ILC Critical Minerals Ltd. - Interim / Quarterly Report 2021

==> picture [230 x 48] intentionally omitted <==

FORM 51-102F1

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

400 - 725 Granville Street Vancouver, British Columbia Canada V7Y 1G5

TELEPHONE: +1 604.449.6520 EMAIL: [email protected]

Management’s Discussion and Analysis

June 30, 2021

The following management’s discussion and analysis (“MD&A”), prepared as of August 30, 2021, should be read together with the unaudited condensed interim financial statements for the period ended June 30, 2021 and the audited financial statements for the year ended December 31, 2020 and related notes attached thereto, which are prepared in accordance with International Financial Reporting Standards. All amounts are stated in Canadian dollars unless otherwise indicated.

Additional information related to the Company is available on the Company’s website at www.internationallithium.com and SEDAR at www.sedar.com.

FORWARD LOOKING STATEMENTS

Certain information included in this discussion may constitute forward-looking statements. Readers are cautioned not to put undue reliance on forward-looking statements. These statements relate to future events or the Company’s future performance, business prospects or opportunities. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These forward-looking statements include statements regarding the future price of lithium or potassium or rare earth metals commodities, the timing and amount of estimated future production, costs of production, capital expenditures, the success of exploration activities, permitting time lines, currency fluctuations, the requirements of future capital, drill results and the estimation of mineral resources and reserves. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forwardlooking statements contained in this report should not be unduly relied upon. These statements speak only as of the date of this report. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this report. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

general business and economic conditions;
the supply and demand for, deliveries of, and the level and volatility of prices of commodities;
the availability of financing for the Company’s development of projects on reasonable terms;
the political and regulatory environment of countries in which the Company operates;
the ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; and
the ability to attract and retain skilled staff.

These forward-looking statements involve risks and uncertainties relating to, among other things, changes in commodity and, particularly, lithium and potash prices, access to skilled mining development personnel, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government approvals, actual performance of facilities, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors hereinabove. Additional risk factors are described in more detail hereinafter. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. The Company cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on the Company's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risks they entail. The forward-looking statements contained in this report are expressly qualified by this cautionary statement.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

DESCRIPTION OF BUSINESS

International Lithium Corp. (the “Company” or “ILC”) was incorporated under the laws of the Province of British Columbia on March 26, 2009 and is in the process of exploring its resource properties. It became a listed public company on the TSX Venture Exchange in 2011 and trades under the stock symbol “ILC”.

The Company is in the process of exploring and developing its mineral properties located in Argentina, Canada and Ireland and it and its development partners have not yet determined whether the properties contain reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company and of its development partners to obtain necessary financing to complete the development of those reserves and upon future profitable production.

As an exploration company, ILC currently requires additional financing to continue in business and is likely to continue to require such additional financing for some time. There can be no assurance that such financing will be available or, if available, that it will be on reasonable terms. If financing is obtained by issuing common shares from treasury, control of the Company may change and investors may suffer additional dilution. To the extent financing is not available, lease payments, work commitments, rental payments and option payments, if any, may not be satisfied and could result in a loss of property ownership or earning opportunities for the Company.

OVERALL PERFORMANCE

The Company incurred a comprehensive loss of $1,086,452 (2020 - $1,123,479) during the six months ended June 30, 2021.

Significant Events and Transactions

Significant events and transactions during the period ended June 30, 2021 and to the date of this MD&A include the following:

On August 11 and 25, 2021, the Company completed tranches of a non-brokered private placement consisting of 16,673,336 units at $0.06 per unit for gross proceeds of $1,000,400. Each unit comprised one common share and one-half of one share purchase warrant. Each whole warrant is exercisable into one common share at an exercise price of $0.08 per share until June 30, 2024. A director of the Company participated in the private placement.
On February 22, 2021, the Company completed a non-brokered private placement of secured convertible debentures in the principal amount of $717,500. The debentures will mature on September 30, 2021 and bear interest at a rate of 15% per annum, payable quarterly. The debenture holder may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.05 per common share. The convertible debentures are secured by a general security agreement against the Company’s assets. Certain 2018 Series 2 Convertible Debentures in the aggregate principal amount of $447,500 with maturity date of June 30, 2020 and certain 2020 Series 2 Convertible Debentures in the aggregate principal amount of $270,000 with maturity date of September 30, 2020 were settled to participate in the private placement.
On February 3 and 19, 2021, the Company completed tranches of a non-brokered private placement consisting of 54,545,454 units at $0.055 per unit for gross proceeds of $3,000,000. Each unit comprised one common share and a half share purchase warrant. Each warrant is exercisable into one common share at an exercise price of $0.08 per share until February 29, 2024. Five of the Company’s directors and officers participated in the private placement. The 2018 Series 1 Convertible Debentures principal of $167,500, accrued fees of $139,818, promissory notes principal of $633,146, and promissory notes and convertible debenture interest of $278,023 were settled to participate in the private placement.
On January 26, 2021, the Company completed a non-brokered private placement consisting of 3,715,750 units at $0.05 per unit for gross proceeds of $185,788. Each unit comprised one common share and a half share purchase warrant. Each warrant is exercisable into one common share at an exercise price of $0.075 per share until December 31, 2023. Five of the Company's directors and officers participated in the private placement. The 2018 Series 2 Convertible Debentures principal of $10,000, the 2020 Series 2 Convertible Debentures principal of $3,750, accrued fees of $145,007, and promissory notes and convertible debentures interest of $27,031 were settled to participate in the private placement.

On January 21, 2021, the Company entered into the Loan Agreements with directors and related parties of the Company to convert certain convertible debentures, accrued fees and interest into non-convertible loans with an aggregate principal of $1,957,750. The loans bear interest of 12.5% per annum payable semi-annually and are due on September 30, 2023. The loans are secured by a general security agreement against the Company’s assets. Pursuant to the Loan Agreements, the Company issued 39,155,000 bonus share purchase warrants with expiry date of September 30, 2023. Each bonus warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.05 per share. The loans may be repaid prior to their maturity without penalty; however, if a loan is reduced or repaid during the first year of its term, a pro rata number of the total bonus warrants will have their term reduced to the later of one year from issuance of the bonus warrants and 30 days from the reduction or repayment of the loan.
On January 21, 2021, the Company entered into the Loan Agreements with directors and related parties of the Company to convert certain convertible debentures and interest into non-convertible loans with an aggregate principal of $1,060,000. The loans bear interest of 12.5% per annum payable semi-annually and are due on June 30, 2022. The loans are secured by a general security agreement against the Company’s assets. Pursuant to the Loan Agreements, the Company issued 21,200,000 bonus share purchase warrants with the expiry date of June 30, 2022. Each bonus warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.05 per share. The loans may be repaid prior to their maturity without penalty; however, if a loan is reduced or repaid during the first year of its term, a pro rata number of the total bonus warrants will have their term reduced to the later of one year from issuance of the bonus warrants and 30 days from the reduction or repayment of the loan.

EXPLORATION SUMMARY

Avalonia Project – Ireland

The Avalonia lithium project is comprised of eight prospecting licenses totalling 292 square kilometres centred 80 km south of Dublin straddling Counties Carlow and Wicklow in southeastern Ireland. The property encompasses an extensive NE-SW oriented 50-kilometre-long rare metals pegmatite belt situated within the East Carlow Deformation Zone along the eastern side of the Leinster Granite. Since acquiring the licenses in 2009, the Company has conducted a series of exploration programs to advance the project. The Company has a 45% interest in the project with the remaining 55% held by GFL International Co. Ltd.

In 2016, a total of 23 diamond drill holes comprising 1,756 metres of NQ sized core were completed in the central part of the Avalonia project’s lithium belt and entirely within County Carlow. Of these, 10 holes focussed on further delineating pegmatites in the Aclare area. Down-dip extension and infill drilling was used to delineate the distribution of lithium and rare metals in the system and identify thickening vectors of the pegmatite body.

Highlights of the drilling include three drill holes which intersected a previously unknown pegmatite 450 metres east of the main Aclare pegmatites. This new pegmatite is hosted in a granite sill parallel and adjacent to the granite sill hosting the main Aclare pegmatites where drill hole ACL13-04 intersected 2.23% Li2O over a drill width of 23.3 metres, including 3.43% Li2O over 6 metres (see Company news release dated June 25, 2013). All lengths reported are drill intercepts and have not been converted into true widths.

Spodumene bearing pegmatite boulders were discovered in field walls between the new pegmatite and the Aclare mineralization. These boulders contain spodumene crystals that are greater than 40 centimetres in length and some of the largest identified on the property to date.

