Morella Corporation Limited provided an update on its Australian and United States lithium projects. Significant progress has been made in project evaluation and planning, with drillhole locations determined for both the Mallina Project in the Pilbara region of Western Australia and the Fish Lake Valley Project in Nevada, USA. The Company has also increased its exploration tenement holdings in the Pilbara and Nevada project areas.

Approvals have been received for the upcoming drill program at Mallina, with the primary focus of the campaign to determine the extension of the previously identified high grade pegmatite intercepts. The 2022 drill program confirmed the presence of a high-grade lithium oxide intercept in Hole M22_004_D, with a highlight section of 16.4m @ 1.24% Li2O from 4.6 metres. Morella has received approval for a Program of Works (PoW) for approximately 40 reverse circulation (RC) drillholes totalling around 3,000 metres.

Drilling contractor tenders are in hand, with commencement of the program expected in April /May 2023. Morella has been granted two new tenements. One tenement E45/2778, which is south of Mt Edon and adjacent to Morella's tenements E59/2092 and E59/2055 and the second tenement E45/5904, which is located in the Tabba Tabba and Strelley region.

Morella is also in a ballot for a tenement located to the south of Mallina. Morella has completed several geophysical surveys over Fish Lake Valley, including passive seismic and magnetotelluric. This work has successfully generated a number of drilling targets across the southern and northern areas of the claim holdings.

The northern area targets are shallower than in the southern area and will be the focus of early drilling and permitting. Drill programs have been developed and permitting is underway. Morella has submitted a notice to the Bureau of Land Management (BLM) in Nevada for the drilling program in the northern project area.

Upon grant of the north permit a notice will be submitted for the drilling in the southern project area. Morella and its United States partner Lithium Corporation have materially increased the claim holding across the North Big Smoky Lithium Project in Nevada, USA. During February 2023, Morella commissioned the staking of two areas in the North Big Smoky region.

The first area is 210 contiguous claims, which extends the existing North Big Smoky claim area to the west and increases the project area by approximately 15 sq km. The claims were lodged with the County and the BLM with the latter confirming their registration. The claim extension is based on the soils sample results and regional gravity work, which shows this area to be prospective for lithium in brines and possibly clays.

In order to clearly identify the two projects, both located in the Big Smoky Valley but separated by several kilometres, the Company has given the name of Carvers, to the original claim area plus the newly acquired contiguous claims and Austin to the newly staked area located separately to the north. The increased footprint highlighting the two new commissioned claim areas can be seen in red outline in Figure 6 below. The second area known as Austin is 11km to the north of Carvers and was identified from regional gravity data, as a potential deep basin which could be a suitable catchment for brines.

360 placer claims covering 29 sq km were staked to cover this area and are shown in Figure 6 which also includes a locality map showing the relationship between the two claim areas. Morella has recently completed passive seismic surveys at the Austin and Carvers claim areas. Magnetotelluric ("MT") survey has also been carried out on all the Carvers and Austin project areas, including the new claim area at Carvers.

The results of the last survey are currently being processed by Morella's geophysical consultants. Soil sampling has recently been completed on the Austin claim area, with samples submitted for analysis. Soil sampling has commenced on the Carvers area extension, with samples being submitted the coming weeks.

A shallow drilling program at Carvers will be developed based on the results of the soil sampling. All the project claims are covered by an earn-in agreement between Morella and Lithium Corporation (OTCBB:LTUM), whereby Morella is earning into a 60% stake in the North Big Smoky Project, with options to acquire a 100% interest. To date, Morella has met all expenditure requirements and is on target to achieve the 60% ownership of these claims in late 2023 or early 2024.