SUDBURY,
ON, Aug. 25, 2022 /CNW/ - Frontier
Lithium Inc. (TSXV: FL) (FRA: HL2) (OTCQX: LITOF) ("Frontier"
or the "Company") has reported financial results for the first
quarter ended June 30, 2022.
The financial statements and the related management's discussion
and analysis have been filed on SEDAR and can be viewed under the
company's profile on SEDAR.
The company continues to advance its plans to develop a lithium
salts refining plant in North
America's Great Lakes region. Frontier is targeting the
delivery of a preliminary feasibility study ("PFS") by the end of
calendar 2022, assessing the viability of constructing and
operating a fully integrated lithium mining and chemicals company
to deliver battery-grade lithium carbonate and lithium hydroxide
for the burgeoning lithium-ion battery market in North America.
Highlights for the quarter ended June 30,
2022, and recent developments:
- On May 2, 2022, the Company
announced its planned exploration program for the fiscal year ended
March 31, 2023. Exploration targets
for the PAK Lithium project include infill and step out drilling on
the Spark deposit and detailed and regional mapping and prospecting
in areas proximal to known spodumene-bearing pegmatites and in
under-explored areas within its approximately 27,000 hectare land
tenure. The Company plans to continue evaluating the Spark
pegmatite with a 15,000 metre drill program which began in
May 2022 utilizing two diamond
drills. It is anticipated that the measured and indicated resource
categories of the deposit will be substantially increased.
Concurrently, during the drilling program, regional and detailed
geological mapping and prospecting will also be carried out;
- At June 30, 2022, the company had
cash and cash equivalents of $16.7
million, leaving it well positioned to execute on its plan
mentioned above to complete the PFS and planned 15,000 metre drill
program. The Company also transferred approximately $13 million cash to high interest rate Guaranteed
Investment Certificate accounts to generate higher interest income
to contribute towards operating costs;
- On June 7, 2022, the Company
announced the results from the drilling completed during the Phase
XI drill program on the Spark pegmatite. The Phase XI drill program
was completed in March 2022 with a
total of 1,342.5 metres in five holes. The drilling confirmed that
the deposit remains open to the west and a new zone to the NW was
discovered which will require further investigation in the future.
The detailed results have been released by the Company and are
available on SEDAR (www.sedar.com).
- The Phase XII drill program is in progress and the Company now
anticipates that this drill program will be completed by
mid-October 2022. On July 25, 2022, the Company announced the results
for four of the drill holes completed during the Phase XII drill
program on the Spark pegmatite. Subsequently on August 17, 2022, the Company announced the
results of four additional drill holes completed during the Phase
XII drill program on the Spark pegmatite. The detailed results have
been released by the Company and are available on SEDAR
(www.sedar.com). The Company has completed 8,000 metres of drilling
in 24 holes and has reported analysis from 8 drill holes as of
August 17, 2022. The initial drill
holes were designed to convert Inferred material to Indicated for
the planned open pit at the Spark deposit. The drilling was
focussed on the Inferred resource within the central portion of the
Spark deposit at depth. These results will be included in the
upgraded Measured-Indicated Resource for Spark that will become
part of the PFS.
- Lithium Chemical Test Work Development: For the
purpose of the PFS, the Company is exploring more conventional
processes such as the sulphate process at the lithium chemicals
conversion plant which is low-risk and used extensively in
East Asia for manufacturing
lithium carbonate and hydroxides from hard-rock spodumene sources.
Lithium chemicals piloting is progressing and the Company expects
the program to be completed by the end of September, 2022.
- Strengthened the Company's management team with the appointment
of Tony Zheng as Chief Financial
Officer, bringing extensive experience in finance matters.
The comparative figures for three months ended June 30, 2021 have been restated. The restated
comparative figures replace and supersede the corresponding
information contained in the previously filed financial statements
and management's discussion and analysis of the Company which
should no longer be relied upon.
