium hydroxide by the Corporation to LG Chem, Ltd. (“LG”). Under this agreement, the

Corporation agreed to supply LG, on a take-or-pay basis and through its wholly-owned subsidiary NMX

Shawinigan, with 7,000 tonnes per year of lithium hydroxide produced at Commercial Electrochemical

Plant, for an initial 5-year period scheduled to start in October 2020.

On August 20, 2018, the Corporation announced the signature of the agreement providing for the supply

by the Corporation to Northvolt AB (“Northvolt”) of battery grade lithium hydroxide. Under this

agreement in principle, the Corporation agreed to supply, through its wholly-owned subsidiary NMX

Shawinigan, and Northvolt agreed to purchase, on a take-or-pay basis, up to 5,000 but not less than

3,500 metric tonnes per year of lithium hydroxide produced at the Commercial Electrochemical Plant, for

a 5-year supply period commencing upon the start of commercial production at both the Commercial

Electrochemical Plant and Northvolt’s projected Skellefteå factory in Sweden.

On August 23, 2018, the Corporation confirmed that NMX Shawinigan has received a first payment of

$US75 million from affiliates of Orion under the Stream Agreement. Such payment represents the first

tranche of the total advance payment equal to $US150 million to be made by Orion under the Stream

Agreement. The second $US75 million tranche will be payable upon the satisfaction of certain technical

and other customary conditions that can be satisfied until December 31, 2019.

On August 29, 2018, the Corporation confirmed that that it has satisfied the conditions required by the

Bond Offering before the Long Stop Date (August 30, 2018 - as defined in the Bond Terms) pursuant to

the Bond Offering in the aggregate principal amount of $US350 million.

On August 23, 2018, the Corporation paid, as the final payment for the purchase of the Shawinigan Site,

$1,700,000 to the Société de Développement de Shawinigan Inc.

On September 12, 2018, the Corporation received from Sustainable Development Technology Canada an

amount of $2,732,198 in relation with the non-repayable grant for construction and operation of its Phase

1 Plant.


No issuance for mineral rights acquisitions has been made during the fiscal year ended June 30, 2018 and

up to the date of this Annual Information Form.

Other

Between July 1, 2017 and June 30, 2018, the Corporation received a total amount of $15,853,751

following the exercises of: i) 19,842,875 warrants by shareholders at an average price per share of $0.48;

ii) 2,864,518 broker units which resulted in the issuance of 3,849,197 common shares at an average price

of $1.42 per share; and iii) 1,651,750 options by officers, employees, consultants and a former board

member at prices per share varying between $0.10 and $1.20, for an aggregate total of 25,343,822

common shares issued following these exercises.

Between July 1, 2018 and the date of this Annual Information Form, 375,000 options were exercised by a

consultant at an exercise price of $0.125 per share. The Corporation also issued 1,850,000 options having

exercise prices varying between $0.85 and $1.04, cancelled 250,000 options that were issued at an

exercise price of $1.04 and 233,334 options exercisable at a price of $1.20 expired.


4. DESCRIPTION OF THE BUSINESS

4.1 General

4.1.1 The Corporation

The Corporation is henceforth a developing chemical company whose activities will be vertically

integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide and lithium

carbonate. These lithium salts are mainly destined for the fast-growing lithium-ion battery market, which

is driven by the increasing demand for electric vehicles and energy storage worldwide. The Corporation

will operate the mine, one of the richest lithium spodumene deposits in the world, both in volume and

grade, and the Concentrator. The spodumene concentrate produced thereat will be processed at the

Commercial Electrochemical Plant using a unique membrane electrolysis process for which the

Corporation holds several patents.

All the Corporation’s projects and assets are located in the Province of Québec, Canada. The

Corporation has currently no mine in operation. As of the date of this Annual Information Form, the

Corporation had 83 employees.

4.2 Description of the Mineral Properties

4.2.1 Whabouchi Property

The following description of the Whabouchi Project has been summarized from the Technical Report that

was prepared by the Authors of the Technical Report, each of whom is a “qualified person” and

“independent” of the Corporation within the meaning of Regulation 43-101 respecting Standards of

Disclosure for Mineral Projects (“NI 43-101”) and is qualified in its entirety with reference to the full text

of the Technical Report. The below summary is subject to all the assumptions, conditions and

qualifications set forth in the Technical Report. The Technical Report was prepared in accordance with NI

43-101 and for additional technical details, reference should be made to the full text of the Technical

Report which was filed with the regulatory authorities and was posted on SEDAR at www.sedar.com on

February 23, 2018. Defined terms and abbreviations used in this section and not otherwise defined in this

Annual Information Form have the meanings attributed to them in the Technical Report. Unless otherwise

specified, the information provided in this section is derived from the information provided in the

Technical Report.

4.2.2 Introduction

Met-Chem, a division of DRA Americas Inc. (“MC-DRA”) has provided engineering and integration

services for all aspects of the Feasibility Study (“FS”) on the Whabouchi Property and Commercial

Electrochemical Plant with the participation of other firms. The FS includes the Resource Estimation by

SGS Geostat, the reserve estimation, mine and Concentrator by MC-DRA, the Commercial

Electrochemical Plant by Hatch and NORAM, the Whabouchi infrastructures by MC-DRA, the

Shawinigan infrastructure by Hatch, waste rock and tailings disposal and water management by SNC-

Lavalin (“SNC”), capital and operating costs (by MC-DRA for Whabouchi, Hatch for Shawinigan and

SNC for Waste and Tailings Disposal, Water Management), and economic analysis by MC-DRA.



References in the Technical Report to “SGS” is deemed to refer to:

SGS Geostat; or

SGS Canada inc.; or

Lakefield SGS; or

SGS Mineral Services.

4.2.3 Property Description and Location

The Whabouchi Property is located in the Eeyou Istchee / James Bay area of the province of Québec,

approximately 30 km East of the Nemaska community and 300 km north-northwest of the town of

Chibougamau. The center of the Whabouchi Property is situated at about UTM 5,725,750 mN,

441,000 mE, NAD83 Zone 18. The Whabouchi Property is accessible by the Route du Nord, the main all-

season gravel road linking Chibougamau and Nemaska. The road crosses the Whabouchi Property near its

center. The Nemiscau airport is 18 km west of the Whabouchi Property.

Figure: Property General Location

Since the publication in February 2018 of the Technical Report, the limits of mining titles composing the

Whabouchi Property were updated by the MERN. This was done following the issuance by the MERN of

the mining lease number 1022 (the “Mining Lease”). The Whabouchi Property is now composed of one

block containing 35 mining claims and the Mining Lease, as listed below (the “Mining Claims”).


Table: List of the Mining Rights Related to the Whabouchi Property

as of the date of this Annual Information Form

On October 26, 2017, the Corporation obtained the Mining Lease under the conditions provided for in the

Mining Act and those prescribed by regulation. The surface of the Mining Lease totals 138.106 hectares,

consisting of lot 4,994,037 of the Québec cadastre, registration division of Lac-Saint-Jean-Ouest. The

Mining Lease confers upon its tenant the right to extract all mineral substances owned by the Crown

within the above-named land, but it does not give entitlement to surface mineral substances, petroleum,

natural gas, or brine. The Mining Lease is for a period of 20 years from the date of the landlord's signature

on October 26, 2017 and will end on October 25, 2037, renewable for 10-year terms.

The Corporation owns a 100 % interest in the Whabouchi Property through its subsidiary NMX

Whabouchi. 16 claims were acquired by the Corporation from Victor Cantore Group, as vendor (the

“Cantore Claims”), on September 17, 2009, ten claims were acquired from Golden Goose Resources Inc.

Sheet Date of Renewal Expiration Date

SNRC 32O12 BM 1022 Aug.24, 2019 Oct.25, 2037

SNRC 32O12 CDC 101251 Sept.1, 2019 Nov.2, 2019





















SNRC 32O12 CDC 2202355 Nov.19, 2019 Jan.20, 2020

SNRC 32O12 CDC 2202356 Nov.19, 2019 Jan.20, 2020

SNRC 32O12 CDC 2202357 Nov.19, 2019 Jan.20, 2020

SNRC 32O12 CDC 2141913 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141920 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141921 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141927 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141928 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141933 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2141934 Nov.22, 2019 Jan.23, 2020

SNRC 32O12 CDC 2203107 Nov.23, 2019 Jan.24, 2020

SNRC 32O12 CDC 2203108 Nov.23, 2019 Jan.24, 2020

SNRC 32O12 CDC 2203109 Nov.23, 2019 Jan.24, 2020

SNRC 32O12 CDC 2203110 Nov.23, 2019 Jan.24, 2020

Title ID


(“Golden Goose”) on January 15, 2010 as part of a larger mining title purchase agreement (594 claims

forming the Lac Levac and Lac des Montagnes properties), and seven claims were acquired by map

designation directly by the Corporation. Two claims (numbers 2519870 and 2519871) were created by the

MERN following the division and the renumbering of claims numbers 2137247 and 2137248, operations

that became necessary due to the conversion of portions thereof into the Mining Lease. All the claims

were, at the effective date of the Technical Report, registered in the name of the Corporation. However,

subsequent to the date of the Technical Report, the Corporation transferred to its subsidiary NMX

Whabouchi all its right, title and interest in and to its immovable assets and mining rights directly related

to the Whabouchi Property pursuant to an asset transfer agreement with an effective date as of April 2,

2018. Therefore, NMX Whabouchi is since then the registered owner of the Mining Lease and the Mining

Claims. For the Cantore Claims, the Corporation paid, at the effective date of the Technical Report, a total

amount of $1,010,000 in cash to the vendor and issued a total of 4,500,000 common shares in the capital

of the Corporation. The vendors of the Cantore Claims retained a 3% net smelter return royalty (“NSR”)

on the Cantore Claims and on four of the seven claims acquired by map designation by the Corporation,

1% of which can be repurchased by the Corporation for an amount of $1,000,000. Golden Goose retained

a 2% NSR on the ten claims it sold to the Corporation, half of which (being 1%) could be repurchased by

the Corporation for $1,000,000 for a period of three years from the acquisition date. As at the date of this

Annual Information Form, all 35 Mining Claims are in good standing. The Whabouchi deposit is located

on the Cantore claims. Claims carry a two-year term, renewable indefinitely, and the current expiry dates

for the aforesaid claims range from November 2, 2019 to January 24, 2020.

Figure “Whabouchi Mine Mineral Title” below show the mining titles.

Figure: Whabouchi Mine Mineral Title


4.2.4 Accessibility, Climate, Local Resources, Infrastructure and Physiography

Whabouchi Site

a) Accessibility

The Whabouchi Property is easily accessible via the Route du Nord road that crosses the Whabouchi

Property near its center. This road links the town of Chibougamau, located approximately 300 km to the

south-southeast, and leads to the community of Nemaska and the Route de la Baie-James road. From the

road turn off, the deposit is accessible via a short forestry road that is well maintained during the summer

months.

b) Physiography and Climate

The Whabouchi Property is characterized by a relatively flat topography with the exception of the local

ridge where the more competent pegmatites occur, forming the surface expression of the deposit. The

elevation above sea level ranges from 275 m to 325 m with an average elevation of 300 m. Lakes and

rivers cover approximately 15% of the Whabouchi Property area. The flora in the area is typical of the

taiga environment observed in the region with a mix of black spruce forest and peat moss-covered

swamps. A vast portion of the Whabouchi Property was devastated by forest fires less than 15 years ago.

There is no permafrost at this latitude and the overburden cover ranges in depth from 0 m near the ridge to

25 m in the south part of the Whabouchi Property. The climate in the region is sub-arctic. This climate

zone is characterized by long, cold winters and short, cool summers. Daily average temperature ranges

from -20°C in January to +17°C in July. Break-up usually occurs in early June, and freeze-up in early

November. The annual precipitation averages 640 mm of rain from March to November and 350 cm of

snow from September to May, totalling about 770 mm on average annually.

c) Local Resources and Infrastructure

The nearest infrastructure with general services is the Relais Routier Nemiscau Camp, located 12 km west

of the Whabouchi Property, where the Corporation has setup its lodging facilities. The community of

Nemaska, located 30 km west of the Whabouchi Property, also has accommodation and general services.

The area is serviced by the Nemiscau airport, serviced by regular Air Creebec flights and charter flights,

and by mobile phone network from the principal Canadian service providers.

Hydro-Québec owns several infrastructure and facilities in the area including the Poste Albanel and Poste

Nemiscau electrical stations located approximately 20 km east and 12 km west from the Whabouchi

Property, respectively. Electrical (735 kV) transmission lines connecting both stations run alongside the

Route du Nord road and cross the Whabouchi Property near its center. As well, a 69-kV power line

connecting the Poste Nemiscau electrical station to the mine site is being built at this moment.

d) Surface Rights

All claims comprising the Whabouchi Property are located on Crown Lands. The Corporation secured in

October 2017 all surface rights to construct and operate the projected infrastructure.


Shawinigan Site

The Commercial Electrochemical Plant site is located in a sector of that city identified as Grand-Mère,

adjacent to the St-Maurice River between the Grand-Mère Bridge and 8th street south.

a) Accessibility

The site is easily accessible via Highway 40 or Highway 20 and Highway 55. It is located about 40 km

north of Trois-Rivières; 140 km west of Québec City; 170 km east of Montreal; and 530 km south-west of

Chibougamau.

b) Physiography and Climate

The Shawinigan Site is located at the transition from the St-Lawrence River Lowlands to the Canadian

Shield (Grenville; Laurentides Geologic Province). Landscape is mainly composed of rounded hills

surrounded by small river valleys, with the large St-Maurice River valley acting as a central element and

is located in the Laurentian Mixed Forest region. The main physiographic regional element is indeed most

certainly the St-Maurice River (watershed of 42,651 km²) which is the 4th largest river flowing towards the

St-Lawrence River, representing from 6 to 15 % of its flow depending on time of the year. Mean annual

flow is estimated to be about 755 m³/s near Shawinigan, i.e. about 40 km upstream of its mouth in the St-

Lawrence River. Climate is cold and temperate. The average annual temperature in Shawinigan is 4.7 °C.

About 1,063 mm of precipitation falls annually. Daily average temperature ranges from -12.7 °C in

January to +19.5 °C in July.

c) Local Resources and Infrastructure

Shawinigan has access to the CN rail network, is located less than 45 km from two (2) ports: Trois-

Rivières and Bécancour. A regional airport accessible to regional jets is located in Trois-Rivières,

approximately 20 minutes from Shawinigan. The Montreal and Québec international airports are both less

than two (2) hours away from Shawinigan.

For international oversea shipments, the port of Montréal, open year-round, is only about 90 minutes from

the Commercial Electrochemical Plant and is connected to the Montreal highway network.

The site is serviced by a high pressure natural gas line, city water and effluent system.

History

Numerous geological surveys and geoscientific studies have been conducted by the Québec Government

in the Eeyou Istchee / James Bay area. Geological surveys in the 1960s (Valiquette 1964, 1965 and 1975)

cover the entire property area. In 1998, the Ministère des Ressources naturelles et de la Faune released the

results of a regional lake bottom sediment survey completed in 1997. The first exploration work reported

in the area, dates back to 1962 by Canico and included the discovery of a lithium-bearing pegmatite by the

geologists of the Québec Bureau of Mines. That same year, Canico drilled two packsack drill holes on the

pegmatite, followed by three diamond drill holes on the same pegmatite ridge in 1963. A total of 462.99 m

was drilled. The best result obtained was 1.44% Li2O over 83.2 m (Elgring 1962).

No exploration was reported for the next ten years. In 1973, James Bay Nickel Ventures (Canex Placer)

performed a large-scale geological reconnaissance that covered the Whabouchi Property (Burns 1973).


From 1974 to 1982, the exploration work was exclusively reported by the Société de Développement de la

Baie James (“SDBJ”), which mainly executed large scale geochemical surveys, followed by geological

reconnaissance of the anomalies (Pride 1974, Gleeson 1975 and 1976). Two exploration programs, one in

1978 and the other in 1980 were aimed at lithium exploration, with the evaluation of the Whabouchi

spodumene-bearing pegmatite (Goyer et al. 1978, Bertrand 1978, Otis 1980, Fortin 1981, and

Charbonneau 1982). No work was conducted from 1982 to 1987.

In 1987, Westmin Resources completed an airborne Dighem III survey. A part of this survey was located

immediately east of the Whabouchi Property (McConnell 1987). In 1987-1988, Muscocho Exploration

Ltd. also completed ground magnetic and VLF surveys that covered a major part of the Whabouchi

Property. The spodumene-bearing pegmatite gave a weak magnetic and VLF response. The Muscocho

Exploration efforts were oriented toward the search for massive sulphides. A program of 14 holes, 11 of

them located on the southern part of the Whabouchi Property, was completed. Several arsenic anomalies

were obtained, with a maximum of 3,750 ppm, as in Hole ML-88-8 (Brunelle 1987, Gilliatt 1987 and

Zuiderveen 1988).

In 2002, while exploring for tantalum, Inco re-sampled the spodumene-bearing pegmatite, taking

11 channel samples and seven grab samples. The best value obtained by Inco was 0.026% Ta, and Li2O

values ranging from 0.3% to 3.72% (Babineau 2002). In 2008, Golden Goose visited and sampled the

Valiquette (Ni) and chromite showings south of the Whabouchi Property (Beaupré 2008).

The Corporation initiated its exploration work on the Whabouchi Property during the fall of 2009. During

the site visit, several outcrops of spodumene-bearing pegmatite were observed and nine samples were

collected and analyzed for Li2O. The highest and lowest results obtained during the site visit are the grab

sample # 946511, with a value of 6.3% Li2O, and grab sample # 946508 at 1.18% Li2O. A mechanical

stripping and trenching program was conducted to expose and sample the main spodumene-bearing

pegmatite along with a small drilling program designed to validate the historical results.

During 2010 and 2011, exploration work completed by the Corporation on the Whabouchi Property

included three drilling campaigns, mechanical stripping, ground and airborne geophysics, a 50-tonne bulk

sample and metallurgical testing. An initial mineral resource was estimated in May 2010 by SGS and was

followed by an initial preliminary economic assessment of the Whabouchi Project completed in March

2011 by Equapolar in collaboration with BBA. The initial mineral resource estimate of the Whabouchi

Property, effective May 28th, 2010, totaled 9.78 Mt grading 1.63% Li2O in the measured and indicated

resource categories, with an additional 15.40 Mt grading 1.57% Li2O in the inferred resource category.

Following further drilling in 2011, SGS provided the Corporation with an updated mineral resource

(effective June 6, 2011) to be included in the Preliminary Economic Assessment (prepared by Met-Chem

Canada Inc. and dated October 2, 2012). These updated mineral resources comprised 11.294 Mt of

measured resources with an average grade of 1.58% Li2O, 13.785 Mt of indicated resources with an

average grade of 1.50% Li2O and 4.401 Mt of inferred resources with an average grade of 1.54% Li2O.

The mineral resources were reported within an optimized pit shell and a cut-off grade of 0.43% Li2O.

From 2012 to 2013, the Corporation conducted further drilling in order to measure the geotechnical

properties of the rocks, condemn certain sector of the Whabouchi Property for construction and increase

the level of confidence on the 2011 in-pit resources.

During 2016, the Corporation conducted a definition drilling program highlighting a new mineralization

zone named Doris. The Corporation started a bulk sampling program in order to extract and pilot test up to

60,000 tonnes of mineralized material.


During 2017, the Corporation conducted a definition drilling program on Whabouchi focussing on the

better definition of measured areas based on the first five years of mining. The program also enabled to

add knowledge and resources to the Doris zone.

Geological Setting and Mineralization

The Whabouchi Property is located in the northeast part of the Superior Province of the Canadian Shield

craton, in the Lac des Montagnes volcano-sedimentary formation which is principally composed of

metasediments and mafic and ultramafic amphibolites. A spodumene-bearing pegmatite intrusive dyke

swarm occurs on the Whabouchi Property and is composed of a series of sub-parallel and general sub-

vertical pegmatite bodies up to 90 m total composite width. The mineralized pegmatite swarm has a

general NE-SW orientation, extends 1.3 km along strike and reaches a depth of more than 500 m below

surface.

Figure: Map of the Property Geology with Drill Holes Location


The mineralization of economic interest on the Whabouchi Property is found in spodumene-bearing rare

metal bearing pegmatite dyke complexes. Spodumene is a lithium-bearing mineral, which contains

8% Li2O when pure. Spodumene also contains minor amounts of niobium and tantalum. Assays for

spodumene normally range between 7.6% and 8.0% Li2O depending on the degree of replacement by

Na2O. Typically, the Whabouchi pegmatite sampled from drill core averages 1.62% Li2O with values up

to 4.59% Li2O. Two distinct phases are observed in the Whabouchi pegmatites: a spodumene-bearing

phase comprising most of the pegmatite material and a lesser, white to pink barren quartzfeldspar

pegmatite. The lithium mineralization occurs mainly in medium to large spodumene crystals (up to 30 cm

in size) but petalite also occurs, averaging less than 2% in the deposit.