Drilling Highlights (News release July 21, 2016)

Most notable pegmatite intersection grading 2.33% Li2O over 4.62m at southern extent of Aclare pegmatite;
Aclare pegmatite high-grade mineralization open along trend to the southwest and at depth;
Improved understanding of mineral zonation to assist future targeting; and
Plans to extend drill pattern at Aclare and initiate exploration in the vicinity of a high-grade spodumene boulder field at Moylisha in preparation for drilling.

Particularly encouraging results (ACL16-22) are from the southern extent of the drilling and show that mineralization is open to the southwest with significant widths and grades. Holes ACL16-15 and 22 determined that an area previously mapped as a fault-controlled break in the pegmatite is in fact a bend in the mineralized zone revealing that the pegmatite zone is continuous and is made up of several closely spaced parallel bodies in this area.

Table of significant lithium values from the 2016 Avalonia drilling program

Hole_ID	From (m)	To (m)	Length* (m)	Li2O%
ACL16-15	68.18	78.83	10.65	1.07
including	70.87	75.97	5.10	1.62
including	70.87	72.12	1.25	2.50
ACL16-22	85.23	89.85	4.62	2.33
including	86.26	87.93	1.67	3.29
ACL16-09	46.10	48.45	2.35	1.58
including	46.10	47.03	0.93	2.99

All lengths reported are drill core intercepts and have not been converted into true width.

The area drill tested by the Company represents one of the main prospects located along the 42-kilometre lithium pegmatite belt that falls within the Avalonia licenses. A total of 23 targets have been identified to date by geochemical surveys and prospecting along the belt. Since its discovery in the late 1960s, the Aclare area has received more exploration activity and drilling than other targets and consequently is the most geologically understood part of the belt. This makes Aclare a valuable area for testing methods that will then be applied at other targets along the 42-km belt.

During 2018 Ganfeng Lithium drilled a total of 1947.6 metres of NQ diameter core drilling in fifteen drill holes spanning a strike length of approximately 400 metres at the Moylisha prospect of the Avalonia Project. The drilling to date suggests that the pegmatites, including spodumene pegmatites, are open to the northeast and southwest along strike and at depth.

Several of the drill holes have successfully intercepted multiple occurrences of spodumene bearing pegmatites as indicated in the table below.

Table of significant lithium results from the 2018 Avalonia Project Drill Program.

Hole ID	Grade(%Li2O) Width*(m) From(m) To(m)
MOY18-04	1.12 0.34 93.93 94.27
MOY18-06 MOY18-06	2.55 2.05 75.17 77.22 1.17 0.74 97.46 98.20
MOY18-08	2.17 0.71 9.77 10.48
MOY18-10	1.56 2.15 31.43 33.58
MOY18-11 MOY18-11 MOY18-11 MOY18-11	1.03 12.29 86.27 98.56 1.27 1.88 100.32 102.20 1.49 1.40 105.45 106.85 1.04 3.28 121.42 124.70
MOY18-13	1.35 4.28 68.32 72.60
MOY18-14 MOY18-14	2.13 1.85 108.77 110.62 0.99 1.18 112.52 113.70
MOY18-16 MOY18-16 MOY18-16	1.69 1.44 21.63 23.07 1.06 1.59 40.83 42.42 1.32 1.62 67.65 69.27
MOY18-17 MOY18-17 MOY18-17	2.08 3.14 44.34 47.48 1.11 1.15 50.70 51.85 1.18 1.01 53.15 54.16
MOY18-18 MOY18-18 MOY18-18 MOY18-18	1.38 0.72 22.08 22.80 2.78 0.72 49.83 50.55 1.95 0.64 55.64 56.28 2.13 0.65 81.21 81.86

All lengths reported are drill core intercepts and have not been converted into true width.

– Mariana Project Salta, Argentina

The Mariana property is comprised of 13 mining licenses, covering approximately 22,133 hectares’ land over Salar de Llullaillaco, located in Salta Province, Argentina. As of the date of the MD&A, ILC owns 8.694% of Litio Minera Argentina S.A. (“Litio”) which holds title to the Property. A subsidiary of Jiangxi Ganfeng Lithium Co., Ltd. (“GFL”) holds the remainder of Litio.

Under the terms of an Option Agreement dated May 19, 2011 entered into between the Company, the Company’s then whollyowned subsidiary, Litio, and the Company’s then parent company, TNR Gold Corp (“TNR”), Litio acquired the Mariana property, and the Company, with Litio as co-signatory, agreed to pay TNR a Net Smelter Return Royalty ("NSR") of 2% of gross revenues received from sale by payer of all concentrate, metal and products derived from the Mariana property less appropriate costs, which can be reduced to 1% at the Company's option on payment to TNR of $1 million within 240 days of the commencement of commercial production.

The Mariana project, a lithium-potash salar covering an expansive 160 km[2] project area, strategically encompasses the entire salar and a significant portion of the surrounding area to provide prospective land for a potential future processing plant facility. Salars, or salt lakes, host some of the largest known lithium resources in the world and the Mariana basin is one of the more prominent salars in the renowned lithium belt of South America that provides more than 70% of global production.

On March 8, 2017, the Company announced an independent resource estimate on the project. The resource estimate was prepared by Geos Mining Minerals Consultants based in Sydney, Australia. A technical report containing the resource estimate was prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The report, entitled “Technical Report: Mariana Lithium Project, Salar de Llullaillaco, Argentina” and dated April 10, 2017, is now available under the Company’s profile at www.SEDAR.com. The effective date for the resource estimation is January 20, 2017, which represents the date of the most recent data that supports the brine estimate and the report.

The following highlights taken from the report, and set out below, should be considered in the context of the detailed information provided.

Indicated resource estimate contains an estimated 1,248,000 tonnes of lithium carbonate equivalent (LCE).
Inferred resource estimate contains an estimated 618,000 tonnes of LCE.
The indicated resource for Resource Area 1 is estimated at 765 billion litres of brine grading 306 mg/L lithium (“Li”) and 9,457 mg/L potassium (“K”).
The inferred resource is estimated at 361 billion litres of brine grading 322 mg/L lithium (“Li”) and 10,316 mg/L potassium (“K”).
Brine resources are tabulated and reported for average specific yield (SY) of 15% and a cut-off value of 230 mg/L Li.

On April 25, 2017, the Company was informed by the manager of the Mariana Joint Venture that three large evaporation ponds measuring 14 x 14 metres were constructed and filled to 30 centimetres depth with raw brine from Salar de Llullaillaco to conduct evaporation tests at the site and begin the development of a natural evaporation concentration process for the brine. Two smaller ponds that are to be used for the later stages of the brine concentration were also constructed at the site. A field laboratory and liming plant are currently still under construction.

On September 5, 2017, the Company received a final report, “Proof of Concept Study – Lithium Recovery Using Membrane Separation” (the “Study”) prepared by Synexus (Pty) Limited of South Africa (“Synexus”). Results from the Study indicate that the selective recovery of lithium directly from the Mariana project’s raw (filtered) brine, with the simultaneous rejection of other cation and anion species, using a proprietary lithium selective separation process (the “technology”) is possible. Lithium was selectively recovered from the raw brine to produce lithium hydroxide (“LiOH”), a high value ingredient used directly in lithium battery manufacturing, as a final product.

In the case of the Mariana project, this new technology could provide an alternative to the currently adopted plan of using natural solar evaporation of producing a brine concentrate containing about 6% lithium that would be exported for refining.

On December 6, 2017 the Company received a report prepared by Geos Mining Minerals Consultants of Australia through ILC’s joint venture partner, Mariana Lithium Co., Ltd. (“MLC”), a subsidiary of GFL. The report summarizes results from trial pump tests conducted in September 2017 at the Mariana lithium brine joint venture project. The trial tests are part of ongoing pump tests at three locations on the project. A conclusion from the trial pump test report states, “A step-drawdown test pumped

at three (3) rates of between 10 and 30 L/s indicated a high transmissivity, hydraulic conductivity and storativity.” The ultimate goal for these ongoing tests is to carry out long term pumping at a constant rate of 60 L/s at three sites within the resource area.

During 2018, a Preliminary Economic Assessment (“PEA”) was produced, showing an estimated value for the project of USD $192 million, based on assumptions of a mine life of 25 years, and annual production of 10,000 tonnes of Lithium Carbonate equivalent and 80,000 tonnes equivalent of Sulphate of Potash.

On December 6, 2018, ILC reported that a positive preliminary economic study was completed for the Mariana project. The PEA was prepared by Advisian (“Advisian”), a division of the WorleyParsons Group, for Mariana Lithium Corp. to provide a PEA of its Mariana Lithium Brine Project in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The PEA technical report assesses the potential economic viability of developing the 14 exploration licenses (Minas), that cover the Salar de Llullaillaco (the Salar) and surrounding area (23,560 hectares), for the purpose of extraction of lithium brine resources and processing of two products – Lithium Carbonate Equivalent and Sulphate of Potash. All figures are quoted in US dollars. It should be noted that the Company did not play any significant part in the production of the PEA report, and that the conclusions are therefore those of the consultants.

