Lithium South Development Corporation — Capital/Financing Update 2021

Jan 18, 2021

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1: Name and Address of Reporting Issuer

Lithium South Development Corporation (the “ Company ”) #804-750 West Pender Street Vancouver, BC V6C 2T7

Item 2: Date of Material Change

January 18, 2021.

Item 3: News Release

A news release was disseminated and filed on SEDAR at www.sedar.com on January 18, 2021.

Item 4: Summary of Material Changes

The Company announced that it has closed its non-brokered private placement (the “ Private Placement ”). See Item 5 for details.

Item 5: Full Description of Material Change

The Company announced that it has closed its Private Placement issuing an aggregate of 8,000,412 units (the “ Units ”) at a price of $0.225 per Unit raising gross proceeds of $1,800,092.80. Each Unit is comprised of one common share (a “ Share ”) and one transferable common share purchase warrant (a “ Warrant ”). Each Warrant allows the holder to purchase one additional Share of the Company at a price of $0.35 per Share for a period of five years from the date of closing of the Private Placement.

The Warrants are subject to an accelerated expiry provision whereby if the Company’s Shares close at or above $0.40 per Share during any 10 consecutive trading day period at any time subsequent to four months and one day after the closing date, the holder will have 30 days from the date the Company provides notice of such accelerated expiry to exercise the Warrant or it will expire.

The Company paid finder’s fees of $90,363.44 and 401,615 finder’s warrants (the “ Finder’s Warrants ”) to Richard Savage, Nathan Rotstein and Public Eye Consulting Busche. The Finder’s Warrants are non-transferable and exercisable on the same terms as the Private Placement Warrants.

Proceeds of the Private Placement will be used to advance the Company’s HMN Lithium Project, located in Salta Province, Argentina. The project is located on the Hombre Muerto Salar, the premier lithium producing salar in Argentina. The property is adjacent to land under development by Korean multinational corporation POSCO, who acquired their ground from Galaxy Resources Ltd. for $ US 280 million. The Company completed a Preliminary Economic Assessment of the HMN Li Project in 2019, and the property has two pumping wells installed. The next phase of development will include moving the project to a pre-feasibility. In addition, the Company is evaluating several new extraction technologies for lithium production which may be applicable to the project.

All securities issued will be subject to a four month hold period.

Item 6: Reliance on subsection 7.1(2) or (3) of National Instrument 51-102

Not applicable.

Item 7: Omitted Information

None.

Item 8: Executive Officer

For further information, please contact:

Adrian Hobkirk, President and CEO

T: 1.855.415.8100 E: ahobkirk@nrgmetalsinc.com

Item 9: Date of Report

January 18, 2021.