At the property level, the geology consists of a volcano-sedimentary assemblage metamorphosed to the

amphibolite level. The volcanic rocks mostly comprise basalt-andesite rocks and gabbro formation. The

primary textures are not identifiable and no geochemistry data enables to correctly identify the rock types.

The sedimentary units range from meta-conglomerates with elongated clasts to fine grained sedimentary

units.

The volcano-sedimentary sequence is intruded by different bodies of granites and pegmatites with varying

composition and probably age (no age constraints are available on the local intrusive bodies). The granites

vary in texture and composition, from white and pink granite fine-grained granites to grey hornblende-

oligoclase granite with phenocryst of pink microcline

Deposit Types

The interpretation of the pegmatite model was developed by the author, Gary H. K. Pearse in 2011, based

on geological mapping, evaluation work, and development work on a number of major pegmatite deposits

over many years.

The Whabouchi deposit is a lithium-bearing rare metal pegmatite. Emplacement of rare metal pegmatites

is the last phase of the crystallization of a parent granite pluton. High-pressure residual fluids, with

abundant water, silica, alumina, alkalis, and rich in rare elements and other volatiles from the

crystallization of a pluton at modest depth, concentrate in the cupola or upper domed contact of the granite

as it crystallizes. Under increasing pressure, this fluid dilates fractures in overlying rocks in a manner

analogous to that of hydraulics in mechanical equipment, thereby providing feeder channels for

emplacement of pegmatites at shallower depth. Progressive crystallization of the main rock-forming

minerals out of this fluid enriches the final fluids in rare metals and the process culminates in the

formation of rare metal pegmatites still under fluid pressure. A variety of types occur depending on the

abundance and type of rare metals associated with the pluton and the physico-chemical conditions

affecting the sequence of emplacement events.

Pegmatite petrologists classify the variety of types and subtypes by combinations of the following criteria:

Mineralogical-geochemical signatures;

Internal structure/zonation; and

Pressure-temperature conditions of crystallization.

The criteria are related through degree of fractionation, which arises from the chemical, temperature and

pressure evolution of the pegmatite fluids over time and distance from the parent granite. The complex

rare element pegmatites generally evolve as follows: at depth under high-pressure and temperature


conditions, simple granite pegmatites of quartz, feldspar and mica crystallize in fractures above and within

the solidified granite pluton. Above this level, columbo-tantalite minerals appear starting with high

niobium compositions and progress to higher tantalum/niobium ratios where the complex pegmatites

appear with lithium, cesium, and rubidium bearing minerals. Variations may appear, in which petalite is

the dominant lithium mineral, often along with pollucite, lepidolite, etc. Alternatively, spodumene

dominates in a classification known as albite-spodumene pegmatite. Tantalum may occur in a variety of

minerals and cassiterite may be present. A final, mariolitic or greisen phase at low pressure-temperature,

may be present with lepidolite, quartz, tantalum-rich minerals, tin, topaz, etc. Where beryllium is

relatively abundant, beryl (most commonly) or other beryllium minerals, these often occur throughout the

sequence from the parent granite through all phases to the final mariolitic mineralization.

Three characteristics of the geological setting for rare metal pegmatites are common:

Emplacement in concordant stacked sills;

Presence of a compressed, near-vertical, syntectonic mobile zone that is the locus of

pegmatite intrusion; and

Host rocks most commonly are dominantly mafic volcanics often with intercalated

metasediments and gabbroic rocks.

The Whabouchi pegmatite is a highly fractionated, spodumene-rich pegmatite swarm, individual bodies of

which display typical zoning to varying degrees – a comparatively thin albite wall zone at the contacts

followed by a K-feldspar rich zone with lesser albite, quartz, mica, and little or no spodumene, followed

by a spodumene-quartz-rich core zone (with variable feldspars and mica) making up more than 90% of the

cross-section. The Whabouchi deposit lacks a quartz core which is one of the classic zoned pegmatite

features. Insufficient stratigraphic work has been done on the host rocks to establish that the bodies are

dominantly sills as in the classic case. The concordance of the bodies with the greenstone belt and the

persistence of even thin pegmatite bodies over a 100 m or more on strike and at depth support this

structural control. The drilled sections at 700E and 800E on the grid do appear to show this, in that the

hanging wall of the main pegmatite zone is basalt and the footwall gabbro.

Exploration

The Corporation carried its first exploration program in October 2009, which consisted of mechanical

stripping, trenching (16 trenches, 1,000 m strike), and channel sampling (35 channels for a total of

295 samples) successfully exposing spodumene-bearing pegmatites. Seven diamond drill holes were

completed (+one hole abandoned) successfully intersecting pegmatites zones.

A second exploration program was conducted from January to April 2010. During that program, 59 drill

holes totaling 11,600 m were completed. In addition to drilling, 14 line-km of ground magnetic surveying

covering the main mineralized occurrence and 670 line-km of helicopter-borne magnetic surveying

covering the Whabouchi Property were completed. Later in May 2010, the Corporation completed

2,780 m of mechanical stripping of the south contact of the main mineralized zone with (16 trenches and

seven contact zones) and collected 649 channel samples. The stripping also allowed the mapping of the

surface geology.

In late 2010, 23 drill holes were completed. An additional 41 holes were drilled in 2011 including 26 for

infill drilling, three for metallurgical tests for a total of 9,500 m. In May 2011, a 50-tonne bulk sample was

collected at surface for metallurgical testing purposes.


In 2013, 14 drill holes were added to better define the mineralization towards the Eastern boundary and

also, to increase the level of confidence of the 2011 in-pit mineral resources. A total of 1,815 m of drilling

was completed and 351 samples were sent for Li2O assay.

In 2016, 51 drill holes were added to: 1) convert the inferred in-pit inferred resources to indicated;

2) increase the confidence level of mineral resources from 0 m to 200 m and 3) extend the mineral

potential at depth. A total of 17,424 m of drilling were completed and 4,039 samples were sent for Li2O%

analysis. A new zone named Doris was discovered to the Southeast of the known Whabouchi deposit.

The 2017 (April to June) campaign aimed to confirm the extension of pegmatite veins of the Doris Zone

and to better define the geological continuity and lithium content in the main zone targeted to be mined

during the first five years of mining operation. This campaign added 48 drill holes totaling 4,361 m on the

Whabouchi Property.

Drilling

A total of 244 drill holes were completed by the Corporation to define the mineral deposit. In addition to

the drilling, extensive mechanical stripping on surface permitted the completion of more than

140 channels. Tables below summarize the drilling and channel sampling completed by the Corporation to

define the mineralized pegmatite intrusion.

Table: Drilling Completed by the Corporation at Whabouchi

Year Count Metres Drilled

2009 8 999

2010 82 15,670

2011 41 9,257

2013 14 1,815

2016 51 17,424

2017 48 4,361

Total 244 49,526

Table: Channel Sampling done by the Corporation at Whabouchi

Year Channels Total Samples

2009 35 295

2010 108 649

Total 143 944

The samples collected for analysis represent approximately 36% of the drill core material. The drill holes

are generally spaced 25 m to 50 m apart with azimuth ranging between N312° and N340° with an average

of N330°. The dips range from 43° to 75° and average 50°. The deepest hole reaches 640 m below collar

location. The mineralized drill intersection ranges from near true thickness to 70% true thickness. The

geometry of spodumene-bearing pegmatites is defined as a series of stacked dyke-shaped intrusions which


include a thicker principal intrusion. Some pegmatite contains local rafts or xenoliths of the host rock

which can be a few metres thick and hundreds of metres in length. Based on the information gathered

from the drilling, the pegmatite intrusion is more than 1,300 metres in length and can be up to 90 metres

thick. The intrusions are generally oriented N050° with dips varying from the southeast to the northwest at

an angle ranging between 70° and 85° and are reaching depths of up the 530 metres below surface.

Sample Preparation, Analysis and Security

This section is based on information supplied by the Corporation and observations made during the

independent verification programs conducted at the Whabouchi Site by SGS on November 27th, 2013 and

during the drilling program of the 2016 summer. Furthermore, the 2017 quality assurance and quality

control (“QA/QC”) protocol and drilling results were verified by SGS and a site visit was done on

December 5th, 2017.

The channel and drill core logging and sampling was conducted at the Whabouchi Property or at the

nearby facilities. All samples collected by the Corporation during the course of the 2009, 2010 and 2011

exploration programs were sent to the Table Jamésienne de Concertation Minière (“TJCM”) preparation

laboratory located in Chibougamau, Québec. The 2009 and 2010 sample pulps were shipped to SGS

laboratory in Don Mills, Ontario, for analysis. The 2011 and 2013 sample pulps were sent to ALS Canada

Inc. – Chemex Laboratory (“ALS Chemex”) in North Vancouver, British Columbia and Val d'Or, Québec

for analysis. The 2016 sample were shipped to SGS laboratory in Québec City, Québec for preparation

and to Lakefield, Ontario for analysis. The remaining drill core is stored at the Whabouchi Site in covered

metal core racks.

All channel samples and drill core handling was done on site with logging and sampling processes

conducted by employees and contractors of the Corporation. The observations on lithology, structure,

mineralization, sample number, and location were noted by the geologists and technicians on hardcopy

and then recorded in a Microsoft Access digital database. Copies of the database are stored on external

hard drive for security.

Channel samples were collected from two (2) diamond saw cuts (typically 4 cm in width and 4 cm in

depth). Each sample is generally one (1) m long and broken directly from the outcrop, identified and

numbered then placed in a new plastic bag. Drill core of NQ (4.8 cm diameter) and HQ (6.4 cm diameter)

size was placed in wooden core boxes and delivered twice daily by the drill contractor to the project core

logging facilities at the Nemiscau camp. The drill core was first aligned and measured by a technician for

core recovery. The core recovery measurements were followed by the rock quality designation

measurements. After a summary review of the core, it was logged and sampling intervals were defined by

a geologist. Before sampling, the core was photographed using a digital camera and the core boxes were

identified with box number, hole ID, and by using “From” and “To” aluminum tags. Due to the hardness

of the pegmatite units, the recovery of the channel material and the drill core was generally very good,

averaging more than 95 %.

Sampling intervals were determined by the geologist, marked and tagged based on observations of the

lithology and mineralization. The typical sampling length is one m but can vary according to lithological

contacts between the mineralized pegmatite and the host rock. In general, one host rock sample was

collected from each side that contacts the pegmatite.

The NQ (4.8 cm diameter) drill core samples were split into two halves with one half placed in a new

plastic bag along with the sample tag; the other half was replaced in the core box with the second sample


tag for reference. The third sample tag was archived on site. HQ (6.4 cm diameter) size drill core was

collected for a portion of the 2011 program for metallurgical purposes. The first half of the HQ (6.4 cm

diameter) drill core was selected for metallurgical testing. The second half was split in two quarters, one

quarter placed in a new plastic bag along with the sample tag and the remaining quarter was replaced in

the core box with the second sample tag for reference. The samples were then catalogued and placed in

rice bags or pails, for shipping. The sample shipment forms were prepared on site with one copy inserted

with the shipment, one copy sent by email to TJCM, and one copy kept for reference. The samples were

transported on a regular basis by the Corporation's employees or contractors by pick-up truck directly to

the TJCM facilities in Chibougamau. At the TJCM laboratory, the sample shipment was verified and a

confirmation of shipment reception and content was emailed to the Corporation's project manager.

Channel and drill core samples collected during the 2009, 2010, 2011, and 2013 exploration programs

were transported directly by the Corporation’s representatives to the TJCM laboratory facilities in

Chibougamau, Québec for sample preparation. The submitted samples were pulverized at the TJCM

laboratory to respect the specifications of the analytical protocol and then shipped to SGS or ALS Chemex

for analysis. The author of the 2011 Technical Report visited the TJCM facilities on March 10, 2010. In

2016, samples were pulverized at the SGS facilities in Québec City, following the same specification used

by TJCM.

All samples received at TJCM were inventoried and weighted prior to being processed. Drying was done

to samples having excess humidity. Sample material was crushed to 80-85 % passing 2 mm using jaw

crushers. Ground material was split using a split riffle to obtain a 275-300 g sub-sample. Sub-samples

were then pulverized using a 2-component ring mill (ring and puck mill) or a single component ring mill

(flying disk mill) to 85-90 % passing 200 mesh (75 µm). The balance of the crushed sample (reject) was

placed into the original plastic bag. The pulverized samples were finally sent to SGS or ALS Chemex

using Canada Post secured delivery services.

All samples received at SGS Mineral, Québec City, were inventoried weight and dry prior to being

process. Sampling material was crushed to 75 % passing 2mm using jaw crushers. Ground material was

spilt to 250g sub-samples and then pulverized using a 2-component ring mill (ring and puck mill) or a

single component ring mill (flying disk mill) to 85 % passing 200 mesh (75 µm). The pulverized samples

were sent to SGS laboratory in Lakefield using Purolator secured delivery services.

The majority of the 2009 and 2010 analyses were conducted at the SGS Minerals laboratory located in

Don Mills, Ontario, which is an ISO/IEC 17025 laboratory accredited by the Standards Council of

Canada. There are two (2) analytical methods used for the pulverized samples from the Whabouchi

Property. The first analytical method used by SGS is the 55-element analysis using sodium peroxide

fusion followed by both inductively coupled plasma optical emission spectrometry (“ICP-OES”) and

inductively coupled plasma mass spectrometry (“ICP-MS”) finish (SGS code ICM90A). This method

uses 10g of the pulp material and returns different detection limits for each element and includes 10 ppm

lower limit detection for Li. The ICM90A analytical method was conducted at the beginning of the 2009-

2010 exploration program to verify the content of other elements in the mineralization. The second

method processed 20g of pulp material and used the mineralization grade sodium peroxide fusion with

ICP-OES finish methodology with a lower detection limit of 0.01 % Li (SGS code ICP90Q). The ICP90Q

analytical method was used at the beginning of the exploration program on samples analysed by ICM90A

returning values greater than 0.3 % Li. The ICP90Q method for Li was later used on a more systematic

basis. Analytical results were sent electronically to Nemaska and results were compiled in an MS Excel

spreadsheet by the project manager.


The 2016 drill samples were analysed at the SGS Laboratory located in Lakefield, Ontario, accredited by

the Standards Council of Canada. There used four-acid digestion with Inductively Coupled Plasma –

Atomic Emission Spectrometry (“ICP-AES”) (SGS code GO ICP41Q) verified by a sodium peroxide

fusion AAS (SGS code GC AAS93B).

The 2010 and 2016 pulp reanalysis and the 2011 and 2013 analyses were conducted at ALS Chemex using

the mineralization grade lithium four-acid digestion with ICP-AES (ALS code Li-OG63). The Li-OG63

analytical method used four (4) g of pulp material and returned a lower detection limit of 0.01 % Li.

The Corporation implemented an internal QA/QC protocol by regularly inserting reference materials

(standards and blank) and core duplicates in the samples stream. The Corporation also conducted in the

2010 and 2011 re-analysis of selected pulps in a second laboratory, as part of their QA/QC protocol.

SGS completed a review of the sample preparation and analysis including the QA/QC analytical protocol

implemented by the Corporation for the Whabouchi Project. SGS visited the Whabouchi Property on

November 27, 2013 and numerous times in the summer of 2016 to review the Corporation’s sample

preparation procedures, local infrastructure and in order to conduct an independent sampling program. The

Authors of the Technical Report visited the site on December 5, 2017. The QA/QC data from previous

campaigns and up to 2017 was reviewed. A review of the QA/QC analytical results for blanks and core

duplicates did not highlight any analytical issues. However, the observations for the 2016 standard

material and pulp duplicates suggest the presence of a bias in the analytical data between SGS and ALS

laboratories of about 5%, SGS Laboratory having the higher average grade. SGS verified the effect of a

5% grade added value on the 2016 assay results in the resources estimate and found the results to be

negligible. Corrective measurements on the data will be taken, if deemed necessary.

Specific Gravity (“SG”) measurements were completed in 2010 and 2011 on mineralized core samples to

estimate an average bulk density value for the Whabouchi deposit and are considered acceptable for the

Technical Report.

The authors of the Technical Report are of the opinion that the sample preparation, analysis and QA/QC

protocol used by the Corporation for the Whabouchi Project follow generally accepted industry standards

and that the Whabouchi Project data is of a sufficient quality that SGS has recommended continuing its

internal QA/QC protocol for blanks, duplicates (core and pulp), and standards (reference materials).

Data Verification

A total of 39 mineralized core duplicates were collected in 2013 by SGS on 2011 and 2013 drill hole

samples and submitted for Li analysis at the SGS Minerals Laboratory in Lakefield, Ontario and followed

the same analytical protocol used by the Corporation during the 2009 and 2010 drilling programs (code

ICP90Q), except that the sample preparation was done directly at the SGS Mineral Services and not at the

TJCM laboratory.

The comparative results show the average relative grade differences between the original and the control

samples range between 1% and 12%, which can be considered acceptable for core duplicates, considering

the coarse nature of the spodumene mineralization generally observed at the Whabouchi Site. The

weighted average grades between the original and the control samples outline similar results.

The digital drill hole database supplied by the Corporation has been validated for the following data field:

collar location, azimuth, dip, hole length, survey data, lithology and analytical values. The validation


returned only minor discrepancies located in lithology and assay data, which were communicated to the

Corporation and corrected in the final drill hole database.

As part of the data verification of the Whabouchi Project, the analytical data from the database has been

validated with the values from the laboratories analytical certificates. No errors were noted during the

validation.

The final database includes the channel samples collected in 2009 and 2010 from surface trenches and the

drilling data from the 2009, 2010, 2011, 2013, 2016, and 2017 drilling programs. The final drill hole with

reported analytical results included in the database is WHA-17-243. The few historical drill hole and

channel analytical data were not considered for the current mineral resource estimate, but were kept for

modeling purposes. The Authors of the Technical Report are of the opinion that the final drill hole

database is adequate to support a mineral resource estimate.

Mineral Processing and Metallurgical Testing

Mineral processing testing was performed to evaluate the potential of spodumene concentrate production

as well as lithium hydroxide (Li2O-H2O) and lithium carbonate (Li2CO3) production separately. A

summary of spodumene concentrate production test work is presented in Section “Whabouchi

Concentrator” below. The electrochemical production of Li2O-H2O and Li2CO3 test work is presented in

Section “Shawinigan Transformation Plant” below.

Whabouchi Concentrator

Between 2010 and 2017, multiple test work programs were done to develop the Concentrator flow sheet.

This involves ore sorting, hydro classification, DMS and flotation methods. It also includes summaries

from screening, settling, filtration, freezing, drying, and magnetic separation tests performed by various

laboratories and suppliers.

Ore sorting was tested at full scale by two suppliers to evaluate the ore amenability to coarse size sorting.

The ore can be effectively separated into rejects and accepted with minimal lithium losses. This was

implemented in the flow sheet to reduce contamination with amphibolite.

Hydraulic separation has been tested to remove muscovite before the two main separation processes

(DMS and flotation). It has been used in pilot plant campaigns. It was also tested in a manufacturer

laboratory.

Multiple DMS testing programs, at bench scale with heavy liquid separation tests and in pilot plant tests,

have been done since the beginning of the flow sheet development. DMS performs well with particles of

less then 9.5 mm and improves as the top size is reduced to 6.3 mm. DMS can produce a final concentrate,

a final reject and a middlings stream which will be reprocessed in flotation.

Multiple test programs involved flotation. Both bench scale and pilot plant work were performed since

2010. The most recent programs aimed at taking advantage of the coarse liberation of the material and

coarse flotation with hydroflotation was introduced. In addition, column flotation shows a better

selectivity against muscovite and other contaminant recovery in the fine flotation concentrate by using

wash water addition. Final design tests were performed at Eriez which supplies the hydroflotation

technology. The grade and recovery of these test was very good. The reagent consumption was reduced

drastically through optimization.


Thickener, filtration and freezing test have been done to size various equipment and validate conditions

where concentrate transportation could be problematic.

Finally, DMS concentrate drying tests were done to evaluate conditions required to have a good

concentrate for dry magnetic separation of the coarse DMS concentrate. This last operation in the

upgrading of the ore was tested at two supplier’s facilities.

Shawinigan Transformation Plant1

Extensive process testing was conducted on the Whabouchi spodumene concentrate to determine the

design and sizing of a facility to produce high quality lithium hydroxide monohydrate (“LHM”).

Key aspects of the process were tested at the laboratory and/or pilot scale. A high-level summary follows:

Calcination: Large scale pilot test work was performed with reputable suppliers of both kilns

and flash calciners. The test work demonstrated that under the right conditions the

concentrate could be calcined and achieve high lithium extraction rates (> 95%).

Acid bake: Laboratory and pilot test work was performed to determine the required mixing

and acid bake parameters to adequately sulfate the lithium and obtain a high lithium

extraction. Impact of using recycled acid was extensively studied.

