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Rock Tech Lithium Inc. Management Reports 2021

Aug 28, 2021

43849_rns_2021-08-27_12940bd9-c03e-42d4-8a0a-b8bc31796bb2.pdf

Management Reports

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Rock Tech Lithium Inc.

Management Discussion and Analysis

MD&A June 30, 2021

PREPARED BY MANAGEMENT

ROCK TECH LITHIUM INC.

Management Discussion and Analysis

For the three and six months ended June 30, 2021

This Management Discussion and Analysis (“MD&A”) of Rock Tech Lithium Inc. (the “Company”) provides analysis of the Company’s financial results for the three and six months ended June 30, 2021 and incorporates certain information from prior fiscal years. This MD&A should be read in conjunction with the annual audited consolidated financial statements of the Company for the years ended December 31, 2021 and 2020. These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A contains statements that constitute “forward-looking” statements and other cautionary notices (refer to “Forward-Looking Statements and Estimates” in this MD&A).

Date of Report

August 27, 2021

Overall Performance

The Company, a Tier 1 Listed Issuer on the TSX Venture Exchange, is a lithium development company holding a 100% interest in the Georgia Lake lithium project in the Thunder Bay Mining District of Ontario. The Company is also planning to build European and North American lithium hydroxide conversion capacity. The Georgia Lake project consists of 277 claim units and 41 mining leases. The project is located in an area underlain by metasediments and metavolcanics of Archaen age. These metasediments were invaded by large masses of Algoman granitic rocks and by numerous sills and dykes of genetically related porphyry, pegmatites and granite aplite. The Georgia Lake pegmatites contain lithium-bearing spodumene and have demonstrated the potential for beryl, columbite, molybdenite, amblygonite, apatite and bityite. Since acquiring the project in 2009, the Company has completed several exploration programs including prospecting, channel sampling and over 12,000 metres of drilling. As of the date of this report, the property has a National Instrument 43-101 compliant resource estimate including a measured resource estimate of 2.31 million tonnes grading 1.04% lithium oxide, an indicated resource estimate of 4.31 million tonnes grading 0.99% lithium oxide and an inferred resource estimate of 6.68 million tonnes at 1.16% lithium oxide.

The Company’s continuation as a going-concern is dependent upon the successful results of its mineral property exploration activities and its ability to raise equity capital sufficient to meet current and future obligations. As at June 30, 2021, the Company had cash and cash equivalents of $15,943,741 which alleviates significant doubt about the Group’s ability to continue as a going concern.

Property Details and Results to Date

Georgia Lake Lithium Property, Northwest Ontario

The Georgia Lake lithium project was the subject of significant historical exploration work conducted by past operators. Over 33,000 metres of drilling had been completed on the original claim blocks acquired by the Company, providing Rock Tech with an historical resource estimate. The Nama Creek claim block, located in the northeast corner of the Georgia Lake properties, was poised to go into production in the late 1950s, with a 4-compartment mine shaft being built to a depth of 153 metres. During the year ended December 31, 2020, the Company continued with environmental baseline studies and other related permitting activities. The Company did not recognize any impairment on the property during the period.

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Exploration expenditures incurred :

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Applicable Regulations and Permits

The Province of Ontario, in which the Company’s property is located, has a history of being an excellent jurisdiction in which to conduct mineral exploration. As a result, Management doesn’t anticipate encountering difficulties in obtaining the necessary work, environmental and regulatory permits for any planned exploration programs. The Company’s mineral exploration activities expose it to potential responsibilities related to the identification and protection of First Nations’ archaeological and cultural sites and artefacts that may be located within the boundaries of the Company’s claims. Management works closely with the First Nations peoples and leaderships involved in these areas to protect their interests. The costs of conducting any required archaeological studies are treated as an exploration expense. Management is not aware of any such interests that would unduly restrict its exploration activities.

