European Lithium : Quarterly Activities Report and Appendix 5B

28 April 2022

QUARTERLY ACTIVITIES REPORT AND APPENDIX 5B

FOR THE QUARTER ENDING 31 MARCH 2022

The Board of European Lithium Limited (ASX: EUR, FRA: PF8, OTC: EULIF) (the Company) is pleased to present its activities report and Appendix 5B for the three months ending 31 March 2022.

SUMMARY OF KEY UPDATES

• • Subsequent to the quarter end, placement to raise proceeds of $30m (before expenses)

• • Completion of tranche 2 placement with Millstone to raise funds of $2.5m

• • E47/4144 located in the northwest Australia is continuing to progress through the WA Mining Act regulatory application process.

• • COVID-19 pandemic and government enforced rules related to international travel continues to impact operations and force EUR to observe closely any changes in government restrictions in Europe, Austria specifically, and Australia.

• • Due to the Company's strict COVID safe rules and other mitigation measures, no COVID-19 incidents or cases were reported by staff and contractors since the start of the pandemic in 2020. The Company has continued its Austrian operations while monitoring changing COVID-19 rules within the European Union, the pandemic is expected to continue to impact the Company for the foreseeable future. World Health Organization (WHO) recommendations remain in place and are applied into national law despite seasonal decreases in case numbers.

• • DRA Global (DRA) as lead consultant managing the Definite Feasibility Study (DFS) has advanced both technical and financial planning work during the quarter.

• • Subsequent to the quarter end, the Company announced an interim DFS progress report showing a pre-tax NPV6 for the accelerated case of A$862 million with the final DFS anticipated to be completed in the third quarter of 2022.

• • Dorfner/Anzaplan has been appointed to plan the layout for the conversion plant QA/QC laboratory to ensure consistent high quality of the battery grade products.

• • EUR continues to collaborate with a research group from University of Graz to develop local production of lithium hydroxide from recycled Lithium-Ion-Batteries.

• • Planning underway for zone 2 exploration drilling

• • Discussions in progress with Traxys and other industry players regarding future off-take contracts

• • GREENPEG (EU-funded) supported infield and underground work continues.

CORPORATE MATTERS

Shareholder Meeting

On 21 January 2022, the Company held its annual general meeting (AGM) of shareholders. All resolutions were carried at the AGM.

Millstone Placement

On 4 November 2021, the Company announced that it has entered into binding agreements under which EUR will acquire European Lithium Ukraine LLC (formerly Petro Consulting LLC) (European Lithium Ukraine), a Ukraine incorporated company that is applying (through either court proceedings, public auction and/or production sharing agreement with the Ukraine Government) for 20-year special permits for the extraction and production of lithium at the Shevchenkivske project and Dobra Project in Ukraine (Figure 1), from Millstone and Company Global DW LLC (Millstone)(Millstone Transaction). In addition, under the terms of the agreement, Millstone will subscribe for $20m in shares in the Company, with $2.5m invested immediately, $2.5m subject to shareholder approval and the balance of $15m following completion of the acquisition of European Lithium Ukraine.

Figure 1 - Location of the deposit Shevchenkivske and Dobra in Ukraine

During the quarter, the Company received funding of $2.5m from Millstone in respect to tranche 2 of the placement proceeded to issue shares pursuant to the placement following receipt of shareholder approval at the AGM held on 21 January 2022.

Capital Movements

During the quarter, the Company issued the following securities:

• ▪ 27 January 2022 - Issue of 26,320,831 shares in respect to tranche 2 of the subscription agreement pursuant to the Millstone transaction, issue of 372,640 shares in respect to the

satisfaction of debts, issue of 2,032,241 shares upon the exercise of unlisted options ($0.05 each expiring 31 July 2022) and the issue of 820,000 shares upon the exercise of unlisted options ($0.075 each expiring 19 April 2024). In addition the Company issued unquoted securities comprising 21,000,000 unlisted options (with 7,000,000 having an exercise price of $0.06 per share, 7,000,000 having an exercise price of $0.08 per share and 7,000,000 having an exercise price of $0.10 per share all expiring 36 months from the date of issue), a total of 80,000,000 performance shares to Directors Tony Sage, Malcolm Day and Michael Carter, and a total of 2,500,000 listed options ($0.075 each expiring 19 April 2024) to Director Michael Carter.

• ▪ 22 February 2022 - Issue of 15,552,850 shares and 7,776,425 unlisted options ($0.20 each expiring 22 February 2024) in respect to the purchase of royalty (refer ASX announcement 9 November 2021).

Appendix 5B Quarterly Report and Statement of Cash Flows

The ASX Appendix 5B quarterly report is attached to and lodged with this report. The Company's Appendix 5B Quarterly Report covers the 3-month period from 1 January 2022 to 31 March 2022.

Exploration and evaluation expenditure during the quarter was $3,197k, associated with the advancement of the Wolfsberg Lithium Project. In addition, administration and corporate expenditure during the quarter was $550k which comprised Director fees ($86k), administration and corporate costs ($413k), promotion and marketing expenses ($29k) and overseas listing fees ($22k). Cash outflows from investing activities comprised transaction costs associated with the Millstone Transaction ($22k). Financing activities inflows during the quarter was $2,500k pursuant to the second tranche of the Millstone Transaction placement and $163k received from the exercise of options.