Leaching: Multiple leaching lab and pilot tests were performed to determine optimum

operating and design parameters.

Impurity removal: A series of impurity removal tests were performed to meet the stringent

requirements of the electrochemical cells. The traditional impurity removal flow sheet was

modified to improve efficiency and reduce equipment size. Theoretical, lab scale and pilot

scale test work investigated reagents and residence times to develop the proposed flow sheet.

Test work showed that high purity solution meeting the electromembrane requirements

could be produced.

Electromembrane process: Various phases of membrane electrolysis test work were

performed by the Electrosynthesis Company. The objectives were to determine optimal

operating parameters (concentration, current efficiency, current density, configuration, etc.)

and to estimate membrane and anode life cycle. Long-term stability of the process was

demonstrated by a series of tests on a continuous basis totaling about 1,000 hours and

referred to as the “1,000-hour test”.

LHM crystallization: LHM crystallization laboratory scale test work was performed.

Acid concentration: Work was performed to develop the ternary phase diagram for the

lithium sulphate – sulfuric acid – water system as a function of temperature. This included

the solubility and to a more limited extent the boiling point curves. The experiments allowed

the flow sheet structure to be confirmed and provided basic data for equipment design.

1 Commercial Electrochemical Plant


Laboratory and pilot test work at suppliers provided further information to be used in

equipment sizing and design.

Mineral Resources Estimates

SGS completed the mineral resource update using the digital database supplied by the Corporation (as of

August 21, 2017) which included channel data from trenches and drill holes data completed by the

Corporation since 2009. The database used to produce the mineral resource estimate was derived from a

total of 593 channels and diamond drill holes, including historical diamond drill holes and unassay

channels.

The mineral resource was estimated from a resource block model interpolated using ordinary kriging. The

2017 geological model was updated with the new exploration information from 2016 and 2017; the

analytical data contained within the wireframe solids was then normalized, to 2 m length composites. The

composite data was used to interpolate the Li2O grade of blocks by ordinary kriging on a regularly spaced

defined grid that fills the 3-D wireframe solids. The mineral resources of the Whabouchi Site are designed

and reported using an open-pit mining perspective. An optimized pit shell model using the pit

optimization software MineSight© was produced, by MC-DRA, in 2016 and later validate in

October 2017, using the completed block model. The interpolated blocks located below the

bedrock/overburden interface, within the optimized pit shell and above a determined cut-off grade

comprise the mineral resources. The blocks are then classified based on confidence level using proximity

to composites, composite grade variance and mineralized solids geometry. The 3D wireframe modeling,

block model, and mineral resource estimate were completed by SGS based on information provided by the

Corporation.

The final mineral resource estimates within the open pit are reported at a cut-off of 0.3% Li2O and totals

16.953 Mt, with an average grade of 1.57% Li2O in the measured category, 20.403 Mt, with an average

grade of 1.41% Li2O in the Indicated category, with an additional 6.687 Mt, with an average grade of

1.37% Li2O in the Inferred category.

The underground mineral resource estimates are reported at a cut-off of 0.60% Li2O and totals 12,000 t of

measured resources at an average grade of 1.87% Li2O, 233,000 t of indicated resources with an average

grade of 1.59% Li2O and 9.376 Mt of inferred resources with an average grade of 1.39% Li2O.


Table: Whabouchi Deposit in Pit Mineral Resource Estimate

Cut-Off Grade

(Li2O %) Category

Tonnage*

(t)

Average Grade

(% Li2O)

0.30 Measured 16,953,000 1.57

0.30 Indicated 20,403,000 1.41

0.30 Measured + Indicated 37,356,000 1.48

0.30 Inferred 6,687,000 1.37

Note: The mineral resource estimate has been estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definitions Standards for mineral resource and mineral reserve in

accordance with NI 43-101. Mineral resources which are not mineral reserve do not have

demonstrated economic viability. Inferred mineral resource are exclusive of the measured and indicated resources.

Bulk density of 2.71 t/m³ is used.

Effective date November 24, 2017.

Blocks touching the pit were taken out,

* Rounded to the nearest thousand.

Table: Whabouchi Deposit Below Pit Mineral Resource Estimate

Cut-Off Grade

(Li2O %) Category

Tonnage*

(t)

Average Grade

(% Li2O)

0.60 Measured 12,000 1.87

0.60 Indicated 233,000 1.59

0.60 Measured + Indicated 245,000 1.60

0.60 Inferred 9,376,000 1.39

Note: The mineral resource estimate has been estimated using the Canadian Institute of Mining,

Metallurgy and Petroleum (CIM) Definitions Standards for mineral resource and mineral reserve in accordance with NI 43-101. Mineral resources which are not mineral reserve do not have

demonstrated economic viability. Inferred mineral resource are exclusive of the measured and

indicated resources.

Bulk density of 2.71 t/m³ is used.

Effective date November 24, 2017.

Blocks touching the pit were taken out,

* Rounded to the nearest thousand.

Mineral Reserve Estimates

Open Pit Mineral Reserve

The effective date of the mineral reserve estimate is November 7, 2017. The Whabouchi deposit was

estimated using the updated resource model that was prepared by SGS. The mineral reserves are the


portion of the measured and indicated mineral resources that have been identified as being economically

extractable and which incorporate mining losses and the addition of waste dilution.

The first step in the mineral reserve estimate was to carry out a pit optimization analysis. The pit

optimization analysis used economic criteria to determine the cut-off grade and to what extent the deposit

can be mined profitably. The pit optimization analysis was done using the MS-Economic Planner module

of MineSight® version 12.0-3. The optimizer uses the 3D Lerchs-Grossman algorithm to determine the

economic pit limits based on input of mining and processing costs and revenue per block.

The pit optimization analysis identified the pit shell that should be used as the basis for the open pit

design. The additional measured and indicated mineral resource that is outside the limits of this optimized

pit shell were then evaluated as an underground mining operation. The cut-off grade for the open pit mine

was calculated to be 0.34% Li2O.

An open pit was designed with an overall pit slope of 56° which was based on a geotechnical study that

was completed by Journeaux Assoc. The pit has 20 m high benches and the ramp will be 20 m wide with a

maximum grade of 10%. The pit will be approximately 1,350 m long and 340 m wide at surface with a

maximum pit depth from surface of 223 m. The open pit design includes 15.5 Mt of proven mineral

reserves and 8.5 Mt of probable mineral reserves for a total of 24.0 Mt at a grade of 1.53% Li2O. In order

to access these reserves, 1.4 Mt of overburden, 69.4 Mt of waste rock (including inferred mineral

resources) must be mined. This total waste quantity of 70.9Mt results in a stripping ratio of 3.0 to 1. Table

below presents the open pit mineral reserves for the Whabouchi deposit. The mineral reserves account for

mining dilution.

Table: Whabouchi Open Pit Mineral Reserves

Category Tonnage

(Mt)

Li₂O Grade

(%)

Proven 15.5 1.56

Probable 8.5 1.48

Proven & Probable 24.0 1.53

Underground Mineral Reserve Estimate

The underground mine will be developed at the end of the open pit life and will take over the production

once the open pit reserves will be depleted in year 24.

The underground mine will be accessed via a mine portal located at elevation 162.5 m and a main ramp

that connects to the seven haulage drifts sub-levels located on the footwall side of the orebody. The sub-

levels will be spaced at every 30-metre in elevation at Levels 182 m, 152 m, 122 m, 92 m, 62 m, 32 m and

2 m.

The underground mineral reserves were estimated at 12.7 Mt grading 1.16% Li2O of proven and probable

mineral reserve categories. The reserves include 10% dilution at a grade of 0.63% Li2O and 100%

recovery and were estimated using an underground mining cost of CAD$29.52/t. The underground cut-off

grade was calculated at 0.63% Li2O. The cut-off grade is used to determine at what point material being


mined will generate a profit after paying for the mining, processing, transportation and general and

administration costs. Table below presents the underground mineral reserves for the Whabouchi deposit.

The mineral reserves account for mining dilution.

Table: Whabouchi Underground Mineral Reserves

Category Tonnage

(Mt)

Li2O Grade

(%)

Proven 1.5 1.36

Probable 11.1 1.13

Proven & Probable(1)

12.7 1.16

Note:

(1) Due to rounding errors, totals may not add-up exactly.

Combined Open Pit and Underground Mineral Reserve Estimate

The combined open pit and underground mineral reserves for the Whabouchi deposit were estimated at

36.7 Mt of ore grading 1.40% Li2O as shown in Table below. Proven mineral reserves account for 46% of

the reserves.

Table: Combined Whabouchi Mineral Reserves

Category Tonnage

(Mt)

Li2O Grade

(%)

Open Pit (OP)

Proven 15.5 1.56

Probable 8.5 1.48

OP: Proven & Probable Reserves 24.0 1.53

Underground (U/G)

Proven 1.5 1.36

Probable 11.1 1.13

U/G: Proven & Probable Reserves 12.7 1.16

Total

OP and U/G

Reserves

Proven 17.0 1.54

Probable 19.6 1.28

Proven & Probable Reserves(1)

36.7 1.40

Note :

(1) Due to rounding errors, totals may not add-up exactly.


To the extent known, there are no metallurgical, environmental, permitting, legal, title, taxation, socio-

economic, marketing, political, or other relevant issues that could materially affect the estimate of mineral

resources and mineral reserves.

Mining Methods

The Whabouchi deposit characteristics make open pit mining more favourable from an economic and

technical standpoint because of its proximity to surface. Open pit mining will therefore be favoured for the

upper portions of the deposit. However, open pit mining is commonly associated with more significant

environmental and social impacts than underground mining, essentially because of the associated larger

surface footprint. In order to mitigate environmental and social effects of the projected mine, where

geological characteristics and economic factors made it feasible to switch to underground mining, the

latter was favored. Consequently, from year 24, the mine will be operating from underground, thus not

only limiting the surface footprint of the ultimate open pit, but also minimizing the amount of waste rock

to be managed and stockpiled at the surface. Such an approach also enables a longer mine life without

significantly increasing the surface area impacted by mining activities, something which extends the

duration and cumulative importance of the Whabouchi Project's economic spin-offs for local, regional and

provincial stakeholders.

Open Pit Mining

The mining method selected for the Whabouchi Project will be a conventional open pit, truck and shovel,

drill and blast operation. Vegetation, topsoil and overburden will be stripped and stockpiled for future

reclamation use. The ore and waste rock will be mined with 4 m high benches, drilled, blasted and loaded

into heavy duty off-road haul trucks with hydraulic excavators.

A topsoil and overburden stockpile has been designed 100 m to the east of the pit ramp exit, to the south

of the Concentrator. Material that will be placed in this stockpile will be used for future reclamation.

The Whabouchi Project has selected to use a co-disposal method for the tailings produced at the

Concentrator and the waste rock from the mine. Co-disposal is construction of waste rock cells in which

fine tailings are disposed. Mixing the fine and coarse waste reduces the empty void space primarily

associated with coarse waste streams, while simultaneously increasing the strength of the fines. Tailings

produced at the Concentrator will have a moisture content of around 14 %. The tailings will be transported

from the Concentrator to the waste rock pile with the same 64-tonne truck fleet that will be used in the

open pit.

Mining operations for the Whabouchi Project will be 50 weeks per year, operating around the clock on

two, twelve hour shifts. During the two planned stoppage weeks, the Concentrator will be either fed from

the run of mine ore stockpile and/or going through scheduled maintenance.

The mine plan is based on an annual production of 215,022 tonnes of concentrate, which is equivalent to a

Run-of-Mine (“ROM”) production of 1.03 Mt/y. The total material mined per year during the 24-year life

of the open pit mine ranges from 0.26 Mt in pre-production to a maximum of 5.3 Mt in Year 10. The

average annual diluted grade of Li2O varies between 1.47% to 1.59% during the 24-year period.

The mine equipment fleet for the open pit includes six 64-tonne haul trucks, two hydraulic excavators with

6 m3 buckets, two diesel powered down the hole track drills that will drill 114 mm (4.5") holes as well as


a fleet of support and service equipment. Blasting will be carried out using bulk emulsion with an average

powder factor of 0.37 kg/t. The mine workforce has been estimated to be approximately 109 employees.

Underground Mining

The ore extraction will switch from an open pit operation to an underground mine located underneath the

final pit floor in year 24 of the operation. The duration of the underground mining is ten years and is

scheduled to be in operation from the beginning of year 24 to the end of year 33. An underground mine

production ramp-up period of 14 months is planned during the last months of year 23 to reach the cruising

production rate of 1.3 Mt of ROM at the beginning of year 25.

The underground mine development and operation will be given to a mining contractor that will excavate

and haul the ore and waste from underground to a stockpile located at the bottom of the open pit. The

Corporation will keep management and engineering activities to supervise and provide engineering

services to the contractor to ensure work efficiency and safety. Hauling of the ore and waste from the

bottom of the pit to the crusher and the waste disposal area along with the mine tailings operation will

continue to be managed directly by the Corporation’s personnel using the existing mobile equipment fleet

from the open pit operation. The underground mine will be operated on two shifts of ten hours, seven days

per week.

The mining methodology selected is 30-metre high long-hole type stopes. Based on the geotechnical and

hydrogeological conditions, it is expected that backfilling of the excavated stopes will be required. The

very last excavation phase consists of mining the 30-metre thick remaining crown pillar from the open pit

floor.

Halfway down in the western area of the open pit, an underground entry portal to a main ramp driven

downward will provide access to the seven horizontal haulage drifts which in turn provides access to the

draw points of the various stopes.

The annual underground mine production requirement has been adjusted to maintain a similar lithium

concentrate production of 215,022 t. An overlapping underground mine ramp up production period is

planned with the open pit ore extraction finishing during year 24 of operations. This will ensure an

uninterrupted ROM feed to the Concentrator.

The contractor will supply and operate the underground mining fleet consisting of two development

jumbos, two production drills, three LHDs, and four haulage trucks. The underground haulage trucks will

haul the ore and waste up to the mine portal where it will be dumped into stockpiles to be reclaimed by the

Corporation and hauled out of the pit to the crusher or waste dump.

The underground mine will require 86 employees for the development phase while 70 will be required

during the production phase, excluding the Corporation’s management and engineering team and waste

and tailings personnel.

Recovery Methods


The Concentrator is located at 675 m north east of the open pit mine. The Concentrator is designed to

produce a nominal 215,022 tonnes of spodumene concentrate per year. The ROM mineralized material


will be fed into the primary jaw crusher and then screened to suit the ore sorter feed limitation. The sorted

material will then go to the secondary and tertiary cone crushers. The final crushed product will be stored

into a stockpile before the Concentrator.

The crushed mineralized material will be screened on the fine ore screen and the oversize will be upgraded

in a dense media circuit after a stage of mica hydroseparation removal to produce a coarse spodumene

concentrate, a tailings product and a middlings product. The DMS coarse concentrate will then be dried in

a rotary dryer before treatment by a dry magnetic separation system. The magnetic product will be

discarded with the tailings and the non-magnetic product will be the first portion of the final spodumene

concentrate.

The DMS middlings product will be ground to less than 0.85 mm and combined with fine ore screen

undersize. This ground product feeds a fine stage of mica hydroseparation removal and then goes to

flotation circuit. The flotation circuit consists of de-sliming, wet magnetic separation, attrition and finally

2-stages of spodumene flotation. The flotation is performed at coarse size (- 850 µm /+ 200 µm) in an

hydrofloat separation unit and at fine size (- 200 µm / 20 µm) by flotation columns circuit.

Tailings from DMS concentration, dry magnetic separation, mica hydroseparation, de-sliming, wet

magnetic separation and flotation will be dewatered by a combination of screen dewatering, thickening

and filtration before storage into a dome. The tailings will be transported by haul truck to the co-disposal

area with mine waste.

The spodumene flotation concentrate will be thickened and filtered by a vertical plate pressure filter to

less than 8% moisture and combined with the dry DMS concentrate for transport by road trucks to

Chibougamau. The shipped concentrate will have moisture of less than 5% to prevent freezing during the

winter months. In Chibougamau, it will be transferred into railcars for transport to the Commercial

Electrochemical Plant for further processing.

Commercial Electrochemical Plant

The Commercial Electrochemical Plant process design criteria, mass balance, process flow sheets,

equipment list as well as plant layouts were prepared for a plant feed rate of 215,022 tpa (dry) of

spodumene concentrate. The facility is designed to produce 33,000 tpa of lithium carbonate equivalent

(“LCE”) in the form of lithium hydroxide monohydrate crystals and lithium carbonate powder. The

Commercial Electrochemical Plant can vary the production of lithium hydroxide monohydrate crystals

from 50 to 100% of the total Li units produced and of lithium carbonate powder from 0 to 50% of the total

Li units produced.

The Commercial Electrochemical Plant is scheduled to operate seven days per week and 24 hours per day.

The Commercial Electrochemical Plant’s availability has been estimated at 85 % based on benchmarks

with comparable industries and high-level availability analysis. The overall lithium recovery is based on

laboratory results and extensive mass balance modeling.


Table: Commercial Electrochemical Plant Design Criteria – Summary

Parameters Unit Value

Concentrate Average Processing Rate tonne per year (dry) 215,022

Concentrate Composition % DMS / % Flotation 42 / 58

Concentrate Grade (Total) % Li / Li₂O 2.9 / 6.25

Concentrate % Moisture % H₂O 4.0

Concentrate Size Distribution F100 microns 9,500

Lithium Sulfate Solution Feed Rate tonne per year

Li₂SO₄H₂O eq. (dry) 2,000

Plant Operating Time hours per day 24

Overall Plant Availability % 85

Lithium Hydroxide Monohydrate Average Production tonne per year 24,500

Lithium Hydroxide Monohydrate Product Moisture % ≤0.1

Lithium Hydroxide Monohydrate Product Grade % LiOH

≥57.5

(< 20 ppm Na)

Lithium Carbonate Average Production tonne per year 11,500

Lithium Carbonate Product Moisture % ≤0.45

Lithium Carbonate Product Grade % Li₂CO₃ ≥ 99.5

Overall Lithium Recovery % 95.9

The spodumene concentrate is transported from the Whabouchi Property to the Commercial

Electrochemical Plant in 92-tonne railcars (100 short tons). The Commercial Electrochemical Plant feed

consists of a blend of DMS concentrate and flotation concentrate.

The first major process step is the calcination of the concentrate where the spodumene mineral is

converted from the alpha form to the beta form. Then, the beta-spodumene is mixed with sulfuric acid in a

pug mixer and the blend of acid and mineral is sent to an acid-bake kiln. The heat provided in the kiln

allows the reaction of oxides with the sulfuric acid to make sulfates (mostly lithium sulfates, but also

minor amount of sulfates of select impurities). The acid bake product is mixed with water in the

concentrate leach process step, and then sent to a belt filter that separates the gangue mineral (a form of

aluminum-silicate) from the pregnant leach solution that contains the lithium sulfates and certain

impurities. The pregnant leach solution then undergoes three (3) purification and filtration steps: primary

impurity removal (“PIR”), secondary impurity removal (“SIR”) and tertiary impurity removal (“TIR”).

The solution is polished in an ion exchange (“IX”) system that removes trace amounts of remaining

calcium.

These three purification steps and IX remove many impurities including, excess acid, calcium, silicon,

iron, aluminum, manganese and magnesium.

The IX polished solution is fed to the electrolyzers. During this process, lithium sulfate is converted to

lithium hydroxide (catholyte solution) and sulfuric acid (anolyte solution). The anolyte solution is sent to


sulfuric acid concentration. The concentrated acid is recycled to the pug mixer along with fresh make-up

acid. The catholyte from electrolysis is sent to the LHM crystallization step. A double crystallization

process produces pure LHM crystals and condensate that is also fully re-used in the process. A small bleed

stream from the LHM crystallization is sent to a treatment unit where lithium is recovered and sodium and

potassium are purged. The LHM crystals are dried to produce LHM crystals for sales. Up to 50% of the

LHM crystals can be converted to lithium carbonate in a dedicated circuit for sale as lithium carbonate

final product.

A simplified flow sheet is presented below and summarizes the electrochemical plant process.

Figure: Commercial Electrochemical Plant Simplified Flow Sheet

Project Infrastructure


The Whabouchi Mine site is located at km 276 on the Route du Nord public road which provides access to

the existing base camp that will be used for both construction and operations. The camp site is about

12 km west of the Whabouchi Property and the Nemiscau airport is another seven km further west. The

planned infrastructure at the mine site are:


Mine service and haul roads;

Maintenance garage;

Guard house;

Mine management and mine dry;

Engineering and administration offices;

Warehouse;

Concentrator building;

Concentrator engineering offices and dry;

Metallurgical laboratory; and

Explosive bulk storage facility, a magazine for caps and detonators and a powder magazine.

In addition to the buildings, the following services will be constructed:

Fresh water supply including fire protection;

Sewage treatment;

Diesel fuel and propane gas storage and distribution; and

Electrical sub-station, power supply and distribution.