Downstream development

Rock Tech is planning to build a lithium hydroxide production plant that will convert hard rock lithium feedstock into a lithium chemical commonly used in the battery industry. During the year ended December 31, 2020, the Company commenced basic engineering and metallurgical studies regarding the planned lithium hydroxide converter. Expenses incurred during the period were as follows:

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Selected Annual Information

Fiscal Year 2020 2019 2018 2017
($) ($) ($) ($)
IFRS IFRS IFRS IFRS
Total revenue - - - -
Loss (3,039,970) (1,049,293) (3,444,621) (3,277,052)
Loss per share (0.08) (0.03) (0.10) (0.12)
Total assets 13,426,687 5,570,982 4,840,758 5,948,183
Long term financial liabilities n/a n/a n/a n/a
Cash dividends declared n/a n/a n/a n/a

The Company’s financial statements are expressed in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards (IFRS).

The losses, year-over-year, reflect the current stage of development of the Company and, more specifically, general administration expenses and the impairment of exploration properties that the Company has decided to abandon. The level of expenditures varies based on available funds and the exploration and promotion programs planned.

In 2020, the Company incurred $424,265 in net exploration expenditures related to the Georgia Lake property and planned lithium hydroxide converter and recognized an impairment loss of $30,433 on the El Nogalito property. The amount was previously classified as a Prepaid Expense pending the grant of certain mining licenses by the relevant authorities in Mexico. During the year-ended December 31, 2019, the Company decided to no longer pursue the acquisition of the El Nogalito project. The amount recognized as a Mineral Property Impairment is refundable by the property vendors; however, the Company assesses the likelihood of collection to be low.

In 2019, the Company incurred $298,927 in net exploration expenditures related to the Georgia Lake property and did not recognize any impairment losses.

In 2018, the Company incurred $555,229 in net exploration expenditures related to the Georgia Lake property and did not recognize any impairment losses.

In 2017, the Company incurred $983,137 in net exploration expenditures related to the Georgia Lake property and did not recognize any impairment losses.

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Results of Operations for the year ended December 31, 2020 and 2019

The Company had working capital of $8,383,056 as of December 31, 2020 (2019: $1,488,646), including $8,987,743 of cash (2019: $1,650,864). The most significant expenses were:

  • General administration expenses of $54,318 (2019: $42,224) related to office rent, commercial liability and directors’ and officers’ insurance policies and other overhead.

  • Management fees of $472,500 (2019: $370,000) related to fees charged by the executive chairman and chief executive officer;

  • Salaries and wages of $210,000 (2019: $185,000) related to the chief financial officer;

  • Professional fees of $74,022 (2019: $59,442) related to assurance and general legal expenses.

  • Stock-based payments of $1,333,340 (2019: $69,085) related to the value of stock options granted to directors, officers, employees and consultants;

  • Consulting fees of $218,297 (2019: $67,697) related to the establishment of an advisory board and the engagement of technical consultants;

  • Downstream lithium converter development expenses of $412,792 related to site due diligence, engineering, metallurgical testing and project management (2019: $Nil);

  • Project investigation expenses of $19,176 (2019: $237);

  • Travel and promotion expenses of $190,421 (2019: $227,177) related to increased exploration, corporate development, marketing and investor relations activities during the year;

  • Transfer agent and filing fees of $33,269 (2019: $26,678) related personal information forms, shares-forservices and other regulatory filings.

The Company expects losses to continue unless and until it finds a commercially viable ore body or deposit and commences commercial production thereon or until commercial production commences at its planned lithium hydroxide facility. The Company further expects that its loss will be greater in succeeding years as it ramps up development and grows its headcount.

Summary of Quarterly Results

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Fluctuations in the quarter-to-quarter performance are largely the result of financing and investing activities and share-based payments related to the granting of stock options to directors, officer, employees and consultants. Periods in which financings are completed tend to be accompanied by higher than average filing fees and legal expenses while periods in which investing activities are undertaken (ie – exploration programs) tend to be accompanied by higher than average general and administrative costs and other overheads necessary to support such investing activities. Fluctuations in the quarter-to-quarter performance are also due to fluctuations in the business cycle.

