LAKE RESOURCES N.L. — Capital/Financing Update 2020

Feb 26, 2020

ASX ANNOUNCEMENT

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27 February 2020

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LAKE EYES UPSIZING SPP FOLLOWING STRONG INVESTOR DEMAND

Placement Completed In Boost For Technology Backed By Bill Gates-Led Fund

• Share Purchase Plan (SPP) oversubscribed following strong investor demand, with Lake considering upsizing the offer to accommodate shareholders. SPP remains open until Friday, 28 February 2020.

• Private placement completed, securing further $1.9 million before costs in boost for development of direct extraction technology backed by Bill Gates-led fund.

Lithium explorer and developer Lake Resources NL (ASX: LKE) announced today a further boost for its growth plans, following strong investor support that will facilitate the development of sustainable and scalable direct extraction technology at its flagship Kachi Lithium Brine Project.

The technology developed by Lake’s partner, Lilac Solutions has received backing from a fund led by Bill Gates and other global business heavyweights and offers a potential sustainable solution for the lithium brines industry.

Under a placement to sophisticated and professional investors, Lake has now secured a total of approximately $3.37 million before costs, while the Share Purchase Plan announced on 10 February 2020 has been oversubscribed having secured some $2.1 million. Lake is now considering upsizing the SPP to accommodate the increased demand from shareholders, with such funding to help speed the Company’s development plans.

Placement

Lake has completed its upsized private placement, with $1.915 million received before costs and the issue of 47,875,000 million shares, at an offer price of $0.04 per share, to sophisticated and professional investors. This brings the total amount raised under the placement to an amount of approximately $3.37 million. The Company is preparing a supplementary prospectus which will address these matters which is anticipated to be lodged on or around 28 February 2020.

Share Purchase Plan (SPP) Update

The SPP and Shortfall Offer, to raise up to $1.5 million before costs, has been oversubscribed following strong support. The Company is currently considering upsizing the SPP Offer and Shortfall Offer and an announcement will be made shortly concerning a Supplementary Prospectus.

The SPP closes this Friday, 28 February 2020 (Closing Date) . Applications and funds must be received by the Company by the Closing Date.

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Please see the relevant documentation under a Prospectus lodged on 10 February 2020, which is available on the Company’s website www.lakeresources.com.au. The supplementary prospectus which is anticipated to be lodged on or about 28 February 2020 will set out details of the rights of applicants under the SPP to withdraw their application within one month from the date of the Supplementary Prospectus and be repaid their funds.

Lake’s Managing Director, Steve Promnitz said: “The strong investor support is extremely encouraging, particularly amid current market conditions, and I would like to sincerely thank both our new and existing investors for your commitment.

“Lake has some huge milestones ahead of us in 2020 and the increased funding will speed our development efforts as we work to unlock the value of the sustainable and scalable direct extraction process for lithium brine extraction.”

For further information please contact: Steve Promnitz, Managing Director Follow Lake on Twitter: https://twitter.com/Lake_Resources +61 2 9188 7864 Follow on LinkedIn: https://www.linkedin.com/company/lake-resources/ steve@lakeresources.com.au Website: http://www.lakeresources.com.au

About Lake Resources NL (ASX:LKE)

Lake Resources NL (ASX:LKE, Lake) is a lithium exploration and development company focused on developing its three lithium brine projects and a hard rock project in Argentina, all owned 100%. The leases are in a prime location among the lithium sector’s largest players within the Lithium Triangle, where 40% of the world’s lithium is produced at the lowest cost. Lake holds one of the largest lithium tenement packages in Argentina (~200,000Ha) which provides the potential for consistent security of supply, scalable as required.