PEA Highlights:

25-year mine life producing 10,000 tonnes per year (“TPY”) Lithium Carbonate Equivalent (“LCE”) plus 84,000 TPY Sulphate of Potash (“SOP”).
The estimated CAPEX and OPEX are for a conventional brine extraction facility, solar evaporation ponds and SOP processing with a level of accuracy of -30/+50%.
CAPEX estimated at US $243 million for 25-year mine life.
NPV = US $192 million after-tax at 10% discount rate, IRR = 20% post-tax.
Project results remain positive, even with important negative variations on the driver variables, indicating project strength and resilience; thus, the PEA study indicates Mariana’s proposed 10,000 TPY LCE concentrated brine and 84,000 TPY SOP fertilizer operation has the potential to generate strong economic returns.

Cautionary Note:

The preliminary economic assessment (PEA) is preliminary in nature, and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. The PEA includes the results of an economic analysis of mineral resources, and mineral resources that are not mineral reserves do not have demonstrated economic viability.

During 2019 an updated resource estimate was completed for the Mariana Joint Venture with a Technical Report delivered on February 3, 2020. The resource estimate contained in the technical report, detailed in the table below, includes:

4,410,000 tonnes of lithium carbonate (“Li2CO3“) equivalent (LCE) in the Measured and Indicated Resource categories, an increase of 253% over the 2017 estimate of 1,248,000 tonnes of Indicated Resource
49,700,000 tonnes of potash (“KCl”) equivalent in the Measured and Indicated Resource categories
an additional 786,000 tonnes of Li2CO3 and 9,260,000 tonnes KCl in the Inferred Resource category

The weight of contained lithium within the Measured and Indicated Resources represents a 253% increase over the 2017 Mineral Resource estimate, and the contained lithium within the Inferred Resources represents a 32% increase over the 2017 figures.

The Technical Report, entitled “Update of Lithium Brine Mineral Resources; Mariana Project, Salar de Llullaillaco, Argentina” and dated January 12, 2020, is available on the Company’s website and under the Company’s profile at www.SEDAR.com. The effective date for the resource estimate is August 23, 2019, which represents the date of the most recent data that supports the brine estimate in the Technical Report.

The following highlights taken from the Technical Report, and set out below, should be considered in the context of the detailed information of the Technical Report.

Resource Category	Brine Volume (GL)	Li (mg/L)	K (mg/L)	Li (kt)	LCE (kt)	K (kt)	KCl (kt)
Measured	1,680	314	9,710	528	2,810	16,300	31,200
Indicated	960	316	10,100	303	1,600	9,730	18,500
Inferred	470	328	10,340	154	786	4,860	9,260
Measured + Indicated	2,640	315	9,860	831	4,410	26,030	49,700

Notes:

A cut-off grade of 230 mg/L Li has been applied for comparative purposes with other operations in Argentina where lithium recovery from brine is undertaken by evaporative processes.
The Measured Resource stated as 1,680GL grading 314 mg/L lithium equates to 528,000 tonnes of contained lithium or 2.8Mt of lithium carbonate (Li2CO3), using the conversion factor of 5.324. Using a process recovery estimate of 86%, an estimate of recovery from processing is 2.4Mt of Li2CO3 from the Measured Resource.
The Indicated Brine Resource grades 316 mg/L lithium. The potential recoverable brine volume from this Indicated Resource, based on the same criteria as for the Measured Resource, is estimated at 960GL. This equates to 303,000 tonnes of contained lithium or 1.4Mt of lithium carbonate (Li2CO3).
Brine resources are tabulated and reported for average specific yield (SY) of 15% and a cut-off value of 230 mg/L Li.

The report states that aquifer volume is still open at depth in the majority of the salar and that there is potential to extend and define additional aquifer volume proximal to the salar margins and throughout the salar at depth below the current resource drilling level.

On July 8, 2021 the Company reported that it had received a 300 page report (the “Report”) from strategic partner Ganfeng Lithium Co. Ltd., (“GFL”) that contains an updated mineral resource estimate for the Mariana lithium brine project (the “Project”) located in Salta, Argentina. The Report was not prepared for public NI43-101 reporting standards, and therefore the Company was unable to disclose it fully. However, in the interests of investor transparency and to avoid selective disclosure, the Company disclosed the following details from the Report which have already been disclosed in a news release issued by Ganfeng Lithium on 06 July 2021, and/or in a news release by the Salta Government in Argentina on 16 June, 2021.

Highlights from the Report which are already in the public domain are as follows:

1. The resource estimate contained in the Report, detailed in the table below, includes:

6,854,000 tonnes of lithium carbonate ("Li2CO3") equivalent (LCE) in the Measured and Indicated Resource categories, an increase of 55% over the 2019 estimate of 4,410,000 tonnes of Measured and Indicated Resource (Company news release, February 6, 2020)
an additional 1,267,000 tonnes of Li2CO3 in the Inferred Resource category
these amount are also now stated as 7,863,000 tonnes of lithium chloride equivalent in the Measured and Indicated Resource categories, and an additional 1,454,000 tonnes of lithium chloride equivalent in the Inferred Resource category

2. Ganfeng have reported that an Environmental Impact Report approval has been received from the Salta regional government in Argentina for the construction of a plant with a designed annualized capacity of 20,000 tonnes per annum of lithium chloride.

3. The Salta regional government has disclosed in a news release following its discussions with Ganfeng that the likely project expenditure from now to bring the Mariana Project to full production is around US$600 million.

Report - Mariana Lithium Brine Project, Argentina

Further to previous Company news releases dated March 8, 2017, April 20, 2017, and February 6, 2020, ILC has received the Report for the Mariana lithium brine project containing an update to the resource estimate for the Project. Golder Associates

Consulting Ltd. (“Golder”) prepared the Report based on an independent lithium brine resource estimate by Geos Mining Minerals Consultants (“Geos”) based in Sydney, Australia.

The following highlights taken from the Report, and set out below, should be considered in the context of the detailed information of the Technical Report.

Resource Category	Aquifer Volume (Mm3)	Brine Volume (GL)*	Brine Density (g/mL)	Li (mg/L)	K (mg/L)	Li (kt)	LCE# (kt)	LiCl# (kt)
Measured	17,653	2,648	1.217	315	9,598	833	4,436	5,089
Indicated	9,286	1,393	1.213	326	10,044	454	2,418	2,774
Inferred	4,747	712	1.211	334	10,121	238	1,267	1,454
Measured + Indicated	26,939	4,041	1.215	319	9,752	1,287	6,854	7,863

Brine volumes are reported using a conservative aquifer average specific yield (SY) of 15%. Due to the nature of brine deposits, it is not relevant to estimate Mineral Resources to a specific cut-off grade. However, a nominal grade cut-off value of 230 mg/L Li has been applied for reporting purposes only.
Based on standard conversion rates, and assumes full extraction and conversion. LCE = Lithium Carbonate Equivalent; conversion factor 5.324 (Ministry of Energy and Mines, British Columbia, Canada). LiCl = Lithium Chloride; conversion factor 6.1078
NB. Figures have been rounded. Well efficiency and production efficiency are modifying factors to resources and reserves, respectively.

The Qualified Person who prepared the brine resource estimate in the Report is Llyle Sawyer, MAIG of Geos. The effective date for the estimate is 4 June 2021.

Brine deposits are unlike the majority of mineral deposits in that they are fluid. Fluids within a brine deposit can move and can mix with adjacent fluids when exploitation of a brine deposit begins. Evaluation of such deposits therefore requires special considerations that are not, in general, applied to other style of mineral deposits.

In preparing these resource estimates, Geos considered and applied processes to be appropriate for brine style deposits, using the principles set out in National Instrument 43-101 (“NI 43-101”), Joint Ore Resources Code JORC (2012) for mineral projects, and CIM Best Practice Guidelines for Resource and Reserve Estimation for Lithium Brines.

Mineral resources are not mineral reserves as defined by the Canadian Institute of Mining and Metallurgy, and the Company cannot guarantee that the resources reported here will be converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

The Company has decided to temporarily cease to make contributions to the Mariana Joint Venture in order to focus on other strategic projects.