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Results of Operations for the quarter ended June 30, 2021 and 2020

The Company’s comprehensive loss for the quarter ended June 30, 2021, was $3,980,439 (2020: $284,135). The most significant expenses were:

  • General administration expenses of $40,993 (2020: $13,747), related to office rent, insurance and other overheads.

  • Stock-based payments of $1,089,348 (2020: $Nil) related to the granting of stock options to directors, officers, employees and consultants;

  • Management fees of $98,937 (2020: $140,000) related to the executive chairman and the chief executive officer;

  • Salaries and wages of $298,771 (2020: $52,500) related to the chief financial officer and other employees;

  • Professional fees of $28,879 (2020: $2,500) related to general legal expenses;

  • Consulting fees of $563,980 (2020: $29,910) related to advisory board and business development expenses;

  • Downstream lithium converter development expenses of $1,584,165 related to site due diligence, engineering, metallurgical testing and project management (2020: $Nil);

  • Travel, promotion and business development expenses of $236,673 (2020: $41,382) related to corporate development, investor relations and shareholder communications activities during the quarter;

Results of Operations for the quarter ended March 31, 2021 and 2020

The Company’s comprehensive loss for the quarter ended March 31, 2021, was $5,273,889 (2020: $1,401,871). The most significant expenses were:

  • General administration expenses of $44,174 (2020: $11,954), related to office rent, insurance and other overheads.

  • Stock-based payments of $3,318,600 (2020: $1,032,812) related to the granting of stock options to directors, officers, employees and consultants;

  • Management fees of $105,000 (2020: $122,500) related to the executive chairman and the chief executive officer;

  • Salaries and wages of $69,167 (2020: $52,500) related to the chief financial officer and other employees;

  • Professional fees of $13,442 (2020: $2,985) related to general legal expenses;

  • Consulting fees of $118,642 (2020: $59,170) related to advisory board and business development expenses;

  • Downstream lithium converter development expenses of $1,326,569 related to site due diligence, engineering, metallurgical testing and project management (2020: $Nil);

  • Travel, promotion and business development expenses of $184,371 (2020: $78,562) related to corporate development, investor relations and shareholder communications activities during the quarter;

Liquidity

The Company’s comprehensive loss for the six months ended June 30, 2021, was $9,254,328 (2020: $1,686,005).

The Company had working capital of $15,171,078 as of June 30, 2021 (December 31, 2020: $8,383,056), including $15,943,741 of cash (December 31, 2020: $8,987,743).

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Capital Resources

The Company has not generated any revenue and no revenue is anticipated until the Company begins extracting and selling minerals and/or lithium chemicals. Accordingly, the Company must continually raise funds from sources other than the sale of minerals found on its properties.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet transactions.

Related Party Transactions

Included in prepaid expenses is $nil of prepaid management fees (2020 - $35,000). Amounts due to related parties consists of amounts due to directors of $nil (2020- $6,000). These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

For the six months ended June 30, 2021, the Company recorded share-based compensation of $4,407,948 (2020 - $1,032,812) for options granted to directors, officers, employees and consultants of the Company.

The Group key management consists of its officers and directors. Key management compensation for the six months ended June 30, 2021 and 2020 is as follows:

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During the six months ended June 30, 2021, the Company incurred management fees of $83,937 (2020: $70,000) payable to the CEO of the Company.

During the six months ended June 30, 2021, the Company incurred management fees of $120,000 (2020: $105,000) payable to the Chairman of the Company.

During the six months ended June 30, 2021, the Company incurred salary expenses of $120,000 (2020: $105,000) payable to the CFO of the Company.

Intercompany balances and transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note. Related party fees and expenses were incurred in the normal course of operations in connection with the companies owned by key management and directors. The amounts allocated to exploration consulting were capitalized to exploration and evaluation assets during the period. Expenses have been measured at the exchange amount.

