FAQ

I would like to address this question in two parts, first a comment on the legislation required and then I’ll answer the metallurgy part of the question.

Part One: there is no uranium mining legislation required in Peru, it is effectively an addendum that is required. Uranium can be mined and processed under the general mining code. The missing piece is a ‘legal framework’ for the transport and export of the yellowcake product only. We won’t build Macusani or produce our clean yellowcake product without a legal framework in place to be able to send it to the enrichment facilities in Canada, US, etc. This legal framework has been in the works for quite some time, it is running through the appropriate government steps to be formalized and implemented. At this point, as mentioned by the Minister of Mines, we remain confident it will come in to place in 2019. Once the legal framework is in place in Peru, this will be a very positive catalyst for Plateau Energy Metals, as I believe this should result in a re-rating for our project.

Part Two: As for metallurgy part of the question, we are awaiting final results from the work ANSTO and DRA are wrapping up together. Since we've already demonstrated multiple routes to recover the lithium through our work in Lima with TECMMINE (see October 4, 2018 press release), we want to have an "optimal" analysis from ANSTO. DRA is collaborating with ANTSO and our team on these final few steps as we want to know optimal recoveries and re-agent use. The high-level parameters included in the optimized metallurgy studies should allow investors to start to determine ballpark process operating costs estimates ahead of the PEA targeted for late Q2 2019. The optimization process is focused on identifying the results that balance processing operating costs with net recoveries and low impurity precipitate of a battery grade product. Considering the deposit was discovered less than 18 months ago, we have the 6th largest hard rock project in the world today and have invested 12 months of research and analysis into identifying the most economic processing route. I believe, this study will be another significant positive catalyst for Plateau.

Shortly after we made the Falchani lithium deposit discovery in 2017, there has been confusion about the uranium-lithium included in Falchani, so let me set the record straight: It was assumed that our Falchani lithium discovery, which is 25 kms away from Macusani, was all part of the same rock type that hosts our Macusani uranium deposit. The uranium bearing rocks on the Macusani plateau are rhyolites, but not all rhyolite is uranium bearing, the only concentration today of uranium grade and scale is at our Macusani uranium project.

Secondly, at Falchani, the rock type is a volcanic tuff that is lithium rich, some of which is at surface and some near surface under rhyolites. At Falchani, there is some overburden of rhyolite rock, and a relatively small area of that rhyolite rock that has some uranium in it (in and around discovery hole 1). We haven't seen it elsewhere, so Falchani is a lithium project first, in a completely different rock type, and given the scale of the deposit, there is no need to move overburden material from any of the small area where uranium exists for many, many years, if at all.

The preliminary economic assessment (PEA), which is expected in late Q2-2019, is for our Falchani lithium project only. As previously noted, there is no uranium production from Falchani. Following the PEA, we will evaluate potential by-product economics for other elements found at Falchani. Considering the Falchani lithium and the Macusani uranium, are two separate and distinct projects, we are treating them as such.

Term contracts for uranium are utilities contracting for supply. Note, sizeable term contracts have not been signed by utilities for years, as existing term contracts are rolling off, and the Section 232 petition in the US has been preventing utilities from signing new ones (due to uncertainty of import restrictions). We have significant new entrants buying in the spot market, both financial investors and also producers that have old term contracts at higher prices than spot with many uranium mines now on care and maintenance. Today it is reasonable to state the majority of mines have a cash cost and an all-in cost above the uranium spot price and are surviving solely on older term contract pricing. Given supply constraints and a demand need that has to be fulfilled in the coming 12 or so months for energy security, we believe producers are price makers today, not price takers.

We can have, and have recently had, conversations with utilities and traders, but given the stage of our project and the structural shift that appears to have taken place in the industry, utility contracting needs are nearer term (~2 years) and the duration of contracts seems to be trending to shorter, ie. 3-5 years vs. 10 years, previously completed. As a uranium developer, term contracts for the stage of our project tend to be market price based and may not come with price floors, as opposed to mid and longterm based forecasts which tend to be higher. From this perspective, it makes sense for us to continue these conversations, advancing the development of Macusani and when the right contracting opportunity comes along we act.

We are evaluating a number of strategic options. While it is too early to determine a definitive path forward, one of the many considerations is a spin-out of one of the two projects from Plateau, where existing shareholders receive shares in the newly spinout company.