Lake considers it is in a strong position to benefit from the market opportunity in electric vehicles and the batteries that power the energy revolution due to:

1. High Purity Lithium Carbonate samples (99.9%) with very low impurities, recently produced from the pilot plant using a direct extraction process (ion exchange);

2. Increased Engagement with Off-takers as larger samples are produced, anticipated from late March 2020 onwards, for off-takers to commence qualification testing to then engage to assist in financing;

3. Kachi Project PFS , in the final stages of completion which is anticipated to show projected production costs at the lower end of the cost curve similar to current lithium brine producers. The Kachi project has a resource (announced Nov 2018) considered large enough for long term production and could be potentially scaled to a much larger project is required as leases cover an area 10 times Manhattan.

4. Sustainable and Scalable Future Lithium Production , demanded by the larger Electric Vehicle makers and an increasing number of battery/cathode makers, who need to show both the quality and provenance of battery materials for ESG/sustainability and carbon footprint reporting. The direct extraction process reinjects brine once the lithium has been removed using ion exchange beads without affecting the chemistry. This means a much smaller footprint and less water usage because evaporation ponds are not used.

The Kachi project covers 70,000 ha over a salt lake south of FMC/Livent’s lithium operation in Catamarca Province. Drilling confirmed a large lithium brine bearing basin over 20km long, 15km wide and 400m to 800m deep. Drilling over Kachi produced a maiden indicated and inferred resource of 4.4 Mt LCE (Indicated 1.0Mt, Inferred 3.4Mt) (refer ASX announcement 27 November 2018 – LKE confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed).

A direct extraction technique has been tested in partnership with Lilac Solutions, supported by Bill Gates – led Breakthrough Fund and MIT’s The Engine fund. A pilot plant is being commissioned, which has shown 80-90% recoveries and lithium brine concentrations over 60,000 mg/L lithium. Battery grade lithium carbonate (99.9% purity) has been produced from Kachi brine samples with very low impurities (Fe, B, with <0.001 wt%). Phase 1 Engineering Study results have shown operating costs forecast in the lowest cost quartile

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(refer ASX announcement 10 December 2018). Test results have been incorporated into a Pre-Feasibility Study (PFS) in the final stages of completion. The Lilac pilot plant in California will produce samples for downstream participants in March/April/May prior to being transported to site to produce larger battery grade lithium samples. Discussions are advanced with downstream entities, mainly battery/cathode makers, as well as financiers, to jointly develop the project.

The Olaroz-Cauchari and Paso brine projects are located adjacent to major world class brine projects either in production or being developed in the highly prospective Jujuy Province. The Olaroz-Cauchari project is located in the same basin as Orocobre’s Olaroz lithium production and adjoins the Ganfeng Lithium/Lithium Americas Cauchari project, with high grade lithium (600 mg/L) with high flow rates drilled immediately across the lease boundary.

The Cauchari project has shown lithium brines over 506m interval with high grades averaging 493 mg/L lithium (117-460m) with up to 540 mg/L lithium. These results are similar to lithium brines in adjoining leases scheduled for production in late 2020 and infer an extension and continuity of these brines into Lake’s leases (refer ASX announcements 28 May, 12 June 2019).

Significant corporate transactions have occurred in adjacent leases with development of Ganfeng Lithium/Lithium Americas Cauchari project as Ganfeng announced a US$397 million investment for 50% of the Cauchari project, together with a resource that had doubled to be the largest on the planet. Ganfeng then announced a 10 year lithium supply agreement with Volkswagen on 5 April 2019. Nearby projects of Lithium X were acquired via a takeover offer of C$265 million completed March 2018. The northern half of Galaxy’s Sal de Vida resource was purchased for US$280 million by POSCO in June-Dec 2018. LSC Lithium was acquired in Jan-Mar 2019 for C$111 million by a mid-tier oil & gas company with a resource size half of Kachi. Orocobre has announced on 19 Feb 2020 the acquisition of all shares in Advantage Lithium, valued at around C$63 million, which holds leases next to Lake at Cauchari. These transactions imply an acquisition cost of US$55-110 million per 1 million tonnes of lithium carbonate equivalent (LCE) in resources.

For more information on Lake, please visit http://www.lakeresources.com.au/home/