Critical Accounting Estimates

Material accounting estimates usually disclosed by resource issuers such as assumptions regarding depletion, resource and production values and capital write downs are not applicable to the Company as it is at the exploration and development stage. The Company utilises certain estimates as more fully described in Note 2 to the financial statements. There have been no changes to the Company’s existing estimates.

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Changes in Accounting Policies including Initial Adoption

The accounting policies followed by the Company are set out in Note 2 to the audited consolidated financial statements for the year ended December 31, 2020 and have been consistently followed in the preparation of the unaudited condensed interim financial statements of the Company.

Financial Instruments and Other Risks

The Company’s financial instruments consist of cash, amounts receivable, accounts payable and accrued liabilities, and amounts due to related parties. The fair value of the Company’s arms-length financial assets and liabilities are estimated by Management to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.

The fair value of amounts due to related parties is assumed to equal its stated value. Comparable arms-length risk profiles, terms and interest rates are not available for Management to determine if any fair value adjustments are required.

The Company’s functional currency is the Canadian dollar. Currently, the Company does not use any hedging or derivative instruments to reduce its exposure to foreign currency risk.

By its very nature, the business of mineral exploration and extraction involves a high degree of risk. The Company competes with other mining enterprises, some of which have greater financial resources, for the acquisition of mineral concessions.

The Company is at risk to fluctuations in precious metal prices, the interest of investors and the availability of contractors. These factors impact upon the Company’s ability to finance its programs and to carry on operations.

Mineral development involves a high degree of risk as very few properties warrant the considerable expenditures required to initially substantiate their reserves and then to develop them into production. Consequently, very few properties are ever developed into producing mines. At present, none of the Company’s properties has a known body of commercial ore and the Company has no mineral reserves.

The recoverability of amounts capitalized for the Company’s properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to arrange economically appropriate financing to complete the development of its properties, relevant metal prices, sufficient global and regional demand, and future profitable production or proceeds from sale.

The Company is at risk for environmental issues. Management is not aware of and does not anticipate significant environmental remediation costs or liabilities in respect of its current operations.

The Company’s mineral exploration activities expose it to potential responsibilities related to the identification and protection of First Nations’ archaeological and cultural sites and artefacts and traditional grounds that may be located within the boundaries of the Company’s leases and claims. The Company works closely with the First Nations peoples and leaderships involved in these areas to protect their interests. Costs of conducting any required archaeological studies are treated as an exploration expense. Management is not aware of any such interests that would unduly restrict its exploration activities.

The Company is not exposed to significant credit concentration or interest rate risk.

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Internal Controls

The Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to the financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis.

In contrast to the certificate under National Instrument (“NI”) 52-109 (Certification of disclosure in an Issuer’s Annual and Interim Filings), the Venture Issuer Basic Certification 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.

Share Capitalization

At June 30, 2021, the Company had 58,795,611 common shares issued and outstanding.

On January 8, 2021, the Company issued 2,580,645 units at $1.55 per unit related to a private placement. Each unit consisted of one common share and one share purchase warrant exercisable into one common share at a price of $1.80 until January 8, 2023.

On January 20, 2021, the Company issued 2,500,000 units at $1.60 per unit related to a private placement. Each unit consisted of one common share and one share purchase warrant exercisable into one common share at a price of $2.00 until January 21, 2023.

During the six months ended June 30, 2021, the Company issued 1,840,000 common shares related to the exercise of stock options and received proceeds of $976,600.

During the six months ended June 30, 2021, the Company issued 3,076,003 common shares related to the exercise of share purchase warrants and received proceeds of $2,954,240.

Subsequent to period end, the Company issued 380,000 common shares related to the exercise of share purchase warrants for total proceeds of $380,000, and issued 600,000 common shares related to the exercise of stock options for total proceeds of $267,500.

At December 31, 2020, the Company had 48,798,963 common shares issued and outstanding.

On February 5, 2020, the Company issued 3,604,622 units at $0.45 per unit related to a private placement. Each unit consisted of one common share and one-half of one share purchase warrant with each whole warrant exercisable into one common share at a price of $0.70 until February 5, 2023. The Company recorded $11,786 as share issuance cost.

