Alpha Lithium Comments on Shareholder Support

Brad Nichol, President and CEO of the Company commented “As a public company, shareholder feedback is tremendously helpful to Alpha’s Board and management in ensuring our vision for the Company aligns with the owners of the Company: the shareholders. I’m very appreciative that Mr. Stevenson made his perspective known, and that perspective is generally consistent with the feedback I’ve received directly from many of our other shareholders”. Mr. Nichol continued “For months we have been, and will continue to, assess all available transactions on the basis of the benefit they provide to shareholders, with particular regard to the unique and compelling characteristic of each of our assets”.

The full text of Mr. Stevenson’s open letter is set out below for reference. The Company notes that  the letter was issued by Mr. Stevenson, not Alpha, and although Alpha is not aware of any misstatement therein,  Alpha has not independently verified and assumes no responsibility for the accuracy or completeness of the information contained therein.

To my fellow shareholders,

My name is Kyle Stevenson. I currently own 9,200,000 common shares of Alpha and securities convertible to acquire 1,300,000 additional shares of Alpha. To the best of my knowledge, I am the single largest shareholder of Alpha Lithium.

I have been heavily involved in the Argentine lithium exploration and development industry since 2016, when I became President, CEO and a director of Millennial Lithium Corp. We developed the Pastos Grandes lithium brine project in Argentina, approximately 70 kilometers northeast of Alpha’s Tolillar project. We sold Millennial to Lithium Americas Corp. in 2022, in a transaction valuing Millennial at approximately C$491,000,000. This experience gave me considerable insight into the exploration and development of Argentine lithium brine assets, and their value in strategic M&A transactions.

In addition to my Millennial experience, I am familiar with Alpha, its assets, and its management team. I have done business with them in the past, and hope to continue working with them in the future.  In 2019 I had the opportunity to travel to Argentina with management and experience, first-hand, the potential of Tolillar. Since then, I have been impressed by management’s ability to add shareholder value, and continue to be impressed by the work they’ve done in developing Alpha’s portfolio of assets.

I have carefully watched Tecpetrol’s attempt to acquire Alpha from its shareholders. I have reviewed Tecpetrol’s bid circular, as well as Alpha’s Directors’ Circular, and it is clear to me that the Tecpetrol bid is wholly inadequate, and I do not intend to tender any of my shares.

In my opinion, the Tecpetrol bid is an opportunistic attempt to seize both Alpha’s Tolillar and Hombre Muerto assets at an indefensible discount to their true value, which I strongly oppose. The bid fails to deliver value to Alpha’s shareholders, including myself, for two key reasons: The first is the valuation is embarrassingly low for Tolillar alone, and second, Tecpetrol is trying to get all the assets, including Hombre Muerto and over $30 million in cash, for no additional consideration.

1. Inadequate Value – a stink bid by all measures

Asset Value: The Tecpetrol bid significantly undervalues the Tolillar asset on its own. As the Alpha team wrote in their Directors’ Circular, the offer price represents a substantial discount to recent lithium brine transactions in Argentina, including the Millennial Lithium sale we completed in 2022. The confusing discount ignores the value added by the unique features of Alpha’s Tolillar salar, most notably: Tolillar may be one of the last wholly-owned lithium bearing salars in Argentina, and Tolillar hosts a unique and valuable freshwater reserve. 

In addition to the obvious operational advantages that come with exclusive ownership of the entire salar, an independent freshwater recharge study commissioned by Alpha indicated that the freshwater aquifer located within the Tolillar salar mining tenements can sustainably support the large freshwater withdrawals needed for a top tier project (see Alpha’s press release of January 23, 2023 for more information).

Market Value: The bid price of $1.24 represents a ~15% discount to Alpha’s closing price on Friday, June 23, 2023. When Tecpetrol first announced their intention to bid Alpha’s share price was steadily climbing, consistent with prevailing trends in Lithium Carbonate Equivalent prices, making their inadequate offer even less appealing. The trading in Alpha’s shares to a high of $1.45 since the announcement of the bid indicates clearly to me that I’m not alone in considering this a ‘take under’ rather than a ‘take over’, which won’t receive the shareholder support it needs.

The unique features of Tolillar make it an incredibly compelling standalone opportunity, and by any measure, worth considerably more than Tecpetrol has offered to pay.

