26 April 2017

ANNOUNCEMENT First lithium drill hole at Agua Fria (Sonora Mexico) a success for the Electra JV partners, Lithium Australia (ASX: LIT) and Alix Resources (TSX:V AIX).

HIGHLIGHTS

  • Agua Fria strike potential verified as more than 5km

  • Drill intersection of lithium bearing sediments commences at surface

  • The prospective horizon exceeds 100m thickness

  • Two intervals of over 1000ppm Li

  • Portable LASER based analytical equipment successful

  • Preliminary metallurgical results show path to low-cost processing

SUCCESSFUL TARGET INTERSECTIONS

The maiden reverse circulation ("RC") hole collared in lithium bearing sediments and intersected two intervals of +1,000 parts per million ("ppm") lithium (Li) on the Agua Fria target, of the Electra Project in Sonora, Mexico (Figure 1).

The target sediments are similar in origin to the neighbouring La Ventana deposit, operated by Bacanora Minerals and thought to be the largest lithium "clay" deposit yet identified. The Agua Fria prospect has similar dimensions to La Ventana and is characterized by fine-grained minerals, only a small proportion of which contain lithium, providing significant potential to increase plant feed grades by beneficiation.

Figure 1 Agua Fria is located within the same geological environment as the adjacent La Ventana deposit, subject of Bacanora Minreals' development plans.

The current equity in the Electra Joint Venture, of which Agua Fria is part, is Lithium Australia 49% and Alix Resources Corporation 51%.

DRILLING RESULTS

The first vertical hole, AF-17-001 (Figure 2), was drilled to a depth of 126 meters, intersecting two intervals of +1,000 ppm Li in clay-bearing volcanogenic sediments, including 33 meters from 3 to 36 meters averaging 1,058ppm Li, and 21 meters from 54 to 75 meters averaging 1,043ppm Li.

Figure 2 Shows the location of the maiden drill hole AF -17-101. Outcrop of the prospective sedimentary horizon is buff coloured.

Assays for the drill hole are shown in Appendix I. Assays over 1,000 ppm are significant, and represent the cut-off grade used by SRK Consulting (UK) Limited on the neighboring La Ventana lithium deposit, owned jointly by Bacanora Minerals Limited (70%) and Rare Earth Minerals PLC (30%).

Drilling on the Agua Fria project is progressing well with five completed holes totaling 627 meters. Assays have only been received for hole AF-17-001.

SUCCESSFUL IN-FIELD LITHIUM ASSAYS

The Agua Fria project is believed to be the first, comprehensive, fielding test of a portable Laser Induced Breakdown Spectroscopy (LIBS) using a SciAps Z300 instrument pre-calibrated for material type and lithium grade to provide "real time" assay verification.

Li assays have been received from one drill hole (AF-17-001), and the initial correlation between obtained laboratory values to concentrations determined by the SciAps Z300 shows very good correlation with laboratory results (Figure 3).

Lab Assay vs SciAps Chart

1600

1400

1200

1000

800

600

400

200

0

3 9 15 21 27 33 39 45 51 57 63 69 75 81 87 93 99 105 111 117 123

Drilled Meter

Lab Li (ppm)

SciAps Li (ppm)

Lithium Concentration (ppm)

Figure 3 Shows down-hole results for lithium (ppm) derived from drill hole AF-17-001.

The comparison between the LIBS and lab assays is presented in Appendix I with quality control detailed in the 2012 JORC Code Table 1, both of which are at the end of this report.

PRELIMINARY METALLURGICAL RESULTS

Initial tests undertaken on trench samples from Agua Fria indicate the lithium is contained within a small fraction of the mass of the target material, providing good potential to increase plant feed grades by separating the lithium bearing component.

Laboratory tests confirm that the lithium can be liberated in sulphuric acid, at ambient temperatures, potentially providing a cheap means of recovering value from the target material.

Lithium Australia Managing Director, Mr Adrian Griffin:

"The maiden drill results demonstrate a target of great significance. These results, together with the outcome of the preliminary metallurgical tests, indicate the robustness of the lithium style mineralisation at our Mexican JV holdings."

Adrian Griffin

Managing Director

Mobile +61 (0) 418 927 658 Z

Adrian.Griffin@lithium-au.com

LIT is a dedicated developer of disruptive lithium extraction technologies. LIT has strategic alliances with a number of companies, potentially providing access to a diversified lithium mineral inventory. LIT aspires to create the union between resources and the best available technology and to establish a global lithium processing business.

MEDIA CONTACT:

Adrian Griffin Lithium Australia NL 08 6145 0288 | 0418 927 658 Kevin Skinner Field Public Relations 08 8234 9555 | 0414 822 631

Competent Persons Statement:

The information contained in the report that relates to Exploration Results is based on information compiled or reviewed by Mr. Adrian Griffin, who is an employee of the Company and is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Griffin has given consent to the inclusion in the report of the matters based on this information in the form and context in which it appears.

APPENDIX I Laboratory assay results and comparison with field-based Laser Induced Breakdown Spectroscopy results produced by a SciAps Z-300 hand-held instrument.

Hole No:

AF-17-001

Easting:

682027

Drill Date:

03/04/17 - 05/04/17

Northing:

3235939

SciAps Date:

04/04/17 - 06/04/17

RL:

758

Coord Sys:

WGS 84 / UTM Zone 12N

Azi/Inc:

0° / -90°

ID

From (m)

To (m)

Lab Li (ppm)

SciAps Li (ppm)

#1

#2

#3

Comment

1

0

3

690

657

597

764

609

2

3

6

1180

941

1069

845

909

3

6

9

1300

1034

1029

1092

981

4

9

12

950

922

926

921

918

5

12

15

510

509

544

499

484

6

15

18

1290

1129

1191

1067

1130

7

18

21

1370

1174

1096

1165

1261

8

21

24

950

843

814

903

814

9

24

27

1140

1083

1141

1066

1041

10

27

30

1090

994

993

988

1000

11

30

33

940

950

1029

924

898

12

33

36

920

934

921

911

970

13

36

39

640

691

671

736

668

14

39

42

720

686

691

639

729

15

42

45

600

630

722

617

551

16

45

48

850

878

901

890

841

17

48

51

980

1092

1001

1044

1232

18

51

54

262

386

399

413

345

19

54

57

810

1081

1109

1104

1029

20

57

60

1410

1396

1406

1444

1338

21

60

63

680

677

667

667

696

22

63

66

1090

1295

1360

1220

1306

23

66

69

1440

1389

1410

1366

1392

24

69

72

930

880

868

855

917

25

72

75

940

1005

1016

1032

967

26

75

78

630

712

717

728

689

27

78

81

800

744

750

712

770

28

81

84

900

697

679

738

673

29

84

87

198.5

299

311

303

283

30

87

90

500

516

526

525

497

31

90

93

393

499

509

470

518

32

93

96

680

822

856

789

821

33

96

99

520

531

533

520

539

34

99

102

580

660

681

612

687

35

102

105

550

568

575

523

605

36

105

108

770

739

799

725

694

37

108

111

600

529

543

520

524

38

111

114

750

813

720

823

897

39

114

117

450

657

679

654

637

40

117

120

266

487

492

475

494

41

120

123

306

422

411

428

428

42

123

126

336

620

614

686

559

End of Hole

Lithium Australia NL published this content on 26 April 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 April 2017 04:28:13 UTC.

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