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Frontier Lithium Inc V.FL

Alternate Symbol(s):  LITOF

"Frontier Lithium Inc is a Canada-based mining exploration company engaged in acquisition, exploration, and development of mining properties. It focuses on elements like lithium, tantalum, rubidium, and cesium by exploring for lithium, cesium and tantalum classified pegmatites. Geographically it operates in one segment, Canada. Its main project is the PAK lithium project."


TSXV:FL - Post by User

Post by FrankCowperwoodon Jun 04, 2023 4:10am
290 Views
Post# 35478967

Upstream vs Full integration

Upstream vs Full integration

There are two mindsets in terms of lithium mining delopment: upstream (spodumene concentrate) and full integration.

I took a look at PFS numbers and found out that refining is 65% of capex. While NPV of refining currently is close to zero best case due to high spodumene price. Therefore choosing to be just spodumene miner FL could command much more robust IRR (>50%) - see CRE's DFS. 

However FL sees long term benefits to be integrated and have direct contracts with NA automakers. Margins can fluctuate between mining and refining and majority (60%) of downstream located in China. All Australians rely on Chinese offtakes. It doesn't fit supply security rule of thumb.

Therefore final ROI will largely depend on US and Canadian subsidies to visioner companies, like FL,  to build refining.

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