Lithium Chile Enters Into Amending Agreement and Credit Facility

Lithium Chile Inc. announced on October 20, 2026, that it has amended and extended the definitive agreements with China Union Holdings ("CUH") for the proposed US$175 million sale of the Arizaro project via its Argentine subsidiary, Argentum Lithium S.A. The transaction’s drop-dead date has been extended to December 22, 2026. If regulatory approvals, specifically the Chinese outbound direct investment filing and the Canadian national-security review, cannot be obtained by that date, an automatic extension applies until February 22, 2027.

Under the revised terms, the US$5,000,000 guarantee deposit is now returnable to the Purchaser if key regulatory approvals or any Investment Canada Act approvals are not secured by the drop-dead dates for reasons not attributable to the Purchaser. Exclusivity and termination-fee provisions were also modified. Lithium Chile and its subsidiaries may now contact, negotiate, and communicate with third parties regarding alternative transactions, provided they confidentially disclose to CUH the principal terms, timetable, and counterparty identity. Additionally, the Sellers may terminate the Share Purchase Agreement to pursue an alternative transaction with 20 business days' notice, incurring no termination fee or other liability unless notification requirements are not met. All other terms of the Share Purchase Agreement remain unchanged.

Separately, Lithium Chile entered a credit facility with a company controlled by a director. The facility provides a maximum loan amount of CAD $2,500,000, with a maturity date of December 31, 2027, and an interest rate of 10% per annum. An origination fee was paid in common shares equal to 20% of the maximum loan amount, totaling CAD $500,000 worth of shares at $0.28 per share, based on the October 20, 2026 closing price. This equates to approximately 1,785,714 shares. No commissions or finders' fees were paid.

The transaction was deemed a related-party transaction under National Instrument 61-101 and is exempt from formal valuation and minority shareholder approval requirements under subsections 5.5(c) and 5.7(1)(b), as the fair market value and related-party consideration did not exceed $2,500,000. The board approved the facility unanimously, with the related director abstaining from the vote. The Lender holds no shares or options in the company.

Notably, the release did not include management quotes, differing from prior updates that featured extensive comments from the CEO. Furthermore, the issuer contact listed is Al Kroontje, Interim CEO ([email protected]), whereas previous releases in this period were fronted by Steve Cochrane, President and CEO.

Lithium Chile Inc. (LITH) announced a significant revision to its transaction terms with CUH, extending the deadline for completion to December 22, 2026, with a potential further extension to February 22, 2027. The update also renders the previously paid US$5M deposit refundable to CUH if regulatory approvals fail for reasons not attributable to the buyer. Additionally, the company waived exclusivity and the US$17.5M mutual break fee, allowing it to solicit alternative transactions.

The timeline of the deal has seen multiple delays since the definitive agreement was executed on December 22, 2025. That initial agreement included US$175M in cash, with 92.5% payable at close and 7.5% (US$13.125M) held in escrow for 18 months. The original deadline was set for 180 days, approximately June 2026. On January 14, 2026, a US$5M deposit was placed in escrow, with a target close of mid-year. By February 18, 2026, the company cited the deposit as evidence of CUH’s commitment and reaffirmed the mid-year closing target. A circular was mailed on April 24, 2026, for a special meeting on May 15, with an intended close date of June 30, 2026. Shareholders approved the transaction with 96% support on May 19, 2026.

The first extension was announced on June 18, 2026, moving the deadline to August 20, 2026, with an optional extension to October 19, 2026, due to CUH needing approval for funds transfer from outside Canada. On August 17, 2026, the company received a notice under subsection 25.2(1) of the Investment Canada Act, with the Director of Investments stating the deal could be injurious to national security. The stock fell from $0.59 on August 13 to $0.43 on August 17. On August 19, 2026, Lithium Chile challenged ISED jurisdiction and stated it was evaluating alternative structures. On September 29, 2026, the Government of Canada ordered a formal review under section 25 of the ICA.

The latest release on October 21, 2026, marks the second and third extensions, now extending to December 22, 2026, and potentially February 22, 2027. The US$5M deposit is now refundable to CUH if regulatory approvals fail for reasons not attributable to the buyer. The company has waived exclusivity and the break fee to allow for the solicitation of alternatives. The company also entered into a related-party credit facility at 10% per annum with a 20% origination fee paid in shares at $0.28. This financing is required for up to CAD $2.5M from a director-controlled entity, a move that comes as the company holds US$5.9M in cash and has no revenue. The share-based fee is issued at a price roughly seven times the $0.27 closing price.

The shift in issuer contact to an Interim CEO was not explained in the release. The company is now free to run an alternative process and can terminate without the US$17.5M penalty, preserving optionality on the asset.

Lithium Chile Inc. (TSXV: LITH; OTCQB: LTMCF) explores and develops lithium properties in the Lithium Triangle, holding a land portfolio of 142,283 hectares as of its April 2026 presentation. This portfolio comprises 113,038 hectares in Chile across 12 salars and 29,245 hectares in Argentina.

The company’s flagship asset is Arizaro (Salar de Arizaro, Salta Province, Argentina), which hosts a 4,122,000 tonne LCE NI 43-101 resource. A Q3 2024 prefeasibility study indicated a pre-tax NPV(8%) of US$3.85B and an after-tax NPV(8%) of US$2.8B, with a pre-tax IRR of 42.1% and an after-tax IRR of 36.3%. The project features a payback period of approximately 2.5-2.7 years, producing 25,000 t LCE/year over 20 years, with capex of US$1,055M and opex of US$5,457 per tonne LCE, based on a long-run Li2CO3 price assumption of US$30,513 per tonne. Arizaro is currently under a definitive agreement for sale to CUH for US$175M.

In Chile, the Coipasa project (19,200 ha) is one of six projects prioritized by the Chilean government for a Special Lithium Operation Contract (CEOL). Lithium Chile Inc. holds 97.8% of the asset alongside Grupo Errazuriz and plans to advance it as a 50/50 joint venture. TEM surveys have identified a large high-conductivity anomaly of approximately 58 km² with an inferred thickness of 200-300 m, while near-surface brine assays have reached up to 1,410 mg/l.

Block IV in Argentina (8,445 ha) was awarded in January 2024 via a REMSa tender, with an EIA already submitted. The company intends to prioritize this block alongside Coipasa following the sale of Arizaro. Other Chilean assets include Molle Verde (35,100 ha, a phased JV with Eramet), Helados, Laguna Blanca, Turi, Atacama, Rio Salado, Aquas Caliente, Los Morros, Mariposas, and Aguilar.