2025-05-29
FRONTIER LITHIUM'S FEASIBILITY STUDY CONFIRMS CA$932M NET PRESENT VALUE AND LOW-COST CONCENTRATE SUPPLY FOR PAK LITHIUM PROJECT
Updated Mineral Reserve Estimate Confirms 37% Growth in PAK ProjectGREATER SUDBURY, ON, May 28, 2025 /CNW/ - Frontier Lithium Inc. (TSXV:FL) (FRA: HL2) (OTCQX:LITOF) (the "Company" or "Frontier") is pleased to report the results of its Definitive Feasibility Study ("FS" or "Study" or "DFS") for the Mine and Mill segment of PAK Lithium Project ("PAK Project" or "Project") near Red Lake, Ontario. The Study confirms the Project could generate an estimated CA$11 billion in net revenue over a 31-year mine life, with an after-tax net present value (NPV) of CA$932 million, an Internal Rate of Return (IRR) of 17.9%, and average annual pre-tax earnings of $285 million in steady-state operations. These robust economics land the Project competitively in the global hard rock lithium cost curve, supporting Frontier's goal to become North America's lowest-cost producer of spodumene concentrate.Building on a 37% increase in mineral reserves, the Study establishes a stronger foundation for an extended mine life, greater scale, and improved economic outcomes for the Project. The Project has also been streamlined to produce a single, high-quality spodumene concentrate (SC6), aligning with market demand and enhancing operational focus."This DFS is a key milestone that builds the confidence to advance permitting, infrastructure, and strategic partnerships. With strong projected economics, low costs, and long-term earnings, the Project could drive self-funded future growth and support Canada's Critical Minerals Strategy," said Trevor Walker, President and CEO. He added, "Canada's pro-battery policies give Frontier a strategic edge as regional lithium supply deficits are expected to continue into the 2030s. We're developing a high-quality, large-scale, low-cost lithium resource to anchor a domestic supply chain—strengthening energy security, competitiveness, and sustainability. This is more than a lithium project—it's about nation-building and delivering long-term value to shareholders and generations of Canadians, including northern and Indigenous communities."Kota Ikenishi, General Manager of Battery Minerals Department at Mitsubishi Corporation, added: "We're very pleased with the release of this DFS, which marks an important step forward for the project just over a year after our investment. This progress reflects the strong commitment and capability of Frontier, and we truly appreciate their continued efforts. The DFS results highlight the project's outstanding quality and scale, showing that it stands among the top-tier lithium projects in North America. We believe that the PAK Project will make a meaningful contribution to building a reliable battery supply chain in Ontario, Canada and across North America. We look forward to continue working closely with our partner as the project moves toward production."Highlights of the Feasibility StudyStrong Project Economics (All in Canadian Dollars unless otherwise stated)The DFS outlines a phased development plan, consisting of with a mine and mill to produce 6% Li2O spodumene concentrate (SC6). The Project delivers compelling economics, including:Potential cumulative net revenue: CA$11 billionAfter-tax Net Present Value (NPV8%): CA$932 millionAfter-tax Internal Rate of Return (IRR): 17.9%Average annual earnings (steady state): CA$285 millionLife of Mine (LOM): 31 yearsThese results provide a robust basis for the Company to advance a Final Investment Decision (FID) target within the next 24 months.Industry-Leading Cost ProfileC1 Operating Cost1,2 (including transport): CA$602/t SC6 (US$439/t)[2]All-in Sustaining Cost (AISC)3,4: CA$624/t SC6 (US$456/t)Average Annual SC6 Production: 200,000 tonnesLife-of-Mine Stripping Ratio: 3.7:1 (waste:ore)Concentrate transportation assumptions are based on free on board (FOB) terms at Thunder Bay, where Frontier recently acquired a vacant industrial site on Mission Island to house its planned lithium conversion facility5. These cost metrics position the PAK Project firmly in a competitive position on the global hard rock cost curve, underscoring its strong cost competitiveness and resilience in volatile market conditions.Substantial Economic