Frontier Lithium Inc. Announces Positive Preliminary Feasibility Study for the PAK Lithium Project, Northwestern Ontario
Sudbury, Ontario (FSCwire) - Frontier Lithium Inc. (TSXV: FL) (“Frontier” or
“the Company”) is pleased to release the results of a Preliminary Feasibility Study (“PFS”) for the PAK Lithium Project located
approximately 175 kilometers north of Red Lake, Ontario. Included with this PFS is the announcement on the updated Mineral
Resource Estimate for the PAK Lithium Project.
The results of the PFS (see tables 1-5 below) include a pre-tax net present value at a 8 percent discount rate of
$448 million with a pre-tax internal rate of return of 46.5 percent and a post-tax NPV at a 8 percent discount rate of $301
million with a post-tax IRR of 38.3 percent.
The PFS is based on an updated mineral resource estimate completed by Todd McCracken, P.Geo, outlined in the
National Instrument 43-101 technical report update as reported in Table 6.
Highlights from the PFS, with the base-case premium technical grade lithium concentrate of 7.2% Li2O
(TG_SC7.2) price of $1,250 (U.S.) per tonne, chemical grade lithium concentrate of 6.6% Li2O (CG_SC6.6) price of
$750 (U.S.) per tonne and an exchange rate of $1.25 USD/CAD, are as follows (all figures in Canadian dollars unless otherwise
stated):
- Life of Mine Revenue is 1,859 million
- Pre-production Capital is $147 million with a contingency of 10% included within the initial capital.
Pre-production is for a 2 year period.
- Sustaining Capital $37 million for the Life of Mine (“LOM”).
- Pre-tax NPV (8% discount rate) of $448 million and internal rate of return of 46.5%.
- Post-tax NPV (8% discount rate) of $301 million and internal rate of return of 38.3%.
- Pre-tax Cash Flow of $1,013 million over 16 year LOM.
- Post-tax Cash Flow of $700 million over 16 year LOM.
- Positive Cash-flow is realized in year 2 of production.
- 5.8 million tonnes of mill feed averaging a combined 2.00% Li2O.
- 11.5 year open pit operation, 4.5 year underground operation.
- Mill operates at average tonnage of 1,090 tonnes per day.
- Total production of 1.14 million tonnes of technical grade concentrate of 7.2% Li2O
- Total production of 115,500 tonnes of chemical grade concentrate of 6.6% Li2O
“The compelling PFS results display the PAK Lithium Project’s ability to firstly become a high margin, low cost
producer of a unique premium low-iron spodumene concentrate which is in very high demand by the global lithium market. In
addition, an additional by-product output of chemical grade concentrate is produced which could also be further upgraded as
required by the lithium battery market” comments Trevor Walker, President and CEO of Frontier Lithium. “Despite the strong PFS
results, I see room to further optimize the resource and engineering designs and have already transitioned to feasibility level
work. This significant milestone also sets the path forward to strategically expand the resource, support ongoing lithium
compound testwork, progress our discussions with potential offtake, as well as furthering collaboration agreements with our
neighboring First Nation communities."