Co-Disposal Storage Facility

Co-disposal methodology will be used for the storage of the tailings produced at the Concentrator and the

waste rock from the mine. The adopted co-disposal methodology consists of confining filtered tailings into

waste rock cells.

With both open-pit and underground mining, the lifespan of the Whabouchi Project will be 33 years and

generate 50.8 Mm³ of material. Four co-disposal storage facilities located north of the Route du Nord were

designed, all located on the Whabouchi Property. All the waste rocks and filtered tailings will be

contained in these co-disposal storage facilities, except 6 Mm³ of waste rocks that are expected to be

disposed in the open pit mine that could be used as backfill material for the underground operation.


The Commercial Electrochemical Plant will be located in Shawinigan, Québec on the site on an old pulp

and paper mill. The infrastructure that have been planned in addition to the Commercial Electrochemical

Plant include the following:

Upgrade of the existing rail network;

Spodumene reception and unloading facilities;

Sub-station, power distribution;

Residues/by product handling;

Site services;

Site buildings;

Roads;

Guard house;

Control system; and

Communication system.


Market Studies and Contracts

The key information contained in the market study was prepared by Roskill Consulting Group Ltd.

(“Roskill”), an independent and experienced consultant.

The main conclusions of the reports received by the Corporation are:

Demand for battery-grade lithium hydroxide is expected to grow at 38.8% CAGR between

2016 and 2031;

Demand for battery-grade lithium carbonate is expected to grow at 13.1% CAGR between

2016 and 2031; and

Lithium hydroxide expected growth demand is mainly related to secondary batteries use

over the next years.

As at the date of the Technical Report, the Corporation has two commercial off-take agreements in place

totalling about 14,000 LCE and valid between 42 and 60 months from the start of commercial production.

There are no established contracts for the sale of concentrate currently in place.

Based on the information provided in the Technical Report, combined with current off-take contracts in

place and information gathered through discussions with potential customers and other sources, the

Corporation has established its sale prices as follows (on a per tonne basis):

Lithium hydroxide (EXW Shawinigan): US $14,000/t;

Lithium carbonate (EXW Shawinigan): US $9,500/t (Years 2 to 5);

Lithium carbonate (EXW Shawinigan): US $12,000/t (Years 6 to 33); and

Spodumene concentrate sales (FOB Port of Trois-Rivières): US $800/t.

Environmental Studies, Permitting and Social or Community Impact

The main permits required to conduct exploration work on the Whabouchi Property are the forest

management permit delivered by the provincial Ministère des Forêts, de la Faune et des Parcs (“MFFP”)

along with owning active mining rights. A Certificate of Authorization (“CA”) from the Ministère du

Développement durable, de l'Environnement et de la Lutte contre les changements climatiques

(“MDDELCC”) may also be necessary to conduct specific advanced exploration works such as, for

example, the mechanical stripping of more than 1,000 m3 of overburden. As of the date of the Technical

Report, the Corporation's management confirmed having valid work permits and authorisations. To the

knowledge of the author of the Technical Report, there are no environmental liabilities pertaining to the

Whabouchi Property.

For the Whabouchi Mine, a first version of the Environmental and Social Impact Assessment (“ESIA”)

document was submitted to both federal (Canadian Environmental Assessment Agency) and provincial

(Review Committee of the James Bay and Northern Québec Agreement, or “COMEX”) authorities for

review in April 2013. Questions and comments on that first version were sent by those authorities to the

Corporation late in 2013. The Corporation provided answers to all questions in early May 2014. The

COMEX held public hearings in March-April 2015; as well, other forms of consultation were organized

by the Corporation and/or the Cree Nation of Nemaska, enabling the COMEX to consider the concerns of

the people in the territory and ensure they were accounted for in the Whabouchi Project and reflected in

the general CA. On September 4, 2015, following a positive recommendation by the COMEX, the


Provincial Administrator of the James Bay and Northern Québec Agreement granted authorization for the

Project and the Corporation announced that it has received the general CA for the Whabouchi Mine from

the MDDELCC. On July 29, 2015, following a comprehensive assessment of the Whabouchi Mine, the

Canadian Minister of Environment decided that the Whabouchi Project is not likely to cause any

significant adverse environmental effects, and set out, in its positive decision statement, the conditions

relative to the mitigation measures and monitoring program to be respected by the Corporation. The

Agency issued on that same date its final EA report.

The Corporation has already begun and is continuing to fulfill the provisions included in the general CA

for the Whabouchi Site, and the authorization application and permitting process for construction has

started in Q1-2016. Applications are being filed in a timely manner with the construction works and have

therefore no impact on the Whabouchi Project schedule.

The Commercial Electrochemical Plant will be located in Shawinigan, Québec using part of the former

Resolute Forest Products (“RFP”)'s Laurentide pulp and paper mill buildings. MDDELCC has indicated

that this part of the Whabouchi Project will need only a CA and not a complete ESIA. The legal

framework for the construction and operation of the projected facilities is a combination of provincial,

national, and municipal policies, regulations and guidelines. The permitting process has been fully

identified and applications are being filed concurrently with the construction works and should therefore

not impact on the Whabouchi Project schedule. Since construction works are to take place within existing

buildings, the environmental permits and authorizations are only needed for infrastructure located outside

of the existing buildings and for the operations to be initiated since only these activities are associated

with potential environmental impacts, as per the Québec Environmental Quality Act.

As part of the acquisition process, the City of Shawinigan and RFP are fully responsible for the

environmental site characterization and associated site rehabilitation, in full compliance of the applicable

laws and regulations, including Quebec's Soil Protection and Contaminated Lands Rehabilitation Policy.

To that regard, the agreement in principle specifies that all liabilities associated to the past activities which

took place at that site are under the full responsibility of the City of Shawinigan. The Corporation will not,

by any means, be accounted for those. Furthermore, the Agreement also specifies that all lands delivered

to the Corporation will comply with applicable soil quality criteria for industrial use.

Water Management

The mine water management plan addresses the management of runoff water collected in the open pit,

industrial area, overburden stockpile and co-disposal storage facilities at the Whabouchi Property.

The water management infrastructure (i.e. ponds, ditches and pumping requirements) are sized based on

the required volume of surface runoff to manage, which varies according to the catchment area of the co-

disposal storage facilities. By Phase 3 of the Whabouchi Project, a total of 14 water collection ponds,

located in strategically selected areas, are required to manage the surface runoff on the Whabouchi

Property.

The final effluent pipeline of the Whabouchi Mine will direct water from the collection pond BC-1 to the

final effluent in Nemiscau River with regular monitoring of flow and water quality in full compliance with

applicable laws, regulations and standards.


Capital and Operating Costs

Whabouchi Property and Chibougamau

Capital Cost

The scope covered in this estimate is based on the remaining construction work as of November 2017 of

green field facilities at Whabouchi Property and Chibougamau transfer site. The cost estimate includes

initial and sustaining capital cost.

The initial capital cost estimate consists of the direct and indirect costs, rehabilitation costs, as well as

some sunk costs that are considered for economic analysis purpose. The indirect costs include the

engineering, procurement and construction management (“EPCM”) and owner's costs. A contingency of

12.5% is also included.

Provision for sustaining capital cost includes closure and rehabilitation.

Table: Summary of the Whabouchi Capital Cost Estimate

Description Capital Cost

($ M)

Whabouchi Site Initial Capital Cost

Sunk Costs (Direct + Indirect) 63.5

Whabouchi Site – Pre-Production Capital Cost

Total Direct Costs 158.6

Total Indirect Costs 79.2

Contingencies 29.7

Rehabilitation Payment Year (-1) 2.3

Sub Total Pre-Production Capital Cost 269.9

Total Whabouchi Site Initial Capital Cost 333.4

Total Whabouchi Site Sustaining Capital Cost 606.3 Note:

The totals may not add up due to rounding errors.

Operating cost

Operating cost was estimated for the Whabouchi Mine operation and concentrate transport up to the

Commercial Electrochemical Plant and cover the costs related to ore extraction, spodumene concentration,

management of tailings, waste and water, general and administration costs including site services,

transport and lodging of workers and operation expenses and concentrate shipping to the Commercial

Electrochemical Plant.


The operating cost was based on a concentrate production rate of 215,022 tpa (dry).

Table: Average Annual Operating Cost Estimate for Whabouchi

Operating Cost

($/y)

Average Operating Cost(1)

($/t of Concentrate)

Mining (Open Pit Years 1 to 24) 21,416,190 99.60

Mining (Underground, Years 23 to 33) 35,876,420 166.85

Tailings Transport (Open Pit) 275,230 1.28

Mill Operating Cost 20,378,220 94.77

G & A Operating Cost 15,433,260 71.78

Concentrate Transport Cost 10,824,250 50.00

Total(1)

68,327,150 317.77

Note:

(2) Average cost calculated for Open pit operation (Mining – Underground excluded)


Capital Cost

The capital cost estimate consists of the direct and indirect costs. The indirect costs include the EPCM and

owner's costs. A contingency of 15% is also included.

Table: Summary of the Capital Cost Estimate

Description Capital Cost

($ M)

Shawinigan Site Initial Capital Cost

Sunk Cost (Direct + Indirect) 10.1

Shawinigan Site – Pre-Production Capital Cost

Total Direct Costs 347.4

Total Indirect Costs 114.2

Contingency 69.7

Sub Total – Pre-Production Capital Cost 531.3

Sub Total Shawinigan Site Initial Capital Cost 541.4

Note:

The totals may not add up due to rounding errors.


Operating Costs

Operating costs were estimated for the Commercial Electrochemical Plant and cover the costs related to

the transformation of spodumene concentrate into lithium hydroxide monohydrate crystals and lithium

carbonate powder.

The operating costs were based on a concentrate feed rate of 215,022 tpa (dry), a lithium sulfate solution

feed rate of 2,000 tonnes per year Li2SO4.H2O eq. (dry), a lithium hydroxide monohydrate production of

24,500 tpa (dry) and a lithium carbonate production of 11,500 tpa (dry).

The sources of information used to develop the operating costs include in-house databases and outside

sources particularly for reagents and consumables.

Total annual operating costs are estimated at $65.3 million.

The facility first produces LiOH-H2O crystals, of which the desired fraction is then carbonated to produce

lithium carbonate powder (Li2CO3). It takes approximately 1.14 t of LiOH-H2O crystals to produce 1 t of

Li2CO3. The cost per tonne of product is approximately:

$1,661/t LiOH-H2O

$2,143/t Li2CO3

Excluded from these costs are concentrate supply and transport, recycled lithium sulfate solution supply

and transport, aluminum-silicate transport and disposal (if required), research and development, and

contingency.

Economic Analysis

An economic analysis based on the production and cost parameters of the Whabouchi Project has been

carried out and the results are shown in the table below. In the analysis, selling prices of US $800/t (FOB

Trois-Rivières) for the spodumene concentrate, US $14,000/t (EXW Commercial Electrochemical Plant)

for LiOH-H2O and US $9,500/t (production years 2 to 5) and US $12,000/t (production year 6 onwards)

(both EXW Commercial Electrochemical Plant) for Li2CO3 have been assumed.


Table: Summary of the Life of Project Production, Revenues, and Costs

Description Units Values

Production – Mineralization kt 36,667

Production – Concentrate @ 6.25% Li2O kt 7,015

Production – LiOH-H₂O product t 729,838

Production – Li₂CO₃ product t 361,270

LiOH-H₂O product – Tolling Services t 40,320

Revenue $ M 19,179.5

Initial Capital Costs

(excludes Working Capital and Sunk Costs) $ M 798.9

Sustaining Capital Costs $ M 604.0

Operating Costs (includes Royalty Payments) $ M 4,539.7

Closure Costs (excludes Sunk Costs) $ M 4.6

Pre-Tax Total Cash Flow $ M 13,232.3

After-Tax Total Cash Flow $ M 9,626.4


Table: Cash Flow Statement


Figures below show the sensitivity of the after-tax NPV and IRR, respectively, to variations in capital

costs, operating costs, selling prices and the USD/CAD exchange rate.

The FS has been compiled according to widely accepted industry standards. However, there is no certainty

that the conclusions reached in the FS will be realized.

Table: Summary of Financial Indicators

Description Units Values

Pre Tax

Payback Period Years 2.7

NPV @ 6% $ M 4,501.8

NPV @ 8% $ M 3,310.2

NPV @ 10% $ M 2,479.7

Internal Rate of Return % 34.4

After Tax

Payback Period Years 2.9

NPV @ 6% $ M 3,261.9

NPV @ 8% $ M 2,387.8

NPV @ 10% $ M 1,776.4

Internal Rate of Return % 30.5


Figure: Sensitivity of Project NPV @ 8% (After Tax)

Figure: Sensitivity of Project IRR @ 8% (After Tax)

Interpretation and Conclusions

0

500

1000

1500

2000

2500

3000

3500

4000

-30 -20 -10 0 10 20 30

A-T

NP

V @

8%

($

mil.

)

RELATIVE VARIATION (%)

CAPEX OPEX PRICE FX RATE

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

-30 -20 -10 0 10 20 30

A-T

IRR

(%

)

RELATIVE VARIATION (%)

CAPEX OPEX PRICE FX RATE


The Whabouchi Project consists in the development of a mine 300 km North of Chibougamau and a

lithium compounds production complex to be built in Shawinigan.

Conclusions

The parameters used in this FS outline the development of a 1.03 Mt/y of ore open-pit mine using a small

fleet of mining equipment for the first 24 years, then followed by an underground operation for the

following nine years. At mine site, the construction of the Concentrator with a nominal capacity of

2,824 t/d will be needed. This is combined with the construction of the Commercial Electrochemical

Plant, capable of producing 33,000 t/y of LCE in the form of lithium hydroxide monohydrate crystals and

lithium carbonate powder.

The mine planning will have to control certain aspects of the ore feed properties to meet the planned

capacity and avoid extreme conditions to overload the sorters. This will also be controlled by the front-end

loader at the crusher that will be used to provide additional blending from the buffer piles in front of the

crusher.

During the 24-year life of the open pit mine, a total of 32.7 Mm³ of waste rock and 12.9 Mm³ of tailings

will be generated for a total of 45.6 Mm³. The underground mine will generate an additional 0.4 Mm³ of

waste rock and 4.9 Mm³ of tailings. In total, the Whabouchi Project will generate 50.8 Mm³ of waste

materials. Four co-disposal storage facilities were designed. All the waste rocks and filtered tailings will

be contained in these facilities, except 6 Mm³ of waste rocks that will be disposed in the open pit mine and

could be used as backfill material for the underground operation. The water management infrastructure is

sized based on the required volume of surface runoff to manage. It varies with the catchment area of the

co-disposal storage facilities. Over time, a total of 14 water collection ponds will be required to manage

the surface runoff on the Whabouchi Mine site.

The final effluent will release water in Nemiscau River with regular monitoring of flow and water quality.

The Corporation has developed a novel industrial process for extracting lithium from spodumene to

produce lithium hydroxide monohydrate and lithium carbonate.

Compared to other hard rock lithium extraction processes, the Corporation will not use soda ash (sodium

carbonate) and will not generate salt cake (sodium sulfate) that is normally a by-product of lithium

extraction from spodumene. The use of flash calcination will reduce fuel costs compared to the traditional

rotary kiln process. Recovery and recycling of sulfuric acid, generated in the electromembrane process,

has a significant impact on the operating costs by substantially lowering both the sulfuric acid, the lime

requirements and the by-production of gypsum cake, which must be disposed. The electromembrane

process permits the synthesis of lithium hydroxide directly from lithium sulfate solution, making use of

Québec’s advantageous electricity prices. Multiple purification steps will allow the production of high

purity final products. The flexibility to produce both lithium hydroxide and lithium carbonate allows both

markets to be serviced depending on evolving market dynamics.

Extensive laboratory and pilot test work have been used to develop multiple new processing technologies

and de-risk the Whabouchi Project.


A large proportion of the required permits for construction and operation have already been secured for

both sites.

MC-DRA and the various QPs have examined the technical and economic aspects of the Whabouchi

Project within the level of precision of a feasibility study. The Technical Report is a feasibility study in

accordance with the standards required by NI 43-101 and Form 43 101F1.

A computed cash flow analysis was developed by MC-DRA from the technical aspects and based on

metal prices projections made for lithium hydroxide and carbonate from a reputable market study firm.

As it stands, the Whabouchi Property contains mineral reserves.

Consequently, MC-DRA concludes that the Whabouchi Project is technically feasible as well as

economically viable. The authors of the Technical Report consider the Whabouchi Project to be

sufficiently robust to warrant moving it to the implementation phase.

Risk Evaluation

Most aspects of the Whabouchi Project are well defined. However, some risks remain. In the Technical

Report, the Authors of the Technical Report have proposed several recommendations that should be

followed in the next phase to mitigate these risks.

The most significant risks identified in the Whabouchi Project were in technology, markets and

environment, as explained in the following paragraphs.

Whabouchi Mine and Concentrator

On the mining side, although moderate, a potential risk exists concerning the stability of the pit slopes and

underground openings. Mitigation measures include re-evaluation of the final pit walls after a few years of

operation and prepare a detail geotechnical study for the stability of the underground infrastructure and

open stopes.

The Concentrator uses a very high internal water recirculation rate. The impact of chemical builds up

cannot be assessed. It could be detrimental to the project performance. However, the process was modified

significantly to reduce chemicals usage and the only process section that needs reagents is the flotation of

spodumene. The other concentration methods are done by physical separation (hydro-separation, DMS

and magnetic separation) which will not be impacted by the chemicals present. This risk is therefore

limited.

The Concentrator design is very flexible and can be adapted during operation to optimize the performance

in terms of recovery and final product quality. The grade and recoveries projected from individual tests

done by various laboratories and suppliers at bench scale or pilot scale have been used to predict the

performance of the Commercial Electrochemical Plant that is stated in the Technical Report. This has not

been specifically demonstrated into a formal pilot plant test in its final flow sheet version as it is

comprised of a high number of unit operations that are very difficult to size and operate at that scale.

Where feasible, full scale equipment were tested by manufacturers which increased the confidence in the

expected performance. There is a risk that the performance recovery or the grade cannot be reached if


some unforeseen factor affects the total performance at the Commercial Electrochemical Plant. The

Concentrator should however meet the total spodumene production output with the design factors used to

select equipment.


Process Risk

The process of making lithium hydroxide monohydrate from spodumene concentrate has been developed

and demonstrated in lab/pilot scale by the Corporation. The process proposed and deployed by the

Corporation will be done by using known industrial unit operations such as flash calciner, pugmill,

indirect fired acid bake kiln, chemical reactors, filters, electro-membrane cells, crystallizers and acid

concentrators. However, the process of assembling these industrial units has not been presently deployed

on a commercial basis and contains the inherent risk related to new process development. Many of these

risks have been mitigated with test work and mass balance modeling.

It is difficult to predict the complex interplay of different areas of the Commercial Electrochemical Plant

resulting from differences from the expected operating conditions, upset conditions, planned and

unplanned maintenance, and ramp up times, and can lead to reduced production. Existing mitigation

measures include static availability analysis, addition of buffers between plant areas, and reserving space

in the layout for additional buffers should they be required. Future mitigation measures include dynamic

simulation of the process to confirm buffer sizing and operating practices.

It is important that high grade Whabouchi concentrate, similar to that used in the test work, be produced

by the Concentrator. Should the concentrate produced by the Concentrator be significantly different with

respect to composition, mineralogy or other properties, it is possible that certain plant areas observe

operating problems or reduced efficiency which could result in reduced capacity or increased operating

costs. Similarly, due to lack of data on the variability of impurities in the ore over the life of the mine, and

the resulting impurities in the concentrate, no sensitivity analysis has been performed on the expected

variability in the feed to the Concentrator. Future mitigation measures include maintaining Concentrator

scope during execution to allow the production of high quality concentrate, inclusions of key impurities in

the mine plan, adequate mine planning to level out peaks in impurity levels (should these exist), and

blending at the mine site.

Flash calciners are used widely in various industries and offer many benefits over the more traditional

rotary kiln. The use of flash calciners for the calcination of spodumene will be an industry first and

contains risk related to operational performance, notably related to build-up of deposits within the calciner

that can hinder operation, as well as due to the relatively short residence times which can result in reduced

efficiency of conversion. Multiple pilot runs at two (2) reputable suppliers have been used to evaluate this

risk and provide mitigation measures to include in the design. These mitigation measures include

increased residence times to allow full conversion, supply of air canons and clean out ports to eliminate

build-up should this occur, and issuing basic engineering packages to the vendors to advance their

engineering.

A significant amount of test work has been performed to determine the acid mixing, acid bake, and leach

conditions to carry forward in the commercial design. Nevertheless, due to budget and time constraints,

repeat tests have not been performed on all test work results to ensure their reproducibility under the


selected design conditions and for a wide variety of feed material. This results in the possibility of some

variability in the exact extraction rates of lithium and impurities and/or filterability of residues. Existing

mitigation measures include increased design factors on the leach and purification filters, and reserving

space for additional impurity removal reactors should they be required. Future mitigation measures

include, where warranted, performing confirmatory test work.

