Welcome to Virtual Investor Conferences. On behalf of OTC Markets, we're very pleased you joined us for the third day of our Precious Metals and Critical Minerals Conference. The first presentation today is from Frontier Lithium. Please note, you may submit questions for the presenter in the box to the left of the slides, and you can view a company's availability for one-on-one meetings by clicking Book a Meeting. At this point, I'm very pleased to welcome Bora Ugurgel. He's the Manager of Investor Relations for Frontier Lithium, which trades on the OTCQB Venture Market under the symbol LITOF, and on the TSX-V under the symbol FL. Welcome, Bora.
Hi, John. Thank you for having us. Good morning, everyone. Today, I would like to share our story, Frontier Lithium, how we are planning to build Canada's integrated lithium future. Please be aware that I will have some forward-looking statements as a part of our training presentation. And as John mentioned it, we are listed on TSX Venture and trading on OTCQB. I would like to first start with our vision. Our vision is to drive a priority Canadian project that advances our economic defense goals, and it's very important for us to start on the right foot on this one.
We have three driving motives behind us, is the global energy transition that has been taking place over the last decade. Strategic and provincial and national alignment vis-à-vis use of critical minerals in advancing economic ventures and GDPs. And economic and community growth, specifically where these resources exist in northern Ontario and remote areas. It is very important for us to be able to put all those three driver visions into the project. Without further ado, let me get in specifically the project. Now, the PAK Lithium Project is Ontario-based, fully integrated critical minerals project designed to anchor North America's clean energy transition. Our strategy begins with a world-class resource, which is a 30 million ton reserves of 1.5% grade. These reserves are one of the highest grades in North America. Low impurity is another highlight of this resource.
As we advanced our feasibility study, we have seen through the value creation. The project is built for efficiency. With a low strip ratio of 3.7:1, we are positioned to be a low-cost producer of spodumene concentrate and ultimately direct that to enter a downstream lithium conversion facility in Thunder Bay. The integration ensures a secure domestic supply of lithium, for the North American battery EV supply chains, and the story is still growing. Along the same trend, we have identified other, resources that we have defined. Together, the strength of integrated strategy from the backbone of our project, Frontier holds 92.5 interest in the project, alongside with Mitsubishi Corporation, who signed up at 7.5%, with the option to increase that to 25%. We announced that in March 2024.
The project is, as can be seen, the PAK is the PAK deposit, and the Spark deposit at the forefront was discovered in 2018. These two deposits are only 2 km, about 1 mi apart, and the definitive feasibility study that I'll share in a minute, has only included the two deposits, PAK and the Spark deposit. The Bolt pegmatite has been recently discovered, and we recently put with the DFS an initial resource estimate on it. So as you can see, along the trend of 65 km claims we have, we already have three discoveries within the 2 km, and there's still upside. Our geology team has been growing the targets, and we have identified another, discovery about 1.2 km north of Spark called Amber pegmatite, and we drill tested it to find out to be over 1% spodumene-bearing.
With regards to the mine and mill feasibility study, we published that in May 2025, which provided a net present value of $932 million, which equates to about $285 million of annual earnings, which gives you an IRR of almost 18% over 31 mine year of mine life. The project will produce about 200,000 tons of SC6, spodumene concentrate 6%, at the cost of CAD 624 per ton. That puts the project in the first quartile versus our peers in our jurisdictions. The mine and mill site layout can be seen as such. There are two open pits at the PAK deposit and the Spark deposit. There will be a centralized mill that will have a flotation and a primary and secondary grinding.
This allows us to be able to take feed from both deposits and centrally produce them into concentrate. One of the most exciting things that happened in our project in the last four months or so is we got designated by the Ontario government as a One Project, One Process candidate. This designation allows us to work with the government, First Nations, to advance the project towards Final Investment Decision. The key highlight is to be able to advance permitting, which one of the most important de-risking events for a junior project that is advancing the development stage. This de-risking event, along with the First Nations, advancing that forward, is something that Ontario government seen as a valuable and has designated Frontier as the first project in the lithium space.
