Lithium South Strengthens the Development Team and Fast-tracks HMN Project Feasibility

Rhea-AI Summary

Lithium South Development (OTCQB:LISMF) has appointed Claudio C. Zalewski as Director of Development & Construction for the Hombre Muerto North (HMN) Lithium Project in Argentina. Zalewski, a civil engineer with over 40 years of experience in lithium projects, will lead the fast-track development plan targeting feasibility study completion by Q1 2026.

The company has secured a Purchase Option for Hydra X claims, expanding their holdings to over 10,000 hectares for US$2 million, payable upon construction or sale. The project benefits from Argentina's new RIGI regime, offering 30-year tax stability and incentives for investments over US$200M. Multiple O.E.M., mining, and financial groups are in discussions for project funding, though previous exclusive talks have ended.

Positive

• Appointment of experienced lithium project director with over 40 years of expertise
• Project holdings expanded to over 10,000 hectares through Hydra X claims option
• Beneficial new RIGI regime providing 30-year tax stability and incentives
• Multiple funding discussions ongoing with O.E.M., mining and financial groups
• Fast-track development plan with clear timeline for feasibility study completion

Negative

• Previous exclusive funding discussions have ended without agreement
• Market conditions described as challenging
• US$2 million payment obligation for Hydra X claims upon construction/sale

VANCOUVER, BC, July 23, 2025 /PRNewswire/ -- Lithium South Development Corporation (the "Company" or "Lithium South") (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is pleased to announce the appointment of Claudio C. Zalewski as Director of Development & Construction for the Hombre Muerto North ("HMN") Lithium Project (the "Project") in Argentina's Salta basin.

Based in Salta, Mr. Zalewski is a bilingual civil engineer (BSc Civil Engineering, Universidad de Buenos Aires, 1981) with more than forty years of project-delivery experience, including:

• Project Director – Pastos Grandes Lithium Project (US $450 M)
• Engineering & Home-Office Construction Manager – Centenario Lithium Project (US $550 M)
• Consultant - ADY Resources Rincon Lithium Project, located on the Rincon salar in Salta Province.

"Joining Lithium South at this pivotal moment lets me bring decades of lithium-brine experience to unlock the full value of the Hombre Muerto North Lithium Project. With the groundwork already in place, I'm confident we can reach feasibility swiftly and move toward construction alongside committed funding partners," said Claudio C. Zalewski, Director of Development & Construction.

Fast-track Work Plan Underway

Together with the COO, Mr. Zalewsky has prioritized four workstreams documented in the project register:

1. DFS Tender Package – draft ready for bidder issue
2. Design Criteria – consolidated discipline bases of design
3. CAPEX/OPEX & Financial Models – templates 70 % populated
4. Project Execution Plan & Procedures – Revision A under internal review

Lithium South is working to complete a comprehensive development schedule covering every stage from Feasibility Study award through construction and commissioning, reinforcing the target to launch the Feasibility Study tendering before end-Q3 2025 and deliver full Feasibility by late Q1 2026.

New Tax and Import Regulations / RIGI Welcomed by LIS

Recent changes to tax and import regulations in Argentina are welcomed by Lithium South. Argentina's Régimen de Incentivo a las Grandes Inversiones (RIGI), created under Law 27.742 (July 2024), grants eligible projects (> US $200 M) a 30-year stability regime on tax, customs and FX rules and a flat 25 % corporate income-tax rate, alongside accelerated depreciation, VAT/import-duty relief and phased export-duty reductions. This new regime is expected to significantly impact the feasibility of the HMN Li Project in a very positive way.

Project Option

The Company is pleased to announce it has arranged the Purchase Option of the Hydra X 1 and Hydra X 2 claim blocks located near the Company holdings on the Hombre Muerto Salar. The two projects total approximately 5,555 hectares and increase the Company holdings within the Project area to over 10,000 hectares. Terms for the Purchase Option are a purchase price of US$2 Million payable upon the commencement of construction of the Project, or the sale of the Project and/or Company. The Purchase Option is at arms- length for the Company.