Acid concentration technologies are used in other industries, but will be operated commercially for the

first time under the current lithium containing conditions. Laboratory and pilot test work has been

performed at multiple suppliers to determine appropriate design parameters. Nevertheless, unforeseen

issues could affect production capacity. Future mitigation strategies include obtaining firm price bids, and

if recommended by the selected vendors, performing further test work to confirm detailed engineering

design.

The commissioning and ramp up to full production capacity has not been completely defined at this point.

The required turn down to meet a gradual increase in capacity may introduce unforeseen operability

problems and the potential addition of temporary equipment and by-passes not accounted for in the

estimate. Existing mitigation measures include the strategic placement of surge vessels throughout the

process which permit a plant area to operate at a different throughput to a neighboring plant area by

providing buffering between plant areas. This will allow a plant area to continue operating, even while a

neighboring plant area is experiencing a maintenance issue. Future mitigation strategies include the

development of a detailed start-up strategy during execution.

Electromembrane Process Risk

In the electro-membrane process, membranes degrade over time and must be replaced when their

efficiency decreases to an unacceptable performance level. Analogous information from the chlor-alkali

industry, 1,000-hour tests, and experience of the technology suppliers have allowed an estimation of the

membrane and electrode coatings, life to be in the order of two years, assuming high-quality brine feed.

Nevertheless, membrane life is unknown as no test has been performed of sufficient duration under the

required conditions. In addition, membrane life will be significantly affected by operating methods and

electro-membrane feed quality. Should membranes degrade more rapidly than expected the operating

costs will increase and production may decrease. Existing mitigation measures includes on-going

confirmatory laboratory test work at the equipment vendor, specific programs of process and optimization

support by the equipment vendor, issuing basic engineering packages at the vendor to advance the

engineering, and reserving space in the layout for additional electrolyzers should these be required. Future

mitigation strategies include development of detailed operating guidelines, and adequate sparing

philosophy so that membranes and associated components are available if required.

Infrastructure Risk

The Shawinigan site was selected because of the readily available existing infrastructure (roads, rail,

building, nearby Hydro-Québec power lines). The main risk associated with the re-use of this

infrastructure is in the conversion of the older paper mill buildings to meet the new requirements. The

estimate includes scope for some building upgrades based on preliminary assessment.


Receiving reagents and shipping product, aluminum-silicate and gypsum by truck will generate a

significant amount of truck traffic. Mitigation strategies include performing a traffic study during detailed

engineering.

The Commercial Electrochemical Plant is located near a residential area. The design will ensure that

noise, dust and other emissions meet regulations. The Corporation has put together a social acceptance

plan to avoid community issues.

Capital Cost Risk

The layout will make use of the existing Buildings #67 and #80. A preliminary assessment of these

buildings has been completed but the final analysis will only be done upon reception of certified vendor

information that will only happen after the award of purchase order for equipment. One of the mitigation

measure taken is to award engineering purchase order for some of the major packages (electrolysis, LHM

crystallizer, calciner). For the remaining sector the design is based on preliminary vendor information but

provisions have been made in the capital estimate for the upgrade of the existing buildings.

No geotechnical investigation of the Shawinigan site has been performed to date, and as such certain

assumptions based on as-built data have been made with respect to the type and quantity of civil and

structural work required. However, the Corporation did have some information about the rock profile and

develop the layout and plot plan for key structure based on the known information. Should the

geotechnical properties of the site vary significantly from the assumptions, project capital costs could

increase. Mitigation measures include rapidly performing the required geotechnical assessments.

The capital cost estimate does not include escalation or provision that could result from changing market

conditions.

A detailed contingency analysis has not been performed but provisions have been included in the estimate

for less developed scope items such as ventilation, HVAC, utilities and services.

Operating Costs Risk

Aluminum silicate by-product will be produced in large quantities by the Commercial Electrochemical

Plant and could bring about significant capital and operating costs should the Corporation not find

end-users capable of accepting the product as is. No capital or operating costs have been included to

prepare the aluminum silicate for shipment, sale or disposal in regulated landfills. Mitigation strategies

include on-going investigations by the Corporation of potential end users.

Overall Project Risk

Lithium is considered as an industrial mineral and the sales prices for the different lithium compounds are

not public. Sales agreements are negotiated on an individual and private basis with each different end-

user. Therefore, it is possible that the sales prices used in the financial analysis be different than the actual

market when the Corporation is in fact in a position to sell lithium compounds. In addition, there are a

limited number of producers of lithium compounds and it is possible that these existing producers try to

prevent new comers in the chain of supply by increasing their production capacity and lowering their sales

prices. In such cases, the economics of the Whabouchi Project could be affected.


The Corporation intends to produce mainly lithium hydroxide monohydrate to address the increasing

demand for that compound favored in the making of cathodes for rechargeable batteries. If cathode

manufacturers use less hydroxide than expected or if the demand for rechargeable batteries, mainly in the

electric and hybrid vehicles, is less than forecasted, it could have an effect on the sales price of that

compound and the need for new production.

Opportunities

Phase 1 Plant – 2017

The Phase 1 Plant is a 1/65 scale demonstration plant of the electro-membrane process for producing high

quality LHM from spodumene and recycled lithium sulfate salts. It has a nameplate capacity of 500 t/y of

LHM crystal production from recycled lithium sulfate salts and 100 t/y of LHM from spodumene

concentrate. The Phase 1 Plant design is based on comparable industries (namely chlor-alkali), the

traditional spodumene processing flow sheet, internally developed technologies, and know-how from

reputable technology suppliers. Its design basis and technologies were established through extensive

laboratory and pilot scale testing described earlier and realized under the supervision of the Corporation’s

own technical team and/or designated engineering firms at independent testing and suppliers’ facilities

since 2011. The Phase 1 Plant is designed for continuous operation with complete instrumentation and

DCS allowing automated and safe operation.

The total budget to build and operate the Phase 1 Plant for two years is $38 M.

The timeline for the Phase 1 Plant is as follows:

September 2016 – Start construction;

February 2017 – Start Electrolysis on recycled lithium sulfate solution;

April 2017 – First tonne equivalent of LiOH-H2O solution produced from recycled lithium

sulfate solution;

June 2017 – First tonne of LiOH-H2O crystals produced from recycled lithium sulfate

solution;

October 2017 – Start processing spodumene concentrate feed; and

December 2017 – First tonnes of LiOH-H2O crystals produced from spodumene

concentrate.

The Phase 1 Plant includes the following key unit operations:

Acid bake pug mixer, kiln, and cooler;

Leaching reactor and filter;

PIR reactors and filter;

SIR reactors and filter;

TIR reactors and filter;

IX columns;

To scale electromembrane cells within a pilot size electrolyzer;

Crude and pure LHM crystallizer; and

Services.


When running on recycled lithium sulfate solution, the acid bake and leaching steps are bypassed, and

impurity removal is adapted for the specific feedstock.

Lithium carbonate precipitation system for treatment of purge solution is installed and remains to be

commissioned. LHM crystal drying is in planning stages.

Figure: Overview Picture of Purification and Crystallization Unit Operation

The spodumene concentrate was sourced from the Whabouchi Property. Spodumene calcination was

performed offsite by third-party suppliers using various technologies.

The Corporation’s objectives in building and operating the Phase 1 Plant in advance of starting

commercial scale operation were multiple:

To demonstrate its ability to repeatedly produce lithium hydroxide according to quality

specifications as defined by customers including battery customers.

To qualify its products with customers and sign off-take agreements before starting

operation of the Commercial Electrochemical Plant.


For the development of staff skills and internal processes and to provide strong foundations

for the integration of new staff in the Commercial Electrochemical Plant.

Process improvements made during the life of the Phase 1 Plant and operational lessons

learned can be integrated in the engineering of the Commercial Electrochemical Plant.

The Corporation will also process lithium sulfate solution that is produced by some

customers in their industrial processes and convert it into lithium hydroxide, demonstrating

the versatility of the process.

Since the beginning of its operation in Q1 2017, many of those objectives and milestones were achieved:

Phase 1 Plant was operated in several campaigns and produced approximately 24 tonnes of

lithium hydroxide monohydrate crystals from lithium sulfate solution. The Phase 1 Plant was

deliberately run at lower than nameplate capacity to ramp up and stabilize operation and

adapt operation to match the availability of feedstock. This material qualified as battery

grade as per typical market specifications.

Table: Nemaska Lithium LiOH-H2O Produced at

P1P from Recycled Lithium Sulfate Solution

Element Unit Market LiOH-H2O Specs*

Span of Max Values

Nemaska

LiOH-H2O Product

LiOH % w/w 54.8 - 56.5

Ca mg/kg 10 - 100 < 1

Na mg/kg 20 - 500 < 20

K mg/kg 10 - 250 < 10

Mg mg/kg 10 < 1

Fe mg/kg 5 - 21 < 5

Al mg/kg 10 < 1

CO2 % w/w 0.035 - 0.35 < 0.2

Cl mg/kg 15 - 100 < 10

SO4 mg/kg 50 - 300 < 150

Cr mg/kg 5 - 100 < 1

Cu mg/kg 1 - 5 < 1

Ni mg/kg 1 - 10 < 1

Si mg/kg 20 - 30 < 10

Zn mg/kg 10 < 1

Sol. Acid mg/kg 40 - 1,000 < 50

* Data from publicly available company product list


Since the end of 2016, engineers, process specialists, support teams, key management staff,

and 24 technical operators have been hired and trained to operate Phase 1 Plant. These

highly skilled technicians have educational backgrounds in mechanical, chemical, and

electrical disciplines as well as a range of technical work experience including chemical

plant start-up. Both process safety reviews during engineering and skilled personnel proved

to be efficient at preventing accidents during commissioning, start-up, and operation of the

Phase 1 Plant, leading one single recordable injury up to now. This phase allowed the

development of important internal processes and know-how required for the commercial

phase.

Learnings from Phase 1 Plant operation were transferred and integrated to the process and

engineering design of the Commercial Electrochemical Plant. This mitigates many of the

technical risks associated with new process development.

Continued operation of Phase 1 Plant until start-up of the Commercial Electrochemical Plant

will allow the production of commercial samples for future clients, accelerating the

qualification process. It will also continue to bring sustained learnings and serve as a training

platform for the future members joining the Corporation for the commercial operations.

In October 2017, the Phase 1 Plant started to process spodumene concentrate from the Whabouchi

Property. The Phase 1 Plant continues to process spodumene in 2018 to further demonstrate and optimize

the process, qualify product with clients, and to develop the know-how of the workers in advance of the

start-up of the full scale commercial process.

4.3 Risk Factors

The Corporation operates in an industry that contains various risks and uncertainties. The risks and

uncertainties listed below are not the only ones to which the Corporation is subject. Additional risks and

uncertainties not presently known by the Corporation, or which the Corporation deems to be currently

insignificant, may impede the Corporation’s performance. The materialization of one of the following

risks could harm the Corporation’s activities and have significant negative impacts on its financial

situation and its operating results. In that case, the Corporation’s stock price could be affected.

Uncertainty of Completion or Disbursement of Funds relating to the Project Financing

Package

Under the terms of the Stream Agreement, a stream deposit of US$150 million will be released in two

equal tranches. The release of the first deposit was done on August 23, 2018. The release of the second

deposit is subject to various conditions precedent having been met on or before December 31, 2019, which

conditions precedent include but are not limited to minimum spend levels in respect of the construction

budget at the Whabouchi Project having been achieved. There is no assurance that any or all of the

conditions precedent will be satisfied.

The Bond Offering includes certain conditions precedent that must be satisfied by the Corporation in

order to permit drawdowns thereunder, which conditions may not be satisfied or complied with by the

Corporation. Accordingly, there is a risk that the Corporation will not be unable to drawdown or access

some or any of the proceeds from the Bond Offering trust account and/or that such proceeds will not be

available to the Corporation when needed. If the Corporation is unable to draw some or all of the funds


from the Bond Offering, this may result in a material adverse effect on the Corporation’s ability to

complete the Whabouchi Project and the Corporation will have to seek other debt and equity financing

options. In particular, no further funds from the Bond Offering will be made available to the Corporation

in the event of certain delays in completing the Whabouchi Project, in which case the Corporation's

options to be able to complete the Whabouchi Project will be to obtain additional equity financing or to

renegotiate the relevant drawdown conditions with the bondholders which may or may not be successful

Need for Additional Funding and Time of Development

There is a risk that the development of the Whabouchi Project into commercial production will not be

completed on time or on budget, or not at all. The project development schedule is still subject to the

receipt of various permits in the ordinary course even though the project’s significant permits were

obtained, financing and various construction facilities being completed on time. The development and

construction schedule of the Whabouchi Project is currently being reviewed and will be based on

management’s expectations, and may be delayed by a number of factors, some of which are beyond the

Corporation’s control. It is common in new mining operations to experience unexpected costs, problems

and delays during construction, development and mine start-up. Most, if not all, projects of this kind suffer

delays in start-up and commissioning due to late delivery of components, the inadequate availability of

skilled labour and mining equipment, adverse weather or equipment failures, the rate at which

expenditures are incurred, delays in construction schedules, or delays in obtaining the required permits or

consents, or to obtain the required financing. In addition, delays in the early stages of mineral production

often occur. During this time, the economic feasibility of production may change.

The Whabouchi Property does not have an operating history upon which the Corporation can base

estimates of future operating costs. Capital and operating costs are estimates based on the interpretation of

geological data, feasibility studies and other conditions, and there can be no assurance that they will prove

to be accurate. The costs, timing and complexities of developing the Whabouchi Project may be

significantly higher than anticipated, including because the Corporation’s property interests are mainly

located in remote areas and therefore the availability of infrastructure such as surface access, skilled

labour, and fuel and power at an economic cost, cannot be assured. In addition, cost estimates may

increase significantly as more detailed engineering work and studies are completed with respect to the

Whabouchi Project.

If there are delays in the commissioning of the Whabouchi Project or unanticipated increases in capital

and operating costs, the Corporation may require additional third party financing or seek to complete

further offerings of equity and/or debt securities to make required payments, if any, under its various

credit facilities, to complete construction and commissioning of the Whabouchi Project and to fund future

working capital, capital expenditures, operating and exploration costs and other general corporate

requirements. The success and the pricing of any such additional capital raising and/or debt financing will

be dependent upon the prevailing market conditions at that time and upon the Corporation’s ability to

attract significant amounts of debt and/or equity without having a significant project already in production

and with the possibility of having to secure significant amounts of indebtedness. There is no assurance that

such financing will be obtained on terms satisfactory to the Corporation and, if raised by offering equity

securities, any additional financing may involve a dilution to existing shareholders. Any lack of financing

could result in the delay or indefinite postponement of further construction, exploration and development

of the Whabouchi Project, which in turn would materially and adversely affect the financial and operating


results of the Corporation and the market price of the Corporation’s securities and, ultimately, could result

in the loss of its properties.

There is no assurance that the Corporation’s mineral properties, including, without limitation, the

Whabouchi Property, will ever be brought into a state of commercial production or that its activities will

result in profitable mining operations.

Negative Operating Cash Flow

The Corporation has no history of revenues from its operating activities. During the fiscal years ended

June 30, 2017 and 2018, the Corporation had negative cash flow from operating activities. The

Corporation’s cash and cash equivalents amounted to $66,567,210 and $371,193,499 as at June 30, 2017

and June 30, 2018, respectively. From July 1, 2016 to June 30, 2018, based on the operating activities and

investing activities as disclosed in the audited statement of cash flows for the year ended June 30, 2018,

the Corporation has had an average monthly cash expenditure rate of approximately $7,545,195 per

month, including addition to restricted cash, property, plant and equipment, intangible assets, deposit to

suppliers, prepaid interest, asset retirement obligation and all operating expenses and development

capitalized costs not covered by grants; and expects such rate to increase in immediate future periods since

the Corporation is in both operation at the Phase 1 Plant and in construction for the Whabouchi Project.

The Corporation anticipates it will continue to have negative cash flow from operating activities in future

periods until commercial production is achieved at the Whabouchi Project. Even if commercial operations

are achieved at the Whabouchi Project, short-term operating factors relating to the lithium deposits, such

as the need for orderly development of the deposits or the processing of new or different grades of ore,

may cause any mining operation to be unprofitable in any particular accounting period.

Risk Factors Related to the Equity Financing

The completion and expenditure by the Corporation of a determined minimum amount of proceeds raised

from equity financings, which includes the May 30, 2018 equity bought deal financing, the

contemporaneous private placement with RQ and the SoftBank Placement, must be deployed and spent by

the Corporation prior to any or all other amounts being released to the Corporation under the Bond

Offering or under the Stream Agreement for the second tranche. There is no assurance that the conditions

precedent to the release of other funds needed for the Whabouchi Project completion will be satisfied or

met. The proceeds of the Whabouchi Project equity financing could be spent in entirety by the

Corporation, under circumstances in which the remaining funds required to satisfy the remaining capital

cost requirements at the Whabouchi Project will never be released. In such circumstances, the Corporation

will be required to find alternative sources of financing to meet its capital cost requirements and there is

no assurance that such financing will be available on terms and conditions acceptable to the Corporation,

if at all.

Obligations, Covenants and Restrictions in the Terms of the Financing Transactions

The terms of the Stream Agreement, the SoftBank Placement and the Bond Offering, contain financial and

operating covenants that limit the discretion of management with respect to certain business matters and to

engage in activities that may be in the Corporation’s long-term best interest. These covenants will restrict

the Corporation's ability to incur additional indebtedness, which may limit the Corporation's ability to

finance any additional capital expenditure for the Whabouchi Project that may be necessary or appropriate


once the project has been completed, to finance additional development activities, to fund working capital

requirements and to service debt requirements, which may greatly restrict the Corporation’s ability to

adjust to changing market conditions and may render the Corporation vulnerable to a downturn in general

economic conditions and unable to make expenditures that are important to its growth and strategy. These

covenants also place significant restrictions on, among other things, the Corporation's ability to create

liens or other encumbrances, to make certain payments and investments, to sell or otherwise dispose of

assets, and to merge or consolidate with other entities, which will limit the Corporation’s operating

flexibility and could prevent the Corporation from taking advantage of business opportunities. The terms

of the Stream Agreement, the SoftBank Placement and the Bond Offering also contain various provisions

requiring the Corporation to take certain positive actions in order to fulfill its commitments such as

entering into various future agreements in connection with the Whabouchi Project and providing

confirmations, evidences and documents as may be required under the financing transactions

contemplated by the Project Financing Package. Events may occur in the future, including events out of

the Corporation's control that could cause the Corporation to fail to satisfy its obligations under the Project

Financing Package that may arise.

The obligations of the Corporation under the terms of the Bond Offering and Stream Agreement are

secured by a first and second ranking security, respectively, on all present and after acquired movable and

immovable property, assets and undertakings of the Corporation and the guarantors, including without

limitation, the Whabouchi Project and all intangible property and intellectual property. A failure to

comply with its obligations and restrictive covenants could result in an event of default which, if not cured

or waived, could permit acceleration of the related debt and acceleration of debt under other instruments

that contain cross acceleration or cross default provisions and lead to enforcement actions or proceedings

under the security granted under the Bond Offering, the Stream Agreement and any other debt entered into

by the Corporation. The occurrence of any such events would have a material adverse effect and could,

among other thing, result in the bankruptcy or liquidation of the Corporation

Going Concern and Insolvency Risk

The Corporation’s financial statements have been prepared on a going concern basis, which assumes that

the Corporation will be able to realize its assets and discharge its liabilities in the normal course of

business as they come due into the foreseeable future. The Corporation does not currently have guaranteed

sources of funding or cash flow to repay indebtedness that it intends to incur under the Bond Offering and

the Stream Agreement or in the event it enters into any permitted working capital or permitted hedging

facilities and the inability to successfully generate revenues from operations would cast significant doubt

as to the Corporation’s ability to continue as a going concern.

The Corporation’s dependence upon the Whabouchi Project

The Corporation expects future mining operations at the Whabouchi Property to account for all of the

Corporation’s ore production unless additional sources of spodumene properties are acquired and brought

into production, producing properties are acquired or spodumene concentrate can be purchased and

processed at the Commercial Electrochemical Plant. Furthermore, the Corporation expects spodumene

revenues (through the sale of spodumene concentrates to third parties from the Whabouchi Property) to be

an integrated part of the completion of the Whabouchi Project. As the Whabouchi Property will be put

into operation prior to the Commercial Electrochemical Plant, spodumene revenues are intended to be

used as a source of financing in the capital budgeting to complete the Whabouchi Project. Any adverse


condition affecting the Whabouchi Property, or any adverse conditions affecting the revenues from any

spodumene concentrate sale or the costs for producing spodumene concentrate at the Whabouchi Property

could be expected to have a material adverse effect on the Corporation’s financial performance, results of

operations and prospects and could require the Corporation to raise additional financing, which may not

be obtainable under such circumstances. While the Technical Report demonstrates the economic

feasibility of the Whabouchi Project, the inability to achieve commercial operations on a basis that is

economically viable will have a material adverse effect on the Corporation.

