Leo Lithium : Quarterly Report for the quarter ended 30 June 2022

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Quarterly Report

For the quarter ended 30 June 2022

Highlights

Corporate

• Leo Lithium commenced trading on the Australian Securities Exchange on 23 June 2022 following an oversubscribed initial public offering which raised A$100 million.
• A US$40 million debt facility was finalised with JV partner Ganfeng post quarter end.
• Recruitment of key executives and project members included Tom Blackwell as Project Director; Bolaji Okubajo as Project Manager and post quarter end, Joe Belladonna as Chief Financial Officer and Joint Company Secretary.

Project Development

• All development work is progressing in line with schedule and budget. Momentum continues to build on design, engineering and procurement activities.
• Key site activities included the installation of the drillers and pioneer camp and the upgrade of the site access road.
• Detailed plant design is underway and will allow flexibility for Stage 2 production expansion.
• Procurement of long-lead items such as the ball mill, jaw crusher and cone crushers de- risked a significant part of the project procurement profile. The ball mill was the most critical item and was secured under budget and with an eight-week improvement on the baseline schedule, due to the assistance of Ganfeng.
• Work is underway on an accelerated production plan targeting compression of the schedule to ensure that first production is achieved as early as possible in Q1 2024.

Environmental, Social and Governance

• A Labour Hire Committee for unskilled workers was established as part of Leo Lithium's objective to maximise local employment. To date, approximately 60 unskilled workers have been employed from the surrounding host communities.
• Community support initiatives have commenced and to date have centred on the economic empowerment of local women.

For personal use only

Leo Lithium Quarterly Report

30 June 2022

MANAGEMENT SUMMARY

"The June quarter marked a fantastic milestone for Leo Lithium as we commenced life as a listed company and entered the ASX300. We attracted numerous high quality institutional shareholders to the register who recognise our vision to become a globally significant provider of lithium for the clean energy market.

"One of the standout achievements of the quarter was formalising our partnership with the world's premier lithium chemical producers - Ganfeng. This partnership places Leo Lithium in the enviable position of not only having the funding required to rapidly progress our Stage 1 development plans, but with offtake for Stage 1 secured, Goulamina is effectively incorporated into the global lithium supply chain.

"We are building a high calibre team of experts who have lost no time in commencing development works at Goulamina. We are delighted to report that all activities are progressing on schedule and budget. We significantly de-risked the project by securing long lead items, the most critical of which was the ball mill which was secured below budget and will be delivered 8 weeks ahead of schedule. Key site works included sterilisation drilling of the waste rock facility, site roadworks and the construction of the camp. We continue to work in unison with our partners on multiple fronts to move the project towards achieving our common goal - which is to deliver the large scale, high grade Goulamina Project into production in the first half in 2024 for the benefit of all stakeholders."

SIMON HAY

Managing Director

This announcement has been approved for release to the ASX by the Board.

Developing the world class Goulamina Lithium Project in Mali - West Africa's first spodumene producer.

To come online in 2024 to supply the booming lithium-ion battery industry.

ASX:LLL

leolithium.com

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Leo Lithium Quarterly Report

30 June 2022

Leo Lithium Limited (ASX: LLL) (Leo Lithium or the Company) is pleased to provide a summary of activities for the June 2022 Quarter.

Leo Lithium is developing the world-class Goulamina Lithium Project (Goulamina) in Mali in partnership with Jiangxi Ganfeng Lithium Co. Ltd (Ganfeng). Ganfeng is China's largest lithium compound producer and top 3 globally. Goulamina is a long life, large-scale, hard rock open pit lithium mine. Goulamina represents the next lithium project of significant scale to enter production and will be the first hard rock lithium project in West Africa.

Figure 1: Regional map showing Project site, local mines and neighbouring countries

CORPORATE

Initial Public Offer and Listing

On 29 April 2022, Firefinch Limited (Firefinch) announced to ASX its plan to demerge its interest in the Goulamina Lithium Project in Mali by making an in-specie distribution of 80% of its shares in its wholly owned subsidiary, Leo Lithium, to Firefinch shareholders on a pro rata basis (Demerger).