Table 1
|
Production Profile
|
|
|
Total Tonnes Milled
|
5.8 million
|
|
Diluted Head Grade
|
2.00% Li2O
|
|
Mine Life
|
16 years
|
|
Daily mill commercial throughput
|
1,090 tpd
|
|
Lithium Recovery
|
78.5%
|
|
Total TG Production (7.2% Li2O)
|
1.14 MT
|
|
Total CG Production (6.6% Li2O)
|
115,500 tonnes
|
Table 2
|
Economic Assumptions and Parameters
|
|
|
Exchange Rate (USD/CAD)
|
$1.25
|
|
Discount Rate
|
8%
|
|
TG_SC7.2 Price (USD)
|
$1,250/tonne
|
|
CG_SC6.6 Price (USD)
|
$750/tonne
|
Table 3
|
Project Economics
|
|
|
Pre-Tax
|
|
|
NPV (8% Discount Rate)
|
$448 M
|
|
Internal Rate of Return
|
46.5%
|
|
Cumulative Cash Flow
|
$1,013 M
|
|
Post-Tax
|
|
|
NPV (8% Discount Rate)
|
$301 M
|
|
Internal Rate of Return
|
38.3%
|
|
Cumulative Cash Flow
|
$700 M
|
Table 4
|
Capital Requirements
|
$ Million
|
|
Site Prep/ Infrastructure
|
45.6
|
|
Mill Processing
|
59.3
|
|
Power Distribution
|
6.4
|
|
Open Pit Equipment
|
12.9
|
|
Water treatment and waste management
|
9.5
|
|
Contingency
|
13.5
|
|
Total Pre-production Capital Cost
|
147.3
|
|
Total Sustaining Capital Cost
|
36.6
|
Table 5
|
Operating Costs
|
$/tonne processed
|
|
Direct Open Pit Mining Cost
|
4.06
|
|
Direct Underground Mining Cost
|
84.07
|
|
Direct Processing Cost
|
18.01
|
Table 6 Updated 2018 Mineral Resource Calculation
|
Cut- off
|
Resource Category
|
Commodity
|
Geologic Zone
|
Tonnes (t)
|
Li2O (%)
|
Ta2O5 (ppm)
|
Cs2O (%)
|
Rb2O (%)
|
Contained Li2O (t)
|
|
0.4% Li2Oeq
|
Measured
|
Lithium
|
Upper Intermediate Zone (UIZ)
|
324,720
|
3.95
|
60
|
0.03
|
0.12
|
12,830
|
|
Lithium
|
Lower Intermediate Zone (LIZ)
|
920,330
|
1.72
|
104
|
0.03
|
0.29
|
15,848
|
|
Lithium
|
Total Lithium Zone
|
1,245,050
|
2.30
|
93
|
0.03
|
0.24
|
28,678
|
|
Lithium / Tantalum / Rubidium
|
Bulk Pegmatite
|
1,245,050
|
2.30
|
93
|
0.03
|
0.24
|
28,678
|
|
0.4% Li2Oeq
|
Indicated
|
Lithium
|
Upper Intermediate Zone (UIZ)
|
333,200
|
3.23
|
70
|
0.04
|
0.20
|
10,776
|
|
Lithium
|
Lower Intermediate Zone (LIZ)
|
5,909,500
|
1.89
|
102
|
0.04
|
0.31
|
111,690
|
|
Lithium
|
Total Lithium Zone
|
6,242,700
|
1.96
|
100
|
0.04
|
0.30
|
122,465
|
|
Tantalum / Rubidium
|
Central Intermediate Zone (CIZ)
|
1,011,300
|
0.80
|
117
|
0.08
|
0.58
|
n/a
|
|
Lithium / Tantalum / Rubidium
|
Bulk Pegmatite
|
7,254,000
|
1.69
|
102
|
0.04
|
0.34
|
122,465
|
|
0.4% Li2Oew
|
Measured + Indicated
|
Lithium
|
Upper Intermediate Zone (UIZ)
|
657,920
|
3.59
|
65
|
0.03
|
0.16
|
23,605
|
|
Lithium
|
Lower Intermediate Zone (LIZ)
|
6,829,830
|
1.87
|
102
|
0.04
|
0.30
|
127,538
|
|
Lithium
|
Total Lithium Zone
|
7,487,750
|
2.02
|
99
|
0.04
|
0.29
|
151,143
|
|
Tantalum / Rubidium
|
Central Intermediate Zone (CIZ)
|
1,011,300
|
0.80
|
117
|
0.08
|
0.58
|
n/a
|
|
Lithium / Tantalum / Rubidium
|
Bulk Pegmatite
|
8,499,050
|
1.78
|
101
|
0.04
|
0.33
|
151,143
|
|
0.4% Li2Oeq
|
Inferred
|
Lithium
|
Upper Intermediate Zone (UIZ)
|
13,000
|
3.56
|
44
|
0.03
|
0.12
|
463
|
|
Lithium
|
Lower Intermediate Zone (LIZ)
|
1,819,000
|
2.09
|
95
|
0.02
|
0.29
|
37,982
|
|
Lithium
|
Total Lithium Zone
|
1,832,000
|
2.10
|
95
|
0.02
|
0.28
|
38,439
|
|
Tantalum /Rubidium
|
Central Intermediate Zone (CIZ)
|
85,000
|
1.16
|
151
|
0.08
|
0.49
|
n/a
|
|
Lithium / Tantalum / Rubidium
|
Bulk Pegmatite
|
1,917,000
|
2.01
|
97
|
0.02
|
0.29
|
38,439
|
|
Grand Total
|
Bulk Pegmatite
|
10,416,050
|
1.82
|
100
|
0.04
|
0.32
|
189,582
|
