Frontier Lithium and Mitsubishi Corporation Form Joint Venture to Advance the First Fully Integrated Lithium Operation IN Ontario, Canada
FRONTIER LITHIUM AND MITSUBISHI
CORPORATION FORM JOINT VENTURE TO
ADVANCE THE FIRST FULLY INTEGRATED
LITHIUM OPERATION IN ONTARIO, CANADA
SUDBURY, ON
,
March 4, 2024
/CNW/ - Frontier Lithium Inc. (TSXV: FL) (FRA: HL2) (OTCQX:
LITOF) ("Frontier" or "the Company"), is pleased to announce a definitive agreement with Mitsubishi
Corporation ("Mitsubishi") (Tokyo Stock Exchange: 8058:JP) to establish a joint venture partnership
("JV") for the PAK Lithium Project mine and planned lithium chemicals conversion facility (collectively
the "Project"). This JV partnership delivers immediate and near-term financing to aggressively
advance the first fully integrated lithium mining and processing operation in
Ontario
.
Under the terms of the agreement, signed on
March 2, 2024
, Mitsubishi will acquire an initial 7.5%
interest in the Project for
C$25 million
. Upon completion of the definitive feasibility study ("DFS"),
Mitsubishi will have the right to increase its interest in the JV to 25% through the purchase of
additional shares at a price based on the net value of the Project as shown in the DFS. Additionally,
Frontier and Mitsubishi will work closely together to pursue project financing to fund the development
capital costs of the Project.
Transaction Highlights
This strategic investment recognizes the size, high quality and strategic importance of the
Frontier's PAK Lithium Project to the North American EV supply chain;
Mitsubishi, a global conglomerate with a market cap of more than
JPY13 trillion
and having a
portfolio of large-scale mineral resource assets with world-class cost competitiveness and
quality, makes its first step into upstream lithium production to contribute to the growing needs
of the battery materials supply chain;
The JV is structured to cover the equity funding for the planned mine and mill while maintaining
at least 75% of future off-take;
This long-term partnership supports the initial development of mining at the PAK Lithium Project,
and future expansions downstream with chemical processing.
"
Today marks a significant milestone for Frontier Lithium as we progress towards our goal of
becoming a key lithium supplier to the North American EV battery materials supply chain.
Mitsubishi's investment reflects confidence in
Ontario's
jurisdiction, the quality and scale of our
asset, and Frontier's operational
expertise
"
stated
Trevor Walker
, President and CEO of Frontier
Lithium.
"We are honored to welcome Mitsubishi
to
the PAK Lithium Project and
know we will
benefit from their integrity,
fairness, and
impressive
track record in co-developing major
projects
around the world. A strong, strategic, and steadfast partner allows us to
develop
our
world-
class asset
and
focus on the long-term value creation for shareholders, communities,
and all
stakeholders."
Kota Ikenishi, General Manager of the Battery Minerals Office, Mitsubishi Corporation added:
"PAK
is an outstanding lithium project, and we recognize its strategic value in ensuring a secure supply
of lithium to North American markets. We are excited to build a long-term relationship with Frontier
and leverage our complementary skills and capabilities to deliver PAK into production."
This JV partnership delivers on the recent memorandum of co-operation signed between the
governments of
Canada
and
Japan
to work more closely to establish sustainable and reliable global
battery supply chains. This includes ensuring there are integrated, value-added investments in the
upstream, midstream, and downstream sectors, including the mining and processing of lithium and
other critical minerals.
Transaction Details
Transaction Details (CNW Group/Frontier Lithium Inc.)
The key terms of the Transaction are summarized below:
Frontier will contribute all assets related to the Project in exchange for a 92.5% interest in
the JV and will serve as the manager of the JV.
Mitsubishi will acquire an initial 7.5% interest in the JV for
C$
25 million ("Tranche 1").
Post completion of the DFS, Mitsubishi will have the right to acquire an additional 17.5% interest
in the JV to a total of 25% interest at a price based on the net value of the Project as shown in
the DFS.("Tranche 2").
Mitsubishi will work closely together with Frontier in arranging project financing to ensure the
Project is fully funded to production.
Frontier will be the operator of the Project and will be responsible for the development and
delivery and subsequent operation of the Project.
A Project Development Committee will include representatives from both Frontier and Mitsubishi
will be formed to review and recommend all significant project development decisions.
Funding of Tranche 2 is subject to certain terms and conditions precedent, including receipt of
material permits and other customary approvals. Frontier anticipates these conditions to be
satisfied in 2025.
The agreement contains terms, conditions, representations, warranties, and indemnities customary
for transactions of this nature. Closing of Tranche 1 is subject to customary closing conditions.