However, at this point, there is no assurance this will be the case as we are evaluating all potential outcomes to create the most value for our shareholders. We still have a lot of work ahead of us to continue to de-risk our projects (see previous questions above) in creating further shareholder value.

We have a series of upcoming important catalysts led by: (1) a resource update for Falchani lithium, (2) Optimized processing routes for Falchani this quarter, and (3) a PEA for Falchani targeted for the end of the first half of 2019. These are exciting times for our company as we scope out a new, large, yet scalable project. Something we think will be well positioned in the high growth EV and Lithium sector at the start of the supply chain.

We have two great projects:

Our focus today is to move our Falchani lithium project from maiden resource to resource update and a PEA. It will be large on a global scale, have room to grow and now we need to show the world the optimized processing options and economics. This clearly shifts Falchani into the development phase; Our second focus is more strategic with our uranium project, as we see the uranium supply side continue to dwindle and term price will be managed by the large players. We see our Macusani uranium project being well positioned to capitalize on a changing landscape. We are focused here on low capital spend optimization work while we wait to be convinced the uranium market is back. We need to see sizable term contracts at higher prices be announced to have that conviction.

When thinking about our Falchani lithium project, we know we can recover lithium and precipitate one of the high value products (carbonate or hydroxide). This is a huge positive, and different from spodumene projects that mostly produce a concentrate and miss out on the high value product market (unless they're integrated). If I think about how this project is going to stack up globally to participate in the electric vehicle revolution and other use cases for lithium-ion batteries, any concerns I have are whether we sit below, at or slightly above the middle of the evolving cost curve. Fortunately, the development pipeline of Li projects and government royalties in jurisdictions other than Peru are pointing us to be a competitive player in the space. For our uranium project, today I think we're getting little value for it, which means as a shareholder, I have option value built in.

Resource development is about managing and mitigating risks to unlock value for stakeholders - whether its technical or social, they are all important. Fears out there from our perspective are speculation driven, not fundamentally driven. We are on the ground, living this every day and greatly aware that positive news to alleviate the fear factor is something we are working on. Our team knows this, I've experienced it in the trenches and we know what we need to do.

If I was asked a few months ago what keeps me up at night I would have said: (1) our lithium project is unique, so what do we need to do to demonstrate it’s not that unique, (2) does it have the potential to be ranked high globally for scale, margins and strategic appeal (what the OEM car companies ultimately look for in our view), (3) is it permittable, and (4) is it financeable. These are interconnected really, (3) and (4) go together, and tie in (2).

I can now confidently say our lithium project is permittable (community and central government support are key - we have both), Peru is a mining nation, we're meeting with the new regional governor (supportive of economic development in the region by the way) which was seen as an unknown quantity late last year and we are working diligently to continue building that relationship. After a few meetings now, we can say he recognizes the positive impacts we have made being present in the region the last 10 years - presence and continuity can't be under appreciated. Of course, the market is probably looking for a statement from him to counter the blogger commentary and incountry press (which I can tell you without a doubt is good at spinning stories). We're aware this would be good.

A comment around lithium metallurgy …. we take comfort in the fact we are conducting a significant amount of work on our metallurgy and processing side not to determine whether it works, but how to best make it work – we have a brand new discovery to two resources, thousands of metallurgical tests and experts standing behind it. So in less than two years what we have accomplished is truly phenomenal and a statement to the calibre of our team.

The market will wake up one day to the prize we are unravelling with Falchani. We recognize that we need to scope out a project that isn't massive capex, can play off its high grade and positive metallurgical work thus far to present an attractive project producing a high-quality end product. This is not about scoping out something that is so big it blows our brains out on the first go, we are taking a disciplined capital and operating approach to scope out a buildable, financeable project that has growth and an ability to scale up. Keep in mind, our ore, a volcanic rock, isn't all that different from the volcanic rocks that were leached by water to charge the South American brine projects. We call it our 'solid brine'.

As for our uranium project, it's there and not going away as we work with the government of Peru on the legal framework for uranium transport and export - this is a standard framework in any uranium producing country. We think 2019 will be the year and so are focused on lower capital intensity investments to keep improving on the project. We have support in our stakeholder group for this project too, we would just like to see the framework and a more robust term market take shape before advancing it to feasibility. Fortunately, the project has scale, growth and is high margin with low capital intensity. Therefore, it stands out in the development pipeline and we think sets it up nicely as a 'next cycle' project.