Amid ongoing concerns over regional lithium supply gaps, TSX-V-listed Frontier Lithium is staking its claim as a future cornerstone of North America's critical minerals supply chain, bolstered by favourable federal policy on batteries.

“Canada's pro-battery policies give Frontier a strategic edge as regional lithium supply deficits are expected to continue into the 2030s,” said president and CEO Trevor Walker, as the company unveiled the results of a definitive feasibility study (DFS) for its PAK lithium project in north-western Ontario.

“We are developing a high-quality, large-scale, low-cost lithium resource to anchor a domestic supply chain – strengthening energy security, competitiveness, and sustainability,” Walker added.

“This is more than a lithium project – it is about nation-building and delivering long-term value to shareholders and generations of Canadians, including northern and Indigenous communities.”

The PAK project is forecast to produce 200 000 t/y of SC6, a high-grade lithium concentrate, from a mine and mill development near Red Lake at a cost profile that places it among the lowest-cost North American spodumene concentrate producers.

The study estimates an after-tax net present value (NPV) of C$932-million and an internal rate of return (IRR) of 17.9%, with average yearly pre-tax earnings of C$285-million in steady-state operations. The mine is expected to generate C$11-billion in net revenue over a 31-year mine life.

“This DFS is a key milestone that builds the confidence to advance permitting, infrastructure, and strategic partnerships,” said Walker.

“With strong projected economics, low costs, and long-term earnings, the project could drive self-funded future growth and support Canada's Critical Minerals Strategy.”

Mitsubishi, a strategic investor in the project since 2024, welcomed the latest results.

“We are very pleased with the release of this DFS, which marks an important step forward for the project just over a year after our investment,” said Kota Ikenishi, general manager of battery minerals at Mitsubishi. “The DFS results highlight the project's outstanding quality and scale, showing that it stands among the top-tier lithium projects in North America.”

HIGH MARGINS, COMPETITIVE COSTS
Frontier’s operating cost for producing SC6 is estimated at C$602/t ($439/t), while its all-in sustaining cost is forecast at C$624/t ($456/t), placing the project within the lowest-cost quartile of global hard rock lithium producers.

Frontier plans to ship its product free on board from Thunder Bay, where it recently acquired an industrial site on Mission Island for a future lithium conversion facility.

Over the life of the project, Frontier expects to generate C$1-billion in federal tax revenue and C$699-million in provincial revenue, along with C$645-million from the Ontario Mining Tax. The company expects to create more than 230 jobs at the mine site, sustained throughout the project’s 31-year duration.

Total capital expenditure includes C$943-million in initial development costs, C$137-million in sustaining capital, and C$60-million for closure, with after-tax cash flow projected at C$5.14-billion.

The base case scenario uses a long-term spodumene concentrate price of $1 475/t. Sensitivity analyses show that a 20% increase in concentrate prices would boost the project's NPV to C$1.37-billion and the IRR to 21.6%, while a 10% price decrease would lower the NPV to C$712-million and IRR to 15.9%.

TIMELINE
A final investment decision is targeted for the first half of 2027, with construction kickoff as early as June 2026. A parallel infrastructure project – construction of the Beren’s River bridge and an all-season road – is expected to begin in 2025 and conclude by the end of 2027, improving access to the remote site.

Frontier cautioned that its schedule remains subject to permitting, engineering, financing, and market conditions. The company said it would explore opportunities for cost optimisation and resource expansion to further enhance project economics.