The PAK Lithium Project encompasses 6,976 hectares located 175 kilometers north of Red Lake in northwestern Ontario.
Aerial drone footage of PAK Lithium Project, captured February 2017
PAK Lithium Project
The PAK Lithium Project encompasses 6,976 hectares located 175 kilometers north of Red Lake in northwestern Ontario. First discovered by Ontario Government geologists in the late 1990’s, the property includes the Pakeagama Lake granitic pegmatite which has highly anomalous values of lithium, cesium, tantalum, and rubidium. The PAK deposit is a lithium-cesium-tantalum (LCT) type pegmatite containing high-purity, technical-grade spodumene (below 0.1% iron oxide). The deposit is exposed at surface and has a known strike length of 500 meters with an estimated true width varying from 14 meters to 125 meters with a sub-vertical orientation of the pegmatite. The deposit remains open to depth and along strike to the northwest and southeast.
Updated 2018 Mineral Resource Calculation
March 2018, Frontier Lithium published an updated resource estimate on the PAK Lithium Project. The current Canadian National Instrument 43-101 compliant mineral resource estimate shows a Measured and Indicated resource of 7.25 million tonnes of 1.69 percent lithium oxide equivalent (Li2O Eq.) and an Inferred resource of 1.9 million tonnes of 2.01 percent Li2O Eq.
Expand to see full Updated 2018 Mineral Resource Calculation
Tight share structure with management ownership exceeding over 30% of the company.
Highest-grade lithium deposit in North America with unique benefit of low-iron spodumene that remains open in all directions (March 2018 Mineral Resource Estimate).
Unique low-iron spodumene provides a low-capital cost entry into lithium market with firstly producing superior technical grade lithium concentrate used directly by glass/ceramics market with some additional by-product of chemical grade concentrates requiring further upgrading as required by the lithium battery market (defined as Phase I).
Potential future participation in the burgeoning lithium battery market with production of lithium compounds (defined as Phase II), current proof of concept underway.
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.
Staged Strategy for Growth
Frontier Lithium is taking a very systematic, staged approach to advancing the PAK Lithium Project into the lithium market by assessment of producing lithium products through the following sequence:
Phase I is to produce technical grade lithium concentrates. Frontier has recently concluded the Pre-Feasibility Study supported by testwork that produced spodumene concentrate with a grade of 7.2% Li2O from with a corresponding Li2O recovery of 78.5% and iron oxide levels of 0.1% Fe2O3. These results meet expectations from the lithium market’s industrial consumers (technical grade), and consequently exceed chemical grade requirements for further upgrading to produce compounds for the lithium-ion battery market – a global market that is anxious to see a new, serious supplier in a favourable jurisdiction come online as a sustainable source for low-iron, high purity lithium.
Phase II is future production of battery and/or technical grade lithium compounds. Currently Frontier is conducting a proof of concept of producing lithium carbonate from representative spodumene concentrate.
UIZ: Steller High Grade Zone at Surface to kickstart the project.
The updated 2018 resource estimate results from the completed Pre-Feasibility Study which included the high-grade Upper Intermediate Zone (UIZ) of the deposit. Results from the 2015 channel sampling conducted on UIZ included up to 28 meters grading 4.41 percent lithium oxide (Li2O). All channels returned consistent grades between 4.25 percent and 4.67 percent lithium oxide over widths no less than 6.2 meters. End-users in this lithium market segment require very low impurities (mainly iron levels) in order to maintain chemical stability, consistency, and avoid discoloration of glass, glazes, and frits.
In late summer 2017 Frontier's spodumene was approved as it satisfied product criteria by a leading global consumer of high purity lithium concentrates by completion of an industrial trial as part of a 280 tonne bulk sample of the PAK lithium deposit.
In 2018 Frontier released the Prefeasibility Study that showed spodumene concentrate with grades of 7.2% lithium oxide (Li2O) with a corresponding Li2O recovery of 78.5%. The original test work was performed from a representative 500 kg master composite mineralized sample. The program also included high intensity magnetic removal of iron that resulted in concentrate iron oxide levels of 0.1% Fe2O3. These results confirm the suitability of the material to meet the most rigorous specifications of the lithium market.
These results exceed chemical grade requirements for further upgrading to produce compounds for the lithium-ion battery market – a global market that is anxious to see a new, serious supplier in a favourable jurisdiction come online as a sustainable source for low-iron, high purity lithium.
Bulk Sampling Program
In Summer 2017, Frontier Lithium satisfied product criteria of a leading global consumer of high purity lithium concentrates by completing an industrial trial/test as part of a 280 tonne bulk sample of the PAK lithium deposit. The bulk sampling program targeted the high-grade Upper Intermediate Zone (UIZ) to assess the suitability of the high-grade zone for the production of DSO, which does not require concentration (flotation or gravity separation). The sale of DSO as a first product from PAK could provide Frontier Lithium with a source of useful revenue at low capital cost during the feasibility-stage for a concentrator facility.
As the glass and ceramics industry is the second largest market segment for lithium demand, qualifying our company and material from the deposit with a global lithium user is a very important part of our strategy for successful development. These results, in addition to the completion of the Pre-Feasibility Study currently being conducted on the project to assess the economic viability and technical feasibility of producing lithium concentrates, will provide the support to advance off-take negotiations to supply lithium products in the future.
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