Frontier Lithium Announces $3.35 Million Convertible Loan, Expected Purchase of Industrial Lands for Lithium Conversion Facility in Thunder Bay & Q3 Quarterly Results
Frontier Lithium Announces $3.35 Million
Convertible Loan, Expected Purchase of
Industrial Lands for Lithium Conversion
Facility in Thunder Bay & Q3 Quarterly Results
SUDBURY, ON
,
Feb. 25, 2025
/CNW/ -
Frontier Lithium
("
Frontier
" or "the
Company
") is pleased
to announce that it has entered into a definitive agreement for a financing of an unsecured
convertible loan (the "
Convertible Loan
") of the Company for aggregate gross proceeds of
$3,350,000
(the "
Financing
"). The lender ("
Lender
") of the Convertible Loan is considered a
"Related Party" of the Company under Multilateral Instrument 61-101 –
Protection of Minority
Security Holders in Special Transactions
("
MI 61-101
") and the policies of the TSX Venture
Exchange (the "
TSXV
"), as the Lender is an affiliate or associated entity of Mr.
Reginald (Rick) F.
Walker
(Chairman of the Board of Directors).
The net proceeds from the Financing will be used to purchase a vacant industrial site on Mission
Island in
Thunder Bay, Ontario
("
Mission Island Lands
") on which the Company plans to build a
Lithium Conversion Facility ("
Facility
"). The Mission Island Lands are comprised of 183 acres,
including a 50-acre water lot. Frontier has held an option to purchase ("
Option
") the Mission Island
Lands since
June 1, 2023
. The Option is expected to be exercised, and the definitive purchase and
sale agreement to purchase the Mission Island Lands is expected to be entered into on
February 28,
2025
, and this transaction is expected to close on
February 28, 2025
.
Thunder Bay, Ontario
is the closest major city to the Company's PAK lithium deposit located in
northwestern
Ontario
and is strategically situated in the heart of
Canada
. The city boasts excellent
transportation infrastructure and connectivity to other potential feedstock sources, as well as
domestic and international markets for the potential future shipment of finished lithium salts.
The Financing
The loan is convertible into, or exercisable for, fully paid common shares in the capital of the
Company (the "
Common Shares
" and each such Common Share, a "
Conversion Share
"). The
Principal Amount of the Loan, together with any accrued and unpaid interest, will mature and
become due and payable in cash on the date that is 18 months from the date of issue of the
Convertible Loan ("
Issue Date
"), subject to earlier conversion (the "
Maturity Date
"). The Principal
Amount owing under the Convertible Loan will accrue interest from the Issue Date at the Canadian
Overnight Repo Rate Average plus 3.0% per annum and the interest will be calculated and
compounded annually and payable and be due on the Maturity Date.
As the Convertible Loan will be unsecured debt obligations of the Company, each Convertible Loan
will rank subordinate to all secured debt obligations of the Company. The Principal Amount may be
converted (in whole or part), for no additional consideration, into Conversion Shares at the option of
the Lender at any time after the Issue Date at a conversion price (the "
Conversion Price
") of
$0.65
per Conversion Share.
Upon not less than 20 days prior written notice ("
Notice
") to the Lender, the Company may prepay
the Principal Amount and all other amounts, including any accrued and unpaid interest thereon, due
hereunder. Upon providing notice of such prepayment to the Lender, the prepayment, together with
all interest accrued through the prepayment date, shall be due and payable on the date set forth
therein. Notwithstanding the foregoing, the Lender may elect to convert to Conversion Shares upon
receiving such Notice. In addition, the Principal Amount and any interest accrued of the Convertible
Loan may be repaid by the Company at any time without penalty.
The Financing is considered a "Related Party Transaction" under MI 61-101 and the TSXV Policies
but is exempt from the formal valuation and minority approval requirements under subsections 5.5(a)
and 5.7(1)a of MI 61-101 and Section 3.1 of Policy 5.9 of the TSXV Policies because neither the fair
market value of the subject matter of, nor the fair market value of the consideration for, the
Financing described herein, exceeds 25% of the Company's market capitalization.
