| Welcome to the Frontier Lithium’s newsletter where we let you know about upcoming events, and make you aware of analyst coverage and industry analysis you may have missed. | | |  | Interview with Frontier Lithium's President & CEO Trevor Walker and Crux Investor Q: How do you insert yourself into this huge EV revolution that we're seeing with the acceleration of lithium prices over the past couple of years? You guys have been the beneficiaries all right, but you have to keep going. So, you're here at a conference in London, what are you hoping to get out of it?
A: Work and speak, and to your point we've made massive progress and have had a massive discovery on our projects. We’ve recently updated mineral resource when we consider all categories measured, indicated, and inferred. The second largest hard rock resource in North America, and one of the highest-grade ranks in the world. We are telling our story to investors and starting to work towards increasing the institutional presence in the company, which is sitting around 50 percent right now. So really going through a phase of telling our story and finding like-minded funders and people ultimately that believe in our vision.
Q: This has started from a family business, and it's grown over the years to the point where the grades are there, the scale is there, it's a global resource that you're dealing with. You're going to need a team who can deliver the next few steps and who need to be able to know what they're doing. So, in terms of the structure of the team: who has come in and what more do you need in terms of personnel coming in?
A: So that’s a great question and a wonderful observation. From a philosophical or strategic sense, the heart of the story flies with a cheer-on resource in a cheer-on jurisdiction. We see the same struggles in North America, particularly in Canada, over the last 10 years on entering the space and delivering products to help build this industry. It was clear observing some of those struggles that 80-85 percent of refined chemicals, for example, are coming out of China. There's no replacement for experience so how does one leverage to create asset to attract world-class talents that we know, with regards to process and technology, can actually deliver.
What the market needs is new incumbents, or new entrance and new supply outside of the incumbents. The reality is with a great asset comes a great responsibility. We've managed to attract our VP of Technology Dr. Naizhen Cao, the former Chief Scientist from Tianqi Lithium; one of the large producers out of China that for the last 10-15 years has delivered to the world's very large part of the market share.
So, we are very fortunate to bridge into Asian experience, however we're not in China. So, the next step was to inject North American or Northern experience. When you look at most of the designs in China it really looks like a small city; a plant that we would never build in Northern Canada. So, we are very fortunate to have in the likes of Marc Boissonneault; the former head of Global Nickel Assets for Glencore, whose processing metallurgical background to build mines, build plants, deliver metals and chemicals for many years. So, really to introduce Northern experience and plant experience with that asset and the Chinese experience to build our team. Our VP of Operations, one of Mark’s guys and a good friend of mine, Graeme Goodall, joined Frontier two months ago. So that we can continue to build the team and we have the internal experience to deliver. We need a champion in North America and in our case a Northern champion to deliver battery materials for that ecosystem that we're working very closely with government to help.
Q: So, you got the grade, got the scale, got the technical expertise, you've got the build expertise, you're still focused on exploration with a few discoveries, but you can make some more. The other bits that you're going to need to deal with in the market are: 1. talking to the market and getting some competitive attention through in terms of interest, whether it's in JV’s or optics or whatever it is that you're looking for, and 2. you're going to need access to that capital to build this thing out, if indeed you're going to build this thing out. So, with regards to those components, what do you do? Being here in London is a good start, but what else do you do?
A: Our strategy has so far served us well, and when we saw this market coming together, we knew it was going to take some time. We can see since the financial crisis that there's been a lot of volatility, and capital markets have gone from looking for value and growth to now near-term cash flow. We've felt market failure really in the past 10 years. It was clear to us that due to some market failures and tension that government needed to step in. So, non-traditional sources we feel that the market hasn't truly understood the impact of. In particular in Ontario, we have yet to see what Volkswagens total plan is, but we believe has been close to 30 billion dollars in total in Ontario be attracted over the last 18 months. From the data that we do have, roughly 30 percent of the capital expenditures through grants from government, from the provincial government of Ontario matched by the federal government. So, government has really stepped up.
We have raised approximately 35 million dollars for the company to continue to advance and grow our resource and soon to be delivering prefeasibility, stepping into the development fees of the company. So, we're well financed, and we believe that we are undervalued compared to some of our peers right now. We think that the next step is showing government support to continue to build that ecosystem and show that support upstream beyond the EV and cell manufacturing that has recently been attracted. Minister Fedeli and Minister Pirie at PDAC this past spring talked about 2023 as the most interesting year for showing lithium the abilities for lithium production from a mining capacity and its chemical production in Ontario.
At this convergence of government support and developing an ecosystem and OEM’s wanting to build batteries and EVs, that needs to be supplied and that's where Frontier Lithium is positioned really well. Tier one resource in a tier one jurisdiction. So, we're really excited about being involved heavily with the critical mineral strategy in Ontario knowing that those roads to prosperity, the drive to prosperity leads to the Pak Lithium Project.
