Frontier Lithium Inc V.FL

Cyclical moves

[Allthewaydown]

The volume associated with the price decline over the past months is very low and reflects the fact that the downward drift is caused by a general lack of buyers more than a high volume of sellers. As time goes on fatigue and discouragement are resulting in shareholders quitting and there is nobody lining up to replace them. There has been no decline associated with bad news or bad results - just general disinterest resulting in people drifting away. Anything that the market deemed to be significant would spike the price enormously since there are almost as few potential sellers as there are current buyers. The vast majority of potential sellers have already sold.

The market has completely ignored a lot of news. The deposit continues to grow, the PFS has been issued, and the awaited road has been fully planned and permitted for two months now. None of these things have moved the needle even slightly. That begs the question of exactly what the market is waiting for. With other companies the market has responded strongly to infrastructure commitments and offtake agreements or partnerships. In other words, the Berens River bridge funding, some substantive support or commitment from the provincial government and any hint of a commercial partnership would all start the ball rolling. The most important of these at the moment is the bridge project, since the company will have much better leverage for a partnership the moment that the infrastructure commitment is in place.  There are multiple indigenous communities waiting for the bridge, not just Frontier. It has been in the works for about a decade now but just this year has reached the status of a completed and permitted proposal. the province has already extended a major power line up there so the infrastructure commitment is real. It's just slow and bureaucratic. It does appear that the approval is imminent since Ontario and Quebec are in competition and Ontario is at risk of missing the boat with Trudeau's partisan commitment to Quebec projects such as Nemaska (Becancour). There is huge motivation for the Ontario government to support Ontario based projects such as Frontier or Avalon, and the size of the commitment for Berens River is modest and potentially reimbursable at least in part from the Federal government due to the importance to indigenous development. 

We have no guarantees what is going to happen and when but it is a patience game. There is no reason for the current decline other than investor fatigue. When it does explode it will explode quickly, and everyone who has given up in the interim will be trying to get back in at the same time. Personally I have been waiting for a basement to form. It looked like there was one at $2, and I increased my holdings at that price. I was wrong. Now it looks like there is some stability at $1.25 and I have increased again, this time pretty substantially. I would be buying more at $1, if that were to happen. It's not just "averaging down". I expect all of my tranches to be in the green when the move does in fact occur. A market cap of $280 million at this stage of the game is almost shockingly low and there is no fatal flaw in the project to justify it.

My one caution is in regard to company time lines. It is not at all uncommon for juniors to be overly optimistic with regard to development time lines but Frontier has dragged it out somewhat. With the exponential growth in personnel there needs to be an exponential growth in the rate of progress. In other words the DFS needs to stay on track. If it does and we see the bridge, the DFS and a substantive parnership emerge then the stock will easily multiply in value in the range of 5x or more relative to the current price. A simple balance between potential downside versus potential upside says that there is good reason to maintain this stock as an attractive speculative buy for those who are not in a hurry.  The flippers and day traders are much better sticking with meme stocks than getting into this waiting game.

[LerMer9]

Very well said! I agree with all of your points