Significant Level of Indebtness

If the Corporation is able to successfully settle and drawdown, in full or in part, the amounts raised under

the Bond Offering, the Corporation will have a significant amount of indebtedness. The Bond Offering

will also bear an interest rate of 11.25% per annum, and will require the Corporation to service this debt

requirement quarterly.

Subject to the limits contained in the Bond Terms, the Stream Agreement, the SoftBank Investment

Agreement and any other debt instruments entered into by the Corporation, the Corporation may be able to

incur additional debt, including but not limited to certain permitted working capital facilities and permitted

hedging arrangements, from time to time. If the Corporation does so, the risks related to the Corporation’s

high level of indebtedness could increase.

The Corporation’s degree of leverage in the future could have adverse consequences for the Corporation,

due to the following factors that may affect the Corporation: (i) increased difficulty in satisfying

obligations with respect to indebtedness, including interest payment and amortized principal payments on

the bonds; (ii) limitations on the ability to obtain additional financing to fund future working capital,

capital expenditures, acquisitions or other general corporate requirements; (iii) requirements that a

substantial portion of the Corporation’s cash flows be dedicated to debt service payments instead of other

purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures,

acquisitions and other general corporate purposes; (iv) increased vulnerability to general adverse

economic and industry conditions; (v) decreased flexibility in planning for and reacting to changes in the

industry in which it competes; (vi) placing the Corporation at a disadvantage compared to other, less

leveraged competitors; and (vii) increased cost of borrowing.

The Corporation’s ability to make scheduled payments on or refinance its debt obligations, depends on the

Corporation’s financial condition and operating performance at that time, which are subject to prevailing

economic and competitive conditions and to certain financial, business, legislative, regulatory and other

factors beyond its control. The Corporation may be unable to generate or maintain a level of sufficient

cash flows from operating activities to satisfy its debt obligations or to refinance its indebtedness on

commercially reasonable terms or at all, which would have a material and adverse effect on the

Corporation’s financial condition and results of operations. The Corporation can provide no assurance that

it will achieve sufficient future cash flow and earnings to satisfy its debt obligations. If cash flows and

capital resources are insufficient to fund debt service obligations, the Corporation could face substantial

liquidity problems and could be forced to reduce or delay investments and capital expenditures, seek

additional debt or equity capital or restructure or refinance indebtedness. If the Corporation cannot make

scheduled payments on its debt, the Corporation could be in default and holders of any indebtedness could

declare all outstanding principal and interest to be due and payable which could lead to cross default and

cross acceleration provisions under certain of the Corporation’s other debt agreements. The Corporation’s


creditors could foreclose against the collateral securing the Corporation’s obligations and the Corporation

could be forced into bankruptcy or liquidation

New Mining Operations

The Whabouchi Property does not have an operating history. Whether income will result from any of the

Corporation’s projects, including, without limitation, the Whabouchi Project, will depend on the

successful establishment of new mining operations and expansion of current operations, including the

construction and operation of the Whabouchi Property, the Concentrator, the Commercial Electrochemical

Plant and related infrastructure. As a result, the Corporation is subject to all of the risks associated with

establishing or expanding new mining operations and business enterprises, including: the timing and cost,

which can be considerable, of the construction of mining and processing facilities and related

infrastructure; the availability and cost of skilled labour and mining equipment; the need to obtain

necessary environmental and other governmental approvals and permits and the timing of the receipt of

those approvals and permits; the availability of funds to finance construction and development activities;

potential opposition from non-governmental organizations, environmental groups or local groups which

may delay or prevent development activities; and potential increases in construction and operating costs

due to changes in the cost of fuel, power, materials and supplies.

Various factors, including the successful construction, commissioning and ramp-up of the Whabouchi

Project, costs, actual mineralization, consistency and reliability of ore grades, commodity prices, future

cash flow and profitability can affect successful project development, and there can be no assurance that

current or future estimates of these factors will reflect actual results and performance. The design and

construction of efficient processing facilities, the cost and availability of suitable machinery, supplies,

mining equipment and skilled labour, the existence of competent operational management and prudent

financial administration, as well as the availability and reliability of appropriately skilled and experienced

consultants can also affect successful project development. The operations of the Whabouchi Project will

rely on new infrastructure for hauling ore and materials to the surface. It is common in new mining

operations to experience unexpected problems and delays during construction, development, mine start-up

and commissioning activities.

The costs, timing and complexities of developing the Whabouchi Project, may be significantly higher than

anticipated, including because the Corporation’s property interests are located in remote, undeveloped

areas and therefore the availability of infrastructure such as surface access, skilled labour, fuel and power

at an economic cost, cannot be assured. Such factors can add to the cost of mine development, production

and operation and/or impair production and mining activities, thereby affecting the Corporation’s

profitability.

Pursuant to the Bond Terms and the Stream Agreement the draw down or release of funds will each be

subject to the satisfaction of certain conditions precedent, including evidence that, at the relevant time, the

construction and commissioning of the Whabouchi Project is proceeding in accordance with the project

budget and the project schedule, and that project completion continues to be capable of being met within

the scope of funds available thereunder and in conjunction with other funds from the Project Financing

Package. In the event that the costs of developing the Whabouchi Project are higher than anticipated,

certain proceeds of the Project Financing Package may not be available to the Corporation, in which case

it would not have sufficient financing to meet the anticipated development expenditures required to

advance the Whabouchi Project to the commencement of commercial production as described herein.


Such a lack of financing could result in the delay or indefinite postponement of further development of the

Whabouchi Project, which in turn would materially and adversely affect the financial and operating results

of the Corporation and the market price of the Corporation’s securities and, ultimately, could result in the

loss of its properties.

Accordingly, there is no assurance that the Whabouchi Project, will ever be brought into a state of

commercial production or that its activities will result in profitable mining operations.

Infrastructure, Supplies and Inflation

The Whabouchi Property is located in the Eeyou Istchee / James Bay area of the Province of Québec,

Canada, approximately 30 km east of the Nemaska community and 300 km north-northwest of the town of

Chibougamau. The Whabouchi Property is accessible by the Route du Nord, the main all-season gravel

road linking Chibougamau to Nemaska, and crossing the Whabouchi Property near its center. The

Nemiscau airport is 18 km west of the Whabouchi Property. Due to the location of the Whabouchi

Property, the Corporation will rely on air transport for the transport of its employees and also for some

goods and services that may not be available at an economic cost.

The Commercial Electrochemical Plant will be installed and constructed in the City of Shawinigan,

Province of Québec, Canada. The Shawinigan site was selected because of the readily available existing

infrastructure (roads, rail, building, electricity and natural gas).

The spodumene concentrate is expected to be trucked from the Whabouchi Property to a transloading

facility, where it is to be transloaded into rail cars to be shipped directly to the Commercial

Electrochemical Plant. The transloading facility is not currently built. It could be built by third parties and

then the Corporation would have to negotiate a contractual arrangement with such third parties for the use

of the facility. Should the transloading facility not be available in time for the initial shipment of

spodumene concentrate expected in the third quarter of calendar year 2019 or in the event the Corporation

is not able to negotiate an agreement for the use of the transloading facility on favorable terms, then the

Corporation will need to source different alternatives to ship its concentrate. One such possibility will be

to truck its concentrate directly to the Commercial Electrochemical Plant or, alternatively to truck its

concentrate to an existing transloading facility located elswhere, where it can be transloaded into rail cars.

The Corporation may also decide to build its own transloading facility in or near Chibougamau. Any of

the alternative scenarios would result in higher costs of the spodumene concentrate.

Prices for goods and services will fluctuate in relation to the level of investment in the mining and

industrial sectors; it is reasonable to expect that increased demand could impact the Corporation’s future

economic projections and competitiveness, as it may entail a meaningful increase in costs for various

goods and services during construction and operation. Improvements in the economic conditions for the

mining and industrial sectors as a whole will typically result in increases to both the costs of planned

development and construction activities, which must also be factored into economic models used in

projections for future development and potential operations. Increased demand for, and costs of, goods or

services could result in delays if they cannot be obtained in a timely manner due to inadequate availability,

and it may cause scheduling difficulties and delays due to the need to coordinate their availability, any of

which could materially increase project development and/or construction costs. These factors could have a

material impact on the Corporation’s operations and profitability


Processing Technology and Off-take Specifications

The Corporation’s proprietary process of preparing lithium hydroxide and lithium carbonate from

spodumene concentrate using membrane electrolysis has only been developed recently. This process, for

which the Corporation has filed several patent applications and which is key to its business strategy and

the economics of the Whabouchi Project, has not been used on a commercial basis and there is no

certainty that results achieved during small scale testing (including at the Phase 1 Plant) will be replicated

in commercial quantities, which could have a material adverse impact on the conversion abilities at the

Whabouchi Project. The production and capital costs associated with the process may also differ from

those used in the Technical Report which could have a direct impact on the economics of the Whabouchi

Project.

Pursuant to the Corporation’s off-take arrangements under the JM Agreements, the FMC Agreement and

the Stream Agreement , as well as the agreements with SoftBank, LG and Northvolt, and any future

definitive supply agreements entered into, the Corporation is, and will be, required to provide lithium

products that meet certain purity and grade specifications. The inability of the Corporation to fully

commission and scale-up its operations at the Phase 1 Plant and the Commercial Electrochemical Plant to

produce battery grade lithium would have an adverse effect on the Corporation’s ability to meet its

obligations under its off-take arrangements which would have a material adverse effect on the Corporation.

Lithium Demand

Lithium is considered an industrial mineral and the sales prices for the different lithium compounds are not

public. Lithium is not a traded commodity like base and precious metals. Sales agreements are negotiated

on an individual and private basis with each different end-user. Therefore, it is possible that the sales prices

used in the Technical Report will be different than the actual prices at which the Corporation is able to sell

its lithium compounds. In addition, there are a limited number of producers of lithium compounds and it is

possible that these existing producers will try to prevent new-comers from entering the chain of supply by

increasing their production capacity and lowering sales prices. Factors such as foreign currency

fluctuation, supply and demand, industrial disruption and actual lithium market sale prices could have an

adverse impact on operating costs and stock market prices and on the Corporation’s ability to fund its

activities. In each case, the economics of the Whabouchi Project could be materially adversely affected,

even to the point of being rendered uneconomic. The Corporation intends to mainly produce lithium

hydroxide monohydrate to address the increasing demand for such compound, which is favoured in the

making of cathodes for rechargeable batteries. If cathode manufacturers use less lithium hydroxide than

expected, or if the demand for rechargeable batteries, mainly used in electric and hybrid vehicles, is less

than forecasted, it could have a material adverse effect on the sales price, profitability and development

strategy of the Corporation.

Uncertainty of Mineral Resources and Mineral Reserves

The estimates of mineral resources and mineral reserves for the Whabouchi Property have been prepared

in accordance with NI 43-101. There are numerous uncertainties inherent in estimating mineral resources

and mineral reserves and no assurance can be given that the anticipated tonnages and grades will be

achieved, that the indicated level of recovery will be realized or that any categories of mineral resources or

reserves will be upgraded to higher categories. The estimation of mineralization is a subjective process and

the accuracy of estimates is a function of quantity and quality of available data, the accuracy of statistical


computation and the assumptions and judgments made in interpreting engineering and geological

information. Mineral reserves at the Whabouchi Property have been determined to be economic ore in the

context of the Technical Report in accordance with NI 43-101. However, factors such as market price

fluctuations, increased production costs, reduced recovery rates, and changes to other assumptions applied

to the estimates, may render the mineral reserves uneconomic.

It should be understood that the mineral resources and mineral reserves presented in the Technical Report

are estimates of the size and grade of the deposits based on a number of drillings and samplings and on

assumptions and parameters available. The level of confidence in the estimates depends upon a number of

uncertainties. These uncertainties include, but are not limited to, future changes in product prices and/or

production costs, differences in size and grade and recovery rates from those expected, and changes in

project parameters. There is no assurance that the Whabouchi Project implementation will be realized or

that the current estimates of volume and grade of minerals mined/processed or of cash flows derived from

production will be achieved.

Substantial expenditures and time are required to establish mineral reserves through drilling and to develop

the mining and processing facilities and infrastructure at mine site. There is no certainty that future

expenditures made in the exploration of the Corporation’s other mineral properties or additional areas at

the Whabouchi Project will result in the identification of commercially recoverable quantities of ore or that

ore reserves will ever be mined or processed profitably.

Governmental and Environmental Regulations, Permits and Licenses

The current operations of the Corporation and anticipated future operations, including further exploration,

development activities and commencement of production for the Whabouchi Project are subject to various

federal, provincial and local laws and regulations governing prospecting, development, mining,

construction, production, exports, taxes, standards of work, labour standards, occupational health (diseases

and the occupational safety), waste disposal, toxic substances, land use, environmental protection, mine

safety and other matters. Companies engaged in exploration activities, and in the construction,

development and operation of mines and related facilities, generally experience increased costs and delays

in production and other schedules as a result of the need to comply with applicable laws, regulations and

permitting requirements.

The Corporation’s operations are also subject to various laws and regulations with the federal, provincial

and local levels governing the protection of the environment. Environmental legislation provides for

restrictions and prohibitions on spills, releases or emissions of various substances produced in association

with certain mining industry operations, such as seepage from tailings disposal areas, which would result

in environmental pollution. These laws and regulations impose high standards on the mining industry, in

order to control the rejects of waste water and to force the participants to account for such controls to the

lawful authorities, to reduce or eliminate the impact that are generated by certain production activities;

extraction and of treatment and which are later on deposited on the ground or are rejected into the air or the

water, to complete work of restoration of the mining properties, to control dangerous waste and materials

and to reduce the risk of industrial accidents.

A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types

of operations require the submission and approval of environmental impact assessments. Environmental

legislation is evolving in a direction of stricter standards and enforcement, and higher fines and penalties


for non-compliance. Environmental assessments of proposed projects carry a heightened degree of

responsibility for companies and directors, officers and employees. The cost of compliance with changes in

governmental regulations has the potential to reduce the profitability of operations.

Failure to comply with applicable laws, regulations, and permitting requirements may result in

enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing

operations to cease or be curtailed, and may include corrective measures requiring capital expenditures,

installation of additional equipment, or remedial actions. Parties engaged in mining operations may be

required to compensate those suffering loss or damage by reason of mining activities and may have civil or

criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular,

environmental laws. The Corporation believes it is in substantial compliance with all material laws and

regulations which currently apply to its activities. However, there is no assurance that future changes to

existing laws and regulations will not impact the Corporation. Amendments to current laws, regulations

and permits governing the operations and activities of mining companies, or more stringent

implementation thereof, could have a material adverse impact on the Corporation and cause increases in

capital expenditures or production costs, reduction in levels of production or require abandonment or

delays in the development of current or new mining projects.

The Corporation’s activities and operations require obtaining on a timely manner and maintaining permits

and licences from various governmental authorities. The Corporation considers that it holds all the permits

and licences required for the activities it currently carries on, in accordance with the relevant laws and by-

laws. Changes brought to the laws and regulations could affect these permits and licences. There can be no

assurance that various permits and all the necessary licences which the Corporation may require in the

normal course for its current and anticipated exploration, development and construction activities as well

as mining operations, including without limitation, on the Whabouchi Project, will be obtainable on

reasonable terms or on a timely basis or that such laws and regulations would not have an adverse effect on

any mining project which the Corporation might undertake, including, without limitation, the Whabouchi

Project. Furthermore, any delays in obtaining the anticipated construction permits in respect of the

Commercial Electrochemical Plant, would have an adverse effect on the Corporation’s timing and costs

associated with start-up. Such delays could also allow other third-party projects to commence production

before the Whabouchi Project, thereby potentially reducing the Corporation’s target market share, which

would have an adverse impact on the level of product sales and economics of the Whabouchi Project.

Currency Fluctuations

Currency fluctuations may have an effect on the Corporation’s costs, revenue and cash flow. Although the

Corporation raised equity in Canadian dollars, certain of the Corporation’s estimated capital costs in

connection with the Whabouchi Project were converted from quotes obtained in foreign currencies and

converted into Canadian dollars applying a fixed exchange rate. The Corporation is also pursuing debt

financing which may be denominated in United States dollars. Accordingly adverse fluctuations in the

relative prices of Euros, Canadian and United States dollars could increase the cost of development and

production at the Whabouchi Project or increase the cost of borrowing and could materially and adversely

affect the Corporation’s earnings and financial condition.


Conditions of the Industry in General

The exploration and development of mineral resources, including construction, start-up and operation of a

mine, involves significant risks that even an allied neat evaluation with experience and know-how cannot

avoid. Although the discovery of a deposit can prove extremely lucrative, few properties where exploration

and development work are carried out become producing mines thereafter. Important expenditures are

necessary to establish ore reserves, to work out the metallurgical processes and to build the mining plant on

a particular site. It is impossible to provide assurance to the effect that the exploration and development

programs contemplated by the Corporation will generate a profitable mine.

The mining activities comprise a high level of risks. The activities of the Corporation are subject to all the

dangers and the risks usually dependent on the exploration and the development, including the unusual and

unforeseen geological formations, explosions, collapses, floods and other situations which can occur

during drilling and the removal of material and of which any could cause physical or material or

environmental injuries and, possibly, legal responsibility.

Insurance Risk

The mining industry is subject to significant risks that could result in damage to or destruction of property

and facilities, personal injury or death, environmental damage and pollution, delays in production,

expropriation of assets and loss of title to mining claims and mining lease. No assurance can be given that

insurance to cover the risks to which the Corporation’s activities are subject will be available at all or at

commercially reasonable premiums. Therefore, the Corporation could be held responsible for pollution or

for other risks against which it could not be insured or against which it could choose not to be insured,

given the high cost of the premiums or for other reasons. The Corporation currently maintains insurance

within ranges of coverage that it believes to be consistent with industry practice for companies of a similar

stage of development. The Corporation carries liability insurance with respect to its exploration and

development operations, including certain limited environmental liability insurance coverage. The payment

of any such liabilities would reduce the funds available to the Corporation. If the Corporation is unable to

fully fund the cost of remedying an environmental problem, it might be required to suspend operations or

enter into costly interim compliance measures pending completion of a permanent remedy. The payment of

sums in this respect could also involve the loss of the assets of the Corporation.

Dividend Policy

No dividends on the common shares of the Corporation have been paid to date. The Corporation has no

current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay

dividends in the future will be made at the discretion of the Board of Directors and will depend on, among

other things, the Corporation’s financial results, cash requirements, contractual restrictions and other

factors that the Board of Directors may deem relevant. In addition, the Corporation’s ability to pay

dividends may be limited by covenants of any existing and future outstanding indebtedness that the

Corporation or its subsidiaries incur. As a result, investors may not receive any return on an investment in

the Corporation’s securities unless they sell the securities for a price greater than that which they paid for

them.


Volatility of Share Price and Market Price of the Common Shares

The price of the shares of resource companies tends to be volatile. Fluctuations in the world price of

lithium and many other elements beyond the control of the Corporation could materially affect the price of

the common shares of the Corporation.

There can be no assurance that an active market for the common shares of the Corporation will be

sustained after any offering of securities. Securities of companies with smaller capitalizations have

experienced substantial volatility in the past, often based on factors unrelated to the financial performance

or prospects of the companies involved. These factors include global economic developments and market

perceptions of the attractiveness of certain industries. There can be no assurance that continuing

fluctuations in price will not occur. If an active market for the common shares of the Corporation does not

continue, the liquidity of a purchaser’s investment may be limited. If such a market does not develop,

purchasers may lose their entire investment in the common shares of the Corporation.

As a result of any of these factors, the market price of the common shares of the Corporation at any given

point in time may not accurately reflect the long-term value of the Corporation. Securities class-action

litigation often has been brought against companies following periods of volatility in the market price of

their securities. The Corporation may in the future be the target of similar litigation. Securities litigation

could result in substantial costs and damages, and also divert management’s attention and resources.

Protection and Maintenance of Intellectual Property

The Corporation’s success could depend in part on its ability to protect and maintain its

intellectual property rights. The Corporation has identified specific markets of interest for lithium

compounds produced from the transformation of spodumene concentrate and has completed,

among other things, numerous metallurgical bench scale, pilot plant scale and demonstration scale

production in order to develop different processes to produce lithium hydroxide from spodumene

concentrate and to produce lithium carbonate from lithium hydroxide.