Mavis Lake - Fairservice Project - Ontario, Canada

The Mavis Lake - Fairservice Project (“Mavis Lake Lithium Project”) is owned 49% by the Company and 51% by Essential Metals Limited (formerly Pioneer Resources Limited) (“Essential Metals”) (ASX:ESS). It consists of a package of nineteen adjacent mineral claims which include thirteen unpatented mining claims (the Mavis Lake claims) and six patented mining leases (the Fairservice property). This package covers the lithium-tantalum core of the Mavis Lake Pegmatite Group adjacent to Mavis Lake near Dryden, Ontario, Canada.

Mavis Lake Option Agreement

During the year ended December 31, 2016, the Company entered into an option agreement and strategic alliance (“Agreement”) with Essential Metals. Under the terms of the Agreement, Essential Metals may earn up to an 80% interest in the Mavis Lake Lithium Project.

First Earn-in: Essential Metals earned a 51% interest in the project by spending $1,500,000 on exploration activities and paying to the Company a total of $375,000, half in cash and half in shares. The Company was granted a 1.5% NSR, purchasable at any time for $1,500,000.

Second Earn-in: Essential Metals has the option to earn an additional 29% by spending $8,500,000 by 2025 ("Mavis Lake Second Earn-in"). Thereafter, the Company and Essential Metals will contribute on a pro-rata basis as to 20% and 80% respectively. If the Company’s interest in Mavis Lake falls below 15% owing to dilution it will be converted to a 1.5% net smelter royalty. Essential Metals has the right to buy back half of this second 1.5% net smelter royalty for $750,000. This second 1.5% net smelter royalty would be in addition to the Company’s existing 1.5% royalty entitlement that it would still retain.

Mavis Lake Exploration

On February 8, 2017, the Company announced that the first drill hole of the 2017 drill program at the Mavis Lake Lithium Project intersected a spodumene-bearing pegmatite. The first drill hole, MF-17-39, intersected 18m* of spodumene-bearing pegmatite between 79.9m and 97.9m down-hole. The spodumene zone is described as exhibiting broken crystals with the largest observed spodumene crystal oriented parallel to the core axis and measuring approximately 45cm in length.

On April 11, 2017, the Company announced the analytical results from the winter drill program at the Mavis Lake Lithium Project. Drilling at the project commenced on February 4, 2017 under the direction of Essential Metals and was completed on March 2, 2017. In total, 12 oriented diamond core drill holes were completed for a total of 1,305 metres across three target areas: PEG006, PEG006.5 and PEG018.

Key intersections from the Pegmatite 6 Target Area indicate*:

1.47% lithium oxide (“Li2O”) over 17.90 metres from 80.00 metres in drill hole MF17-39;
1.70% Li2O over 26.30 metres from 111.9m in drill hole MF17-49, including a zone grading 2.97% Li2O over 7.70m; and
1.45% Li2O over 16.55 metres from 74.55 metres and 1.40% Li2O over 23.10 metres from 122.00 metres in drill hole MF17-50.
All lengths reported are drill core intercepts and have not been converted into true width. True width of the drill hole intercepts, which may be shorter than those reported, are currently unknown.

On April 9, 2018, the Company announced the results of a successful drilling program at Mavis Lake. The program, targeting the Fairservice Pegmatite 6 Prospect, consisted of nine diamond core holes for a total of 1,591 metres, and delivered multiple intersections of spodumene-bearing pegmatite in all nine holes. Seven of the nine drillholes intersected significant mineralization.

STANDOUT INTERSECTION* | MF18-53: 55.25m at 1.04% Li2O from 82.75m

Other intersections* of spodumene-bearing pegmatites returned:

MF18-58: 28.95m at 1.14% Li2O from 116.8m
MF18-51: 23.30m at 1.09% Li2O from 76.8m
MF18-52: 13.45m at 1.17% Li2O from 149.95m
MF18-54: 18.20m at 1.27% Li2O from 94.8m and
MF18-54: 6.10m at 2.33% Li2O from 139.25
MF18-55: 12.35m at 1.41% Li2O from 135.14m
All reported widths are drill hole widths and have not been converted to true width. True width is unknown at this time.

Raleigh Lake Lithium Pegmatite Project, Ontario, Canada

The Company’s wholly-owned Raleigh Lake project (“Raleigh Lake”) is situated six kilometres south of the Trans-Canada Highway, 60 kilometres southeast from the Company’s Mavis Lake Lithium Project, 80 kilometres southeast from the town of Dryden, Ontario and approximately 240 kilometres northwest of Thunder Bay. The project is road accessible and is less than 20 kilometres directly west of the Township of Ignace, Ontario where many logistical and support services are readily accessed. The project distinguishes itself from other lithium projects in Canada by being very well situated near to major public infrastructure; the Trans-Canada Highway, the mainline of the Canadian Pacific Railway, natural gas pipelines, and the hydropower line junction at Raleigh Lake are all just a few kilometres from the Raleigh Lake project’s claim boundary.

Previous exploration campaigns on the Raleigh Lake project included mapping, lithogeochemistry, trenching (1,500 m) and diamond core drilling (2,817.5m in 17 holes) resulting in the identification of several substantial pegmatites and numerous smaller ones (see Company news releases dated March 23, 2016 and July 13, 2016 for further details).

Mapping and litho-geochemical sampling indicate a highly fractionated rare-metals’ pegmatite belt at least 5 km in length and 2 km in width now fully enclosed within the Company’s expanded claim boundaries. The strength of the litho-geochemical signature in the host rock adjacent to known pegmatites will be a highly effective exploration tool to signal the location of hidden or blind pegmatites; pegmatites buried under soil cover or capped by another rock type.

Magnetic Survey Highlights

On October 1, 2019 the Company announced the receipt of the final results from an unmanned aerial vehicle magnetometer (“UAV-MAG”) survey conducted earlier in 2019. The survey was designed to collect high-resolution magnetic field data over the Raleigh Lake project area. The resulting magnetic images confirm that a geologic body with elevated magnetic response, previously interpreted to be a gabbroic intrusive hosting the lithium bearing pegmatites, continues onto the adjacent group of claims acquired by ILC in 2018. The survey covered a total of just under 500 line-kilometres using a 40-metre line spacing. The resultant data were merged with an earlier UAV-MAG survey conducted in 2016 resulting in almost 700 line-kilometres of continuously profiled magnetic data over the project area.

Drilling Highlights

On April 19, 2021 the Company reported the completion of a maiden drill program at the Raleigh Lake Lithium project. A total of 1,504 metres of NQ core drilling were completed in eight holes (Table 1) to test the continuity of spodumene bearing pegmatites and their associated lithium, tantalum and cesium mineralization down dip and along strike from outcrop and previous operators’ drilling.

The recent drilling focused on what the Company now refers to as Zone 1, an area of approximately one square kilometre (100 hectares) that hosts Pegmatites 1 and 3, two shallow dipping pegmatite dykes have been mapped at surface. Pegmatite 1 is exposed along strike for at least 300 metres and was intersected 400 metres downdip by drilling conducted prior to ILC’s drilling campaign. Seven of ILC’s eight widely dispersed holes, covering an area approximately 600 x 300 metres, intersected pegmatite.

On June 1, 2021 the Company announced that assay results have been received for the maiden diamond drilling program at the Raleigh Lake Lithium project near Ignace, Ontario, Canada.

The Company was highly encouraged by the results at Zone 1 of the Raleigh Lake claim grouping, and especially by the consistent and highly anomalous quantities of rubidium and caesium encountered in the first round of drilling. The chemical analysis of the samples as a whole found the ppm of Rb to be 52.7% of the ppm of Li and the ppm of Cs to be 7.2% of the ppm of Li.

These results are also reflected in surface geochemical samples collected in Zones 1, 2, 3 and 4 with the more recently acquired Zone 5 not yet having any coverage at all. The Company believes that there is a high probability of discovering more near surface mineralized pegmatites in future drilling campaigns.

Highlights:

7 of 8 holes intersected significant lithium, rubidium, caesium and tantalum mineralization.
Rubidium, caesium and tantalum mineralization at Raleigh Lake is closely associated with lithium mineralization.
RL21-03 intersected: 1.05 metres grading 2.69% Li2O* (11,900 ppm ) from 31.04 metres;
1.18 metres grading 4210 ppm Rb from 29.86 metres;
0.55 metres grading 997 ppm Cs from 33.09 metres; and
1.00 metres grading 207 ppm Ta from 32.09 metres downhole. The near surface interval is interpreted to be the downdip extent of Pegmatite 3, observed at surface and intersected by previous operators’ drilling. The entire 3.78 metre interval grades 1.72% Li2O, 2829 ppm Rb, 299 ppm Cs, and 85 ppm Ta from 29.86 metres downhole (Table 2).
RL21-02 intersected Pegmatite 3 more than 100 metres from RL21-03 at a downhole depth of 91.25 metres and returned 3.3 metres of 1.29% Li2O, 2862 ppm Rb, 232 ppm Cs, and 118 ppm Ta indicating significant downdip continuity of the mineralized pegmatite system.
Based on the interpreted geometry of the pegmatite bodies, the orientation of the drill holes and structural measurements from oriented drill core, the reported drill intercept widths are deemed to be representative of the true width of the pegmatite bodies and associated mineralization.