Payments to Related Parties and their Associates

In accordance with ASX Listing Rule 5.3.5, payments to related parties of the Company and their associates during the quarter totalled $94k. This amount comprises Director fees ($86k) and payments to Director-related parties for office occupancy costs ($8k).

EXPLORATION AND DEVELOPMENT ACTIVITIES

Austria

WOLFSBERG LITHIUM PROJECT

COVID-19

Various challenges for commodity markets continued in Q1/2022 due to the impact of the COVID-19 pandemic. The Omicron variant has not impacted society and health systems as seriously as first thought, however, uncertainty remains with governments, companies and individuals required to follow recommendations to help in controlling the rate of infection at a global scale. WHO have yet to lift the pandemic status. During the quarter, Europe experienced fluctuating infection rates with restrictions being reintroduced as vaccination rates stagnate. Although Australian international border restrictions were lifted in the middle of Q1/2022, the European restrictions have continued to impact the Company's operational activities at its Wolfsberg Lithium Project (Wolfsberg Project). The Company continues to monitor and address the changing circumstances with suitable COVID-19 measures implemented.

Drilling

No additional drilling took place during Q1/2022. In Q4/2021, as forecasted, the Company reported a resource increase in Zone 1 that has contributed to an increased Life of Mine (LOM) and further improved the project economics.

To increase the Wolfsberg Project's resource base significantly, the Company plans to start exploration activities in Zone 2. During Q2/2022 the Company aims to complete an assessment and initiate the approval process by submitting a drilling proposal to the authorities.

Definitive Feasibility Study (DFS)

During the quarter, the Company continued to work with their DFS team based in Europe, South Africa, and Canada to progress all areas of the DFS.

Subsequent to the quarter end, the Company released an interim DFS update announcement on the major DFS KPIs including a pre-tax NPV6 for the accelerated case of A$862 million, a maximum of 20 years life of mine and mining rate of approximately 770,000tpa (refer ASX Announcement 19 April 2022).

German based Dorfner Anzaplan (Dorfner) is the Company's independent metallurgic consultants and have been assigned to design the Company's QA/QC chemical laboratory facilities to ensure, through all production cycles, a consistent high-quality product will be delivered.

Hydrogeology

The Company continued its hydrogeology monitoring program during Q1/2022, collecting the data and interpretations for integration into the DFS.

All hydrogeological data continues to be stored and secured within the Company's database.

The preparation work by SRK, and the geological consultant, GEO Unterweissacher GmbH (GEO Unterweissacher), continues to ensure in-hole hydrogeological test work has been completed appropriately and can continue in the future.

Data from the above activities is fed into a water measuring database from which an annual report is produced.

Environmental

No additional environmental field studies were conducted in Q1/2022 by the Company. However, a detailed review of all work, reports and related documents is underway and will be integrated into the operational and technical applications to all relevant authorities when the DFS is completed. The Company has appointed an independent consultancy, Hasslinger & Nagele in Vienna to lead this complex process.

Monitoring of water flows and quality from the mine is continuous.

Product Marketing

The strategy for the Company remains unchanged and focuses on the supply of lithium hydroxide to the nascent lithium battery plants of Europe. The Company is in discussion with several industry players regarding future off-take contracts. Good progress has already beenmade with potential off-take partners and an MoU was signed with Traxys.

Horizon 2020

In Q1/2022, the Company's 100% owned subsidiary, ECM Lithium AT GmbH (ECM), continued work on the infield and underground geophysical survey program for which reporting is required in respect to ECM's participation in the European Union funded Horizon 2020 - GREENPEG project.

The Company continued to work proactively in the already approved and funded Horizon 2020 LithRef program.

Continued participation shows the Company's abilities and eligibility to contribute with EU-level support to the sustainable supply of battery grade lithium, sourced and produced in Europe.

Other Business

The Company continues to develop technical solution to incorporate recycled lithium-ion battery materials into the flowsheets for final lithium carbonate and hydroxide (LiOH) production. Pursuant to a letter of intent, this project is technically supervised by a research group from the University of Graz.

The Company continues to work with the technical advisory team at Tunley Engineering to assess the Wolfsberg Project eligibility to achieve Carbon Neutrality.

EV Resources

The Company previously announced that it had entered into a Collaboration Agreement with EV Resources Limited (formerly Jadar Resources Limited) (ASX: EVR) (EVR) and an agreement to acquire a 20% interest in EVR's Austrian Lithium assets from their JV partner (EVR Acquisition) (refer ASX announcement 11 May 2021).

EVR holds an 80% interest in Subsidiary Jadar Lithium GmbH (Jadar Lithium), the holder of the Weinebene and Eastern Alps Projects which lies 20km to the east of the Company's Wolfsberg Project (refer figure 4).

Figure 4 - Weinebene Lithium Project Location