Nemaska Lithium Announces Positive Preliminary Economic Assessment (PEA) for Whabouchi Mine and Lithium Hydroxide/Carbonate Plant

QUEBEC CITY, QUEBEC, CANADA--(Marketwire - Oct. 2, 2012) - Nemaska Lithium Inc. ("Nemaska" or the "Corporation") (TSX VENTURE:NMX) (OTCQX:NMKEF) is pleased to announce the results of a positive PEA prepared by independent consultants Met-Chem Canada Inc. and BBA Inc. (Chemical Plant - PEA level / Mine and Concentrator - Feasibility Study level).

The Company issued a PEA on March 5^th, 2011 prepared by Equapolar Inc., Mr. Gary Pearse MSc. P. Eng. and Patrice Live P. Eng. concerning the Whabouchi project. There are no significant changes between the assumptions concerning the mining production rate. The main difference between the reports concerns the life of mine increased from 15 years in the March 2011 PEA to 18 years.

"The project economics are robust and I am very pleased with a NPV of $567 million," commented Guy Bourassa, President and CEO. "Our goal is to continue toward production with a feasibility study due out at the end of the year. Quebec is emerging as a global lithium centre driven by the ever increasing demand for lithium batteries. These facilities (mine and concentrator) will create jobs in northern Quebec, in the Cree Nation of Nemaska as well as in the South in Valleyfield, Quebec, where the lithium hydroxide/carbonate plant is slated to be built."

The Whabouchi deposit has a NI 43-101 compliant proven and probable reserve (Feasibility Study level)

Nemaska's Whabouchi deposit is the second richest deposit in the world. The mine is expected to produce approximately 213,000 tonnes of spodumene concentrate annually that will be transformed into approximately 20,700 tonnes of lithium hydroxide and approximately 10,000 tonnes of lithium carbonate, both of battery grade. The plant has been designed with the flexibility to produce 27,000 tonnes of lithium hydroxide and 4,000 tonnes of lithium carbonate should the market demand for hydroxide outpace lithium carbonate.

According to a study prepared for Nemaska by Roskill Consulting Group Ltd. in September 2012, the production of lithium ion batteries has grown by 20% per year from 2000 to 2011, overtaking nickel cadmium type batteries in the market. Demand for lithium hydroxide from the lithium ion battery industry is forecasted to grow at a rate of 30% per year between 2012 and 2020 driven by electric vehicles, electric bikes and grid storage increasing to 42,000 tonnes in 2020. In addition, the market for lithium hydroxide from all applications is expected to grow to 99,000 tonnes by 2020.* The price of battery grade lithium hydroxide in 2010 and 2011 was at US $7,500 - $8,000/t. During 2012, the price increased to US $8,500/t and prices are projected to stabilize in 2013 around US $9,000/t, increasing to US $10,475/t by 2020.

*(SignumBox Market Research, March 2012)

"Our proprietary electrolysis method of producing lithium hydroxide will set Nemaska apart from the competition, having the distinction of being the only producer with predictable stable input costs throughout the life of the project," Mr. Bourassa said. "We believe our ability to control conversion costs will provide us with a competitive advantage and enable us to grow our market share as the forecasted demand for lithium hydroxide comes to fruition." He continued, "With the positive economics of the mine and plant in place we can turn our attention to aggressively marketing our products. To that end, we have already sent samples of battery-grade lithium hydroxide to potential customers for evaluation and the response to date has been very positive. We will update the market on the progress on this important front in the weeks to come."

An Environmental and Social Impact Assessment (ESIA), including an Environmental and Social Baseline Study (ESBS), for the Whabouchi project is ongoing and should be completed by the end of November 2012. A request for an environmental "Certificat d'autorisation" is in preparation for the Valleyfield plant, which will not require an ESIA.

The technical information in this press release has been reviewed by Céline M. Charbonneau, P. Eng. of Met-Chem and Yves Dessureault, P. Eng. of BBA Inc., qualified persons as defined in National Instrument 43-101.

About Nemaska

Nemaska Lithium is an exploration and development company with its Whabouchi and Sirmac lithium deposits located in the James Bay Region in the Province of Quebec. Both projects are easily accessible year round by the Route du Nord from Chibougamau. The Whabouchi lithium deposit is located near the Cree community of Nemaska and the Némiscau airport. Nemaska plans to become a lithium hydroxide/carbonate producer based in Quebec and has filed patent applications for its proprietary method to produce lithium hydroxide and lithium carbonate. The Corporation's lithium hydroxide/carbonate processing plant will be located in Valleyfield, Quebec. Nemaska is also an important shareholder of Monarques Resources Inc. (TSX VENTURE:MQR).

Forward-looking statements contained in this press release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Nemaska to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.