A summary of recent drilling results is given in Table 2.

Table1: Summary of Drill Hole location and orientation at Raleigh Lake.

Table1: Summaryof Drill Hole location and orientation at Raleigh Lake.	Table1: Summaryof Drill Hole location and orientation at Raleigh Lake.

DDH_ID Easting Northing Elevation (m ASL) Azimuth (deg)	Dip (deg) Length (m)
RL21-01 576759 5473557 474 308 RL21-02 576689 5473464 478 330 RL21-03 576583 5473516 468 308 RL21-04 576877 5473355 485 308 RL21-05 576261 5473294 479 308 RL21-06 576335 5473238 475 308 RL21-07 576343 5473516 472 308 RL21-08 576644 5473380 474 308	-70 170.0 -70 209.0 -70 170.0 -70 185.0 -70 173.0 -70 176.0 -70 167.0 -70 254.0
	TOTAL 1504.0

Table2: Summary of significant mineralized intersections at Raleigh Lake.

Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.	Table2: Summaryof significant mineralized intersections at Raleigh Lake.
2021 Raleigh Lake Project Diamond Drilling Program
Significant Intersections*
Hole_ID	From (m)	To (m)	Width (m)	Li(ppm)	Li20 (%)	Ta (ppm)	TaO2 %	Rb (ppm)	Rb2O %	Cs (ppm)	Cs2O (%)
RL21-01 139.88 144.90 5.02 3962 0.85 74 0.009 3038 0.33 161 0.017 RL21-02 91.25 94.55 3.30 5973 1.29 118 0.014 2862 0.31 232 0.025 RL21-02 185.00 195.00 10.00 3157 0.68 - - 1452 0.16 298 0.032 incl. 185.00 187.58 2.58 1880 0.40 - - 703 0.08 267 0.028 incl. 187.58 194 6.42 3761 0.81 45 0.005 1878 0.21 306 0.032 incl. 194 195 1.00 2574 0.55 - - 666 0.07 325 0.034 RL21-03 29.86 33.64 3.78 7992 1.72 85 0.010 2829 0.31 299 0.032 incl. 29.86 33.09 3.23 9023 1.94 97 0.012 2923 0.32 180 0.019 incl. 33.09 33.64 0.55 1940 0.42 13 0.002 2280 0.25 997 0.106 RL21-03 149.76 153.45 3.69 1218 0.26 57 0.007 2761 0.30 170 0.018 RL21-05 13.25 14.5 1.25 1146 0.25 55 0.007 1899 0.21 316 0.033 RL21-05 85.48 87.63 2.15 2308 0.50 102 0.012 1938 0.21 239 0.025 RL21-05 104.61 106.79 2.18 1258 0.27 45 0.006 2158 0.24 466 0.049 RL21-06 62.22 62.95 0.73 2240 0.48 123 0.015 1820 0.20 127 0.013 RL21-06 126.58 127.94 1.36 2290 0.49 118 0.014 2630 0.29 106 0.011 RL21-06 144.36 148.5 4.14 1077 0.23 43 0.005 1048 0.11 167 0.018 incl. 144.36 146.89 2.53 1257 0.27 66 0.008 1246 0.14 120 0.013 incl. 146.89 148.5 1.61 795 0.17 8 0.001 737 0.08 243 0.026 RL21-07 81.38 84.67 3.29 3008 0.65 148 0.018 2364 0.26 137 0.014 RL21-07 97.76 100.52 2.76 4416 0.95 42 0.005 1538 0.17 371 0.039 RL21-07 103.06 104.69 1.63 2813 0.61 48 0.006 1139 0.12 158 0.017 RL21-08 217.88 224.78 6.9 1784 0.38 85 0.010 1946 0.21 110 0.012

Based on the interpreted geometry of the pegmatite bodies, the orientation of the drill holes and structural measurements from oriented drill core, the reported drill intercept widths are deemed to be representative of the true width of the pegmatite bodies and associated mineralization.

Logistics of the drill program were excellent as the project is road accessible and is just a short distance from the Trans Canada Highway. The Raleigh project is located less than 20 kilometres directly west of the Township of Ignace, Ontario.

John Wisbey, Chairman and CEO of International Lithium Corp. made the following comment :

“The really significant news from these results, however, is not the lithium but rather the high level of rubidium found at Raleigh Lake together with a lower but still possibly valuable level of caesium. Rubidium in this analysis totals approximately 52% of the ppm of lithium while caesium oxide totals approximately 7.2% of the ppm for lithium. However, the Company notes that the market price of high quality rubidium carbonate per kg is 76 times the market price of lithium carbonate while that of high quality rubidium and caesium metal is more than 1000 times the market price of lithium metal (Table 3), so these discoveries are far more than useful by-products. It will take time to analyze fully the economic value of the rubidium and caesium to the Company, especially the cost of getting to a high level of purity of rubidium and caesium oxide and how we would do this, but at first sight this looks like an extraordinarily promising result.”

Table 3: Comparative prices of Lithium, Rubidium and Caesium. Source: SMM (https://www.metal.com/), May 24, 2021.

Product	Price (USD)	Price Ratio to Lithium Carbonate
Lithium Metal (Li≥99%)	$97,331/tonne ($97/kg)
Lithium Carbonate (99.5% Battery Grade)	$13,971/tonne ($13.97/kg)	1
Caesium (Cs≥99.5%)	$109.89/g ($109,890/kg)
Caesium Carbonate(Cs2CO3≥99%)	$133.44/kg	9.55
Rubidium (Rb≥99.5%)	$125.60/g ($125,600/kg)
Rubidium Carbonate (Rb2CO3≥99%)	$1059.65/kg	75.9

As well as a commercial analysis of the results so far, the Company plans to conduct more drilling at Raleigh Lake during 2021 in Zone 1 and in the other Zones 2-5.

On August 23, 2021 the Company announced that it expanded the Raleigh Lake project through staking from 3,027 hectares to over just over 17,000 hectares (170 square kilometres). The new claims were staked within the Raleigh Lake Greenstone Belt adjacent to the pre-existing Raleigh Lake claim grouping.

The Company’s ongoing investigations in the region determined that the surrounding greenstone belt is significantly underexplored and the potential to host additional mineral deposits is quite high. Previous exploration by Canadian Nickel Co Ltd. in the early 1970s had identified pegmatite in drill holes that were targeting nickel mineralization. The Company intends to conduct an airborne geophysical survey as soon as practical as the first phase of exploration on the newly acquired claims.

During the period ended June 30, 2021, the Company incurred exploration costs totaling $384,884 on the Raleigh Lake Project.

Forgan Lake Project, Ontario, Canada

The Forgan Lake property is wholly owned by the Company and consists of certain claims covering an area of 256 hectares located in the Thunder Bay Mining District in Northwestern Ontario, Canada.

In 2018, the Company entered into a sale and royalty agreement with Ultra (TSXV: ULT) for Forgan Lake property. In 2019, the Company entered into an Amendment Agreement with Ultra. In accordance with the amended terms, Ultra may earn a 100% interest in the Forgan Lake property by spending $500,000 on exploration expenditures and paying the Company a total of $191,000 (paid), divided in cash and shares, over the period of three years from the date of underlying sale and royalty agreement. In addition, the Company will receive a 1.5% NSR on future production from the Forgan Lake property and from an adjoining property owned by Ultra.

During the year ended December 31, 2020, the Company received $37,500 in cash and 493,968 shares valued at $37,500 from Ultra recorded as recoveries in excess of carrying value.

Afzaal Pirzada, PGeo, a Qualified Person under the meaning of NI 43-101 and a consultant of the Company, is responsible for the technical content of this MD&A.

MINERAL PROPERTIES AND COMMITMENTS

A detailed listing and narrative of the Company’s properties is provided in the condensed interim financial statements for the period ended June 30, 2021, including the capitalized exploration and evaluation costs presented on a property-by-property basis.