On December 18, 2020, the Company issued 9,994,447 units at $0.85 per unit related to a private placement. Each Unit consisted of one common share and one share purchase warrant exercisable into one common share at a price of $1.00 until December 17, 2022. The Company recorded $35,421 as share issuance cost.

Basic and diluted loss per share

The calculation of basic and diluted loss per share for the quarter ended June 30, 2021, was based on the loss attributable to common shareholders and the weighted average number of common shares outstanding. Diluted loss per share did not include the effect of stock options and warrants as the effect would be anti-dilutive.

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Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX-V requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the Company’s issued and outstanding common shares. In connection with the foregoing, the number of Common Shares reserved for issuance to any one person in any 12-month period under this Plan and any Other Share Compensation Arrangement shall not exceed 5% of the outstanding Common Shares at the time of the grant, unless the Company has obtained Disinterested Shareholder Approval to exceed such limit.

On January 14, 2020, the Company granted 500,000 stock options to a director and officer of the Company. The options have an exercise price of $0.53. The grant date fair value of the options recognized as share-based compensation was $232,714, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 1.69%; volatility of 174%; dividend rate 0%; forfeiture rate 0%; and expected life of 5.97 years.

On January 14, 2020, the Company granted 10,000 stock options to a consultant of the Company. The options have an exercise price of $0.53. The grant date fair value of the options recognized as share-based compensation for the period was $2,576, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 1.69%; volatility of 73%; dividend rate 0%; forfeiture rate 0%; and expected life of 3 years.

On January 14, 2020, 45,000 stock options originally granted on July 18, 2017 with an exercise price of $0.93 were amended to an exercise price of $0.53. The expiry date of these stock options was also amended to December 31, 2025. An additional $17,952 of share-based compensation was recorded based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 1.69%; volatility of 120%; dividend rate 0%; forfeiture rate 0%; and expected life of 5.97 years.

On January 14, 2020, 1,250,000 stock options originally granted on December 20, 2017 with an exercise price of $1.50 were amended to an exercise price of $0.53. The expiry date of these stock options was also amended to December 31, 2025. An additional $473,044 of share-based compensation was recorded based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 1.69%; volatility of 120%; dividend rate 0%; forfeiture rate 0%; and expected life of 5.97 years.

On January 14, 2020, 1,480,000 stock options originally granted on August 6, 2018 with an exercise price of $0.88 were amended to an exercise price of $0.53. The expiry date of these stock options was also amended to December 31, 2025. An additional $419,836 of share-based compensation was recorded based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 1.69%; volatility of 120%; dividend rate 0%; forfeiture rate 0%; and expected life of 5.97 years.

On January 14, 2020, 225,000 stock options originally granted on June 7, 2019 with an exercise price of $0.62 were amended to an exercise price of $0.53. The expiry date of these stock options was also amended to December 31, 2025. An additional $53,757 of share-based compensation was recorded based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate of 1.69%; volatility of 120%; dividend rate 0%; forfeiture rate 0%; and expected life of 5.97 years.

On July 24, 2020, the Company granted 20,000 stock options to a consultant of the Company. The options have an exercise price of $0.60. The grant date fair value of the options recognized as share-based compensation for the period was $5,962, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.24%; volatility of 87%; dividend rate 0%; forfeiture rate 0%; and expected life of 2 years.

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On July 24, 2020, the Company granted 250,000 stock options to a consultant of the Company. The options have an exercise price of $0.60. The grant date fair value of the options recognized as share-based compensation for the period was $127,499, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.24%; volatility of 128%; dividend rate 0%; forfeiture rate 0%; and expected life of 5 years.

On February 16, 2021, the Company granted 1,480,000 stock options to directors, officers, employees and consultants of the Company. The options have an exercise price of $4.21. The grant date fair value of the options recognized as share-based compensation for the period was $3,318,600, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.20%; volatility of 118%; dividend rate 0%; forfeiture rate 0%; and expected life of 1.5 years.

