SUDBURY,
ON, Feb. 25, 2025 /CNW/ - 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.
Upon not less than 20 days prior written notice
("Notice") to the Lender, the Company may prepay the
Principal Amount and all other amounts, including any accrued and
unpaid interest thereon, due hereunder. Upon providing notice of
such prepayment to the Lender, the prepayment, together with all
interest accrued through the prepayment date, shall be due and
payable on the date set forth therein. Notwithstanding the
foregoing, the Lender may elect to convert to Conversion Shares
upon receiving such Notice. In addition, the Principal Amount and
any interest accrued of the Convertible Loan may be repaid by the
Company at any time without penalty.
The Financing is considered a "Related Party Transaction" under
MI 61-101 and the TSXV Policies but is exempt from the formal
valuation and minority approval requirements under subsections
5.5(a) and 5.7(1)a of MI 61-101 and Section 3.1 of Policy 5.9 of
the TSXV Policies because neither the fair market value of the
subject matter of, nor the fair market value of the consideration
for, the Financing described herein, exceeds 25% of the Company's
market capitalization.
The Financing is expected to close on or about February 28, 2025, and is subject to TSXV
approval. There is no finder's fee owed pursuant to the
Financing.
Interim Quarterly Financial Statements and
MD&A
The Company also reports the filing of its interim financial
results for the third quarter ended December
31, 2024. The Company's financial statements and
accompanying management's discussion and analysis for the period
ended December 31, 2024, have now
also been filed on SEDAR+ (www.sedarplus.ca) and can be
viewed under the company's website at
https://www.frontierlithium.com/.
About Frontier Lithium
Frontier Lithium Inc. is a pre-production mining company with an
objective to become a strategic and integrated supplier of premium
spodumene concentrates as well as battery-grade lithium salts to
the growing electric vehicle, and energy storage markets in
North America. The Company's PAK
Lithium project maintains the largest land position and resource in
a premium lithium mineral district located in Ontario's Great Lakes region.
About the PAK Lithium Project
The PAK Lithium Project is a fully integrated lithium
development initiative, developing North
America's highest-grade lithium reserves. A joint venture
between Frontier Lithium Inc. (92.5%) and Mitsubishi Corporation
(7.5%), the project involves the extraction of lithium ore,
advanced processing to produce high-purity lithium concentrates,
and downstream refining facility to manufacture battery-grade
lithium salts. A 2023 Pre-Feasibility Study by BBA
E&C Inc., titled "National Instrument 43-101 Technical
Report PFS PAK Lithium Project", estimates a 24-year
project life with a post-tax NPV (8%) of US$1.74 billion and an IRR of 24.1%.
These results were disclosed in a May 31, 2023, press
release and filed on SEDAR+ (www.sedarplus.ca).
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
Canadian securities laws. All statements other than statements of
present or historical fact are forward-looking statements.
Forward-looking statements are often, but not always, identified by
the use of words such as "anticipate", "achieve", "could",
"believe", "plan", "intend", "objective", "continuous", "ongoing",
"estimate", "outlook", "expect", "may", "will", "project", "should"
or similar words, including negatives thereof, suggesting future
outcomes.
Forward-looking statements are subject to both known and unknown
risks, uncertainties, and other factors, many of which are beyond
the control of the Company, that may cause the actual results,
level of activity, performance, or achievements of the Company to
be materially different from those expressed or implied by such
forward looking statements. Forward-looking statements and
information are based on plans, expectations and estimates of
management at the date the information is provided and are subject
to certain factors and assumptions. The Company is making forward
looking statements, with respect to, but not limited to: the
Financing and the terms thereof, including the proceeds, the use of
proceeds, the timing of closing, the terms of the Convertible Loan,
including the Conversion Shares, the hold period applicable to the
securities that may be issued under the Financing, including any
notice/announcements to be made in connection therewith.
Investors should continue to review and consider information
disseminated through news releases and filed by the Company on
SEDAR+. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended.
Forward-looking statements are not a guarantee of future
performance and involve a number of risks and uncertainties, some
of which are described herein. Such forward-looking statements
necessarily involve known and unknown risks and uncertainties,
which may cause the Company's actual performance and results to
differ materially from any projections of future performance or
results expressed or implied by such forward-looking statements.
Any forward-looking statements are made as of the date hereof and,
except as required by law, the Company assumes no obligation to
publicly update or revise such statements to reflect new
information, subsequent or otherwise.
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.
SOURCE Frontier Lithium Inc.