Detailed exploration and evaluation expenditures (including acquisition costs) for the period ended June 30, 2021 are as follows:

	Mavis Lake / Fairservice Project	Raleigh Lake Project	Total
Acquisition Costs Balance, December 31, 2019 and 2020 Additions Balance, June 30, 2021	$ 193,500 - 193,500	$ 56,000 4,950 60,950	$ 249,500 4,950 254,450
Exploration Costs Balance, December 31, 2019 and 2020 Additions Balance, June 30, 2021	1,006,005 - 1,006,005	92,140 384,884 477,024	1,098,145 384,884 1,483,029
Exploration and Evaluation Asset, net December 31, 2020 June 30,2021	$ 1,199,505 $ 1,199,505	$ 148,140 $ 537,974	$ 1,347,645 $ 1,737,479

Deferred exploration costs were as follows:

	Raleigh Lake Project
Period ended June 30, 2021 Assays and laboratory Drilling Exploration expense Geology and geophysics Travel and accommodation Total	$ 8,482 293,460 11,030 58,915 12,997 $ 384,884

OUTLOOK

The Company’s primary focus for the foreseeable future will be exploring the potential of the Raleigh Lake lithium pegmatite project. In addition, it will follow up on work with strategic partner GFL to advance exploration programs on its Mariana lithium-potash brine (Argentina), and Avalonia lithium (Ireland) rare metals pegmatite projects. The Company will, in parallel, be exploring its strategic options on Mariana. The Company will also be working with Essential Metals to facilitate the exploration on the Mavis Lake lithium project. It is also seeking out new project opportunities globally.

SUMMARY OF QUARTERLY RESULTS

				For the Quarters	For the Quarters	Ended
		June 30,		March 31,		December 31,		September 30,
		2021		2021		2020		2020
Total assets	$	9,781,583	$	10,517,044	$	9,002,021	$	9,127,996
Investment		5,760,937		5,760,937		5,760,937		5,760,937
Exploration and evaluation assets		1,737,479		1,634,232		1,347,645		1,347,645
Working capital (deficiency)		(1,472,806)		(253,519)		(6,040,993)		(5,623,035)
Long-term debt		4,972,694		5,575,164		3,846,070		3,962,920
Shareholders’ equity (deficiency)		3,258,621		3,786,039		(904,824)		(532,533)
Loss and comprehensive loss		(508,334)		(578,118)		(373,105)		(209,610)
Basic and dilutedloss pershare		(0.00)		(0.00)		(0.00)		(0.00)
		June 30,		March 31,		December 31,		September 30,
		2020		2020		2019		2019
Total assets	$	9,072,191	$	8,963,271	$	8,897,824	$	8,823,933
Investment		5,760,937		5,760,937		5,760,937		5,760,937
Exploration and evaluation assets		1,347,645		1,347,645		1,347,645		1,340,568
Working capital (deficiency)		(5,368,955)		(4,934,773)		(4,567,247)		(4,131,053)
Long-term debt		3,980,079		4,072,596		3,663,642		3,668,813
Shareholders’ (deficiency) equity		(327,000)		(108,818)		559,429		975,564
Loss and comprehensive loss		(396,974)		(726,505)		(521,348)		(503,420)
Basic and diluted loss per share		(0.00)		(0.01)		(0.00)		(0.00)

Changes in key financial data over the periods presented can be attributed to the Company exploring mineral properties in Argentina, Canada and Ireland.

The Company has no present intention of paying dividends on its common shares as it anticipates that all available funds will be invested to finance project exploration and advancement.

RESULTS OF OPERATIONS

Six months ended June 30, 2021

The Company incurred a comprehensive loss of $1,086,452 (2020 - $1,123,479) during the six months ended June 30, 2021.

Significant changes are as follows:

Consulting fees increased to $201,855 (2020 - $190,395) due to private placements.
Foreign exchange resulted in a gain of $97,792 relative to a loss of $171,792 in corresponding period 2020. The Company is exposed to foreign exchange movements on liabilities denominated and settled in foreign currencies including the Exploration Loan and convertible debentures.
Interest and bank charges of $647,265 (2020 - $579,123) relate to interest accruing on the Company’s exploration loan with GFL, loans payable, convertible debentures, promissory notes and additional financing costs.
Depreciation expense decreased to $nil (2020 - $28,942) due to termination of right-of-use assets and leases.
Professional fees increased to $65,253 (2020 - $49,946) due to professional engagements for private placements.
Shareholder communications expense of $50,507 (2020 - $53,456) relates to investor relations activities.
Share-based payments of $nil (2020 - $63,871) relate to the stock options vesting in the period.
The Company realized a gain of $nil (2020 - $59,193) from change in fair value of the embedded derivatives.

Three months ended June 30, 2021

The Company incurred a comprehensive loss of $508,334 (2020 - $396,974) during the three months ended June 30, 2021. Significant changes are as follows:

Consulting fees increased to $98,415 (2020 - $94,740) due to private placements.
Foreign exchange resulted in a gain of $54,798 relative to $181,910 in corresponding period 2020. The Company is exposed to foreign exchange movements on liabilities denominated and settled in foreign currencies including the Exploration Loan and convertible debentures.
Interest and bank charges of $346,450 (2020 - $279,935) relate to interest accruing on the Company’s exploration loan with GFL, loans payable, convertible debentures, promissory notes and additional financing costs.
Depreciation expense decreased to $nil (2020 - $14,471) due to termination of right-of-use assets and leases.
Professional fees increased to $34,395 (2020 - $27,238) due to professional engagements for private placements.
Shareholder communications expense of $23,298 (2020 - $11,457) relates to investor relations activities. The increase is a result of increase in investor relations consulting expenses.
Share-based payments of $nil (2020 - $25,882) relate to the stock options vesting in the period.
The Company realized a loss of $nil (2020 - $39,282) from change in fair value of the embedded derivatives.

LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has not yet realized profitable operations. As an exploration company, ILC currently requires additional financing to continue in business and is likely to continue to require such additional financing for some time. There can be no assurances that such financing will be available or if available, will be on reasonable terms.

The condensed interim financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing through alliances with financial, exploration and mining entities, or other business and financial transactions which would assure continuation of the Company’s operations and exploration programs. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

The following table provides information regarding the Company’s working capital and accumulated deficit as at June 30, 2021 and December 31, 2020.

		June 30,		December 31,
		2021		2020
Working capital deficiency	$	(1,472,806)	$	(6,040,993)
Deficit	$	(15,143,873)	$	(14,641,410)

At June 30, 2021 the Company had $24,625 (December 31, 2020 - $1,906) in cash. The Company works to invest in its mineral properties in a difficult economic environment.

Net cash used by operating activities during the period ended June 30, 2021 was $966,890 (2020 – $158,524). The cash used in operating activities for the period consists of the operating loss net of non-cash items and changes in non-cash working capital.

Net cash outflow from investing activities during the period ended June 30, 2021 was $389,834 (2020 - $nil). Exploration and evaluation expenditures paid were $389,834 (2020 - $nil).

Financing activities provided net cash receipts of $1,379,443 during the period ended June 30, 2021 (2020 – $137,947). The Company received $1,764,833, net of issuance costs, for shares issued (2020 - $nil), received $nil, net of issuance cost, from convertible debentures issued (2020 – $50,000), received share subscriptions of $24,408 (2020 - $nil), received promissory notes proceeds of $nil (2020 - $105,717), repaid convertible debentures totalling $2,637 (2020 - $nil), and paid interest of $407,161 (2020 - $nil) with respect to the convertible debentures and loans payable.

There can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. If adequate financing is not available when required, the Company may delay, scale back or eliminate various programs and may be unable to continue in operation. The Company may seek such additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will result in dilution to the ownership interests of the Company’s shareholders and may result in dilution to the value of such interests.

The Company’s revenues, if any, are expected to be in large part derived from the mining and sale of lithium and rare earth metals or interests related thereto. The economics of developing and producing mined material are affected by many factors including the cost of operations and the market price of the mined material. Depending on the market price of mined material, the Company may determine that it is impractical to continue commercial production (once commenced).

RELATED PARTY TRANSACTIONS

The Company entered into the following transactions with related parties:

Transaction Relationship	June 30, 2021	June 30, 2020
Exploration expenditures and consulting fees Anthony Kovacs, Director and COO, and Blacksmith Metals Exploration Ltd. IT Support Services CONVENDIA Ltd., John Wisbey, Director and CEO Consulting fees John Wisbey, Director and CEO Maurice Brooks, Director and CFO Nancy La Couvee, former Corporate Secretary Directors’ fees John Wisbey Maurice Brooks Ross Thompson Nicholas Davies Share-based payments Directors	$ 72,000 $ 72,000 15,092 14,330 60,000 60,000 45,000 45,000 24,855 13,395 30,000 30,000 15,000 15,000 15,000 15,000 15,000 15,000 - 63,871 $ 291,947 $ 343,596

At June 30, 2021, due to related parties consisted of $nil (December 31, 2020 - $666,898) to various directors, officers and related companies for services detailed above and is included in accounts payable and accrued liabilities.