ContributionOver $1 billion in federal and $699 million in provincial tax revenues expected over the life of the Project.Additional $645 million of Ontario Mining Tax estimated for the province;Creation of more than 230 jobs at the mine site and sustained for the life of the Project._________________________________1C1 Cost and C1 Cost per tonne of concentrate sold: C1 Cost consists of all production related expenses including mining, processing, services, tailings handling, royalties, and general and administrative, plus treatment charges, penalties, transportation and other selling costs. C1 Cost per tonne of concentrate sold is calculated as C1 Cost divided by tonnes of spodumene concentrate sold.2 US$:CA$: 1.00:1.373 All-in Sustaining Costs (AISC) and AISC per tonne of concentrate sold: AISC consists of C1 Cost plus sustaining capital. AISC per tonne of concentrate sold is calculated as AISC divided by tonnes of spodumene concentrate sold.4 C1 Costs and AISC are non-GAAP financial measures or ratios and have no standardised meaning under IFRS Accounting Standards and may not be comparable to similar measures used by other issuers. As the Project is not in production, Frontier does not have historical non-GAAP financial measures nor historical comparable measures under IFRS, and therefore the foregoing prospective non-GAAP financial measures or ratios may not be reconciled to the nearest comparable measures under IFRS5 The lithium conversion facility will be developed separately by Frontier and is not included in the cost metrics described herein nor in the associated Technical Report.Expanded Mineral Reserves, Resources and Exploration UpsideProven & Probable Reserves: 31.1 million tonnes @ 1.51% Li2O — a 37% increase over the Company's pre-feasibility study published in 2023.Maiden Inferred Resource at the Bolt deposit: 5.5 million tonnes @ 1.23% Li2O.All deposits remain open at depth and with the recent Ember pegmatite discovery, located 1 km north of the Spark deposit, this further highlights the ongoing exploration upside and broader regional potential.Frontier is advancing project financing and has commenced the permitting process which is expected to be completed within the next two years.Table 1. PAK Project DFS – Summary of Key Results and AssumptionsDescriptionUnitsValueMacroeconomic ParametersSC6 Spodumene Concentrate Price,Long-TermUS$1,475US$:CA$ Exchange Rate, Long-TermUS$:CA$1.00:1.37Inflation Rate, Long-term1%2.0Project ParametersDiscount rate (real terms)%8.0Mine lifeYears31Mineable Mineral Reserves, TotalMt of ore31.1Mineable Mineral Reserves, PAKMt of ore3.9Mineable Mineral Reserves, SparkMt of ore27.2Grade Mined, PAK (LOM average)% Li2O1.96Grade Mined, Spark (LOM average)% Li2O1.44Annual Mill Throughput (LOM average)Ktpa1,040Lithium Recovery, PAK (LOM average)%77.9Lithium Recovery, Spark (LOM average)%77.5Concentrate Grade% Li2O6.0Total Concentrate Produced (LOM)Mt6.1Capital Expenditures (real terms)Development CapitalCA$ M943Sustaining CapitalCA$ M137Closure CapitalCA$ M60LOM Unit Operating Expenditure (real terms)MiningCA$/tonne of ore processed28.7ProcessingCA$/tonne of ore processed31.3Tailings Management FacilityCA$/tonne of ore processed1.2Non-process powerCA$/tonne of ore processed1.2HeatingCA$/tonne of ore processed0.9G&A5CA$/tonne of ore processed23.7Total OpexCA$/tonne of ore processed87.0Other Expenditures (real terms)Concentrate transport costsCA$/tonne of concentrate sold (wet)143LOM Undiscounted Cash Flows (real terms)Net RevenueCA$ M11,298Total OpexCA$ M(2,709)Closure Bond FeesCA$ M(19)Operating EarningsCA$ M8,569Capital ExpendituresCA$ M(1,138)Clean Technology Manufacturing Investment Tax CreditCA$ M120Change in Working CapitalCA$ M(15)Pre-Tax Cash FlowCA$ M7,536Income Tax, FederalCA$ M(1,049)Income Tax, ProvincialCA$ M(699)Mining Tax, ProvincialCA$ M(645)After Tax Cash FlowCA$ M5,144Cost Metrics (real terms)C1 Cost2, 4CA$/tonne of concentrate sold602All-In Sustaining Cost (AISC)3, 4CA$/tonne of concentrate sold624Notes:1. The inflation rate is used in the tax, depreciation, and working capital calculations only. The results of these calculations are deflated using the same inflation rate for use in the cash flow model.Full story available on Benzinga.com
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