Q: What we've been hearing in battery conferences is the fact that a lot of people are talking a good game, a lot of people talking about getting into production, but no one will or ever does. But for those that can, they're in an environment financially where the debt element makes it seem that you might. Governments whether being federal, provincial, or even more local than that; the money's available to get projects going and a supply potential is there, the demand is definitely there. You've got the US government announcing that two-thirds of all US cars and vehicles by 2032 will be electric, up from one-third by 2050 only two years ago; so it's moving at a pace here. But I'm interested in what the next steps are for you in terms of getting into production, going through the economic studies; what else do you need? Why are you going to be a winner where others are again, talking a good game, why are you going to get over the line?
A: So, it's really about bringing the stakeholders together right. As you build an ecosystem to supply and manufacture and serve this demand and a new industry, it's about where the government money is going, who's going to build the proximity, and would that be a great customer for future output or for the company. So, as we've been working through exploration and now stepping into development fees we've had numerous conversations, everything from incumbent lithium suppliers right through to cell and electric vehicle producers. It's clear to us that we are required in the Great Lakes region to deliver lithium chemicals before 2030. We're out in conversations and we're excited about OEM's plans that are just starting to build.
Q: You've got people in industry looking at who's talking about it and who's going to do it. What do you need to prove to them, apart from economic studies because sometimes that's just not enough, you've got to move through to demo-plant stage before they'll kind of commit to you. I guess that's the big win and certainly the big beneficiaries from that last two years have been when the OEMs step in and go ‘I believe this story so the rest of you can believe this story too’. How do you move those sorts of dialogues forward?
A: At the end of the day, it's beyond a story and it's about delivering and making sure there's alignments amongst partners. That's a process and dialogue that we've been having to essentially shortlist, who are those partners, from governments right through to OEMs. It's clear that, like anything, there's a process that needs to take place. Due diligence, for example, in reviewing the physical plan of constructing the mine, concentrator, and chemical. We're really excited to be delivering pre-feasibility here and in the near future because that's an essential piece of work.
Our mandate is clear in conversations: we need to deliver lithium chemicals from the lithium project before 2023. So, working backwards from that, what are the things that need to happen? Pre-feasibility study (PFS) which will give us a clear phased approach; phase one: Mine & Mill and lithium concentrate production. One of the things that is important is to de-risk; the market, as you know, is searching for near-term cashflows. How can we get to cash flow as quickly as possible to de-risk and ultimately move towards expansion of mine site and construction of the chemical. That'll come through the PFS, definitive feasibility study (DFS), and Mine & Mill. We're 12 months into a rigorous environmental baseline. The company as well is starting to have conversation with regards to permitting with government, impact benefit agreements with our partnered First Nations communities around the project. These are all the things that need to take place to ensure we've got a rock-solid foundation.
Q: You know and I know and the industry knows, that there's a whole bunch of deliverables; there’s permits, licenses, the EIA and any other ESG requirements you need to deliver. There's the First Nations and local partnerships that you obviously need to establish and have agreements with, as well as deciding which bit to go for first. It's a long road with lots of deliverables so between now and then, I guess you need to tell a growth story and why it is a growth story, because 2030 feels like a long time away. For investors, is there still a growth story looking at you from today? You said you’re undervalued, but where's the potential for this thing to go and what are the moments that you think are true value, not just industry but to investors?
A: Therein lies the opportunity, so when I deliver that message it's a conservative timeline. With the great excitement in our conversations with both OEMs and government, they say ‘Trevor, can we do this quicker?’ and our response is 'show us how we can do this quicker'. So, when we talk about permitting and the efforts and the timeline of permitting, it's through governments coming to the table to help steward such an important anchor resource. Through non-traditional sources of capital, how do we de-risk that and provide government support on such a strategic resource and supply that ecosystem that they're financing. You can't just help finance and attract OEMs and say we're not going to supply it in a timely fashion. And therein lies the opportunity at Frontier Lithium: show us to OEMs and ask them how they can deliver, how can they accelerate, how can they support us to deliver quicker, how can they de-risk and provide project finance support for the project or possible partnerships. So, that's really exciting and a huge opportunity for the company, shareholders, stakeholders, our Indigenous partners around the resource.
