Mitsubishi and Frontier Lithium announce $25m partnership for PAK project in Ontario

Japan’s leading trading company Mitsubishi Corporation has agreed to invest $25 million in Frontier Lithium (TSXV: FL) and its PAK lithium project mine and planned conversion facility in Ontario, Canada.

The two companies have signed a definitive agreement to establish a joint venture (JV) partnership, under which Mitsubishi has agreed to acquire an initial 7.5% interest in the project.

Upon completion of the definitive feasibility study (DFS), the Japanese giant will have the right to increase its interest in the JV to 25% through the purchase of additional shares at a price based on the net value of the project as shown in the DFS.

Mitsubishi and Frontier have also agreed to work closely together to pursue project financing to fund the development capital costs of the project.

The JV is structured to cover the equity funding for the planned mine and mill while maintaining at least 75% of future off-take.

Trevor Walker, president and chief executive officer of Frontier Lithium, said the long-term partnership supports the initial development of mining at PAK and future expansions downstream with chemical processing.

Key lithium supplier

“Today marks a significant milestone for Frontier Lithium as we progress towards our goal of becoming a key lithium supplier to the North American electric vehicle battery materials supply chain,” Mr Walker said.

“Mitsubishi’s investment reflects confidence in Ontario’s jurisdiction, the quality and scale of our asset and Frontier’s operational expertise.”

“A strong, strategic and steadfast partner allows us to develop our world-class asset and focus on the long-term value creation for shareholders, communities and all stakeholders.”

Outstanding lithium project

General manager of the battery minerals office with Mitsubishi Kota Ikenishi said PAK is an outstanding lithium project.

“We recognise its strategic value in ensuring a secure supply of lithium to North American markets [and] are excited to build a long-term relationship with Frontier and leverage our complementary skills and capabilities to deliver PAK into production.”

The partnership follows the signing of a recent memorandum of co-operation between the governments of Canada and Japan to work more closely to establish sustainable and reliable global battery supply chains.

This includes ensuring there are integrated, value-added investments in the upstream, midstream and downstream sectors, including the mining and processing of lithium and other critical minerals.