Project Discussion Update

The Company is in discussions with several O.E.M., mining and financial groups for the funding and development of the HMN Li Project. The discussions announced in January of 2025 are still ongoing though the party noted is now out of the exclusivity period. While the market remains challenging, interest in the high quality HMN Li Project remains strong.

About Lithium South Development Corp.

Lithium South owns 100% of the HMN Li Project located in Salta and Catamarca Provinces, Argentina, in the heart of the lithium triangle. The Salar del Hombre Muerto has a history of lithium production, with Rio Tinto Lithium (Formerly Arcadium Lithium and recently purchased by Rio Tinto Corporation for US$6.7 billion in March 2025) in operation to the south of the HMN Li Project for over twenty-five years. The HMN Li Project is adjacent to the east with a U.S. billion-dollar lithium development by POSCO (Korea), now in lithium production. Exploration work to date has delineated a NI 43-101 compliant 1,583,200 tonne Lithium Carbonate Equivalent ("LCE") Resource at an average grade of 736 miligrams per liter lithium (mg/L Li ) , with 1,463,000 tonnes in the measured category and 120,000 tonnes in the indicated category, at a cutoff grade of 500 mg/l Li (Note 1 below) on the Alba Sabrina, Natalia Maria, and Tramo claim blocks, three of five non-contiguous blocks that make up the HMN Li Project (View Report: www.lithiumsouth.com/wp-content/uploads/2023-technical-report-NI43-101.pdf). A recent Preliminary Economic Assessment (Note 2 below) April 30, 2024, delineates potential to develop a 15,600 tonne per year lithium carbonate project. LIS is now moving the project forward to a Feasibility Study.

On behalf of the Board of Directors

Adrian F. C. Hobkirk
President and Chief Executive Officer
Investors / Shareholders call 855-415-8100 / website: www.lithiumsouth.com

The contents of this press release and the scientific information contained herein were reviewed by Mr. William Feyerabend, CPG, a Consulting Geologist and a Qualified Person under N.I. 43-101. Mr. Feyerabend participated in the writing of this press release and approves the content.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has not reviewed the content of this news release and therefore does not accept responsibility or liability for the adequacy or accuracy of the contents of this news release.

Note 1: A report titled, Updated Mineral Resource Estimate – Hombre Muerto North Project, NI 43-101 Technical Report Catamarca and Salta, Argentina, Mark King, PhD, PGeo, Peter Ehren, M.Sc, MAusIMM, September 5th, 2023.

Note 2: The report titled, N.I. 43-101 Preliminary Economic Assessment Hombre Muerto North Lithium Project, Salta, Argentina, was completed by Knight Piesold Consulting and JDS Energy and Mining Inc., and on SEDAR April 30, 2024

This news release contains certain "forward-looking statements" within the meaning of Section 21E of the United States Securities and Exchange Act of 1934, as amended. Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based upon opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors which could cause actual results to differ materially from those projected in the forward-looking statements. The reader is cautioned not to place undue reliance on forward- looking statements. We seek safe harbor.

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SOURCE Lithium South Development Corporation

FAQ

Who is the new Director of Development & Construction for Lithium South's HMN Project?

Claudio C. Zalewski, a civil engineer with over 40 years of project-delivery experience, including significant lithium project expertise, has been appointed to the role.

What is the timeline for LISMF's HMN Lithium Project feasibility study?

The company aims to launch feasibility study tendering before end-Q3 2025 and deliver the full feasibility study by late Q1 2026.

How large is Lithium South's HMN Project after the Hydra X claims option?

With the addition of Hydra X 1 and X 2 claims (5,555 hectares), the company's holdings in the project area have increased to over 10,000 hectares.

What benefits does Argentina's new RIGI regime offer to LISMF's project?

RIGI offers eligible projects (>US$200M) a 30-year stability regime on tax, customs and FX rules, 25% corporate income-tax rate, accelerated depreciation, VAT/import-duty relief, and phased export-duty reductions.

What is the status of funding discussions for Lithium South's HMN Project?

The company is in discussions with multiple O.E.M., mining and financial groups. Previous exclusive discussions announced in January 2025 have ended, but interest remains strong despite challenging market conditions.