BRUTAL BRUTAL BRUTAL......BUT!RELEASED FROM CANACORD.......
Positive Drill Results from Frontier Lithium’s PAK Project Phase XI Drill Program in Northwestern Ontario – Extends Spark Deposit to the West with 1.35% Li2O over 81.5 metres and a Lower Intercept of 1.34% over 94.3 metres: Yesterday after the close, Frontier Lithium (FL-CN, SPEC BUY, C$2.69, C$570M market cap | C$4 target, Katie Lachapelle) announced drill results from its recently completed Phase XI drill program at the Spark deposit, one of two high-grade spodumene-bearing deposits at its 100%-owned PAK Lithium Project in northern Ontario. In total, five holes were drilled for a total of 1,342.5 meters. The objective of the drill program was to define the western limit of the Spark deposit via low-ground drilling. Frontier successfully extended the deposit strike length 80m to the West and discovered a new mineralized zone, with all holes having hit high-grade mineralization (Figures 1 and 2). Highlights include:
- DDH PL-054-22: 95m grading 1.31% Li2O, including 26m @ 2.38% Li2O
- DDH PL-055-22: 69.5m grading 1.39% Li2O
- This intersection includes a highly enriched 22.5m tantalum zone grading 754 ppm Ta2O5
- DDH PL-056-22 (westernmost hole on the plan below): upper (81.5m) and lower (94.3m) mineralized pegmatite zones grading 1.35% and 1.34% Li2O respectively
- The lower zone was unexpected and represents a new mineralized zone that appears to be an extension of the Spark deposit to the northwest. Follow-up drilling will occur later this year. In Katie’s view, this suggests that the deposit still has a high potential to increase in size.
- PL-GDH-09-22: 24.3m grading 2.46% Li2O with key intercepts including: 10m @ 3.64% Li2O
Overall, Katie views the results from Phase XI drilling as positive. The program, albeit small, exceeded her expectations. As shown in Figure 3, all holes hit high-grade in line with the average grade of the current resource (1.38% Li2O). The extension of the strike length indicates that Spark extends at least 80m to the West and still remains open. Katie expects this area + the newly discovered zone to add significant tonnage to the current resource. Frontier has now mobilized another drill rig on site that will continue to drill the Spark deposit, with a target of ~15,000m this year consisting of both infill and step out holes. The infill drilling should result in a substantial upgrading of inferred resources to the measured & indicated category for inclusion in the upcoming Pre-Feasibility Study (before year-end). As a result, Katie expects a longer mine life than that envisioned in the PEA, which forms the basis of her current valuation where she models ore processing of only 23Mt of the current 42Mt resource. Her estimates remain unchanged at this time and she maintains her SPEC BUY rating and C$4.00 per share target price. Beyond Spark, Frontier has also confirmed the presence of high-grade spodumene at two additional pegmatites: Bolt and Pennock. The Bolt pegmatite is located between PAK and Spark and has been traced over 600m with zones up to 50m wide. Given their proximity, Katie believes these deposits could be connected. A recent channel sample at Bolt returned an impressive 49m grading 1.14% Li2O, including 29m grading 1.45% Li2O at surface. Management remains focused on Spark, but she looks forward to first drilling at Bolt in 2023. Frontier continues to be our top pick among Canadian lithium developers, with the second largest and highest-grade lithium resource in North America and substantial exploration upside, in our view. FL currently trades at 0.70x NAV, relatively in line with peers at 0.67x.