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.