At June 30, 2021, convertible debentures with a face value of $nil were due to five directors of the Company or their related companies (December 31, 2020 - $2,664,993 and GBP 254,000), loans with a face value of $3,017,750 were payable to five directors of the Company or their related companies (December 31, 2020 - $nil), and a promissory note in the amount of $nil was due to an officer and director of the Company (December 31, 2020 - $633,146) (See Notes 11, 13 and 14 of the financial statements).

Loans payable

On January 21, 2021, the Company entered into the Loan Agreements with directors and related parties of the Company to convert certain convertible debentures, accrued fees and interest into non-convertible loans with an aggregate principal of $1,957,750. The loans bear interest of 12.5% per annum payable semi-annually and are due on September 30, 2023. The loans are secured by a general security agreement against the Company’s assets. Pursuant to the Loan Agreements, the Company issued 39,155,000 bonus share purchase warrants with expiry date of September 30, 2023. Each bonus warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.05 per share. The loans may be repaid prior to their maturity without penalty; however, if a loan is reduced or repaid during the first year of its term, a pro rata number of the total bonus warrants will have their term reduced to the later of one year from issuance of the bonus warrants and 30 days from the reduction or repayment of the loan.

On January 21, 2021, the Company entered into the Loan Agreements with directors and related parties of the Company to convert certain convertible debentures and interest into non-convertible loans with an aggregate principal of $1,060,000. The loans bear interest of 12.5% per annum payable semi-annually and are due on June 30, 2022. The loans are secured by a general security agreement against the Company’s assets. Pursuant to the Loan Agreements, the Company issued 21,200,000 bonus share purchase warrants with the expiry date of June 30, 2022. Each bonus warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.05 per share. The loans may be repaid prior to their maturity without penalty; however, if a loan is reduced or repaid during the first year of its term, a pro rata number of the total bonus warrants will have their term reduced to the later of one year from issuance of the bonus warrants and 30 days from the reduction or repayment of the loan.

Convertible debentures

2020 Series 1 Convertible Debenture

On February 4, 2020, the Company completed a non-brokered private placement of a convertible debenture, known as 2020 Series 1 Convertible Debenture, in the principal amount of GBP 254,000 with a related party. The debenture was set to mature on September 30, 2020 and bears interest at the rate of 12% per annum, payable quarterly. The debenture holder had the right to redeem the debentures on March 31, 2020. The debenture holder may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.05 per common share until maturity. The convertible debenture was secured by a general security agreement against the Company’s assets. The 2019 Series Convertible Debenture in the principal amount of GBP 246,016 and accrued interest of GBP 7,984 were settled to participate in the private placement.

During the period ended June 30, 2021, the 2020 Series 1 Convertible Debenture principal of GBP 254,000 was converted into non-convertible loans.

2020 Series 2 Convertible Debentures

On February 4, 2020, the Company completed a non-brokered private placement of secured convertible debentures, known as 2020 Series 2 Convertible Debentures, in the principal amount of $1,027,500. The debentures were set to mature on September 30, 2020 and bear interest at a rate of 12% per annum, payable quarterly. The debenture holders had the right to redeem the debentures on March 31, 2020. The debenture holders may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.05 per common share until maturity. The convertible debentures were secured by a general security agreement against the Company’s assets. Directors and officers of the Company participated in the private placement. Certain 2018 Series 2 Convertible Debentures in the aggregate principal amount of $205,000 with maturity date of September 30, 2019, promissory notes and convertible debenture accrued interest of $283,275, and accrued fees of $274,225 were settled to participate in the private placement.

During the period ended June 30, 2021, certain convertible debentures in the aggregate principal amount of $751,113 were converted into non-convertible loans, certain debentures in the aggregate of $2,637 were repaid, certain debentures in the aggregate of $3,750 were settled as share subscriptions towards share private placement, and certain debentures in the aggregate of $270,000 were settled as subscriptions towards 2021 Series Convertible Debentures private placement.

2019 Series Convertible Debenture

On February 13, 2019, the Company completed a non-brokered private placement of a convertible debenture, known as 2019 Series Convertible Debenture, in the principal amount of GBP 240,000 with a related party. The debenture was set to mature on May 31, 2019 and bore interest at the rate of 15% per annum. The debenture holder may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.07 per common share until maturity. The debenture was secured by a general security agreement against the Company’s assets. On May 31, 2019, the Company entered into an Amending Agreement to extend the maturity date to September 15, 2019 and amend the interest to 10% per annum. Accrued interest of GBP 6,016 was converted into principal. All other terms remained the same.

During the year ended December 31, 2020, the 2019 Series Convertible Debenture principal of GBP 246,016 was settled to participate in the 2020 Series 1 Convertible Debenture private placement.

2018 Series 2 Convertible Debentures

On May 3, 2018, June 15, 2018, and July 14, 2018, the Company completed tranches of a non-brokered private placement of secured convertible debentures known as the 2018 Series 2 Convertible Debentures to raise proceeds of $1,800,000. The debentures matured on June 30, 2019. The Company entered into Amending Agreements to extend the maturity date to June 30, 2020. The 2018 Series 2 Convertible Debentures bore interest at a rate of 15% per annum, payable quarterly. The debenture holders who subscribed to the $1,007,750 tranche may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.085 per common share in the first year and $0.10 per common share thereafter until maturity. The debenture holders who subscribed to the $792,250 tranche may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.085 per common share until the maturity date. The debentures were secured by a general security agreement against the Company’s assets. Directors and officers of the Company participated in the private placement.

On March 25, 2019 and June 28, 2019, the Company entered into an Amending Agreement with certain 2018 Series 2 Convertible Debentures holders. Pursuant to the Amending Agreement, the debentures in the aggregate amount of $1,184,993 was set to mature on June 30, 2020 and the debentures in the aggregate amount of $265,000 was set to mature on September 30, 2019 ($205,000 matured on September 30, 2019). The debenture holders may convert at any time, all or a portion of the

convertible debenture principal into common shares of the Company at a price of $0.065 until maturity. An accrued interest of $22,993 was converted into principal. All other terms remained the same.

During the year ended December 31, 2020, certain 2018 Series 2 Convertible Debentures in the aggregate principal amount of $205,000 with maturity date of September 30, 2019 were settled as subscriptions towards 2020 Series 2 Convertible Debentures private placement .

During the period ended June 30, 2021, certain convertible debentures in the aggregate principal amount of $727,493 were converted into non-convertible loans, certain debentures in the aggregate of $10,000 were settled as share subscriptions towards share private placement, and certain debentures in the aggregate of $447,500 were settled as subscriptions towards 2021 Series Convertible Debentures private placement.

2018 Series 1 Convertible Debenture

On April 18, 2018, the Company completed a non-brokered private placement of convertible debenture, known as 2018 Series 1 Convertible Debenture, in the principal amount of $1,180,000 with a director who is also an officer of the Company. The debenture matured on June 30, 2019. The Company entered into Amending Agreement to extend the maturity date to June 30, 2020. The 2018 Series 1 Convertible Debenture bore interest at the rate of 15% per annum, payable quarterly. The debenture holders may convert at any time, all or a portion of the convertible debenture principal into common shares of the Company at a price of $0.065 per common share until maturity. The Company has the right to repay the convertible debentures on notice. The convertible debenture was secured by a general security agreement against the Company’s assets.

During the period ended June 30, 2021, the 2018 Series 1 Convertible Debenture principal of $1,012,500 was converted into non-convertible loans and principal of $167,500 and accrued interest of $117,485 were settled as share subscriptions towards share private placements.

Promissory notes

During the year ended December 31, 2018, the Company received a total of $515,857 from an officer and director of the Company under a promissory note. The note is payable on demand and bears interest at the rate of 15% per annum. The promissory note is secured by a general security agreement against the Company’s assets (Note 11 of the financial statements).

Balance, December 31, 2019 Advances received Lease payment on behalf of the Company Interest expense Interest settled Balance, December 31, 2020 Principal settled Interest settled Balance, June 30, 2021	$ 573,412 103,308 10,030 89,358 (53,604)
	722,504 (633,146) (89,358)
	$ -

Share capital

On February 3 and 19, 2021, the Company completed tranches of a non-brokered private placement consisting of 54,545,454 units at $0.055 per unit for gross proceeds of $3,000,000. Each unit comprised one common share and a half share purchase warrant. Each warrant is exercisable into one common share at an exercise price of $0.08 per share until February 29, 2024. Five of the Company’s directors and officers participated in the private placement. The 2018 Series 1 Convertible Debentures principal of $167,500, accrued fees of $139,818, promissory notes principal of $633,146, and promissory notes and convertible debenture interest of $278,023 were settled to participate in the private placement.

