Company Announcements

This management's discussion and analysis ("MD&A") reports on the operating results and financial condition of the Company for the three and 12 months ended February 29, 2024, and is prepared as of June 26, 2024. The MD&A should be read in conjunction with Bradda Head Lithium Limited's (the "Company" or "Bradda Head") audited consolidated financial statements for the year ended February 29, 2024, and the notes thereto which were prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar amounts referred to in this MD&A are expressed in United States dollars except where indicated otherwise.

Overview

Bradda Head Lithium Limited was incorporated on October 28, 2009, in the British Virgin Islands under the British Virgin Islands Companies Act with registered number 1553975 with the name Copper Development Corporation. On October 5, 2015, the Company changed its name from Copper Development Corporation to Life Science Developments Limited, and on April 18, 2018, the Company changed its name to Bradda Head Holdings Limited.  On September 15, 2021, the Company changed its name to Bradda Head Lithium Limited.

The Company has one business segment, being mineral exploration. The Company is focused on appraising and developing lithium mining projects within North America and currently has interests in a variety of projects in the United States.

Corporate and Exploration Highlights

Exploration Highlights

Set forth in this section is a description of the Company's material mineral projects. All scientific and technical data contained in this MD&A has been reviewed and approved by Joey Wilkins, B.Sc., P.Geo., who is Chief Operating Officer at Bradda Head and a Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").

Arizona Sedimentary Hosted Lithium Projects

Basin Project

No significant work has been undertaken on this project during the 3-month period, aside from drill hole permitting for an upcoming core drilling program at Basin North.

During March 2024, the Company commenced drilling at its Basin North project.

Wikieup Project

On February 28, 2024, the Company announced the completion of the land exchange over the unpatented lode claims at the Wikieup clay project in Western Arizona. Bradda Head retained 66 new claims equating to 1,302 acres (5.27 km²), which the Company staked in early 2019, and held in its subsidiary Zenolith (USA) LLC. In turn, Bradda Head transferred 55 unpatented lode claims to Arizona Lithium's subsidiary, Big Sandy Inc., to the amount of roughly 1,136 acres (4.60 km²), per the terms of this settlement.

Arizona Pegmatite District

San Domingo Project

During December 2023, the Company completed its second phase 18,950 feet (5,776m) drilling programme at San Domingo. Final assay results were received during January 2024, with the programme delivering an abundance of encouraging results.

Summary of results:

·      High grade lithium mineralisation found at intervals such as 4.14m at 2.07% Li₂O at a depth of 54.56m in drill hole SD-DH23-104 and 5.40m of 1.70% Li₂O at a depth of 31.39m in 093, both at the Morning Star pegmatites (all holes are abbreviated from SD-DH23-)

·      Again, favoured coarse-grained spodumene crystals were observed as the dominant lithium mineral with minor amounts of lepidolite and montebrasite

·      Large, cohesive, and mostly vertical pegmatite bodies were verified at Morning Star, which were strongly zoned with massive quartz, fine-grained albite, and minor schorl as well as massive zones of potassium feldspar

·      Pathfinder elements of tin ("Sn"), tantalum ("Ta₂O₅"), and beryllium ("BeO") are found to be highly anomalous in the drilling, such as 6.76m at 145ppm Sn in hole 100, 872ppm Ta₂O₅ with 0.23% BeO in drill hole SD-DH23-088 over 2.90m

·      Morning Star drill hole 088 contains high-grade Ta₂O₅ with an interval of 872ppm Ta₂O₅ ppm and anomalous Sn over 2.90m at a depth of 39.26m and 477 Ta₂O₅ ppm over 5.34m at 75.74m depth

·      Lithium, plus the bonus of ore grade Ta₂O₅with discrete anomalous Sn and BeO in the Morning Star drill holes in a shallow environment, bodes well for the potential of open cut mining.

