Frontier 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 inOntario’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.
