RE:FL article by Epstein Research -At $0.425/shr. (YahooFinance 2/23 close), Frontier Lithium (TSX-v: FL) / (OTCQX: LITOF) is down 89% from an all-time high of $3.89/shr. in May, 2022. Admittedly, this is an inauspicious way to start the bullish commentary that follows, but please continue reading. {see new corp. presentation} With a strong Pre-Feasibility Study (“PFS“) backing its 100%-owned PAK project, and a Bank Feasibility Study (“BFS“) in 2H 2024, Frontier remains one of the best positioned Li juniors in N. America. The stock would be a 5-bagger if it were to retrace half of what it lost — a return to $2.16/shr. At $2.16/shr., Frontier would be valued the same as Patriot Battery Metals on an EV/tonne of Li Carbonate Equiv. (“LCE“) basis. Patriot’s shares have sold off — down 63% — so, I’m not just cherry-picking a highly-valued comp. While much larger in resource tonnage, pre-PEA Patriot is years behind Frontier’s development stage.
How likely is a return to $25,000/t? It’s hardly a stretch as the price soared past $80,000/t in 4th qtr. 2022. To be clear, Frontier does not need $25,000/t — $16,000-$20,000/t would be fine — given that all-in op-ex is $7,333/t. Frontier’s enterprise value {market cap + debt – cash} of ~$82M is just 3.4% of the $2.4B after-tax NPV(8%).
Trading below 10% of NPV is absurd for a low technical risk project in Canada nearing a BFS. Frontier is valued like an earlier-stage, higher risk, low-grade brine/DLE company.