Lithium South Development Corporation announced positive results from an independent Preliminary Economic Assessment (PEA) for its Hombre Muerto North Lithium Project (HMN Lithium Project) near Salta, Argentina. The PEA was prepared by Knight Piésold Consulting (KP) and JDS Energy and Mining (JDS), both of Vancouver, in accordance with the standards set out in National Instrument 43-101 Standards of disclosure for Mineral Projects (NI 43-101), and CIM's Best Practice Guidelines for Mineral Processing (BPGMP). Resource Estimate: The resource estimate for this PEA was prepared in accordance with NI 43-101 and CIM Standards, and uses best practice methods specific to brine resources, including a reliance on core drilling and sampling methods that yield depth-specific chemistry and effective (drainable) porosity measurements.

The technical report filed on November 6, 2023, is titled, Updated Mineral Resource Estimate ­ Hombre Muerto North Project, NI 43-101 Technical Report Catamarca and Salta, Argentina, Mark King, Ph.D., P.Geo., Peter Ehren, M.Sc., MAusIMM, September 5, 2023. The report was prepared in accordance with National Instrument 43-101 ­ Standards of Disclosure for Mineral Projects, on behalf of the Company by independent consultants Groundwater Insight of Halifax, Nova Scotia, Canada. Project Location and Environmental Permitting: The HMN Lithium Project is located at the northern portion of the Salar del Hombre Muerto, at the boundary zone of the Catamarca and Salta provinces, 170 km southeast of the city of Salta.

The project area comprises a collection of properties or concessions acquired under purchase options from the existing owner. The properties are held as minas (full mining licenses not subject to further area reduction requirements) by a wholly owned Argentine subsidiary of the Company. The HMN Lithium Project comprises six properties distributed over the Salar for a total of 3,237 hectares.

All properties are subject to a mining license for borates. The area of the property is not subject to any known environmental liabilities. Lithium Pricing: A lithium price of USD 20,000/tonne (t) was assumed for the study, assuming a 2029 production start-up.

The price of lithium has been volatile in recent months, declining from a peak of approximately USD 85,000/t in November 2022 and stabilizing to USD 13,000/t in 2024. The selected price was based on current published market analysis and by benchmarking the price assumptions found in multiple technical reports from similar brine lithium projects. The benchmarking exercise provided a long-term price range of between USD 20,000 and USD 25,000/t, with an average of USD 22,400/t over seven projects.

The assumption of USD 20,000/t is deemed to be reasonable by the Qualified Person (QP). Processing: The PEA models process eco-system covers the following units: The brine chemistry is similar to other brines in the region, which allows the brine to be processed using similar processing technology as existing producers. The nominal extraction rate of the design is 179 liters per second.

After an initial preconcentration, lime is added to the brine, which removes a large part of magnesium as magnesium hydroxide and the sulfate as gypsum. When the low magnesium and calcium brine is concentrated to about 0.75% it is fed to the lithium carbonate plant. Most of the noxious impurities that are still left in the brine are removed by selective precipitation through the addition of a solution of soda ash and slaked lime and a final ion exchange polishing.

The impurity free brine is then sent to specially designed carbonation precipitators. To produce technical-grade lithium carbonate, a soda ash solution is added at high temperatures, leading to the precipitation of solid lithium carbonate. This solid is then subjected to a series of processes: it is filtered in a centrifuge, washed, repulped, centrifuged once more, and finally washed again.

The lithium carbonate is dried and packaged in maxi bags, to be finally transported to the client. Increased Lithium Recovery: The report has an updated lithium recovery process for the HMN Lithium Project brine, which uses industry proven evaporation. An adjustment in the processing sequence will reduce lithium loss as brine entrainments in harvested salts, in the magnesium hydroxide, and in calcium sulfate solids, obtaining a lithium recovery of approximately 70%, an improvement from the previous recovery of 50%.

Peter Ehren, M.Sc., MAusIMM, is the QP responsible for Mineral Processing.