Frontier Lithium (TSXV: FL) has entered into a joint venture with Mitsubishi Corporation, which it says will lead to the first fully integrated lithium operation in Ontario.
The venture is focused on Frontier Lithium’s PAK Lithium Project and the planned conversion facility. PAK is claimed as having the highest-grade lithium resource in North America, while a pre-feasibility study released in 2023 outlines a post-tax net present value of US$1.74 billion for the project under a proposed 24 year mine life. That estimate is based on lithium hydroxide pricing of US$22,000 per tonne.
Under the terms of the joint venture, Mitsubishi is to take an initial 7.5% interest in the project for $25 million. Once a definitive feasibility study is completed, which is slated to be released later this year, the Japanese conglomerate will have the option to expand its ownership to a 25% stake, with the price paid to be based on the net value of the project as identified by the study. The second tranche is expected to close at some time in 2025, and will enable Mitsubishi to take 25% of the off-take from the mine.
The joint venture is expected to cover the equity funding for the mine and mill, while maintaining at least 75% of future off-take.
Frontier will remain as the operator of the project under the joint venture.
Frontier Lithium last closed at $0.92 on the TSX Venture, trading up 35% on Friday.
Information for this story was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