That is the opportunity that we have; a tier one resource in a tier one jurisdiction whereby we've seen a very active government with OEMs starting to build. We lie in a perfect position right now. So, what can we show our shareholders, what can we show the market? Deliver PFS, show government support around our project, and get through due diligence process to show the partnerships what kind of support we expect from the OEMs building in the Great Lakes Region. These are the events to take place over the next 12 months for Frontier Lithium. It’s such a great opportunity that we're really excited about. The original interview by Crux Investor. The information contained herein is provided solely for informational and discussion purposes only and is not, and may not be relied on in any manner as legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in Frontier Lithium Inc. | |  | Initiating Analyst Coverage by Desjardins Capital Markets
analyst Frederic Tremblay
“Frontier’s flagship PAK project is one of the highest-grade hard rock lithium resources within the emerging North American EV supply chain. We view PAK as a high-quality Canadian hard rock lithium project which clearly stands out from other projects." | | Global Mining + Metals
Canaccord Genuity's Global Metals & Mining Conference May 10-12 | The JW Marriott Palm Springs | | | Electric Vehicle Track 2023 Cross Sector Insight Conference June 6-7 | InterContinental Hotel Boston | | | Global Mining + Materials
RBC Capital Markets 2023 Global Mining & Materials Conference June 15-16 | InterContinental New York Barclay | | | Lithium & Battery Raw Materials
Lithium Supply and Battery Raw Materials Conference 2023 June 20-22 | Green Valley Ranch, Las Vegas | | | Demand for electric cars is booming, with sales expected to leap 35% this year after a record-breaking 2022  Electric vehicles, being the main driving force in the new global energy economy, are bringing about a historic transformation of the car manufacturing industry worldwide. Governments have announced policies to foster domestic industries that will improve their competitiveness in the EV market in years to come. As well, announced battery manufacturing projects are deemed to be sufficient in meeting the demand for EVs to 2030. - IEA | April 26, 2023 READ MORE | | | Chile's plan to grant the state with a majority stake in the lithium industry shocks business leaders The Chilean government is considering a proposal that would give state-owned companies a larger role in the sale and production of lithium in an attempt to secure a greater share of profits from the electric vehicle industry, which would lead to higher prices for foreign customers. - CNBC | April 22, 2023 READ MORE | | | Volkswagen's New Electric Vehicle Battery Plant in Ontario Will Create Thousands of New Jobs Exciting news for the lithium industry! Volkswagen has announced plans to build their largest battery factory to date in St. Thomas, Canada. The factory will be operated by PowerCo and is expected to create up to 3,000 jobs while producing up to 90 GWh of battery cells per year.
To put this into perspective, the plant will require approximately 100,000 tonnes LCE. The Volkswagen Group is investing up to $7 billion until 2030, showcasing their ambitious growth strategy in the North American region. While the initial production capacity has not been specified, production is set to begin in 2027 and reach nameplate capacity by 2030. According to Volkswagen, the 90 GWh produced by the factory should be enough for approximately one million electric vehicles, with an average of 90 kWh per vehicle.
This news is especially exciting for Frontier, as the demand for lithium-ion batteries is expected to surge in the coming years. Keep an eye on this developing story and the opportunities it presents for the industry. - Office of the Premier | April 21, 2023 READ MORE | | | Major drop in lithium prices could mean cheaper electric vehicles The recent drop in lithium prices due to increased production may benefit electric vehicle manufacturers who rely on lithium-ion batteries to power their vehicles. The mining sector is used to the ups and downs in mineral prices; and the battery-grade mineral prices remain high enough to motivate industry players to move forward with new projects. Frontier Lithium's Trevor Walker believes as Ontario's auto sector continues to grow in the upcoming years, the demand for lithium salts will as well. - CBC | April 17, 2023 READ MORE | | | The New FAANGs: The Investment Theme For The Next Decade (And Beyond?) The detailed profile of Frontier Lithium written by Chris Temple discusses the company's story throughout the years. The PAK Lithium Project is highlighted as one of the largest undeveloped lithium deposits in North America which the company has been conducting exploration and drilling to better understand the geology of the deposit. Frontier Lithium's management team, partnerships, and other lithium projects are also highlighted in the profile. - The National Investor | Spring, 2023 Special Issue READ MORE | | | FRONTIER LITHIUM TO DRILL UNTESTED BOLT PEGMATITE - March 15, 2023 READ MORE | | | FRONTIER LITHIUM ANNOUNCES EXPANSION OF SPARK DEPOSIT - 18.8 Mt IN INDICATED AND 29.7 Mt IN INFERRED CATEGORIES - February 28, 2023 READ MORE | | | FRONTIER LITHIUM ATTRACTS ACCOMPLISHED METALLURGICAL EXPERT AS VP OF OPERATIONS - February 15, 2023 READ MORE | | | Company Contact Information
Bora Ugurgel Manager, Investor Relations
2736 Belisle Drive, Val Caron, ON. P3N 1B3 CANADA | T. +001 705.897.7622 F. +001 705.897.7618 | | | | | |