Another important infrastructure update that has happened in the project is that the energy power line that has been in construction for the last five years or so is now completed. Now, the communities in and around the project have access to clean hydropower, and Frontier's advancing ability to put substation to be able to connect to that power line as we advance the project towards the development stage. Another announcement that came up during the One Project, One Process announcement is increasing of the power lines coming into our jurisdiction, where our future mine and mill is going to be. We are seeing strong support from our provincial government to advance this project with the power that it needs. Another aspect of the project is the road infrastructure. Government of Ontario is advancing a public all-season road in partnership with Canadian government and the First Nations.
The key highlights of the project consists of three parts: The Berens Bridge on the most southern part of it, about 135 km north of Red Lake, Northern Ontario. Berens Bridge has been announced to be in construction and expected to be completed in 2028. That gives us a good timeline to be able to then we can put our project into the Final Investment Decision. In tandem, second part of that is the Branchwood Road, which has been fully permitted, require funding to be able to connect Berens Bridge to the Junction Road. Junction Road is the last 55 km that connects our project to the rest of the roads. Junction Road has been supported through the Critical Minerals Infrastructure Fund that was supported from federal government.
We have been under grant funding to be able to advance this project, and we have been doing so with regards to advancing the consultation and permitting and engineering to finalize the Berens Bridge for the Junction Road project into the construction decision. Now, this project is designated as a project of national significance by Ontario to the federal government. We are seeing more and more interest in critical minerals and Canadian government taking steps in ensuring that there is a clear signal of support, and there's an enhanced collaboration between the province and the federal government. What we would like to build on existing provincial support by seeing further support from federal government.
In line with that, last year at PDAC in March 2025, we have announced our letters of intent to sign agreements with both federal government and the Ontario government, with their financial support, with the ability to produce a lithium chemical facility in Thunder Bay. It's very important to be able to North America to establish its supply chains. There are quite a few policy considerations for Canada and Ontario at this time. We have seen similar deals happening out of United States and other allied countries that are seeing importance of critical minerals, securing the future production of it, and mining. We would like to advance the project within the same line as the other projects in our jurisdictions, and we are working with those institutes at this time. The lithium conversion facility is located in Thunder Bay.
We have acquired Mission Island, a portion, to be able to build this facility eventually. It will become an anchor for to be able to bring the mine-to-battery supply chain within 1,200-km radius, as well as ability to attract investments towards electric vehicle production and battery production, to be able to produce 20,000 tons of lithium chemical equivalent. 20,000 tons will be about 500,000 EVs per year. The site is located on 183 acres of brownfield land and has access to all the facilities for us to be able to advance that. In order to advance that, we also awarded the engineering to Fluor Canada to be able to do the initial feasibility study of the refinery this time.
If you look at quickly at the project timeline, you would have seen on the top side, the mine and mill and conversion facility split it in half as we are advancing those projects in tandem. We are currently in permitting and Impact Benefit Agreement process with the communities under One Project, One Process. We are expected to receive the permits in 24 months. We have started that process and advancing that forward, which also coincides quite well with the bridge and road constructions that are taking place between now and until 2028. Detailed engineering is taking place right now, and we are seeing if we can reduce some of the CapEx associated with the with the CapEx of the mine and mill. We would like to, at this time, to make the Final Investment Decision in 2028.
We aim to do the construction two years after that. With regards to the conversion facility, as I mentioned, we have acquired the site, and we are advancing the feasibility study with Fluor. We will immediately follow up with permitting and the funding required to be able to do that, to potentially do the FID investment decision at the same time as mine and mill. I wanted to share a bit of a background onto the Frontier and vis-à-vis the share price and lithium carbonate price that we can look at. You will see from the chart on the left that there's a strong correlation in our share price to lithium carbonate prices and lithium prices at large. We have seen this trend since 2018, and it continues to do so.
Having lithium prices appreciated since September gives us a good leg up, similar to run-up that could have happened in 2022. We are sitting about CAD 40 million dollar cash as our last quarter reporting, and we have a strong insider ownership to close to 15%. We have research coverage from following institutions.... We can't achieve this without the proper support of the board of directors, the executive team, and advisors. Our board of directors are seasoned individuals that are from the north, are in the region, and have been there, and specifically know large conglomerates have merged with other mining companies, and specifically in our project.