Frontier's financial adviser is Goldman Sachs & Co. LLC and its legal counsel in connection with the
transaction is
Osler
, Hoskin & Harcourt. Mitsubishi's legal counsel in connection with the transaction
is Stikeman Elliott.
Frontier invites its shareholders and the financial community for an investor call on
Monday March 4,
2024
, at
07:30 AM Eastern Time
, investors can join Zoom meeting via
https://us06web.zoom.us/j/89267573275
with the Meeting ID: 892 6757 3275 or dial
by their
location
; Canada +1 780 666 0144, US +1 929 205 6099 (
New York
),
Japan
+81 363 628 317
About Mitsubishi Corporation
Mitsubishi Corporation operates a wide range of businesses spanning multiple industries and
overseen by its Industry DX Group, Next-Generation Energy Business Group and ten industry-
specific business groups: Natural Gas, Industrial Materials, Petroleum & Chemicals, Mineral
Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry,
Power Solution, and Urban Development.
About Frontier Lithium
Frontier Lithium Inc. (TSX-V: FL) is an exploration and development mining company with
headquarters and assets in
Northern Ontario
, a Tier1 mining jurisdiction. The Company's PAK
Lithium Project represents a high-grade, large tonnage, pure lithium resource in a new, premium
lithium mineral district in northwestern
Ontario
. Strategically located in the Great Lakes region near
the United States
border, Frontier is developing the first fully integrated lithium mining and processing
operation in
Ontario
with an aim to become
Canada's
lithium champion and a significant supplier of
spodumene concentrates and battery-grade lithium chemicals to the growing electric vehicle and
energy storage markets across North America.
About the PAK Lithium Project
The PAK Lithium Project contains
North America's
highest-grade lithium resource and is the largest
in
Ontario
by size. The claims encompass more than 26,000 hectares and remains largely
unexplored; however, since 2013, the Company has delineated two premium spodumene-bearing
lithium deposits (PAK and Spark), located only 2.3 kilometres apart. Exploration is continuing on the
project through two other spodumene bearing discoveries: the Bolt pegmatite (located between the
PAK and Spark deposits), as well as the Pennock pegmatite located 25 kilometres northwest of
PAK deposit within the project claims. A 2023 Pre-Feasibility Study titled ""National Instrument 43-
101 Technical Report PFS PAK Lithium Project"" authored by BBA E&C Inc., delivered a 24- year
project life, at a post-tax NPV(8%) of
US$1.74 billion
and internal rate of return of 24.1% as per the
press release disseminated on
May 31, 2023
, and filed on
www.sedarplus.ca
.
On Behalf of the Board of Directors
Trevor Walker
President and CEO
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute "forward-statements." Such forward looking
statements involve known and unknown risks, uncertainties and other factors that may cause the
Company's actual results, performance or achievements, or developments to differ materially from
the anticipated results, performance or achievements expressed or implied by such forward-looking
statements. Although the Company believes, in light of the experience of its officers and directors,
current conditions and expected future developments and other factors that have been considered
appropriate that the expectations reflected in this forward-looking information are reasonable, undue
reliance should not be placed on them because the Company can give no assurance that they will
prove to be correct. When used in this press release, the words "estimate", "project", "belief",
"anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words
or such variations thereon or comparable terminology are intended to identify forward-looking
statements and information. The forward-looking statements and information in this press release
include information relating to the funding of Tranche 1, the formation and operations of the JV, the
timing of the satisfaction of the conditions to funding of Tranche 2, the prospectivity of the
Company's mineral properties, the mineralization and development of the Company's mineral
properties, the Company's exploration program and other mining projects and prospects thereof.
Such statements and information reflect the current view of the Company. Risks and uncertainties
that may cause actual results to differ materially from those contemplated in those forward-looking
statements and information. By their nature, forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our actual results, performance or
achievements, or other future events, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. The forward-looking
information contained in this news release represents the expectations of the Company as of the
date of this news release and, accordingly, is subject to change after such date. Readers should not
place undue importance on forward-looking information and should not rely upon this information as
of any other date. The Company undertakes no obligation to update these forward-looking
statements in the event that management's beliefs, estimates or opinions, or other factors, should
change.
Readers are cautioned that any such forward-looking statements are not guarantees of future
performance and those actual results or developments may differ materially from those projected in
the forward-looking statements. For more information on the Company, please review the
Company's public filings available on SEDAR+ at
www.sedarplus.ca
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 news release.
Frontier Lithium (CNW Group/Frontier Lithium Inc.)
SOURCE
Frontier Lithium Inc.
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For further information:
Company Contact Information: Bora Ugurgel, Senior Manager, Investor
Relations, 2736 Belisle Drive Val Caron, ON. P3N 1B3 CANADA, T. +001 705.897.7622, F. +001
705.897.7618
CO: Frontier Lithium Inc.
CNW 06:00e 04-MAR-24