1) For the sole purpose of this resource estimation, Li2O equivalent was determined based on lithium and
tantalum grades, prices ($400 per tonne of 6% spodumene concentrate and $150 per kg of 30% tantalite concentrate) and their
respective recovery ratio (78.5% recovery for lithium and a 50% recovery for tantalum from bulk pegmatite). No credit was
included for rubidium, cesium or any of the other elements contained for the purpose of this estimate
2) Li2O content in the CIZ is predominantly associated with lithian micas and without
metallurgical testing not deemed recoverable, therefore, not included in the Li2O contained and subsequently the Li2O
equivalent calculation for the purpose of this report.
3) The UIZ and LIZ are technical/ceramic-grade lithium zones (high-grade lithium with low inherent iron
(0.1% Fe2O3 from whole rock analysis). The iron content of spodumene contained within the LIZ increases as
the contact with iron-rich metasedimentary country rocks are approached, but it has been noted that a concentration below 0.1%
wt.% Fe2O3 is maintained to within about 1 meter of the pegmatite-metasediment contact.
4) Calculation is based on 6,307m of drilling in 32 holes with an average depth of 160m to a maximum depth
of 360m vertical in the deposit, 294m of production drilling for 68 blast holes for the 300 tonne UIZ bulk sample in 2015, and 32
channels covering 216m at surface.
5) Mineral Resources are not Mineral Reserves having no demonstrated economic viability. Results are
presented undiluted and in situ.
6) Measured, Indicated and Inferred Resources were evaluated from drill hole and channel sample results
using a block model approach (krig interpolation) with Surpac software.
7) (Calculations used metric units (meters, tonnes and ppm). Results were rounded to reflect their estimated
nature. Tonnes are rounded to reflect the accuracy of the estimation. Grades reported in percent were rounded to two decimals
while grades reported in part per million (ppm) were rounded to the closest integer.
Table 7 Reserve Table
|
Reserve Category
|
Million Tonnes
|
Li2O%
|
|
Open Pit
|
|
|
|
Proven
|
1.19
|
2.39
|
|
Probable
|
2.93
|
1.93
|
|
Sub total
|
4.12
|
2.06
|
|
Underground
|
|
|
|
Probable
|
1.65
|
1.84
|
|
Total (OP+UG)
|
5.77
|
2.00
|
Due Diligence
The Mineral Resources for PAK Lithium Project disclosed in this news release have been estimated by Mr. Todd
McCracken, P.Geo., an employee of WSP Canada Inc and independent of Frontier. By virtue of his education and relevant experience,
Mr. McCracken is "Qualified Person" for the purpose of National Instrument 43-101. The Mineral Resource has been classified in
accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves, (November 2014). Mr. McCracken, P.Geo., has
read and approved the contents of this press release as it pertains to the disclosed Mineral Resource estimate.
Qualified Persons and 43-101 Disclosure
Garth Drever, P.Geo, Vice President Exploration for Frontier Lithium Inc. is a Qualified Person as defined by NI
43-101 and has reviewed and approved the contents of this news release. Mr. Drever has been involved with all aspects of
the PAK Lithium project since 2013.
Todd McCracken, P.Geo, Principal, Manager – Mining , at WSP Canada is an independent Qualified Person as per
National Instrument 43-101, and is responsible for the estimation of the PAK Lithium Project mineral resource. Mr. McCracken has
reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of
same.