On January 26, 2021, the Company completed a non-brokered private placement consisting of 3,715,750 units at $0.05 per unit for gross proceeds of $185,788. Each unit comprised one common share and a half share purchase warrant. Each warrant is exercisable into one common share at an exercise price of $0.075 per share until December 31, 2023. Five of the Company’s

directors and officers participated in the private placement. The 2018 Series 2 Convertible Debentures principal of $10,000, the 2020 Series 2 Convertible Debentures principal of $3,750, accrued fees of $145,007, and promissory notes and convertible debentures interest of $27,031 were settled to participate in the private placement.

SUBSEQUENT EVENTS

On August 11 and 25, 2021, the Company completed tranches of a non-brokered private placement consisting of 16,673,336 units at $0.06 per unit for gross proceeds of $1,000,400. Each unit comprised one common share and one-half of one share purchase warrant. Each whole warrant is exercisable into one common share at an exercise price of $0.08 per share until June 30, 2024. A director of the Company participated in the private placement.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Company is exposed to various financial instrument risks and assesses the impact and likelihood of this exposure. These risks include credit risk, currency risk, interest rate risk and liquidity risk. Where material, these risks are reviewed and monitored by the Board of Directors.

Please refer to Note 20 of the financial statements for the period ended June 30, 2021, for further details.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements as at the date of this report.

CRITICAL ACCOUNTING POLICIES

The preparation of these condensed interim financial statements requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates.

The most significant judgments relate to the functional currency of the Company, significant influence over associates, recognition of deferred tax assets and liabilities, and impact of COVID-19.

Functional currency

Judgment is involved in the assessment of the functional currency of the Company and its equity investment. Management reviews the guidance provided under IAS 21 (discussed above) in determining its functional currency.

Significant influence over associates

Management deems the Company to have significant influence over an associate when the Company is able to influence the financial and operating decisions of the associate. The Company has determined that its investment in Blackstairs Lithium Limited is an investment in associate.

Deferred tax assets and liabilities

The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry forwards. Changes in these assumptions could significantly affect the recorded amounts, and therefore do not necessarily provide certainty as to their recorded values.

Impact of COVID-19

The most significant estimates relate to the calculation of share-based payments, recoverability of exploration and evaluation assets, valuation of investment in Litio Minera Argentina S.A. (“Litio”), and embedded derivatives.

Share-based payments

Share-based payments, as measured with respect to stock options granted and re-priced, are estimated by reference to the BlackScholes pricing model; a detailed discussion of management’s estimates with respect to the pricing model is found in Note 17.

Recoverability of exploration and evaluation assets

Recorded costs of exploration and evaluation assets and deferred exploration and evaluation costs are not intended to reflect present or future values of these properties. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that change in future conditions could require a material change in the recognized amount. Management is required, at each reporting date, to review its exploration and evaluation assets for signs of impairment. This is highly subjective process taking into consideration exploration results, metal prices, economics, financing prospects and sale or option prospects. Management makes these judgements based on information available, but there is no certainty that a property is or is not impaired. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

Valuation of investment

The Company holds a 9.152% interest in Litio as at June 30, 2021 (December 31, 2020 - 11.243%). The Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of, and near-term business outlook for, the investee, including factors such as industry and sector performance, changes in technology, and operational and financing cash flow.

The determinations of fair value of the Company’s investments at other than initial cost are subject to certain limitations. Financial information for privately-held company investments may not be available and, even if available, that information may be limited and/or unreliable. Use of the valuation approach described below may involve uncertainties and determinations based on the Company’s judgment and any value estimated from these techniques may not be realized or realizable.

Company-specific information is considered when determining whether the fair value of a privately-held investment should be adjusted upward or downward at the end of each reporting period. In addition to company-specific information, the Company will take into account trends in general market conditions and the share performance of comparable publicly-traded companies when valuing privately-held investments.

Embedded derivatives

As part of assessing whether an instrument is a hybrid financial instrument and contains an embedded derivative, significant judgement is required in evaluating whether the host contract is more akin to debt or equity and whether the embedded derivative is clearly and closely related to the underlying host contract. The Company concludes that the host instrument of the convertible debentures is a debt host due to the holder’s right to redeem the instrument for cash at a point in time in the future. The Company determines that the conversion option is not closely related to the debt host, and that the conversion option is required to be separated from the host instrument and accounted for as an embedded derivative due to the variability in the number of shares issuable under the convertible debentures. In applying its judgement, the Company relies primarily on the economic characteristics and risks of the instrument as well as the substance of the contractual arrangements.

The initial fair values of the embedded derivative conversion options and subsequent re-measurements at fair value at each reporting date are determined by using the Black-Scholes pricing model which required exercise of judgment in relation to variables such as expected volatilities in share price and foreign exchange rates.

OUTSTANDING SHARE DATA

The following table summarizes the outstanding share capital, convertibles, stock options, and warrants as of the date of the MD&A:

	Number of shares
	issued or issuable
Common shares	210,830,443
Convertible debentures ($552,500 at $0.05)	11,050,000
Stock options	10,405,000
Warrants	116,622,272
Total if all converted or exercised	348,907,715

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

Information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future value for certain assets or liabilities. Management believes that such estimates have been based on careful judgments and have been properly reflected in the financial statements. Management maintains a system of internal controls to provide reasonable assurance that the Company’s assets are safeguarded and to facilitate the preparation of relevant and timely information.

BUSINESS RISKS

Natural resources exploration, development, production and processing involve a number of business risks, some of which are beyond the Company's control. These can be categorized as liquidity, operational, market and regulatory risks. There are also legal risks and risks where we are relying on partners to make key decisions which affect the future of the Company’s projects.

Liquidity risk, in particular funding risk, is seen by the Board as the key issue or risk in 2021. The Company, as an exploration company, has no or insignificant income, and has expenditure to develop its properties as well as normal operating costs and debt service costs. Consequently, it has required and will require additional financing to continue in business and this is likely to continue for some time. In March 2018, the Company was within days of suffering an uncurable default on the Mariana project which would permanently have decreased its shareholding in Litio. Following the change in management in March 2018, considerable focus is being placed on funding the Company ahead of its needs.

There can be no assurance that future financing will be available or, if available, that it will be on reasonable terms. If financing is obtained by issuing common shares from treasury, control of the Company may change, and investors may suffer additional dilution.

To the extent financing is not available, lease payments, work commitments, rental payments and option payments, if any, may not be satisfied and could result in a loss of property ownership or earning opportunities for the Company. For example, for the Company’s Mariana property if a cash call is missed and the default is not cured, there is a loss of shareholding in Litio. If three cash calls are missed and the default is not cured, the Company’s equity interest in Litio can, under a 2014 agreement, be converted by its partner into a NSR, with considerable potential loss of value to the Company. There are no defaults outstanding on Mariana or other properties at the time of this MD&A.

Operational risks include finding and developing reserves economically, marketing production and services, product deliverability uncertainties, changing governmental laws and regulations, hiring and retaining skilled employees and contractors and conducting operations in a cost effective and safe manner. The Company continuously monitors and

responds to changes in these factors and to the best of its knowledge adheres to all regulations governing its operations. Insurance may be maintained at levels consistent with prudent industry practices to minimize risks, but the Company is not fully insured against all risks, nor are all such risks insurable.

Market risks include commodity prices, interest rates and the Canadian dollar, United States dollar, Argentinean Peso and Euro exchange rates, all of which are beyond the Company's control.
Regulatory risks include possible delays in the Company or its partners getting regulatory approval to the transactions that the Board of Directors believe to be in the best interests of the Company, and also on a much smaller scale include increased fees for filings and the introduction of any additional reporting requirements the cost of which the Company must meet in order to maintain its exchange listing.
Partner risks can exist, and might exist in the future, where the Company’s partner has different interests or capabilities from those of the Company and is unable or unwilling to progress projects at the same speed that the Company would like to. The Company has mitigated its credit or liquidity risk by choosing a strong company, Ganfeng Lithium, as its key partner, but there is no guarantee that Ganfeng will prioritize Mariana and Avalonia for development over other projects even though the Board might wish that they do. Similarly the Company might argue, for example, that membrane technology is an appropriate technology to use at Mariana, but under the terms of the 2014 joint venture agreement it will ultimately be Ganfeng’s decision on whether or not to adopt this technology, and whether to spend money on other initiatives that the Company might not wish to spend money on.
Legal risks: In the mining industry there is always a risk over contractual interpretation of royalty rights and obligations, and it is possible that the Company’s interpretation of its rights and obligations could be different from other parties’ interpretation of them. This carries litigation risk.

For information on additional risks, please refer to the Company’s condensed interim financial statements for the period ended June 30, 2021.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Changes in Internal Control over Financial Reporting (“ICFR”)

In connection with National Instrument 52-109, Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to financial information contained in the condensed interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109.