We are lucky to have been led with Trevor Walker, who has been at the helm of the company since 2010, supported with Erick Underwood as our CFO, Naizhen Cao on our VP Technology, Garth Drever on our exploration team, Graeme Goodall on operations and engineering, and Greg Da Re on corporate development. Those are a couple of the deliverables in 2026 and 2027 that I would like to share immediately that will get us to the FID on the project. That will be the important point for us. In 2026, we already seen the commencement of the Berens Bridge project and road construction. We'll hope to update the investors as this advances forward. We also plan to finalize conversion facility related to government, funding letters of intent this year.
We also would like to announce senior debt letters of intent to be able to how we can put the project financing together, to be able to make the decision on the mine and mill. We also would like to announce our first offtake of letter of intent in the current 2026, and advance mine and mill permitting with community Process Agreements. In fact, last month, we already have announced two communities that signed up for the Process Agreement vis-à-vis our mine and mill permitting. We are eager to get back other communities onto the same step. Some of our deliverables for 2027 will be advancing the Process Agreements into Impact Benefit Agreements.
We would like to deliver the conversion facility feasibility study that is under study right now with Fluor, and we want to be able to use the advanced permitting and advancing feasibility study to the ability to unlock conditions for Mitsubishi's Tranche 2. In closing, I would like to highlight some of the Frontier's highlights. Ontario-based, fully integrated critical mineral project, anchored by a high-grade hard rock resource with a low-cost concentrate production potential, designated to be Ontario's first One Project, One Process, and recommended for downstream conversion, and supported with the federal government and Ontario government support. We would like to supply North America's transition towards clean energy and battery transition. At this time, I will take some questions that I have here. Some of the questions that came in: Can you provide some color around Mitsubishi joint venture? Absolutely.
Mitsubishi joint venture was signed in March 2024, and it was initial interest of 7.5% interest for C$25 million. Their intent to be able to move that up to 25% after permits, and that is why we are advancing the project towards permitting. Make sure I didn't miss anything. Second question: What is your competitive edge on other hard rock lithium developers? We have been advancing this project over 10 years and have seen the rally in lithium prices. Our competitive edge will be the high grade and good widths on the project that gives us ability to produce low-cost spodumene concentrate. Low-cost spodumene concentrate that we can actually compete with the current producers in Australia, that can actually be taken downstream to be able to produce chemicals.
Another question is: Are you afraid of the shift of sodium-based batteries? We always have seen that a new and newer technologies always tends to come up when the lithium prices go up, and other technologies does come in. We believe there's an application for every mineral to be able to for the right application, but the fact that lithium still has the highest energy density compared to sodium ion batteries, that makes it more feasible to move forward. Let's see. It's quite a few questions. Thank you, everyone. I'm just trying to pick the ones that actually, that I can read faster. Do you believe that we may have soon too much lithium? The lithium demand is continuous, is growing.
The fact the cost of the lithium ion batteries have been coming down makes it more and more appealing for the supply to come online. So there will be. There's always adequate amount of lithium for, to satisfy the demand. The challenge would be when there's oversupply, and then becomes the cost becomes the most driving point vis-a-vis if that project should move forward. So if you can produce a low-cost spodumene concentrate production, the other producer is likely to be the higher cost because either their resource grades are lower. So their strip ratio are higher, and they handle more waste rock that brings their OpEx higher. And that really differentiates a good project versus other projects. With many lithium conversion facilities proposed in Thunder Bay, why build your own?
Just like everybody else, ours has been proposed as well, but so far we are the one that received support from both Ontario and federal government. And the fact that we can self-supply our own refinery one day with our own resource, which can't be said for the other resources, which they can't have enough resource to be able to supply on their own. They have to rely third party to supply them. In our case, we are self-sustained, that we have enough resource to be able to produce this with our, on our refinery. For investors to reach us, you can visit us at frontierlithium.com or reach us out at info@frontierlithium.com, which I'll be able to take on any of your questions that I couldn't address at this time. And, we are also on social media, on Twitter and LinkedIn, that we post updates on an ongoing basis.
