Critical Elements Lithium Corporation — Capital/Financing Update 2021

Nov 10, 2021

TERM SHEET

CRITICAL ELEMENTS LITHIUM CORPORATION

Public Offering of Units

A preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the securities regulatory authorities in each of the provinces of Canada, including Québec. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities.

There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

Issuer:	Critical Elements Lithium Corporation (the “Company”)
Issued Securities:	14,915,000 Units of the Company (each a “Unit” and the offering of such Units, the
	“Offering”). Each Unit to be comprised of one (1) common share in the capital of the
	Company (each, a “Common Share”) and one-half Common Share purchase warrant (each
	whole warrant, a “Warrant”).
Size of Issue:	$26,101,250
Issue Price:	$1.75 per Unit (the “Issue Price”).
Warrants:	Each Warrant shall entitle the holder to purchase one Common Share at $2.50 at any time on
	or before the date which is 24 months after the Closing Date.
Over-Allotment Option:	The Underwriters will have an option, exercisable in whole or in part at any time up to 30
	days following the Closing Date (as defined below), to purchase up to an additional 15% of
	the Units at the Issue Price on the same terms and conditions as set forth herein.
Syndicate:	Cantor Fitzgerald Canada Corporation (“CFCC”) and will act as lead left underwriter and
	joint bookrunner (the “Joint Bookrunners”) on behalf of a syndicate of underwriters (together
	with CFCC, the “Underwriters”).
Form of Underwriting:	“Bought Deal” offering by way of a short form prospectus, subject to a mutually acceptable
	underwriting agreement containing the industry standard “Disaster Out”, “Regulatory Out”,
	and “Material Adverse Change Out” clauses running until the Closing Date (as defined
	below).
Jurisdictions:	All provinces of Canada, including Quebec. The Units will not be offered or sold in the United
	States except under Rule 144A or Regulation D or in such other manner as to not require
	registration under the United States Securities Act of 1933, as amended. The Units may also
	be offered in those jurisdictions outside of Canada and the United States as agreed to by the
	Company and the Underwriters provided that no prospectus filing or comparable obligation
	arises and the Company does not thereafter become subject to continuous disclosure
	obligations in such jurisdictions.

Underwriters’ Fees: The Company shall pay the Underwriters a cash commission equal to 6.0% of the gross proceeds of the Offering plus broker warrants to purchase up to 6.0% of the number of Units sold in the Offering (the “Broker Warrants”). Each Broker Warrant shall entitle the Underwriters to purchase one Unit at the Issue Price at any time on or before the date on which the Warrants issued under the Offering are set to expire. Use of Proceeds: The net proceeds from the Offering shall be primarily used for exploration and development, and general working capital purposes.

Listing: Prior to the Closing Date, the Company will obtain all necessary regulatory approvals for the Offering, including TSXV approval of the listing of the Common Shares (including the Common Shares issuable upon the exercise of the Warrants, and Common Shares issuable pursuant to the exercise of the Broker Warrants). Warrants will not be listed. Eligibility for Investment: Eligible under the usual Canadian statutes as well as for RRSPs, RESPs, RRIFs, TFSAs and DPSPs. Closing Date: On or about November 25, 2021 or such other date as the Company and the Joint Bookrunners mutually agree (the “Closing Date”). Standstill Period: The Company shall not issue, negotiate or enter into any agreement to sell or issue or announce the issue of, any equity securities of the Company, other than: (i) as contemplated herein; (ii) pursuant to the grant of options or other securities in the normal course pursuant to the Company’s employee stock option plan or other equity compensation plan or issuance of securities pursuant to the exercise or conversion, as the case may be, of options or securities of the Company outstanding on the date hereof; or (iii) an issuance of options or securities in connection with a bona fide acquisition by the Company (other than a direct or indirect acquisition, whether by way of one or more transactions, of an entity all or substantially all of the assets of which are cash, marketable securities or financial in nature or an acquisition that is structured primarily to defeat the intent of this provision), for a period of 90 days following the Closing Date (the “Expiry Date”), without the prior written consent of CFCC, on behalf of the Underwriters, such consent not to be unreasonably withheld Insider Lock-Ups: As a condition precedent to the Underwriters’ obligation to close the Offering, all directors and senior officers of the Company shall execute and deliver written undertakings in favour of the Underwriters agreeing not to sell, transfer, pledge, assign, or otherwise dispose of any securities of the Company owned, directly or indirectly, by such directors or senior officers, until the Expiry Date, without the prior written consent of CFCC, on behalf of the Underwriters, such consent not to be unreasonably withheld.

Hold Period: In the United States, the Units will be “restricted securities” as defined in Rule 144 or Regulation D under the United States Securities Act of 1933, as amended.