Lithium Royalty Corp. Acquires Royalty Interest on the James Bay Lithium Project in Québec

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TORONTO, March 16, 2023 /CNW/ - Lithium Royalty Corp. (TSX: LIRC) ("LRC") announced today that it completed the acquisition of a 1.5% net smelter revenue royalty (the "James Bay Royalty") covering the eastern portion ("Royalty Area") of the mineral resource at the James Bay Lithium Project ("James Bay Project") in Québec, Canada. The project is owned by Allkem Ltd. (ASX: AKE) ("Allkem"), a specialty lithium chemicals company listed on the Australian Stock Exchange.

"This transaction adds our 30th royalty to the LRC portfolio and is expected to be immediately accretive to our Net Asset Value on a per share basis," noted Ernie Ortiz, CEO of Lithium Royalty Corp.

"It adds to our exposure in the James Bay region in Québec, which we believe will be a prolific area for future lithium production. The James Bay Project is 100% owned by Allkem, a world class operator that currently operates the Mt. Cattlin mine in Australia, which LRC owns a royalty on, as well as the Olaroz project in Argentina. We are looking forward to Allkem's resource update on the James Bay Project, which is expected by mid-2023. Allkem has recently completed 19,255m of resource extension drilling."

James Bay Lithium Project Highlights

• Located in northern Québec, approximately 130km east of James Bay and the Cree Nation community of Eastmain.
• Allkem released a NI 43-101-compliant feasibility study ("FS") on December 16, 2021. The following are the key highlights:
• ~19 year life of mine.
• Average annual production of 321 kt spodumene concentrate.
• Projected capital expenditure is USD$286 million.
• Construction to begin in 2023, with commissioning in the first half of 2024.
• Run-rate nameplate production expected in 2026.
• December 2021 Mineral Resource Estimate contained probable mineral reserve of 37.2m tonnes at a grade of 1.3% Li₂O.
• An updated resource for the James Bay Project is expected by mid-2023.
• Project will source a significant amount of total energy requirements from local sustainable hydro-electric generation.
• Allkem is ready to start construction following a positive approval ruling from the Joint Assessment Committee (Cree Nation and Provincial Government). The company noted that the public consultation period ended on February 27^th.

Lithium Royalty Corp. James Bay Royalty Highlights

• 1.5% net smelter revenue royalty, covering a portion of the mineral resources at James Bay Lithium Project.
• One-third of the royalty is subject to a buy-back right for USD$365,000
• Net of the buyback the acquired royalty is expected to produce approximately USD$3,000,000 of annual royalty cash flows to Lithium Royalty Corp at current market prices for Spodumene Concentrate when mining of the claims occurs.
• LRC paid an all cash consideration of USD$1,800,000 to the third party vendor.
• This acquisition is accretive to Net Asset Value per share using LRC's conservative underwriting assumptions.
• Allkem has recently completed 19,255m of resource extension drilling, which should directly benefit the Royalty Area.
• Allkem's prior disclosures highlight that mineralization is open to the north and to the east presenting attractive optionality given the Royalty Area covers the eastern areas of the project.

"This transaction marks our first as a public company and we expect it to serve as a template for accretive capital deployment into quality projects with high grade resources and low cost profiles in a top tier jurisdiction. We are encouraged by the potential expansion opportunity at James Bay which represents volume optionality consistent with LRC's current project portfolio and underwriting philosophy," commented Blair Levinsky, Executive Chair of Lithium Royalty Corp.

"We are excited to increase our exposure to Allkem, a world class operator. Not only do we share a common philosophy as it relates to top quartile global lithium projects, but also regarding sustainable resource extraction. Allkem is a constituent of the Dow Jones Sustainability Australia Index and the James Bay lithium project is expected to source a significant proportion of total energy needs from local sustainable and low cost hydro-electric power."

About Lithium Royalty Corp

LRC is a lithium-focused royalty company with a globally diversified portfolio of 30 high grade, top quartile revenue royalties on mineral properties around the world that supply and are expected to supply raw materials to support the electrification of transportation and decarbonization of the global economy. Our portfolio is focused on high-grade and low cost mineral projects that are primarily located in top tier jurisdictions predominantly in Australia, Canada, South America and the United States. LRC is a signatory to the United Nations Principles for Responsible Investment and the integration of ESG factors and sustainable mining are important considerations in our investment analysis and royalty acquisitions.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation, including statements with regard to the expected cash flow from the James Bay Royalty. Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, those described under "Risk Factors" in LRC's supplemented PREP prospectus dated March 8, 2023, and in particular risks summarized under the "Risks Related to Mining Operations" heading. Forward-looking information is based on management's beliefs and assumptions and on information currently available to management. These assumptions include, but are not limited to, the following: estimates of commodity prices, particularly lithium-related products; the accuracy of public statements and disclosures made by Allkem as the owner, developer and operator of the James Bay Lithium Project, including with respect to mineral resources, mineral reserves, construction timelines, production estimates and other related matters; the economic viability of the James Bay Lithium Project; that the James Bay Lithium Project will be developed, transitioned into production and successfully achieve production ramp up, in each case, in accordance with expectations; no adverse development relating to the James Bay Lithium Project; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated, intended or implied. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, you are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this news release is provided as of the date of this news release, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

SOURCE Lithium Royalty Corp.

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