The Financing is expected to close on or about
February 28, 2025
, and is subject to TSXV approval.
There is no finder's fee owed pursuant to the Financing.
Interim Quarterly Financial Statements and MD&A
The Company also reports the filing of its interim financial results for the third quarter ended
December 31, 2024
. The Company's financial statements and accompanying management's
discussion and analysis for the period ended
December 31, 2024
, have now also been filed
on SEDAR+ (
www.sedarplus.ca
) and can be viewed under the company's website at
https://www.frontierlithium.com/
.
About Frontier Lithium
Frontier Lithium Inc. is a pre-production mining company with an objective to become a strategic and
integrated supplier of premium spodumene concentrates as well as battery-grade lithium salts to the
growing electric vehicle, and energy storage markets in
North America
. The Company's PAK Lithium
project maintains the largest land position and resource in a premium lithium mineral district located
in
Ontario's
Great Lakes region.
About the PAK Lithium Project
The PAK Lithium Project is a fully integrated lithium development initiative, developing
North
America's
highest-grade lithium reserves. A joint venture between Frontier Lithium Inc. (92.5%) and
Mitsubishi Corporation (7.5%), the project involves the extraction of lithium ore, advanced processing
to produce high-purity lithium concentrates, and downstream refining facility to manufacture battery-
grade lithium salts. A 2023 Pre-Feasibility Study by BBA E&C Inc., titled
"National Instrument 43-
101 Technical Report PFS PAK Lithium Project"
, estimates a 24-year project life with a post-tax
NPV (8%) of
US$1.74
billion and an IRR of 24.1%. These results were disclosed in a May 31,
2023, press release and filed on SEDAR+ (
www.sedarplus.ca
).
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain forward-looking statements and forward-looking information
(collectively referred to herein as "forward-looking statements") within the meaning of applicable
Canadian securities laws. All statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often, but not always, identified by the
use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective",
"continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar
words, including negatives thereof, suggesting future outcomes.
Forward-looking statements are subject to both known and unknown risks, uncertainties, and other
factors, many of which are beyond the control of the Company, that may cause the actual results,
level of activity, performance, or achievements of the Company to be materially different from those
expressed or implied by such forward looking statements. Forward-looking statements and
information are based on plans, expectations and estimates of management at the date the
information is provided and are subject to certain factors and assumptions. The Company is making
forward looking statements, with respect to, but not limited to: the Financing and the terms thereof,
including the proceeds, the use of proceeds, the timing of closing, the terms of the Convertible Loan,
including the Conversion Shares, the hold period applicable to the securities that may be issued
under the Financing, including any notice/announcements to be made in connection therewith.
Investors should continue to review and consider information disseminated through news releases
and filed by the Company on SEDAR+. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward looking
statements, there may be other factors that cause results not to be as anticipated, estimated or
intended.
Forward-looking statements are not a guarantee of future performance and involve a number of risks
and uncertainties, some of which are described herein. Such forward-looking statements necessarily
involve known and unknown risks and uncertainties, which may cause the Company's actual
performance and results to differ materially from any projections of future performance or results
expressed or implied by such forward-looking statements. Any forward-looking statements are made
as of the date hereof and, except as required by law, the Company assumes no obligation to
publicly update or revise such statements to reflect new information, subsequent or otherwise.
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 release.
SOURCE
Frontier Lithium Inc.
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For further information:
Company Contact Information: Bora Ugurgel, Senior Manager, Investor
Relations, 2614 Belisle Drive Val Caron, Ontario, P3N 1B3 CANADA, T. +001 705.897.7622, F.
+001 705.897.7618
CO: Frontier Lithium Inc.
CNW 21:17e 25-FEB-25