Results from the Morning Star and South Morning Star targets are highlighted by the following intervals:

·      4.14m at 2.07% Li₂O in drill hole 104 at Morning Star

·      5.40m of 1.70% Li₂O followed by 4.18m of 1.63% Li₂O (within 14.63m at 0.54% Li₂O) plus 0.67m of 1.21% BeO, all above 55.93m depth in drill hole 093 at Morning Star

·      5.55m of 1.03% Li₂O in hole 099 at South Morning Star

·      6.67m at 0.82% Li₂O in drill hole 100 at South Morning Star

·      2.01m at 1.84% Li₂O in drill hole 091 at Morning Star

·      2.80m at 0.65% Li₂O in drill hole 090 at Morning Star

·      Morning Star surface samples of 4.35% and 3.67% Li₂O above holes 093 and 104 highlight open pit potential

·   Wide-open potential >100m depth, virtually unexplored by this second program and presents impressive opportunities district wide

Total drilled metres at San Domingo, from both drill programmes completed to date, is 13,076 meters, covering less than 1% of the total property held.

Nevada Lithium Brine Projects

Wilson Project

No significant work has been undertaken on this project during the 3-month period.

Eureka Project

No significant work has been undertaken on this project during the 3-month period.

Corporate Highlights

With effect from January 1, 2024, the Company delisted its shares from trading on the US OTCQB Market, due to share trading liquidity expectations not having been met and cost saving in this current market environment.

The Company's shares continue to trade on the London AIM Market and on the Canadian TSX Venture Exchange.

Issuance of Stock Options

On April 6, 2023, the Company announced that is awarded a total of 4,800,000 options to acquire ordinary shares (the "Options") at an exercise price of £0.06 (or C$0.10 to the Company's directors and operational team.

On February 14, 2024, the Company announced that is awarded a total of 2,850,000 options to acquire ordinary shares (the "Options") at an exercise price of £0.02 (or C$0.034) to the Company's directors and operational team.

The options issued are subject to the following conditions:

-       Options vest immediately;

-       The options have no performance or non-performance conditions attached to them;

-       Are exercisable for a period of five years from date of issue; and

-       The options issued to each participant should lapse upon any participant no longer being an employee or connected person remunerated by the Company.

Directors included in the awards are detailed in the table below:

Selected Financial Information

The following table sets forth selected financial information with respect to the Company for the years ended February 29, 2024, and February 28, 2023. The selected financial information has been derived from the audited financial statements for the periods indicated.  The following should be read in conjunction with the said financial statements and related notes that are available on the Company's website - www.braddaheadltd.com.

The annual financial statements and interim financial statements are presented in US dollars and are prepared in accordance with IFRS, See "Summary Financial Data" and "Currency Information".

* On 21 December 2021, the Company completed a royalty agreement with the Lithium Royalty Corporation ("LRC"). Key terms of the royalty agreement are:

-     LRC has been granted a 2% gross overriding royalty (GOR) over Bradda Head's sedimentary lithium claims in Arizona (Wikieup project and Basin project) leaving the Company's pegmatite and brine projects unencumbered;

-     LRC has paid to the Company upon closing the sum of US$2.5 million for granting of the Royalty;

-     LRC will pay to the Company an additional US$2.5 million upon the Company publicly reporting a 1 million tonne lithium carbonate equivalent (LCE) Mineral Resource with a minimum lithium grade of 800 parts per million (ppm);

-     LRC will pay to the Company an additional US$3 million upon the Company publicly reporting a 2.5 million tonne LCE Mineral Resource with a minimum lithium grade of 800ppm.

During the year, the Company hit the next milestone of a 1 million tonne lithium carbonate equivalent (LCE) Mineral Resource with a minimum lithium grade of 800 parts per million (ppm), thereby triggering the next royalty payment from LRC. This has been recognised as a gain on sale in the consolidated statement of comprehensive income.

      Reconciliation of gain on sale

MANAGEMENT DISCUSSION AND ANALYSIS: QUARTER ENDED FEBRUARY 29, 2024

Introduction

This interim Management Discussion and Analysis (the "interim MD&A") should be read in conjunction with the audited financial statements of the Company for the year ended February 29, 2024, and related notes. This MD&A is made as of June 26, 2024.

Results of Operations for the 12-months ended February 29, 2024

The Company's net loss after tax for the 12-month period to February 29, 2024 was US$ 1,503,858, compared to US$ 3,887,588 for the comparative period ended February 29, 2023.  The major expenses for the three and 12-month periods ended February 29, 2024 were operational expenses incurred on the Company's exploration projects which have not been capitalised, and are broken down in the respective projects as follows:

During the 12-month period to February 29, 2024, the Company incurred and capitalised exploration expenditures of US$ 4,232,891, compared to US$ 3,841,146 for the comparative 12-month period to February 28, 2023.

