Frontier Lithium (TSXV: FL; US-OTC: LITOF) studies progress in direction of finishing a useful resource replace and prefeasibility research for its PAK mission in northwestern Ontario by the primary quarter of 2023.
The possible lithium pegmatite mission is 170 km north of the famed Crimson Lake Gold Camp in an rising lithium mineral district within the Canadian Defend dubbed the ‘Electrical Avenue.’
Having already outlined one of many largest and highest grade spodumene sources in North America, the mission has the potential to crystalize the imaginative and prescient of Frontier turning into Canada’s ‘lithium champion,’ as proprietor, president and CEO Trevor Walker tells The Northern Miner in an interview.
The corporate’s exploration effort had traced the deposit over a strike size of 500 metres and to a depth of 300 metres, with the precise width various between 10 and 125 metres.
Frontier is at present in its Section XII delineation and infill drilling, with two drill rigs deployed to the Spark deposit. The corporate has accomplished 11,150 metres of drilling in 34 holes as of Sept. 11.
Apart from having delineated one of many continent’s most strategically important lithium deposits, Frontier continues to report world-class drill intercepts. On Oct. 11, it mentioned that outcomes from one other 4 holes demonstrated grades nicely above the present mineral useful resource estimate of 1.38% lithium oxide.
In March, the corporate reported a useful resource replace, quadrupling the indicated useful resource at Spark to 14.4 million tonnes grading 1.4%, up from the beforehand estimated 3.3 million tonnes grading 1.59%, after the corporate performed two drill packages final yr protecting 3,269 meters. Spark additionally hosts an inferred useful resource of 18.1 million tonnes grading 1.37% lithium oxide (the present M&I+I common grade).
The most recent outcomes averaged 1.57%, 1.92%, 1.74%, and 1.55% lithium oxide over vital widths.
“We proceed to chop lengthy intervals of high-grade lithium in infill drilling on the Spark pegmatite,” says Walker. “The present drill marketing campaign is concentrated on upgrading inferred open-pittable sources at Spark as we work in direction of finishing the prefeasibility research.”
As with earlier outcomes launched in July, some holes resulted in pegmatite. As the present two-drill rig program is concentrated on the central portion of Spark at depth whereas the corporate prepares the upcoming prefeasibility research (PFS), Frontier plans to increase these holes later.
The whole useful resource (measured, indicated, and inferred) of the PAK deposit is 9.3 million tonnes grading 2.06% lithium oxide. The inferred useful resource is 2.8 million tonnes at 2.22% lithium oxide. The deposit stays open at depth and alongside the strike.
Along with the PAK deposit, the mission additionally hosts the Spark deposit, estimated to comprise 14.4 million indicated tonnes at 1.4% lithium oxide and 18.1 million inferred tonnes at 1.37% lithium oxide. Two different pegmatite occurrences — Daring and Pennock — have been situated within the space. Channel sampling returned 1.51% and 1.96% lithium oxide, respectively.
In a word to shoppers, Canaccord Genuity Capital Markets mining analyst Katie Lachapelle mentioned Frontier’s high-grade hits lead her to imagine there’s a sturdy probability the corporate will report an indicated useful resource with a better general grade.
She additionally expects the up to date mineral useful resource to incorporate new inferred materials, with drilling indicating that the Spark deposit continues to be open in all instructions.
Administration’s focus has now shifted to defining the bounds of the pegmatite and deepening some preliminary holes (from earlier in this system).
Primarily based on the consistency of infill drilling so far, Lachapelle mentioned she expects the vast majority of Frontier’s present mineral useful resource at Spark to be upgraded and included within the mine plan sooner or later, which may lead to a mine life extension of about 14 to 18 years. The analyst solely consists of 18 million tonnes of the present useful resource in her mine plan at a 1million tonne per yr processing capability.
In response to lithium market circumstances, Frontier plans to speed up lithium manufacturing by way of a phased strategy. Section 1 focuses on promoting spodumene focus from a mine and mill operation, adopted by a second section of expanded manufacturing to supply lithium chemical substances.
The phased strategy will probably be mirrored within the upcoming PFS, Walker says.
In February of 2021, Frontier launched a preliminary financial evaluation for PAK, forecasting a 26-year mine life with the potential to determine a hydrometallurgical chemical plant at an unidentified port within the Nice Lakes.
At an 8% low cost charge, the mission would generate a post-tax internet current worth of US$974 million and an inside charge of return (IRR) of 21% utilizing a base value of US$13,500 per tonne of lithium hydroxide. The research envisions an preliminary capital price of US$685 million with a strip ratio of three.6 to 1 and a mean annual manufacturing of 23,174 tonnes of lithium hydroxide, with a projected common promoting value of $13,500 per tonne.
“There’s a major upside to the mission, given the rising demand for lithium and the report value ranges of US$70,000-plus per tonne for sure lithium merchandise,” mentioned Walker.
Frontier’s PAK property is one in every of Canada’s extra superior lithium tasks. Final Might, it acquired $363,000 in funding from the Ontario authorities to assist the corporate display its lithium extraction course of by means of a pilot mission.
5 months later, the corporate mentioned that the pilot produced battery-quality lithium hydroxide monohydrate from the PAK deposit.
Earlier this yr, Frontier concluded a pilot-scale marketing campaign to supply 500 kg of spodumene focus that will probably be used to pilot a hydrometallurgical conversion course of. It used a 7,800-kg pattern of composite materials from the Spark (89%) and PAK (11%) deposits.
It averaged 1.57% lithium oxide and 0.8% iron oxide. The Spark materials is fine-grained, necessitating desliming, magnetic separation and gravity focus earlier than flotation.
Late in October, Frontier introduced a $20 million purchased deal financing to be underwritten by a syndicate led by RBC Capital Markets and Goldman Sachs.
“Canada has by no means seen Goldman Sachs are available in on a small financing like this. In order that speaks to the significance of the mission and the strategic nature of the asset within the Nice Lakes area,” mentioned Walker.
It additional highlights the significance of constructing the native provide chains with PAK positioned within the Nice Lakes area of North America, near the northern U.S. and southern Ontario, that are very important manufacturing hubs on the continent.
The chief complains the enterprise is undervalued in comparison with pegmatite opponents in Australia.
“We’re actually a couple of quarter of the in-situ useful resource values. We see large upside for our firm. Frontier is Canada’s lithium champion managed out of North America by native palms,” Walker mentioned.
Regardless of coming off its current excessive of $3.89, at $1.99, the corporate’s shares are nonetheless up 59% over the previous 12 months. It has a market cap of $422.5 million.