SYDNEY, AUSTRALIA: Allkem Limited has entered into a binding and conditional Heads of Agreement (HOA) to transfer Borax Argentina S.A to Minera Santa Rita S.R.L (MSR) and to acquire the María Victoria lithium tenement from MSR in return.

HIGHLIGHTS

• Allkem will acquire 100% of the strategic lithium tenement of María Victoria located north of the Olaroz Lithium Facility (“María Victoria Tenement”) and in exchange transfer to MSR all of the shares in the Borax holding companies and US$14 million cash1 for employee and rehabilitation liabilities

• Conditions precedent to completion of the Proposed Transaction include transfer of certain lithium tenements and royalties from Borax to Allkem in return for borate extraction rights (usufructs) in favour of MSR, completion of due diligence by Allkem on the Maria Victoria Tenement and receipt of required internal and third party approvals

Transaction details

Under the Proposed Transaction Allkem will transfer to MSR all of the issued shares in the two Borax holding companies and US$14 million cash. In return, MSR will transfer to Allkem (or its nominee) 100% ownership of the Maria Victoria Tenement, as described in more detail below. All employees of Borax will continue to be employed by MSR.

Conditions precedent to completion include:

• The transfer by Borax to Allkem (or its nominee) of lithium tenements and associated lithium royalties held in the Cauchari, Olaroz and Hombre Muerto salars (“Allkem Property Transfers”)

• Allkem granting to Borax certain borate usufructs over the properties the subject of the Allkem Property Transfers (on customary industry terms), with Allkem retaining a right to repurchase those usufruct rights in the future; and

• Finalisation of satisfactory due diligence by Allkem on the Maria Victoria tenement, finalization and signing of definitive agreements reflecting the terms of the HOA and obtaining all required internal, third party and regulatory approvals

Allkem will, subject to receipt of necessary third party and regulatory approvals, also retain a portion of the gas capacity that Borax is entitled to from the Fenix and La Puna gas pipelines to be available for its Sal de Vida project.

Subject to satisfaction of the conditions precedent, completion of the Proposed Transaction is expected to occur in Q4 CY2022.

Managing Director & CEO, Martin Perez de Solay says: “The acquisition of the Maria Victoria tenement complements Allkem’s existing extensive lithium brine holdings in the region and will allow more efficient development of the Olaroz salar. The exchange of Borax which is a non-core asset allows Allkem to remain focussed on its key aim of delivering growth plans of increasing lithium production threefold by 2026 and maintaining 10% of global market share in the longer term.”