The capitalied exploration costs for the three and 12-month periods ended February 29, 2024 have been allocated amongst the Company's exploration projects in approximately the following amounts:

During the 12-month period to February 29, 2024, as part of receiving the next tranche of royalty funds from LRC, the Company expensed US$ 105,273 and US$ 24,600 of capitalied exploration costs and capitalised expenditures for licences and permits respectively.

The exploration expenditures have been primarily costs associated with drilling, assaying, resource and mining consultants, metallurgical testing, environmental studies, project team fees, acquisition of new leases, and annual renewal of existing leases.

General and administrative expenses for the 12-month period to February 29, 2024 totalled US$ 4,208,142, compared to US$ 5,880,205 for the comparative 12-month period to February 28, 2023. General and administrative expenses are broken down as follows:

During the 12-month period to February 29, 2024, there have been no changes in financial performance or other elements that relate to non-core buisness activities and operations.

Cash flows

During the 12-month period ended February 29, 2024, the Company had net cash outflows of US$ 7,081,992, compared to inflows of US$ 419,216 during the comparative 12-month period to February 28, 2023. The cashflows for the two periods are shown below:

Liquidity and Capital Resources

As at February 29, 2024, the Company had cash and cash equivalents, including cash deposits, of US$ 1,664,662, and a working capital surplus of US$ 1,601,571. As of February 28, 2023, the Company had cash and cash equivalents of US$ 7,746,519, and a working capital surplus of US$ 7,135,119.

Outstanding Share Data

As of February 29, 2024, the following securities were outstanding:

The Company's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Company includes cash and cash equivalents, equity attributable to equity holders comprised of contributed equity, reserves and accumulated losses.  In order to maintain or adjust the capital structure, the Company may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the Company.

The Company monitors capital based on cash flow requirements for operational, exploration and evaluation expenditures.  The Company has no debt or other borrowings as at the date of this Application. The Company will continue to use capital market issuances to satisfy anticipated funding requirements.

The availability of equity capital, and the price at which additional equity could be issued, is dependent upon the success of the Company's exploration activities, and upon the state of the capital markets generally.  Additional financing may not be available on terms favourable to the Company or at all.  If the Company does not receive future financing, it may not be possible for the Company to advance the exploration and development of its mineral exploration properties.  If the Company is not able to fund these minimum expenditures, it may not be able to maintain part or all of its mineral exploration property interests.  See "Risk Factors".

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Transactions with Related Parties

The Company has conducted transactions with officers, directors and persons or companies related to directors or officers and paid or accrued amounts as follows:

Edgewater Associates Limited ("Edgewater")

During the 12 month period ended February 29, 2024,, Directors and Officers insurance was obtained through Edgewater, which is a 100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke are Directors of both the Company and MFG.

The premium payable on the policy was US$ 43,061 (2023: US$ 49,318), of which US$ 11,560 was prepaid as at the period end (2023: US$ 14,497).

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.  Such estimates and assumptions affect the carrying value of assets, and impact decisions as to when exploration and development costs should be capitalized or expensed. 

As at February 29, 2024, the Company had incurred capitalised exploration expenditures, including capitalised licence and permit costs, of US$ 13,807,158. Changes in management's judgment as to the prospective nature, assessment of the existence or otherwise of economically recoverable reserves, technical feasibility and/or commercial viability of the relevant tenements and the Company's intentions with respect to the relevant tenements, could affect the assessment of the recoverable amount.

The Company regularly reviews its estimates and assumptions: however, actual results could differ from these estimates and these differences could be material.

Forward-Looking Statements

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward-looking statements" which are not comprised of historical facts.  Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations.  Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, following:  The Company's objectives, goals or future plans. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to: failure to identify mineral resources; failure to convert estimated mineral resources to reserves; delays in obtaining or failures to obtain required regulatory, governmental, environmental or other project approvals; political risks; future operating and capital costs, timelines, permit timelines, the market and future price of and demand for lithium, and the ongoing ability to work cooperatively with stakeholders, including the local levels of government; uncertainties relating to the availability and costs of financing needed in the future; changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices; delays in the development of projects, capital and operating costs varying significantly from estimates; an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains; and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents filed on SEDARplus. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue ,reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.