You can sign up for our newsletters as well. What are the lessons learned from lithium cycle volatility applied to your development strategy? It's more and more engagement of First Nations early on in advancing the importance of this project, and getting both levels of government to the table to be able to advance this project. For us to be able to build the supply chains in North America, we really have to work in tandem with the communities and the government to be able to get these resources off the ground and into production. Will the processing plant only serve FL production, or is there intention to use this facility for other processing applications? It can be. It is most important for us to be able to be self-sustaining. However, the refinery can take other inputs of spodumene concentrate.
It's not only limited to produce Frontier spodumene to be able to run. So it can definitely take more if there were concentrate available at a good price. Any valuable byproducts of your basic rock material, like rare earths? Another, Lithium is usually hosted in LCT pegmatites, lithium, cesium, tantalum. We do have higher values of cesium and tantalum within all of our discoveries, both PAK and Spark. There are more and more opportunities to be able to define that, if there's adequate amount for us to be able to accrue any value from that. However, it is suffice to say that LCT pegmatites are formed together, and we have very high-grade lithium, so it's very likely for us to be able to identify other cesium and tantalum within the deposit itself.
And we are continuing the exploration, on other pegmatites at surface as we do surface work. In a downside price scenario, what is the minimum lithium price keeps correct cash flow and IRR at acceptable levels? Tough question because it depends who's financing it. As I mentioned, today's spodumene price is sitting at $2,000 . Our cost of produce is around $500 , so it can still make money. But to be able to, produce that, you have to at least at around $1,000 or $1,200. And for the purposes of a feasibility study, we carried $1,475 for our long-term study, which we think that's a good break even for us to be able to advance the project, achieve good IRR, and it's still lower than current spot market. There's one...
One other question that came out saying that North Spirit Lake First Nation did not sign the agreement. Could you talk about that? I certainly can. There was no agreement for them to sign, so every community will choose their path, how they want to engage the company vis-à-vis advancing the project forward. While some communities find the Process Agreement is the right path forward, for the case of North Spirit Lake, that may not be the case, and we are obviously in consultation for them to what's the right path for them that they want to see, and how we can actually get the government in helping them to get to what they wanted to be able to achieve from this project as well. So it is not the process that needs to be done per se for North Spirit Lake.
That's how they will choose to be able to advance their collaboration with us. Does your CAD 14 million cash cover your initiatives for 2026 and 2027? Our current cash flow allows us to deliver for 2026. We are looking into, again, mention the MOUs and bringing other, grant funding to the project to be able to advance towards our projects, achievables in 2027. Any questions that I haven't answered here? Thank you for all the questions. It's a little bit overwhelming, but. Could you please talk where the over CAD 1 billion needed for the project will come from? I believe that's the question trying to be asked here. The project financing is done in two ways. It's first the senior debt, essentially, that comes in. Our, we split senior debt 60%, representative of the CapEx, that is associated.
The remaining 40% can be in portion taken by our JV partner, who is obviously will pay their pro rata of 25% of the CapEx. The balance can be done with equity, with other financing or offtakes that we still have not talked much about how we're gonna allocate the balance of 75% of the offtake that we have. Any plans to drill in 2026? Any drilling that will be happening in 2026 will be on advancing the DFS and advancing the consultation. It will not be for the exploration purposes. We will hold on to that probably, like, until 2027. So most of the drilling programs we have or any of the permits we have will be about supporting DFS and supporting the consultation. I believe I addressed all the questions.
I'm not seeing any new one coming in. Saying that there are mentions of discussing with other partners coming into project, when will the news be out? Obviously, when it's advanced enough for us to be able to disclose that. Obviously, at this time, we are advancing, trying to find the right project partners to advance it, but our priority is very clear on what we need to do in 2026 to deliver value to our shareholders by advancing and de-risking the project. That is something that we have taken a keen look at. But as I mentioned, it's the 75% offtake is still not spoken for, so I wouldn't be surprised other partners coming and emerging as a result of us advancing those discussions vis-à-vis offtakes and partnerships. I believe that's it.
Well, thank you very much for everyone, for your time and your attention, and to attention to the presentation today. Again, you can reach me at info@frontierlithium.com, and, and, follow up to our, our newsletters and that we share, updates, and, hope to see you, again. Thank you.