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 [Music] [Music] I'm Charlotte McLoud with investing news.com and here today with me is tror bucker president and CEO of Frontier lithium thank you so much for being here now thanks for for having the Charlotte really uh really excited to uh this morning for uh for the company and shareholders and stakeholders uh around our company so thanks yes we're we're at pdac the second day you've got some exciting news and we're going to go into that so this morning Frontier announced a joint venture partnership with

Mitsubishi it's a 90 billion Japanese trading house so I wonder if you can just start by giving me a quick quick overview of this deal yeah so uh on the on the deal or transaction it's uh it's really about partnership and uh laying a pathway to bring the pack lithium project to production so uh that partnership really is formed first and foremost around trench one which is an injection of $25 million into uh newco uh whereby they'll they have received 7.5% uh uh ownership and so that money really

uh allows for expenditures around uh delivering definitive feasibility for the project both on phase one m and Mill phase two Downstream Refinery uh to produce uh lithium chemicals for the burgeoning uh battery supply chain North America so uh a lot of excitement a lot of Al uh alignments uh they're great people at MIT Bishi core uh we've known for uh some time yeah really excited to form that partnership around uh being leaders in helping to develop the supply chain in North America right and so I believe it's

Mitsubishi's first step into Upstream lithium production so maybe you can talk about why they're taking that step now and what it was about the project that brought them to you yeah you know to your earlier points uh they the global conglomerates um they have Investments and parnerships um typically minority Partnerships to uh help co-develop some worldclass projects everything from uh base precious metals to uh in this case now Industrial Minerals so uh uh when you look at some of the uh

projects or um uh Investments That Mitsubishi Corp has made um it's really straight breing is promly world class assets um or tier one assets uh so we're really uh and went through quite an extensive due diligence process uh you know as a part of uh forming this partnership um so it obviously became evident to Mitsubishi core that the quality um great jurisdiction of Ontario it's the opportunities around uh the supply chain for their first uh first investment in on lithium so we're

really um we're uh really excited about that and um we uh it's a huge huge milestone for for for both both companies but uh this is um really about the formation of Canada's lithium champion in um so this develops sat pathway again to uh to bring this into uh prod in the future very good and so you had talked about the structure of this agreement and there's a 25 million initial payment for a 7.5% interest in Frontier so maybe we talk about that and what the funding will go towards yeah so that that

funding will um deliver uh definitive feasibility for both what we call fees one mine and Mill and uh phase two um uh Refinery to produce uh lithium hydroxide which is a key chemical that's I know the battery industry is uh looking for uh to uh to basically build uh High nickel cathode batteries for long range Vehicles so go you know this is uh obviously to your earlier question uh as well to tie that in uh you know the pack liin projects it is uh maintains a 60 million ton resource uh it's still open

uh we see strong potentials for 100 million tons through two uh open pits out cro R of surfice um the grade is 1.5% roughly it's North America's highest grade uh lithium asset and uh the highest quality SP so uh you know these are key this is key anchor resource uh in the Great Lakes region of North America so uh the again this is uh a world class asset to form such a great partnership with such honorable stream uh people at Nishi course just so thrilled very good and what I noticed so you've talked about how it's Mining and

processing and I wondered if you could talk a little bit more about why that's important in terms of building out Canada's battery models supply chain yeah it's a Creed question um you know uh the critical mineral strategy uh in the country first started in Ontario theader um followed up uh with the federal government uh you know this is uh strategy is about uh sustainable development uh in the future it's about realizing the endowment of mineral and resource wealth that we have in

Canada as we go towards uh decarbonization uh it's so important to uh realize the uh the metals and chemicals required for energy storage so Canada has such a golden opportunity to um become a global leader with the uh endowment of of resources with um resource Rich uh country willing able the CATE expertise from an ESG perspective you know some of that top um uh ESG profile in the world uh this is such a huge opportunity and one that uh the government has not taken lightly in Ontario to dat we've seen uh

approximately $30 billion over the past two two and a half years of investment from uh Global uh uh companies uh related to uh battery materials uh cell production hands auto manufacturing at so what's really critical is to um close that Loop and uh one of the remaining steps for governments and government involvement is to realize and uh help shepher the supply of the critical materials for this industry that enters uh Canada's lithium champion in the M by Frontier lithium uh with the projects located in

arthern Ontario so uh it's a huge responsibility uh that we don't take lately uh we know that the project will be absolutely transformational for northern northern indigenous communities so uh it's just um a golden opportunity to provide uh better days ahead for for ontarians for comedians uh and it's really exciting so uh again we're absolutely FS uh that we form the spreaders ship R MIT um B on to world class asset B right here in noran Ontario yes where we are where we are today very good the other

