International Battery Metals Ltd. is pleased to announce that it has completed a subsequent closing of its previously announced (April 26, 2024, and May 31, 2024) strategic private placement. Pursuant to the Private Placement, the Company issued 11,478,246 units, with each Unit being issued at a deemed price of CAD$0.76632, for aggregate proceeds of USD$6,430,772 (approximately CAD$8,796,010).

Each Unit consists of one common share of the Company, and one Common Share purchase warrant, each Warrant entitling the holder thereof to acquire one Common Share for a period of two years from the date of issuance for an exercise price of CAD$0.9579 per Common Share.

The Private Placement was completed with EV Metals VI LLC, a private company controlled by Jacob Warnock, a director of the Company, and funds and accounts managed by Encompass Capital Advisors LLC. Encompass is participating in the Private Placement pursuant to certain pre-emptive rights granted under the terms of an Investment Agreement dated effective April 21, 2023.

In connection with the Private Placement, the Company will pay a structuring fee to EV Metals (or as directed by EV Metals) in the amount of USD$237,500 (CAD$324,852), payable through the issuance of 423,912 Common Shares.

The proceeds of the Private Placement will used by the Company for expenditures to increase the production capacity of its modular direct lithium extraction plant contracted for operations in the western United States as previously announced on January 11, 2024 and May 6, 2024, and for general working capital purposes. The expanded production capacity will be achieved by adding an additional modular set of extraction columns into the existing framework. In order to manage the increase production, the Company will also increase the size of the filtration and reverse osmosis units.

The securities issued under the Private Placement are subject to a statutory hold period of four months from the date of issuance under Canadian Securities laws and will be restricted securities under the United States Securities Act of 1933.

MI 61-101 Disclosure

In connection with the Private Placement, EV Metals acquired 8,478,246 Units for gross proceeds of USD$4.75 million (approximately CAD$6,497,050), 423,912 Common Shares pursuant to the Structuring Fee, and Encompass acquired 3,000,000 Units for gross proceeds of USD$1,680,772 (approximately CAD$2,298,960). The participation of EV Metals and Encompass in the Private Placement and the payment to EV Metals of the Structuring Fee and the Reimbursement Issuance, respectively, each constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company is relying upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(b) and 5.7(1)(a), respectively – Fair Market Value Not More Than 25 Per Cent of Market Capitalization, on the basis that at the time the Private Placement was agreed to, neither the fair market value of the Units to be distributed pursuant to the Private Placement to EV Metals and Encompass, and the Common Shares issued pursuant to the Structuring Fee, nor the consideration to be received for those Units and Common Shares, exceeds 25 per cent of the Company’s market capitalization. The terms of the Private Placement were negotiated with a special committee of directors of the Company, all of whom are independent for the purposes of MI 61-101. The Board ‎of Directors of the Company has unanimously approved the Private Placement (with Jacob Warnock abstaining) and no materially ‎contrary view or ‎abstention ‎was expressed or made by any director ‎in relation to the ‎Private Placement‎.‎ The Company did not file a material change report in respect of the participation of EV Metals or Encompass in the Private Placement at least 21 days before closing of the Offering as the participation of ‎EV Metals and Encompass was not determined at that time.‎

About the Company

The Company is an advanced technology company focused on the development of environmentally responsible methods of extracting lithium compounds from brine. The Company has developed the DLE Plant which allows for rapid deployment to a resource holders production site. The Company is working with resource holders of oilfield brines, brine aquifers, and industrial customers with brine by-products. The Company believes the modular design of its DLE Plant provides significant initial costs savings to customers and the proprietary DLE technology lowers operating costs by selectively extracting lithium from the brine while efficiently removing contaminants.