Johnny Canosa P.Eng., Sr. Mining Engineer for Nordmin Engineering Ltd., is an independent Qualified Person as
defined by NI 43-101 and has reviewed and approved the contents of this news release. Mr. Canosa is responsible for Financial
Analysis, Open Pit Mine Planning, Operating and Capital Costs.
Roy Levesque P.Eng., Sr. Mining Engineer for Nordmin Engineering Ltd., is an independent Qualified Person as
defined by NI 43-101 and has reviewed and approved the contents of this news release. Mr. Levesque is responsible for Underground
Mine Design, Mine Planning and Scheduling.
Kurt Boyko, P.Eng., Consulting Specialist - Mechanical for Nordmin Engineering Ltd., is an independent Qualified
Person as defined by NI 43-101 and has reviewed and approved the contents of this news release. Mr. Boyko is responsible for
process plan design.
About Frontier Lithium Inc.
Frontier’s goal is to become a low-cost, fully integrated lithium and tantalum producer through development of the
PAK lithium deposit in Ontario, Canada. Frontier maintains a tight share structure with management ownership exceeding 30% of the
Company. The initial target market is the glass-ceramic industry which consumes roughly one-third of global lithium supply and is
currently faced with monopolistic conditions, coupled with major lithium producers increasingly directing output toward
supporting battery manufacture.
Ceramic/glass customers prefer to source technical-grade (low-iron) spodumene concentrate in excess of 7% lithium
oxide (Li2O), if available, to avoid lower grade petalite concentrates, or paying much higher prices for battery grade
lithium compounds.
The PAK lithium deposit remains open in all directions and Company Management is working towards developing a
viable operation. The Company is currently completing a pre-feasibility study to assess the economic viability and technical
feasibility of producing lithium concentrates. Frontier’s goal is to first establish a viable technical grade spodumene
concentrate operation. A possible second stage of investment and longer term prospect is to further process a combination of some
of PAK’s output to produce the higher purity lithium compounds required for lithium battery technologies used in the
electrification of transportation and electric grid storage applications.
About the PAK Lithium Project
The PAK Lithium Project lies close to the boundary between two geological sub-provinces of the western Superior geologic province
in northwestern Ontario and hosts a rare metals pegmatite deposit. The deposit is an LCT (lithium- cesium- tantalum) type
pegmatite. These types of pegmatites have been the principal source of hard rock lithium, tantalum, rubidium and cesium ores
mined in the world but there are comparatively few commercially-viable deposits.
Frontier is actively exploring its 100% owned project which contains the Pakeagama Lake pegmatite. The PAK deposit
has a current Measured and Indicated Resource of 8.5 million tonnes of 1.78% Li2O and an Inferred Lithium Resource of
1.9 million tonnes of 2.01% Li2O which has a technical/ceramic grade spodumene with low inherent iron (below 0.1%
Fe2O3).
The deposit now has a known 500m strike length with an estimated true width varying from 10m to 125m with a
sub-vertical orientation. The resource remains open to depth and along strike to the northwest and southeast.
Company Contact Information
Trevor R. Walker
President & CEO
2736 Belisle Drive Val Caron, ON. P3N 1B3 CANADA
T. +001 705.897.7622
F. +001 705.897.7618
Media Requests
Joseph Mansourian
Manager, Investor Relations
2736 Belisle Drive Val Caron, ON. P3N 1B3 CANADA
T. +001 705.618.0070
F. +001 705.897.7618
Additional information regarding Frontier Lithium is available on SEDAR at www.sedar.com under the Company's profile and on its website at www.frontierlithium.com, including various pictures of ongoing work at the
project.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking Statements
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This release includes certain
statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical
facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or
developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in
such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause
actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration
successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are
cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ
materially from those projected in the forward-looking statements. For more information on the Company, Investors should review
the Company’s registered filings what are available at https://www.sedar.com
To view the associated document to this release, please click on the following link:
public://news_release_pdf/FrontierLith03022018_1.pdf
To view the original release, please click here
Source: Frontier Lithium Inc. (TSX Venture:FL, OTC Bulletin Board:HLKMF, FWB:HL2)
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