On May 3, 2021, the Company granted 375,000 stock options to consultants of the Company. The options have an exercise price of $4.42. The grant date fair value of the options recognized as share-based compensation for the period was $956,627, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.29%; volatility of 113%; dividend rate 0%; forfeiture rate 0%; and expected life of 2 years.

On May 3, 2021, the Company granted 65,000 stock options to employees of the Company. The options have an exercise price of $4.42 and fully vest on May 3, 2022, with an expiry date of May 3, 2024. The fair value of the options granted was $178,769, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.29%; volatility of 101%; dividend rate 0%; forfeiture rate 0%; and expected life of 3 years. The sharebased compensation expense recognized in the period for the vesting of these options was $28,407.

On May 3, 2021, the Company granted 65,000 stock options to employees of the Company. The options have an exercise price of $4.42 and fully vest on May 3, 2023, with an expiry date of May 3, 2025. The fair value of the options granted was $190,177, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.29%; volatility of 95.4%; dividend rate 0%; forfeiture rate 0%; and expected life of 4 years. The sharebased compensation expense recognized in the period for the vesting of these options was $15,102.

On May 25, 2021, the Company granted 130,000 stock options to consultants of the Company. The options have an exercise price of $4.06 with an expiry date of May 3, 2023, and vest as follows: 50% on August 25, 2021 and 50% on November 25, 2021. The fair value of the options granted was $303,851, based on the Black-Scholes Option Pricing Model, with the following assumptions: risk free rate 0.30%; volatility of 113%; dividend rate 0%; forfeiture rate 0%; and expected life of 2 years. The share-based compensation expense recognized in the period for the vesting of these options was $89,203.

On May 25, 2021, the Company granted 600,000 stock options to a consultant of the Company. The options have an exercise price of $4.06 with an expiry date of May 3, 2023, and vest based on certain share price restrictions. No share-based compensation expense has been recognized on these options in the period.

The changes in options during the six months ended June 30, 2021 and 2020 are as follows:

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Details of options outstanding and exercisable at June 30, 2021, are as follows:

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Warrants

The changes in warrants during the six months ended June 30, 2021 and 2020 are as follows:

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Details of warrants outstanding and exercisable as at June 30, 2021 are as follows:

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Management and Board of Directors

The current directors and officers are:

Dirk Harbecke – Director, Chairman and Chief Executive Officer Stefan Krause – Director, Vice Chairman and Chief Financial Officer Dr. Peter Kausch – Director Klaus Schmitz – Director Wolfgang Voigt - Director Simon Bodensteiner – Director Stephen Egle – Chief Operating Officer Don Stevens – Chief Technology Officer Olaf Schulze – Head of Engineering Robert MacDonald – General Manager, Georgia Lake Lithium Project Brad Barnett –Corporate Secretary

Website

The Company maintains a website at www.rocktechlithium.com which serves as an information source for its investors.

Cautionary Note on Forward-looking statements

Some of the statements contained in this report are forward-looking statements, such as estimates and statements that describe the Company’s future plans, expectations, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “intends”, “expects”, “estimates”, “may”, “could”, “could”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events or conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, reclamation, capital cost, and the Company’s financial condition and prospects could differ materially from those currently anticipated in such statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include those described under the heading “Other Risks” elsewhere in this MD&A. Therefore, the reader is cautioned not to place undue reliance on forward-looking statements. Further, the Company disclaims any obligation or intention to update or to revise any forward-looking statement, whether as a result of new information, future events, or otherwise except as may be required under applicable securities legislation.

The information contained within this discussion, by its very nature, is not a thorough summary of all matters and developments concerning the Company. This information should be considered with all of the disclosure documents of the Company. The information contained herein is not a substitute for a detailed investigation or an analysis of any issue related to the Company. No securities commission or regulatory authority has reviewed the accuracy or adequacy of the information presented.

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