No assurance can be given that the rights used by the Corporation will not be challenged,

invalidated, infringed or circumvented, nor that the rights granted thereunder will provide

competitive advantages to the Corporation. Patent applications have been filed by the Corporation

regarding methods of transforming spodumene and producing lithium hydroxide from lithium

sulfate and lithium carbonate from lithium hydroxide. Therefore, it is not clear whether the

pending patent applications will result in the issuance of patents. Moreover, it is not clear whether

the patents to be issued regarding these methods will be challenged by third parties, whether the

patents of others will interfere with the Corporation’s ability to use those patents and know-how

to produce lithium compounds. There is no assurance that the Corporation will be able to develop

or obtain alternative technology in respect of patents issued to third parties that incidentally cover

its production processes. Moreover, the Corporation could potentially incur substantial legal costs

in defending legal actions which allege patent infringement or by instituting patent infringement

suits against others. The Corporation’s commercial success also depends on the Corporation not

infringing patents or proprietary rights of others.


Competition

The mining industry is intensely and increasingly competitive, and the Corporation competes with

many companies with greater financial resources and technical facilities than those of the

Corporation. Competition in the mining industry could adversely affect the Corporation’s ability

to put the Whabouchi Project into production and to secure sale agreements for all (100%) of its

products.

Price of Lithium Salts and Spodumene Concentrate

The mining industry is heavily dependent upon the market price of the metals or minerals being mined.

There is no assurance that a profitable market will exist for the sale of the same. There can be no

assurance that mineral prices will be such that the Corporation’s properties can be mined at a profit. The

price of the common shares, financial results of the Corporation, its activities; could undergo in the future

important negative effects because of the fall of the prices of the lithium compounds, resulting in an impact

on the capacity of the Corporation to finance its activities. The prices of lithium compounds may fluctuate

in an important way and are tributary to various factors which are independent of the will of the

Corporation, such as the sale or the purchase of lithium compounds by various brokers, the rates of

interest, foreign exchange rates, the rates of inflation or deflation, the fluctuations in the value of the

Canadian dollar and other currencies, the regional and world offer and demand, the economic conjuncture

and policy which prevails in the countries of the world which are large lithium compounds producers.

Lithium compounds, which are not traded on any exchange and the fact that sales contracts are negotiated

on an individual basis, can see their prices fluctuates sometimes positively or negatively and any serious

fall could prevent the continuation of the development activities of the properties of the Corporation.

Dependence on, and Protection of, Key Personnel

The success of the Corporation is currently largely dependent on the performance of its directors and

officers as well as its operations and technical leaders. The loss of the services of any of these persons

could have a materially adverse effect on the Corporation’s business and prospects. There is no assurance

the Corporation can maintain the services of its directors, officers or other qualified personnel required to

operate its business. The loss of their services could have an unfavourable impact on the Corporation. The

Corporation has contracted key-man insurance in order to mitigate such unfavourable impact on the

Corporation

Cree Nation Mining Policy and Related Agreements

On November 7, 2014, the Corporation signed the Chinuchi Agreement concerning the development and

operation of the Whabouchi Project in Eeyou Istchee / James Bay territory. The Chinuchi Agreement is a

binding agreement that governs the long-term working relationship between the Corporation and the Cree

parties during all phases of the Whabouchi Project. It provides for training, employment and business

opportunities for the Crees during project construction, operation and closure, and sets out the principles of

social, cultural and environmental respect under which the project will be managed. The Chinuchi

Agreement includes a mechanism by which the Cree parties will benefit financially from the success of the

project on a long-term basis, consistent with the mining industry’s best practices for engagement with First

Nations communities as well as with the Cree Nation Mining Policy.


Under the current mining policy adopted by the Cree Regional Authority, any mineral production on the

Eeyou Istchee/James Bay territory shall be subject to specific agreement among the Corporation, the Cree

Nation of Nemaska (the First Nations on whose traditional territory the Whabouchi Property is located),

the Grand Council of the Crees (Eeyou Istchee) and the Cree Nation Government (collectively, the “Cree

Parties”).

On November 7, 2014, the Corporation signed the Chinuchi Agreement with the Cree Parties

(the “Chinuchi Agreement”) concerning the development and operation of the Whabouchi Property in

Eeyou Istchee/James Bay territory. The Chinuchi Agreement is a binding agreement that governs the long-

term working relationship between the Corporation and the Cree Parties during all phases of the

Whabouchi Project. It provides for training, employment and business opportunities for the Crees during

project construction, operation and closure, and sets out the principles of social, cultural and environmental

respect under which the Whabouchi Property will be managed. In consideration for the consent of the Cree

Parties to the Whabouchi Property and their support thereof, which ensures a stable regional environment

for the development and operation of the Whabouchi Property and the Whabouchi Project, the Corporation

is subject to several obligations, including in respect of the foregoing opportunities and principles, and

including payment of fixed and ongoing variable amounts throughout the life of the Whabouchi Project.

The said fixed payments, which first become payable upon the satisfaction of a specified milestone, are

subject to a one-time adjustment mechanism at a specified time after commencement of commercial

production has been achieved at the Whabouchi Property and at the Commercial Electrochemical Plant,

which might result in a larger payment. All expected payments under the Chinuchi Agreement have been

included in the assessment for the 2018 Feasibility Study.

The obligations of the Corporation under the Bonds Offering will be secured by, among other things, a

first ranking (in all material respects) security package which will cover, to the extent legally possible, all

material mining titles and the Shawinigan site. In the event of a default under the Bonds Offering, the

security trustee, on behalf of the bondholders will be entitled, subject in all cases to the terms of the Bond

Terms and all intercreditor agreements entered into (including in respect of the Stream Agreement ) to

exercise all rights and remedies in respect of the security package and to commence any enforcement

action, including but not limited to selling, transferring or disposing of, in whole or in part, the Whabouchi

Project. Pursuant to the terms of the Chinuchi Agreement, upon (i) a transfer of the Whabouchi Property to

a third party that is not affiliated with the Corporation or (ii) the sale of, or acquisition of a controlling

interest in, the Corporation (or of any permitted assignee of the Corporation’s rights and obligations under

the Chinuchi Agreement), payment of the aggregate balance of all outstanding fixed payments, together

with any accrued interest in respect thereof, is accelerated. This accelerated payment (which may be

substantial), together with any variable payments owed to the Cree Parties at the date of such transfer, sale

or acquisition of control, become payable within thirty days of the closing thereof. Moreover, any

transferee of the Whabouchi Property must assume the rights and obligations of the Corporation under the

Chinuchi Agreement in order to avail itself of the benefit thereof. The consent of the Cree Parties to, and

their support of, the Whabouchi Project, as set forth in the Chinuchi Agreement, is essential to the success

of the Whabouchi Project. Non-compliance with the obligations of the Corporation under the Chinuchi

Agreement could have a material adverse effect on the Corporation.

Titles Matters and Territorial Claims

While the Corporation has reviewed and is satisfied with the titles to its mineral properties, and, to the best

of its knowledge, such titles are in good standing, there is no guarantee that titles to such properties will


not be challenged or impugned. The properties may be subject to prior unregistered agreements of transfer

or aboriginal land claims, and titles may be affected by undetected defects. In addition, according to the

applicable mining legislation in the Province of Québec, the Corporation will need to incur expenditures on

its properties and pay a rent in order to renew claims upon their expiry. There can be no assurance that the

Corporation will be successful in renewing all such claims. The properties in which the Corporation holds

an interest are not currently subject to territorial claims on behalf of First Nations. No insurance can

however be provided to the effect that such will not be the case in the future.

Tax Risks

The Corporation was partly financed by the issuance of flow-through shares. However, there is no

guarantee that the funds spent by the Corporation will qualify as Canadian exploration expenses, even if

the Corporation has committed to take all the necessary measures for this purpose. Refusals of certain

expenses by tax authorities could have negative tax consequences for investors and, in such an event, the

Corporation will have to indemnify each flow-through share subscriber for any additional taxes.

Conflicts of Interest

Some of the directors and officers of the Corporation are engaged as directors or officers of other

Corporation’s involved in the exploration and development of mineral resources, and situations may arise

where these directors and officers will be in direct competition with the Corporation. Such engagement

could result in conflicts of interest. Conflicts, if any, will be dealt with in accordance with the relevant

provisions of the Canadian Business Corporation Act. Any decision taken by these directors and officers

and involving the Corporation will be in conformity with their duties and obligations to compromise in an

equitable way and in good faith with the Corporation and these other corporations. Moreover, these

directors and officers will declare their interests and will abstain to vote on any question which could give

place to a conflict of interest. Some of the directors and officers of the Corporation may become in the

future directors of other companies engaged in same or other business ventures.

Dilution

Additional financing needed to continue funding the development and operation of the Corporation may

require the issuance of additional securities of the Corporation. The issuance of additional securities and

the exercise of common share purchase warrants, options and other convertible securities will result in

dilution of the equity interests of any persons who are or may become holders of common shares.

Structural Subordination of the Common Shares

In the event of a bankruptcy, liquidation or reorganization of the Corporation, holders of certain of its

indebtedness and certain trade creditors will generally be entitled to payment of their claims from the

assets of the Corporation before any assets are made available for distribution to the shareholders. The

common shares of the Corporation will be effectively subordinated to most of the other indebtedness and

liabilities of the Corporation.


Lack of Revenue

As the Corporation does not have revenues, it is dependent upon future financings to continue its plan of

operation, yet stay in business. The Corporation has not generated any revenues since its incorporation.

The Corporation’s business objectives include the construction and operation of the Whabouchi Project.

There is no assurance that it will be commercially viable.

History of Losses

The Corporation does not have a history of profitable operations. It sustained net losses in the fiscal years

ended June 30, 2017 and 2018. Management of the Corporation does not expect any income until its first

sales of spodumene concentrate as mentioned hereinabove, and assesses that the Corporation may incur

ongoing losses in the near future, and there is no guarantee it will become profitable in the short term.

The Corporation’s future success will depend to a large extent on its ability to ensure the respect of its

contractual commitments which are important from an operational and financial point of view.

In general, the Corporation’s revenues will also be affected by economic conditions and the capacity of

the Corporation to start production and manage its growth.

5. DIVIDENDS AND DIVIDENDS POLICY

During the three most recently completed fiscal years and as of the date of this Annual Information Form,

the Corporation has not paid any dividends or made any distributions on its issued and outstanding

common shares.

The Corporation’s current policy is to reinvest future earnings in order to finance the growth and

development of its business. The Corporation does not intend to pay dividends in the foreseeable future.

Any future determination to pay cash dividends is at the discretion of the Board and will depend on the

Corporation’s financial condition, results of operation, capital requirements and such other factors as the

Board deems relevant.

6. GENERAL DESCRIPTION OF THE CAPITAL STRUCTURE

6.1 Common Shares

The Corporation’s authorized capital is made up of an unlimited number of common shares without par

value. As of June 30, 2018, 846,059,338 common shares were issued and outstanding as fully paid and

non-assessable. As of the date of this Annual Information Form, October 10, 2018, 846,434,338 common

shares are issued and outstanding as fully paid and non-assessable. The holders of common shares of the

Corporation are entitled to vote at all shareholder meetings. They are also entitled to dividends, if, as and

when declared by the Board and, upon liquidation or winding-up of the Corporation, to share the residual

assets of the Corporation. The common shares do not have any pre-emptive, conversion or redemption

rights, and all have equal voting rights. There are no special rights or restrictions of any nature attached to

any of the common shares, all of which rank equally as to all benefits which might accrue to the holders of

the common shares.


6.2 Warrants

As of June 30, 2018, an aggregate number of 29,274,823 warrants issued by the Corporation were

outstanding, collectively entitling the holders thereof to purchase an aggregate of up to 29,274,823

common shares. The warrants having an expiry date of July 8, 2019 are subject to acceleration provisions

as described in the July Warrant Indenture, each whole warrant is exercisable up to July 8, 2019 to

purchase one common share of the Corporation at a price of $1.50.

Between July 1, 2018 and the date of this Annual Information Form, there were no additional warrants

issued or exercised.

For further details about the warrants issued by the Corporation as of June 30, 2018, reference is made to

note 9 to the Corporation’s audited consolidated financial statements for the last fiscal year ended June 30,

2018 which are available on SEDAR at www.sedar.com. The warrants having an expiry date of

July 8, 2019 are listed on the TSX exchange under the symbol NMX.WT.

6.3 Compensation Options

As at June 30, 2018, the Corporation had the equivalent of 735,488 broker warrant units outstanding,

collectively entitling the holders thereof to purchase an aggregate of up to 735,488 units of the

Corporation, at a price of $1.15 per unit, each being comprised of one common share of the Corporation

and one-half of one common share purchase warrant. Subject to acceleration provisions as described in the

warrant indenture, each whole common share purchase warrant is exercisable up to July 8, 2019 to

purchase one common share of the Corporation at a price of $1.50 per common share. As at June 30, 2018,

in addition to the outstanding and exercisable broker units, a total of 447,580 broker warrants allowing the

holders to purchase 447,580 common shares are still outstanding at an exercise price of $1.50 per share

and having an expiry date of July 8, 2019.

Between July 1, 2018 and up to the date of this Annual Information Form, there were no additional

compensation options, broker warrants and finder’s options issued.

6.4 Stock Options Issued Under the Stock Option Plan

As of June 30, 2018, an aggregate number of 34,512,734 stock options issued by the Corporation were

outstanding, collectively entitling the holders thereof to purchase an aggregate of up to

34,512,734 common shares as follows:



Number of Stock

Options

Number of Vested

Stock Options Exercise Price Expiry Date

233,334 233,334 1.20 August 14, 2018

375,000 375,000 0.13 October 1, 2018

200,000 200,000 0.12 October 21, 2018

500,000 500,000 0.13 November 26, 2018

50,000 50,000 0.10 January 19, 2019

150,000 150,000 0.20 January 19, 2019

250,000 250,000 0.40 January 19, 2019

354,500 354,500 0.92 January 19, 2019

50,000 50,000 1.11 January 19, 2019

150,000 150,000 0.10 May 27, 2019

50,000 50,000 1.41 May 31, 2019

2,538,250 2,538,250 0.20 March 2, 2020

100,000 100,000 0.20 July 6, 2020

1,925,000 1,925,000 0.40 December 24, 2020

4,786,650 4,786,650 0.92 April 14, 2021

100,000 100,000 1.11 April 26, 2021

200,000 100,001 1.10 July 20, 2021

200,000 100,001 1.10 July 25, 2021

200,000 100,001 1.10 September 2, 2021

300,000 150,000 1.16 September 7, 2021

700,000 350,002 1.38 September 16, 2021

75,000 37,500 1.41 September 18, 2021

500,000 250,001 1.26 October 11, 2021

75,000 37,500 1.34 October 21, 2021

75,000 37,500 1.32 October 24, 2021

75,000 25,000 1.37 January 9, 2022

100,000 33,334 1.44 January 11, 2022

75,000 25,000 1.32 March 20, 2022

300,000 233,334 1.11 May 11, 2022

100,000 16,667 1.19 August 14, 2022

100,000 16,667 1.43 October 13, 2022


Number of Stock

Options

Number of Vested


75,000 - 2.32 January 5, 2023

350,000 - 2.39 January 8, 2023

75,000 - 1.34 March 13, 2023

Total 34,512,734 20,630,242

For further details about the stock options issued by the Corporation as of June 30, 2018, reference is made

to note 9 to the Corporation’s audited consolidated financial statements for the last fiscal year ended June

30, 2018 which are available on SEDAR at www.sedar.com.

Between July 1, 2018 and up to the date of this Annual Information Form, 375,000 options were exercised

by a consultant at a price of $0.125 per share and the Corporation issued 375,000 common shares in

relation to this exercise. Also, the Corporation issued 1,850,000 options having exercise prices varying

between $0.85 and $1.04, cancelled 250,000 options that were issued at an exercise price of $1.04 and

233,334 options exercisable at a price of $1.20 expired As a result and as of the date of this Annual

Information Form, an aggregate number of 35,504,400 stock options issued by the Corporation were

outstanding, collectively entitling the holders thereof to purchase an aggregate of up to 35,504,400

common shares as follows::

Number of Stock

Options

Number of Vested


200,000 200,000 0.12 October 21, 2018

500,000 500,000 0.13 November 26, 2018

50,000 50,000 0.10 January 19, 2019

150,000 150,000 0.20 January 19, 2019

250,000 250,000 0.40 January 19, 2019

354,500 354,500 0.92 January 19, 2019

50,000 50,000 1.11 January 19, 2019

150,000 150,000 0.10 May 27, 2019

50,000 50,000 1.41 May 31, 2019

2,538,250 2,538,250 0.20 March 2, 2020

100,000 100,000 0.20 July 6, 2020

1,925,000 1,925,000 0.40 December 24, 2020

4,786,650 4,786,650 0.92 April 14, 2021

100,000 100,000 1.11 April 26, 2021

200,000 133,334 1.10 July 20, 2021

200,000 133,334 1.10 July 25, 2021

200,000 133,334 1.10 September 2, 2021

300,000 200,000 1.16 September 7, 2021

700,000 466,668 1.38 September 16, 2021



Number of Stock

Options

Number of Vested


75,000 50,000 1.41 September 18, 2021

500,000 250,001 1.26 October 11, 2021

75,000 37,500 1.34 October 21, 2021

75,000 37,500 1.32 October 24, 2021

75,000 37,500 1.37 January 9, 2022

100,000 50,001 1.44 January 11, 2022

75,000 37,500 1.32 March 20, 2022

300,000 233,334 1.11 May 11, 2022

100,000 33,334 1.19 August 14, 2022

100,000 16,667 1.43 October 13, 2022

75,000 12,500 2.32 January 5, 2023

350,000 58,333 2.39 January 8, 2023

75,000 12,500 1.34 March 13, 2023

18,800,000 8,360,000 1.04 May 29, 2023

75,000 - 1.03 June 5, 2023

75,000 - 0.85 July 9, 2023

1,500,000 - 1.04 August 13, 2023

200,000 - 1.04 August 15, 2023

75,000 - 1.04 September 17, 2023

75,000 - 1.04 September 10, 2023

Total 35,579,400 21,497,740

The Board may grant stock options in accordance with the Amended and Restated Nemaska Lithium Inc.

2011 Stock Option Plan as adopted by the Board on October 28, 2011, as amended on November 1, 2012,

December 16, 2013, January 26, 2016 and November 8, 2016 to employees, officers, directors or

consultants of the Corporation or any subsidiary thereof, and to persons employed to perform investor

relations activities.

7. MARKET FOR SECURITIES

7.1 Market

The common shares of the Corporation were listed on the TSX-V on January 20, 2010 under the trading

symbol “NMX”. Effective as of July 8, 2016, all of the issued and outstanding common shares of the

Corporation, including the warrants issued under the 2016 Public Offering, commenced trading on the

TSX under the trading symbol “NMX” for the common shares and “NMX.WT” for the warrants. As a

result, the common shares of the Corporation were concurrently delisted from the TSX-V.


7.2 Trading Price and Volume

The following table shows the variation in price and the trading volume of the common shares of the

Corporation on the TSX-V from July 1, 2017 to September 30, 2018, on a monthly basis for each month of

the financial year ended June 30, 2018 and up to the date of this Annual Information Form.

Month High ($)(1)

Low ($)(2)

Trading volume(3)

July 2017 1.31 0.95 15,142,300

August 2017 1.30 1.10 13,565,340

September 2017 1.50 1.24 30,331,950

October 2017 1.85 1.40 37,442,130

November 2017 2.06 1.56 38,993,650

December 2017 2.40 1.94 37,176,120

January 2018 2.44 1.64 56,415,310

February 2018 1.85 1.31 33,211,670

March 2018 1.48 1.02 39,436,210

April 2018 1.44 1.07 32,883,460

May 2018 1.35 0.95 60,451,850

June 2018 1.08 0.80 65,461,380

July 2018 0.92 0.65 51,592,960

August 2018 0.84 0.60 56,304,880

September 2018 0.94 0.66 56,410,710

Notes:

(1) Includes intra-day high prices.

(2) Includes intra-day low prices.

(3) Total volume traded in the relevant period.

8. DIRECTORS AND OFFICERS

8.1 Name, Occupation and Securities Holding

The following table contains certain information on the Corporation’s directors and executive officers as of

the date of this Annual Information Form. The directors of the Corporation are elected at the annual

general meeting of shareholders for a term of office ending at the following annual general meeting or until

their successor is duly elected, unless their position becomes vacant earlier.


It must be noted that, on August 13, 2018, the Board of Directors of the Corporation approved the

following:

The Audit Committee becoming the Audit & Risk Committee to reflect its expanded

mandate;

the creation of the Corporate Governance & Social Responsibility Committee

(the “Governance Committee”) and of the Human Resources, Compensation &

Nominating Committee (the “HR Committee”); and

the designation of three directors to act as members of an ad hoc technical committee (not a

formal Board committee), which committee oversees the progress of the construction and

commissioning of the Whabouchi Project and which committee has non-Board members

(the “Technical Committee”).