point I wanted to pull out about Theo so Frontier is retaining 75% of the off so I wondered if you could go into that it sounds like you will have more deals to do in the future you know that's a great question and um we're one of a few companies uh at this the stge that have um allocated future off um what's really important is that we continue to execute and hit key Milestones to get to that point one of the last things that we'll do um uh and we expect that you know this will be

worked on over the next uh 12 months um is is is uh consider off te so yes uh uh if and when mitubishi comes through on TR 2 post FID um that would um give them the right to 25% off tap uh you know recent announcements um uh around you know Japanese automakers that are uh some of the largest producers of uh vehicles in in North America it's really really uh critical uh components of uh of of the industry is a fool so uh we've seen recent announcements from Fondo for example looking to invest uh

up to 15 billion dollar in electric vehicle uh investments in North America uh you this joint fenter really Builds on the memorandum of cooperation that the Canan government and Japanese governments have recently signed as well so um you know this is about leveraging Ontario Canadian assets to continue to add value you know beyond the days of Mining and shipping it away to foreign jurisdictions as Canadians a huge responsibility to leverage that opportunity to increase further investment and again become Global

players this partnership really leads that Foundation to continue to support Japanese Investments and others uh that we've seen in particular here in Ontario again through Power coat uh this Volkswagen um cell Manufacturing Company um stantis uh with their joint venture with lgbs uh in Winder um and we believe others to come so um it's uh put strategic resource for Canada now with strategic partnership around that resource for the benefit those all King deers and are you are you happy with the

valuation that the deal gives you in the short term in the long term yeah uh absolutely uh $25 million we're coming through a low uh in uh some volatility that uh lithium Market has experienced over the years um so uh 25 million for 7.5% uh it's an adequate uh valuation that's uh when we consider current uh trading of the company it's f a premium cl to the 100% premium on on stock uh as sits right now but you know it's not about TR one it's really uh it's really about the formation of the

joint venture or a pathway towards TR 2 uh to execute the project um TR 2 is really um based on uh the intrinsic value of the asset and uh some multiple of net asset Val so we totally expect that uh TR 2 um option when exercis by mitubishi core will uh provide all the adequate Capital to builds um at a minimum the uh fees one which is the mining asset uh mining no so that's is really uh was really compelling for um Frontier uh you know we've done this outside of the pubco in newco um so

that's really a non-dilutive form of financing given the fact that uh there's we've experienced lows in the lithium market so um so uh with shareholders and Minds uh is uh and uh minimizing dilution it is uh really a good uh I'm really excited about the structure of the de and uh the value despite uh bad times of the market when we think about drisking we fully expect again to be in line with that asset value or intrinsic value the asset for charge to so it's a strong deal and I think I think we have

to at least touch on what's going on in the lithium market right now so you've alluded to you know last year was a pretty tough year this year we don't know what we're going to see this here so where where do you feel we're at where do you think the market is going I know there's a very positive long-term Outlook but you know this this is a little bit of a tough time yeah you know you took the words out of my mouth uh and uh you know long-term fundamentals are very strong um you know

the you move into internal combustion towards electric vehicles is uh I've always referenced it as an evolution not a revolution and um you know since the GRE recession it's fac it it's been difficult times um when you think about you know the Investments um that have taken place in the Ontario particular we've seen 20 to 30% of uh support through uh grants from both Ontario Provincial and federal government so what the transition also is is about stimulus uh and the stimulus Mings towards um supporting

Canadians uh so again long-term fundamentals look really strong we see three to four time uh increase in demands by mid uh 2030 so uh currently about 600,000 tons of lithium carbonate equivalent is uh Ed globally you said getting up to about 3 million tons by roughly 2030 uh 20 32 so um you know part of the problem is lithium is not a commodity uh we have yet as we're the if andc or early stages Dev developing supply chain in North America we have a strong correlation to the Chinese market they have yet to

decouple from that market Market which is very op peque um recently you've seen a balance just post Chinese New Year to lithium chemel pricing but in the near to medium term as other assets continue to advance in North America we see that decup wi taking place um swear by um reducing the opness of of the market increasing institutional investment um for the benefit of uh the industry so we think that we're the early days of that we see that um taking place in uh the not to distant future so

we positioned ourselves quite nicely at Frontier lithium with a world class asset um huge demand in front of us um and now a great partner to uh uh help realize the capital and expertise um globally to bring this project forward and help develop Ontario Canadian supply chain very domestically okay I think that sounds like a great place to wrap it up I feel like the we've going through the deal we've looked at the lithium Market thank you so much for for going through all those things with me yeah thanks so much

really appreciate it very good and once again I'm Charlotte McLoud with investing news.com and this is tripa Walker with Frontier lithium [Music]