LithiumBank Resources Corp. (TSX-V: LBNK) is pleased to announce that it has closed its previously announced bought deal private placement financing pursuant to an underwriting agreement among Echelon Capital Markets, Beacon Securities Limited and Red Cloud Securities Inc. and the Company dated May 15, 2023 in connection with the “bought deal” private placement of 3,631,700 units of the Company issued on a charity flow-through basis at a price of $1.90 per FT Unit for gross proceeds of $6,900,230. Each FT Unit consists of one common share of the Company to be issued as a “flow-through share” within the meaning of the Income Tax Act (Canada) and three quarters of one common share purchase warrant of the Company, each issued as a “flow-through share” within the meaning of the Income Tax Act (Canada). Each FT Warrant entitles the holder thereof to purchase one non flow-through Common Share at an exercise price of $2.00 per Warrant Share for a period of 36 months from the date of issuance thereof, subject to adjustment in certain events.

Pursuant to the Underwriting Agreement, the Underwriters received a cash commission representing an aggregate of 6.0% of the gross proceeds raised under the Offering and were issued an aggregate of 192,372 non-transferable compensation warrants of the Company. Each Compensation Warrant entitles the holder to purchase one unit of the Company at a price of $1.28 per Compensation Unit for a period of 36 months from the date of issuance. Each Compensation Unit is comprised of one common share in the capital of the Company and three quarters of one common share purchase warrant. Each Compensation Unit Warrant entitles the holder thereof to purchase one Compensation Share at price of $2.00 for a period of 36 months from the date of issuance. The Underwriters received a reduced cash commission of 3.0% and that number of Compensation Warrants equal to 3.0% of the number of FT Units sold to purchasers under a president’s list.

The FT Shares partially comprising the FT Units will be used to incur, on the Company’s Canadian mineral exploration properties, Canadian exploration expenses that will qualify as “flow-through mining expenditures”, as defined in subsection 127(9) of the Income Tax Act (Canada). The Qualifying Expenditures will be incurred on or before December 31, 2024 and will be renounced by the Company to the subscribers with an effective date no later than December 31, 2023 to the initial purchasers of the FT Units in an aggregate amount not less than the gross proceeds raised from the issue of the FT Shares partially comprising the FT Units. In the event that the Company is unable to renounce the issue price of the FT Shares partially comprising the FT Units on or prior to December 31, 2023 for each FT Unit purchased and/or if the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will as sole recourse for such failure to renounce, indemnify each FT Unit subscriber for the additional taxes payable by such subscriber to the extent permitted by the Income Tax Act (Canada) as a result of the Company’s failure to renounce the Qualifying Expenditures as agreed. Currently, the Company intends to use the proceeds raised from the Offering for exploration and development of its projects in Alberta.

In compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions, 2,630,700 FT Units were offered for sale to purchasers resident in Canada and other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of NI 45-106. Because this portion of Offering was completed pursuant to the Listed Issuer Financing Exemption, 2,630,700 FT Units issued to purchasers in the Offering are not subject to a hold period pursuant to applicable Canadian securities laws. There is an offering document related to the Offering that can be accessed under the Company’s profile at www.sedar.com and on the Company’s website at https://www.lithiumbank.ca/.

The Compensation Warrants, Compensation Shares, Compensation Unit Warrants and 1,001,000 FT Units issued and issuable under the Offering are subject to a statutory hold period and may not be traded until September 16, 2023, except as permitted by applicable securities legislation.

The Offering is subject to the final approval of the TSX Venture Exchange.

Line of Credit Agreement

The Company is also pleased to announce that it has entered into a line of credit agreement with a related party of the Company, pursuant to which the Lender will provide the Company with a revolving credit facility in the principal sum of up to $2,000,000. The Credit Facility accrues interest at a rate of 15% per annum, paid quarterly, and any outstanding indebtedness will mature on March 31, 2025. The accrued interest will be due on the 1^st business day following the end of each calendar quarter.

The Company is not issuing any securities, paying any bonus, commission, or finder’s fees in connection with the Credit Facility and any indebtedness thereunder is not convertible, directly or indirectly, into equity or voting securities of the Company. Any indebtedness under the Credit Facility is repayable at any time without penalty prior to the Maturity Date. Should all or any part of indebtedness under the Credit Facility, including interest, not be paid when due, the rate of interest shall increase to 18% per annum, calculated and compounded daily, until all amounts are paid in full.

In connection with the Credit Facility, the Company intends to deliver a fixed and floating charge demand debenture to the Lender in the principal amount of $2,000,000, mortgaging and charging certain mineral claims in connection with the Company’s Park Place property located in Alberta, Canada, as a fixed mortgage and charge against the Claims.

Multilateral Instrument 61-101

The Lender is an affiliate of a director of the Company, and as a result, the entering into of the Line of Credit Agreement constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Credit Facility has been determined to be exempt from the requirements to obtain a formal valuation or minority shareholder approval based on sections 5.5(b) and 5.7(a) of MI 61-101, as the Company does not have securities listed or quoted on any of the specified markets listed in section 5.5(b) of MI 61-101 and at the time of the entering into of the Line of Credit Agreement, the fair market value of the Credit Facility does not exceed 25% of the Company’s market capitalization.

About LithiumBank Resources Corp.

LithiumBank Resources Corp. is a development company focused on lithium-enriched brine projects in Western Canada where low-carbon-impact, rapid DLE technology can be deployed. LithiumBank currently holds over 3.6 million acres of mineral titles, 3.33M acres in Alberta and 336k acres in Saskatchewan. LithiumBank’s mineral titles are strategically positioned over known reservoirs that provide a unique combination of scale, grade and exceptional flow rates that are necessary for a large-scale direct brine lithium production. LithiumBank is advancing and de-risking several projects in parallel of the Boardwalk Lithium Brine Project.