On 29 April 2022 Leo Lithium lodged a Prospectus with ASX for an initial public offering (IPO) of Shares to raise up to $100 million, comprising:

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Leo Lithium Quarterly Report

30 June 2022

1. a pro-rata priority offer to Eligible Firefinch Shareholders of up to 114.35 million fully paid ordinary shares in Leo Lithium (Shares) on the basis of 1 Leo Lithium Share for every 10.33 Firefinch Shares held by Eligible Firefinch Shareholders at 5.00pm on 5 May 2022, at an issue price of $0.70 per Share to raise up to $80 million (before expenses) (Pro-rataOffer);
2. an additional offer to Eligible Firefinch Shareholders and Eligible Institutional Investors of Shares from any Shortfall under the Pro-rata Offer at an issue price of A$0.70 per Share; and
3. an offer to Firefinch of up to 28.57 million Shares at an issue price of A$0.70 per Share to Firefinch to raise up to A$20 million.

Firefinch shareholders voted in favour of the Demerger on 31 May 2022 and the Demerger became effective on 1 June 2022.

The IPO was successfully completed and raised $100 million (before costs). The proceeds of the Offer will be used to:

1. fund Stage 1 development capital costs for the Goulamina Lithium Project, being the construction and operation of a plant with a 2.3 million tonne per annum throughput rate for the production of spodumene concentrate, and associated infrastructure;
2. repay a loan to Firefinch which was advanced to Leo Lithium to facilitate the implementation of the Goulamina Joint Venture;
3. transaction costs associated with the Demerger and Offer; and
4. provide for working capital, exploration and other expenses.

Leo Lithium satisfied the ASX listing requirements in early June and commenced trading on ASX on 23 June 2022 under the ticker LLL.

The listing followed the oversubscribed IPO of 142.9 million shares at an issue price of $0.70 and raised $100 million (before costs). Combined with the in-specie distribution associated with the demerger from Firefinch Ltd, the total number of shares on issue for Leo Lithium is 1,197.6 million. The number of shares issued under the $100 million IPO (before costs) represents 11.9% of the total shares on issue. Leo Lithium was included in the ASX300 index upon listing.

Finance

Leo Lithium's closing cash at 30 June 2022 was A$85.9 million.

The major cash flow items during the quarter were:

• Cash Inflows:
• • Receipt of A$100.0 million from the IPO
  • Intercompany loan from Firefinch of A$0.4 million
• Cash Outflows:
• • IPO transaction costs of A$2.7 million

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Leo Lithium Quarterly Report

30 June 2022

• Repayment of Firefinch intercompany loan of A$10.3 million
• Interest on Firefinch intercompany loan of A$0.3 million
• Corporate costs of A$1.3 million

As the Goulamina Joint Venture is not consolidated in Leo Lithium's financial statements, the cash impacts of the Goulamina Joint Venture are not included in Leo Lithium's cash flows or Appendix 5B (to be released separately) apart from any equity or loan funds provided by Leo Lithium to the Goulamina Joint Venture. The Goulamina Joint Venture arrangement is a 50:50 joint venture with Ganfeng and Leo Lithium accounts for the arrangement as an investment utilising the equity method as per the Accounting Standards.

The Goulamina Joint Venture's closing cash at 30 June 2022 was US$129.3 million. The Goulamina Joint Venture's major cash flow items during the quarter were:

• Cash Inflows: Receipt of US$130.0 million equity injection from Ganfeng
• Cash Outflows: Project development costs of US$0.7 million

Subsequent to quarter end, Leo Lithium announced that Lithium du Mali SA (LMSA) and GFL International Co., Ltd (GFL), a wholly owned subsidiary of Jiangxi Ganfeng Lithium Co., Ltd have entered into a Facility Agreement for a US$40M debt facility pursuant to the Ganfeng deal announced by Firefinch Limited in June 2021.

LMSA is a wholly owned subsidiary of Mali Lithium BV (MLBV). MLBV is the Goulamina JV entity that is owned 50:50 by Leo Lithium and GFL.

Payments of $124,000 were made to related parties during the quarter, being the payment of the Managing Director's salary, in addition to Non-Executive Directors' fees as set out in Section 6 of the Quarterly Cashflow Report. Pursuant to ASX Listing Rule 5.3.4, the following expenditure has occurred since the listing of Leo Lithium on ASX.

Table 1: Expenditure since listing. Note: expenditure is over a two-year period.