For further information regarding the restatement of the
comparative figures contained in the June
30, 2022 Unaudited Condensed Interim Financial Statements,
please refer to the details in Note 13 of the quarter ended
June 30, 2022 Unaudited Condensed
Interim Financial Statements which are summarized as follows:
- Change in Accounting Policy – During the year ended
March 31, 2022, the Company changed
its accounting policy for exploration and evaluation expenditures
to expense them as incurred. Management considered that this change
in accounting policy will result in clearer, more relevant and
reliable financial information by reducing financial reporting
complexity. Under the previous accounting policy, exploration and
evaluation expenditures were capitalized.
- Related Party Disclosures – It was determined that there were
additional related party transactions in the prior year financial
statements that had not been disclosed. The comparative disclosures
in Note 11 have been revised accordingly.
- Prior Period Adjustment – In the process of preparing the
Company's unaudited condensed interim financial statements for the
first quarter ended June 30, 2022,
management determined that there were some adjustments that need to
be made on the Statements of Cash Flows for the comparative period
three months ended June 30, 2021, in
addition to the adjustments resulting from "Change in Accounting
Policy" mentioned above. These adjustments on the Statements of
Cash Flows for the comparative period three months ended
June 30, 2021 are summarized
below:
- There was a clerical error when adding the subtotal for the
"total cash used in operations";
- The Company purchased a 2.5% net smelter royalty ("NSR") on the
Pakeagama Lake Property during the three months ended June 30, 2021 for a total cash proceeds of
$4.0 million and 1,000,000 common
shares valued at $1.0 million. The
"additions to exploration and evaluation assets" has been corrected
to $4.0 million which only includes
the cash portion of the additions;
- $1.4 million was presented
incorrectly as "cash restricted for flow-through expenditures" and
it's now presented as "cash and cash equivalents".
About Frontier Lithium
Frontier Lithium is a preproduction business with an objective
to become a strategic domestic supplier of spodumene concentrates
for industrial users as well as battery-grade lithium hydroxide and
other chemicals to the growing electric vehicle and energy storage
markets in North America. The
Company maintains the largest land position and resource in a new
premium lithium mineral district located in Ontario's Great Lakes region.
About PAK Lithium Project
The PAK Lithium Project is one of the highest quality known
lithium mineral resource in North
America due to its high-grade and low impurity properties in
the pegmatite ore material and the spodumene mineral. The Company
published a Preliminary Economic Assessment ("PEA") in April 2021 that indicated an after-tax Net
Present Value ("NPV") at an 8% discount rate of US $974 million and a 21% after-tax Internal Rate of
Return ("IRR") through a fully-integrated lithium operation
utilizing spodumene concentrate generated from the PAK Lithium
Project to achieve downstream conversion for production of
battery-quality lithium chemicals and concentrate for the glass and
glass-ceramics market. For details, please refer to the NI 43-101
Technical report by BBA Engineering Ltd. issued on April 9, 2021 and filed under the Company's
profile on SEDAR on April 14,
2021.
Forward-looking Statements
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. This news release includes certain
statements that constitute "forward-looking information" or
"forward-looking statements". All statements in this release, other
than statements of historical fact, including but not limited to
statements that address future production, reserve potential,
exploration drilling, exploitation activities and events or
developments that the Company expects are forward-looking
statements. Forward-looking statements are based upon the
expectations and assumptions that, while considered reasonable by
the Company are subject to uncertainties and contingencies. As
such, the statements are not guarantees of future performance and
actual results or developments may differ materially from those in
the forward-looking statements. Factors that could cause actual
results to differ materially from those in forward looking
statements include market prices, exploitation and exploration
successes, continued availability of capital and financing, and
general economic, market or business conditions. The Company does
not undertake any obligation to update or revise any
forward-looking information, except as required by law. For more
information on the risk factors that could cause actual results to
differ materially from the forward-looking statements readers
should review the risk factors contained in the Company's most
recent Annual Information Form available at www.sedar.com.
SOURCE Frontier Lithium Inc.