Lithium Ionic Announces Agreement to Sell its Salinas Group of Lithium Properties to PLS for US$37.5 Million in Cash, Retaining a 2.0% Royalty on Future Spodumene Sales

Lithium Ionic Corp. (LTH) announced on August 12, 2026, that it has entered into a definitive agreement to sell its Salinas group of lithium properties to PLS Brasil Mineração Ltda., a wholly owned subsidiary of PLS Group Limited (ASX: PLS). The transaction includes ten mineral claims and associated assets in Minas Gerais, Brazil, notably the Baixa Grande lithium resource.

Under the terms of the deal, Lithium Ionic will receive an aggregate cash consideration of US$37.5 million. This includes US$30.0 million payable at closing, with the remaining US$7.5 million deferred until the earlier of a positive Final Investment Decision for PLS’s Colina Project or December 31, 2029. Additionally, Lithium Ionic retains a 2.0% royalty on future spodumene sales from Baixa Grande, calculated on an FOB basis and net of certain allowable deductions.

The transaction is expected to close within 10 business days, subject to customary conditions. Proceeds will be used for non-dilutive balance-sheet strengthening, as well as early works, procurement, and construction-readiness activities at the company’s 100%-owned Bandeira Lithium Project.

PLS Group Limited is described as one of the world’s largest hard-rock lithium producers, owning the Pilgangoora Operation in Australia. The company entered Brazil’s Lithium Valley in early 2025 by acquiring Latin Resources, and its Colina Project is located adjacent to Baixa Grande. BMO Capital Markets acted as financial advisor to Lithium Ionic on the transaction.

Lithium Ionic Corp. (LTH) has announced a transaction for the sale of its Salinas project, marking a distinct shift from prior capital allocation strategies that focused on the Bandeira asset, including the termination of the K2 option. The company had not previously disclosed a sale of Salinas in earlier releases.

According to the Q1 2026 MD&A and financial statements, which were not disclosed in this specific release, Lithium Ionic held CAD 12.02 million in cash, CAD 7.79 million in working capital, and CAD 5.24 million in total current liabilities. The company also carried a long-term royalty-based obligation of CAD 30.63 million and faced explicit going-concern uncertainty. Against this backdrop, the US$30.0 million upfront payment is considered material. Based on the latest provided share count of 194,745,661 and the August 12, 2026 close of $0.52, the market capitalization is approximately CAD 101 million. The full US$37.5 million consideration represents roughly half of that market cap, providing a substantial cash injection that should sharply improve near-term liquidity.

The transaction includes a retained 2.0% Baixa Grande royalty, which preserves optionality if PLS develops the deposit, though that value is contingent and cannot be banked today. Additionally, the deferred US$7.5 million is contingent and may not be received until 2029.

The deal provides non-dilutive capital at a time when the share price has collapsed from $1.46 in April 2026 to $0.47 in early August 2026. It strengthens the balance sheet against the going-concern risk highlighted in the MD&A, simplifies the asset base, and aligns with the stated focus on Bandeira. The royalty structure retains exposure to future lithium price upside.

However, the transaction does not resolve the Emerita litigation over Bandeira ownership, nor does it address the OSC enforcement proceeding involving former directors and officers. Furthermore, the deal does not fund the Bandeira initial capex of US$191 million, meaning larger project financing is still required. Closing has not yet occurred.

Lithium Ionic Corp. (TSXV: LTH, OTCQX: LTHCF, FSE: H3N) is a Canadian lithium development company focused on the Bandeira Lithium Project in Minas Gerais, Brazil, located within the region known as the Lithium Valley. The company’s flagship asset is the 100%-owned, hard-rock spodumene deposit, which is planned for underground mining.

An updated Definitive Feasibility Study effective September 17, 2025, outlines the project’s economic parameters. The study projects a post-tax net present value (NPV8) of US$1.45 billion and a post-tax internal rate of return (IRR) of 61%. Initial capital expenditure is estimated at US$191 million, including contingency, representing a decrease of approximately 28% from the prior estimate of US$266 million. Site operating costs are projected at US$378 per tonne of spodumene concentrate. The mine is expected to have a life of 18.5 years, with average annual production of 177,000 tonnes per annum (tpa) of spodumene concentrate. The project is projected to achieve payback in 2.2 years.

Mineral reserves stand at 23.2 million tonnes at 1.10% Li2O. Measured and indicated resources total 27.27 million tonnes at 1.34% Li2O, while inferred resources amount to 18.55 million tonnes at 1.34% Li2O.

Beyond Bandeira, Lithium Ionic holds other assets, including the Salinas group, which comprises the Baixa Grande property now being sold to PLS. The company also holds the Outro Lado asset, which contains measured and indicated resources of 2.97 million tonnes at 1.46% Li2O and inferred resources of 0.42 million tonnes at 1.48% Li2O.

Engineering on the Bandeira project had advanced to approximately 65% completion by June 11, 2026. The company placed the first long-lead equipment order for the main substation power transformer. Requests for quotations (RFQs) were issued for underground mine portals in July 2026, and construction-phase water access was secured in June 2026.

The company has secured binding five-year take-or-pay offtake agreements with Sichuan Yahua and Grand Chen for up to 170,000 tpa of spodumene concentrate. These agreements include a floor price of US$1,000 per tonne of SC6 with no ceiling, alongside a US$20 million pre-payment facility.

The feasibility study assumes operations targeted for the second half of 2027, subject to permitting, financing, and final investment decision.