2. Predatory Structure – Tecpetrol wants everything, at a huge discount

Assuming Tecpetrol has taken adequate time to familiarize itself with Alpha, they know, or ought to know, that Alpha has at least two distinct and compelling assets: (i) the Tolillar project, and (ii) the roughly 5,000-hectare land position in the world-class Hombre Muerto Salar. For those of my fellow shareholders who have not yet had the opportunity, I would encourage you to review Alpha’s technical report about its Hombre Muerto asset. It’s available under Alpha’s profile at www.sedar.com. Even prior to the filing of the Hombre Muerto technical report, it would be clear to anyone who had conducted appropriate due diligence on Alpha that its early stage Hombre Muerto asset represents compelling potential for additional shareholder value. Therein lies the second problem with the Tecpetrol bid: for a low-ball price, Tecpetrol wants the de-risked Tolillar project, the discovery potential of the Hombre Muerto asset, and approximately $30 million of capital.

Tecpetrol declined to participate in the Tolillar sale process when invited by Alpha, instead deciding to make a hostile bid for the entire company. While I expect Tecpetrol hopes to be able to use the hostile bid as a way to get Tolillar at a discount, shareholders need to understand that the proposed structure would also allow Tecpetrol to also take 100% of the future potential of Hombre Muerto, whatever that may be, for essentially nothing.

I put my trust, and capital, behind the team at Alpha to develop Tolillar from a very early stage, and am impressed by the work they have done. I want to bet on this management team again to do the same thing in Hombre Muerto.

I strongly encourage Tecpetrol to engage with Alpha in a constructive manner and offer a fair price for Alpha and/or its Tolillar asset. I further encourage them to include a structure which contemplates a spin out of Hombre Muerto along with the working capital necessary to begin to develop its potential for the benefit of all current shareholders of Alpha.

Your fellow shareholder,
[signed]
Kyle Stevenson
kyle@blueprintcapital.ca
604.788.0537

Take No Action

The Board and management of Alpha will not tender to the Tecpetrol bid. For the reasons fully described in our Directors’ Circular, Alpha recommends that shareholders REJECT the undervalued and opportunistic Hostile Offer. To reject, shareholders simply need to do nothing. If you have already tendered your Common Shares and wish to withdraw, simply ask your broker or contact Kingsdale Advisors (by phone at 1-800-749-9197 (toll-free in North America) or 647-251-9740 (for collect calls outside North America) or by email at contactus@kingsdaleadvisors.com) to assist you with this process. For more information, please go to www.ProtectAlphaLithium.com.

Advisors

Credit Suisse Securities (USA) LLC is serving as the Company’s financial advisor, Cozen O’Connor LLP is serving as the Company’s legal advisor and McMillan LLP is serving as the Special Committee’s legal advisor. PI Financial has been appointed independent financial advisor to the Special Committee.  Longview Communications & Public Affairs is serving as government and public relations advisor and Kingsdale Advisors is serving as strategic shareholder and communications advisor.

ON BEHALF OF THE BOARD OF ALPHA LITHIUM CORPORATION

“Brad Nichol”
Brad Nichol
President, CEO and Director
For more information:
Alpha Lithium Investor Relations
Tel: +1 844 592 6337
relations@alphalithium.com  
www.alphalithium.com                                     

Kingsdale Advisors
+1 800 749 9179 (toll free in North America)
+1 647 251 9740 (collect, outside North America)
contactus@kingsdaleadvisors.com
www.ProtectAlphaLithium.com

About Alpha Lithium (NEO: ALLI) (OTC: APHLF) (German WKN: A3CUW1)

Alpha Lithium is a team of industry professionals and experienced stakeholders focused on the development of the Tolillar and Hombre Muerto Salars. In Tolillar, we have assembled 100% ownership of what may be one of Argentina’s last undeveloped lithium salars, encompassing 27,500 hectares (67,954 acres), neighboring multi-billion-dollar lithium players in the heart of the renowned “Lithium Triangle”. In Hombre Muerto, we continue to expand our 5,000+ hectare (12,570 acres) foothold in one of the world’s highest quality, longest producing, lithium salars. Other companies in the area exploring for lithium brines or currently in production include Allkem Ltd., Livent Corporation, and POSCO in Salar del Hombre Muerto; Orocobre in Salar Olaroz; Eramine SudAmerica S.A. in Salar de Centenario; and Gangfeng and Lithium Americas in Salar de Cauchari.

Forward-Looking Statements

This news release contains forward-looking statements and other statements that are not historical facts, including statements concerning the Hostile Offer. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this news release are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations include the results of further discussions, if any, between the Company, and third parties, the ability of the Company to successfully complete a transaction involving itself or its assets, or to do so on a timely basis, global economic conditions and other risks detailed from time to time in the filings made by the Company with securities regulators. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, include numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements as expressly required by applicable law.

No securities regulatory authority has reviewed nor accepts responsibility for the adequacy or accuracy of the content of this news release.