Guy Bourassa

Québec, Canada

President and Chief Executive

Officer of the Corporation

Director of the Corporation since

May 2007

Member of the Technical

Committee

Number of common shares held:

6,070,000

Mr. Guy Bourassa graduated in law from Université Laval, Québec, in

1983. He was member of the Barreau du Québec (Law Society) from 1983

to October 2011. During his career as an attorney, he mainly worked with

Québec mining exploration businesses. He is currently a director of

Monarques Gold Corp., a mining exploration corporation, since February

2011 and was President and Chief Executive Officer of that corporation

from March 2011 to October 2012. He is currently director of Nouveau

Monde Graphite Inc. since February 2017. Mr. Bourassa was a director and

President of Radisson Mining Resources Inc. from November 1988 to June

1991, and was President and a director of Dufresnoy Industrial Minerals Inc.

from May 1994 to November 1996, and Corporate Secretary of Mazarin Inc.

from September 1991 to June 1994.


Michel Baril

Québec, Canada

Chairman of the Board


October 2008

Chairman of the Audit & Risk

Committee

Member of the Governance

Committee and of the HR

Committee


1,133,000

Mr. Michel Baril graduated from Montréal’s École Polytechnique in June

1976 with a mechanical engineering degree. Since 2003, Mr. Baril has

served on several boards of directors. He was a Director of The Hockey Co.

from June 2003 to June 2004. He was also Director of Groupe Laperrière &

Verreault Inc., a corporation that specializes in the fields of pulp and paper

and water treatment, from September 2004 to August 2007. He was a

Director of Raymor Industries Inc, a corporation specialized in the

production of metallic powder and carbon nanotubes, from January 2005 to

February 2009 and from June 2009 to February 2010. Also, he was a

Director of Komet Manufacturers Inc., a corporation specialized in the

manufacturing of vanities and kitchen cabinets, from June 2007 to

September 2011. He is currently a Director of Imaflex Inc., a corporation

specialized in the manufacturing of polymer-based films, since April 2008

and of Monarques Gold Corp, a mining corporation, since February 2011.

These two corporations are listed on the TSX-V. From June 1979 to

November 2003, he held various senior executive positions with

Bombardier Inc. Notably, he was President, Mass Transit Division,

responsible for all Bombardier Transportation activities in Canada and the

United States; Executive Vice President, Operations, Bombardier Aerospace

Group, responsible for all manufacturing and procurement activities of

Canadair, De Havilland, Learjet and Shorts; Executive Vice President,

Bombardier Transportation Group, responsible for the worldwide operations

of Bombardier Transportation; and President and Chief Operating Officer of

Bombardier Recreational Products Inc.

Steve Nadeau, CPA, CGA

Québec, Canada

Chief Financial Officer of the

Corporation since May 2008


1,071,195 (1)

Mr. Steve Nadeau has been a certified professional accountant since 1998.

He completed a bachelor’s degree in business administration at Moncton

University in May 1991. Amongst other things, he brings more than 21

years of experience and knowhow in management, financing structures,

strategic planning, accounting, negotiation and finance, of which over 15

years has been in the mining industry. He acted as a key negotiator of the

Chinuchi Agreement and also in other important financing and sales

agreements. As an officer of the Corporation since 2008, he played a key

role in raising over $1.3 billion through a combination of equity,debt, grants

and advance payments in order to fund the Corporation’s development and

projects. Prior to joining the Corporation, Mr. Nadeau held several senior

financial positions for companies which were either mining or

manufacturing products related to the granite industry, electronics and

automotive field. Mr. Nadeau was also Chief Financial Officer of

Monarques Gold Corp. from March 2011 to December 2015.


Marc Dagenais, LL.B.

Québec, Canada

Vice President, Legal Affairs and

Corporate Secretary of the

Corporation since September 2016


10,940

Mr. Marc Dagenais has 28 years of experience in the mining industry, both

in North America and internationally. Prior to joining the Corporation in

September 2016, he was Vice-President, General Counsel & Corporate

Secretary of Graymont Limited, an emerging international lime producer

headquartered in the Greater Vancouver Area from March 2014 to January

2016. Prior to joining Graymont Limited, he was Vice-President & General

Counsel – Africa of Kinross Gold Corporation, a senior gold producer

headquartered in Toronto. With Kinross Gold Corporation, he built the

African legal function from the ground up, from April 2011 to March 2014,

and was based in Las Palmas de Gran Canaria, Spain. Prior to that, Mr.

Dagenais worked for 15 years with Cambior Inc. (now part of IAMGOLD

Corporation), during six of which years (2000-2006) he served as Vice-

President, Legal Affairs. In this latter position, he played a major role in

Cambior Inc.'s financial restructuring as well as the development of the

Rosebel Gold Mine in Suriname and the acquisition of the Linmine bauxite

complex in Guyana. He also was a partner of Lavery, de Billy, LLP, a major

Montréal law firm and a partner of MinQuest Capital Inc., a private equity

fund specialized in mining investments. Mr. Dagenais holds a Bachelor of

Laws from Université de Montréal, as well as Bachelor of Management

Accounting from Université du Québec à Montréal. He has been a member

of the Barreau du Québec (Law Society) since 1990.

Chantal Francoeur

Québec, Canada

Vice President Human Resources

and Organizational Development

since October 2016


nil

Ms. Chantal Francoeur has more than 25 years of experience in the mining

and metallurgical industry, both in Canada and internationally. Prior to

joining the Corporation in October 2016, she was Vice-President, Human

Resources and Communications of Koniambo Nickel SAS, a green field

start-up of a mine and metallurgical nickel plant in New-Caledonia, one of

the largest mining project in the world, owned 51% by Glencore PLC and

49% by Société Minière du Sud Pacifique (SMSP), and was based in Koné,

New-Caledonia from January 2010 to October 2016. Prior to joining

Koniambo Nickel SAS in 2010, she was Human Resources Director from

January 2008 to January 2010 for Xstrata Copper Canada Inc., which

included one copper mine in Timmins, Ontario, two copper and zinc

smelters, situated in Timmins, Ontario and the Horne Smelter in Rouyn-

Noranda, Québec as well as a copper refinery called CCR Refinery in

Montréal, Québec and two copper recycling plants in the United States.

Prior to that, Ms. Francoeur worked for five years for Noranda Inc. from

June 2003 to January 2008 as Human Resources and Communications

Director at Horne smelter in Rouyn-Noranda. During this period, she was

the spokesperson who negotiated two collective bargaining agreements.

Prior to that, from 1997 to 2003, she was Human Resources and

Communications director for Magnola Metallurgy Inc., a green field project

of magnesium transformation, located in Asbestos, Québec and owned by

Noranda Inc. and Société générale de financement du Québec. From 1990 to

1997, she also participated in another green field project as Organizational

Development and Health and Safety Manager for Aluminerie Alouette Inc.

in Sept-Îles (Québec). Ms. Francoeur holds a Bachelor of Industrial

Relations from Université de Montréal.


René Lessard

Québec, Canada


September 2008


657,225(2)

Since 2009, Mr. René Lessard has been self-employed as a consultant in the

construction sector. Mr. Lessard held the position of sales manager at

Campagna Motors, a corporation specialized in vehicle manufacturing, from

September 2008 to October 2009. From October 2004 to October 2007, he

was sales manager of T-Rex Vehicles Inc., a corporation specialized in the

manufacturing of three-wheeled vehicles. From February 2001 to July 2004,

he was sales manager of Distribution GLR, a company involved in

import/export of various products. From March 1997 to October 2000, he

was sales representative of Ray-Flammes Inc.

Paul-Henri Couture

Québec, Canada


July 2013

Member of the Audit & Risk

Committee and of the Governance

Committee

Chairman of the HR Committee


365,000(3)

Mr. Paul-Henri Couture has over 35 years of experience as a financial

manager and investment professional. He has a bachelor’s degree in

business administration from HEC Montréal. He is a Chartered Financial

Analyst (CFA) and member of several professional associations. Mr.

Couture held various positions at Caisse de dépôt et placement du Québec

(the “Caisse”) from May 1983 to June 2009. For many years, he built and

led a team responsible for the management and development of a CAD 3

billion investment portfolio in financial institutions and natural resources

sectors. Prior to leaving Caisse in 2009, he was Senior Vice-President

responsible for the natural resources, distress and restructuring and new

products portfolios. At Caisse, he was a member of the Private Equity

Investment Committee among others. As such, Mr. Couture had to evaluate

hundreds of transactions. Mr. Couture put forward innovative projects that

included the launch of two mining funds: Gestion Sodémex Inc., involved

with mining exploration corporations, and MinQuest Capital Inc., a CAD

225 million private equity capital development mining fund seeking

investment opportunities worldwide. In June 2009, he headed Sentient Asset

Management Canada Ltd., a subsidiary of The Sentient Group, an important

manager of private equity funds in the mining sector, as President and

Director. Since April 2013, Mr. Couture has been the President of Minvest

Capital, an enterprise that provides management and investment consulting

services. He worked at the Business Development Bank of Canada for the

first six years of his professional career. He is currently a member of the

board of directors of Strateco Resources Inc.


François Biron

Québec, Canada


November 2015

Chairman of the Governance

Committee

Member of the Audit &d Risk

Committee and of the Technical

Committee


175,000

Mr. Francois Biron is a senior professional mining engineer with 42 years of

experience in the mining industry. Mr. Biron is a director of Québec

Precious Metal Corporation (previously Matamec Explorations Inc.), a

junior exploration company, since August 2015. He is also a director of

Sphinx Resources Ltd., a junior mining exploration company since July

2016. Of specific interest to the Corporation’s mining project, Mr. Biron

was, from August 2005 to June 2010, the General Manager of the Troilus

Division of Inmet Mining Corp., an open pit mine in the Eeyou Istchee

James Bay region about 125 km North of Chibougamau, with 260

employees, including 65 First Nations people. He was Project Manager of

the Mine Arnaud Project owned by Investissement Québec, a financing

corporation that provides guidance and financial solutions to companies,

from July 2010 to May 2015. Mr. Biron has extensive experience in mining

operations and has acted in several senior site-based positions with well-

known international mining companies. Throughout his career, he has

worked in the gold, base metals and industrial minerals sectors. He has

participated in the management of major open-pit mines with the state of the

art operations and standards. Mr. Biron is very experienced in public

consultations and social acceptability for new mining projects and well

versed in the latest automation mining technologies that improve mining

processes.

Patrick Godin

Québec, Canada


June 2018

Chairman of the Technical

Committee

Member of the Governance

Committee and of the HR

Committee


nil.

Mr. Godin joined Stornoway as Chief Operating Officer in May 2010 and

was appointed director in October 2011. He has had overall responsibility

for the development of the Renard Project up to commercial production and

now oversees operations. Prior to joining Stornoway, he was Vice President,

Project Development for G Mining Services Inc. and was responsible, in

such capacity, for the development of the Essakane Mine in Burkina Faso,

as contractor for Iamgold Corp. Prior to that, he was Vice President of

Operations for Canadian Royalties, heading the development of its nickel

project in Northern Québec. Prior to that, he was President and General

Manager of the French subsidiary of Iamgold (originally Cambior Inc.) that

was developing the Camp Caïman in French Guiana, after having held

positions of increasing management responsibility within Cambior. Mr.

Godin holds a bachelor degree in Mining Engineering from Université Laval

(Québec), is a member of the Ordre des Ingénieurs du Québec and of the

Collège des administrateurs de sociétés. He is a director of Mason Graphite

Inc.


Shigeki Miwa

Saitama, Japan


May 2018

Member of the Audit and Risk

Committee


nil.

Shigeki (Sean) MIWA holds several positions concurrently within the

SoftBank including Representative Director & CEO of SB Energy Corp.

(from 2017), General Manager – CEO Project Office (from 2016) at

SoftBank, Board Member of the Renewable Energy Institute (from 2014),

Representative Director & CEO of Bloom Energy Japan Ltd. (from 2013)

and Director of Clean Energy Asia LLC (from 2012). Before joining

SoftBank in 2011, he worked for Mitsui & Co. Ltd., from 1991 mainly in

the natural resources and energy sector, based in Tokyo, Sydney and

Brisbane. Mr. MIWA graduated from Waseda University in Tokyo with a

BA in history, received a Master of Financial Management and an MBA

from the Graduate School of Management, Macquarie University in Sydney,

and completed the General Management Program at Harvard Business

School in Boston.

Notes:

(1) Mr. Nadeau personally holds 926,000 common shares and 145,195 common shares through a registered retirement savings plan.

(2) Mr. Lessard personally holds 470,125 common shares and 187,100 common shares through 9180-7644 Québec Inc., a corporation

controlled by Mr. René Lessard and of which he is the president and a director.

(3) Mr. Couture personally holds 187,500 common shares, 70,400 common shares through Fiducie familiale (2010) Paul-Henri Couture, a trust whose trustee is Mr. Paul-Henri Couture and beneficiaries are immediate family members and 107,100 common shares through a

registered education savings plans.

As of the date of this Annual Information Form, the Corporation’s directors and executive officers

beneficially owned, directly or indirectly, an aggregate of 9,482,360 common shares representing

approximately 1.12% of the Corporation’s outstanding common shares.

8.2 Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Board and based on the information provided by the directors or executive

officers of the Corporation, none of these persons:

(a) is, as at the date of this Annual Information Form, or has been, within ten years before this

date, director, chief executive officer or a chief financial officer of any corporation, including

the Corporation, which has been subject to one of the following orders:

(i) a cease trade order, an order similar to a cease trade order or an order that denied the

corporation access to any exemption under securities legislation, that was in effect for

a period of more than 30 consecutive days, while the person was acting in the capacity

as director, chief executive officer or chief financial officer; or

(ii) a cease trade order, an order similar to a cease trade order or an order that denied the

corporation access to any exemption under securities legislation, that was in effect for

a period of more than 30 consecutive days, after the person ceased to be a director,

chief executive officer or chief financial officer and which resulted from an event that

occurred while the person exercised these duties.


To the knowledge of the Board and based on the information provided by the directors or executive

officers of the Corporation or shareholders holding a sufficient number of securities of the Corporation to

affect materially the control of the Corporation, none of these persons:

(a) is, as at the date of this Annual Information Form, or has been within ten years before this

date, a director or executive officer of any corporation, including the Corporation, that, while

the person was acting in that capacity, or within a year of that person ceasing to act in that

capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or

insolvency or was subject to or instituted any proceedings, arrangement or compromise with

creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

(b) has, within the ten years before the date of this Annual Information Form, become bankrupt,

made a proposal under any legislation relating to bankruptcy or insolvency, or become

subject to or instituted any proceedings, arrangement or compromise with creditors, or had a

receiver, receiver manager or trustee appointed to hold its assets; or

(c) has been imposed any penalties or sanctions by a court relating to securities legislation or by

a securities regulatory authority or has entered into a settlement agreement with a securities

regulatory authority or has been imposed any penalties or sanctions by a court or a regulatory

body that would likely be considered important to a reasonable investor in making an

investment decision.

Notwithstanding the above, Mr. Michel Baril was, until February 8, 2010, a director of Raymor Industries

Inc., a reporting issuer in the provinces of Québec, Alberta and British Columbia that filed a notice of

intention to make a proposal to its unsecured creditors under the Companies’ Creditors Arrangement Act

(Canada) on January 16, 2009. The proposal was approved by the unsecured creditors, as amended and

ratified by the Superior Court on January 27, 2010.

Mr. Paul-Henri Couture carried out the functions of director of Strateco Resources Inc. while on

September 21, 2015, the Autorité des marchés financiers and on September 23, 2015, the Ontario

Securities Commission issued orders that all trading in the securities of Strateco Resources Inc. shall cease

due to its failure to file the continuous disclosure materials as required by Regulation 51-102 respecting

Continuous Disclosure Obligations for the six-month period ended June 30, 2015 and the certification of

the foregoing filings as required by Regulation 52-109 respecting Certification of Disclosure in Issuer’s

Annual and Interim Filings. The Alberta Securities Commission and the British Columbia Securities

Commission enforce the cease trade orders already issued in Québec and Ontario in regards to Strateco

Resources Inc. As of the date hereof, these cease trade orders still remain effective.

On June 9, 2015, Strateco Resources Inc. obtained an initial order under the Companies’ Creditors

Arrangement Act (Canada) by the Superior Court of Québec, commercial division in the district of

Montréal, which was amended and restated on July 8, 2015. This order authorizes, among others things,

Strateco Resources Inc. to pursue the litigation for damages against the Government of Québec about the

Matoush Uranium Project. This order from the Superior Court was obtained while Mr. Paul-Henri Couture

carried out the functions of director of Strateco Resources Inc. This order has been since renewed and

remains effective as of the date hereof.


9. LEGAL PROCEEDINGS AND REGULATORY ACTIONS

Since the beginning of the fiscal year ended June 30, 2018 and up to the date of this Annual Information

Form, there was no legal proceedings outstanding or regulatory actions pending involving the Corporation

or any of its properties or to which the Corporation is a party or to which its properties are subject, nor to

the knowledge of the Corporation are any such legal proceedings contemplated or such regulatory actions

threatened, as of the date hereof, which could become material to a purchaser of securities of the

Corporation.

Since the beginning of the fiscal year ended June 30, 2018 and up to the date of this Annual Information

Form: (i) the Corporation has not been the subject of penalties or sanctions imposed by a court relating to

securities legislation or by a securities regulatory authority; (ii) the Corporation has not entered into any

settlement agreement before a court relating to securities legislation or with a securities regulatory

authority; and (iii) no penalties or sanctions has been imposed by a court or regulatory body against the

Corporation that would likely be considered important to a reasonable investor in making an investment

decision.

10. TRANSFER AGENT AND REGISTRAR

The Corporation’s transfer agent and registrar is Computershare Investor Services Inc.

(“Computershare”). The register of transfers of the Corporation’s common shares and the warrants issued

under 2016 Public Offering is held at Computershare’s offices located in its place of business at 1500

Robert-Bourassa Blvd., 7th Floor, Montréal, Québec H3A 3S8.

11. INTERESTS OF EXPERTS

Certain information of a scientific or technical nature in respect of the Whabouchi Project contained in this

Annual Information Form is based on the Technical Report. Each of the Authors of the Technical Report,

being Messrs. Maxime Dupéré, P. Geo, Patrick Perez, P. Eng., M. Sc., Anthony Boyd, P. Eng., Ph. D.,

James Anson, P. Eng., Ph. D., Pierre Girard, P. Eng., Dominic Tremblay, P. Eng., M.A. Sc., Martin

Stapinsky, P. Geo., M. Sc., Ph. D., Alain Michaud, P. Eng., Michel Tremblay, P. Eng. and Rock Gagnon,

P. Eng , is a “qualified person” within the meaning of NI 43-101. As of the date hereof, the aforementioned

persons had no beneficial or registered interests, direct or indirect, in the Corporation’s securities or

properties.

Mr. Patrick Laforest, Geo. B.Sc. has reviewed and approved the scientific and technical information

contained in or incorporated by reference in this Annual Information Form. Mr. Laforest is considered, by

virtue of his education, experience and professional association, to be a “qualified person” within the

meaning of NI 43-101.

KPMG LLP are the Corporation’s auditors and are independent of the Corporation within the meaning of

the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada.


12. MATERIAL CONTRACTS

The following lists any contract material to the Corporation that was entered into outside the normal course

of business during the most recently completed fiscal year or before the last fiscal year that is still in effect:

a) the transfer agent and registrar agreement dated December 31, 2009 between the

Corporation and Computershare;

b) the Whabouchi Purchase Agreement;

c) the Shareholders Rights Plan dated October 28, 2010, as amended on October 27, 2011,

between the Corporation and Computershare, as rights agent;

d) the Chinuchi Agreement;

e) the License Agreement dated May 11, 2016 between the Corporation and JM pursuant to

which the Corporation granted a non-exclusive license to use its process to convert

lithium sulfate monohydrate into lithium hydroxide in favour of JM;

f) the License Agreement dated May 11, 2016 between the Corporation and

9671714 Canada Inc. (“9671714”) (now Nemaska Lithium P1P Inc.) pursuant to which

the Corporation granted a non-exclusive license to use its process to convert lithium

sulfate monohydrate into lithium hydroxide in favour of 9671714;

g) the July Warrant Indenture dated July 8, 2016 between the Corporation and

Computershare Trust, as warrant agent;

h) the Stream Agreement; and

i) the Bond Terms.

13. ADDITIONAL INFORMATION

Additional information regarding the Corporation, including directors’ and officers’ remuneration and

indebtedness, the principal holders of the Corporation’s securities and securities authorized for issuance

under equity compensation plans, if applicable, are contained in the Corporation’s Management Proxy

Circular dated January 10, 2018 prepared in connection with the most recent annual general and special

meeting of shareholders held on February 16, 2018.

Also, additional financial information is provided in the audited financial statements and the

Management’s Discussion and Analysis for the Corporation’s last fiscal year ended June 30, 2018.

Additional information regarding the Corporation is also available on SEDAR at www.sedar.com and on

the Corporation’s Web site at www.nemaskalithium.com.

http://www.nemaskalithium.com/

Documents

ANNUAL INFORMATION FORM FOR THE FISCAL YEAR ENDED …€¦ · nemaska lithium inc. annual information form for the fiscal year ended june 30, 2018 issue date: october 10, 2018