The company said it has struck a deal with a syndicate of underwriters which has pledged to purchase 9.1 million units at $2.20 each on a bought deal basis. Each unit consists of one common share and one half of a common share purchase warrant. Each warrant will entitle the holder to buy one common share for $2.75 for 36 months after the closing date of the offering.
In addition, the company has granted the underwriters a green shoe option to purchase an additional 1.36 million additional units, a move that could potentially raise the total proceeds to $23 million. This option is open for 30 days after the closing date of the offering.
Closing is expected to occur on November 8, 2022,
Frontier Lithium is a preproduction business. Its aim is to become a strategic domestic supplier of spodumene concentrates for industrial users as a well as a battery-grade lithium hydroxide and other chemicals to the growing electric vehicle and energy storage markets in North America.
The company has said its PAK Lithium project is one of the highest quality known lithium mineral resources in North America due to its high-grade and low impurity properties in the pegmatite ore material and the spodumene mineral.
The company published a preliminary economic assessment (PEA) in April, 2021 that indicated an after-tax net present value at an 8% discount rate of US$974 million and a 21% after-tax internal rate of return (IRR) through a fully-integrated lithium operation utilizing spodumene concentrate generated from the PAK project to achieve downstream conversion for production of battery-quality lithium chemicals and concentrate for the glass and glass-ceramic market.
On October 11, 2022, Frontier released results from four additional drill holes completed during a Phase X11 drill program on the Spark pegmatite, which began in May 2022, and is currently in progress. The initial drill holes were designed to convert inferred material to the indicated category for the planned open pit. The Spark pegmatite is one of two delineated premium spodumene-bearing lithium deposits on the PAK Lithium Project.
Drilling highlights included 326.6 metres of pegmatite averaging 1.92% Li20, including a 50-metre zone of 2.98% Li20. This intersection was collared in pegmatite in the southern end of the Spark orebody.
On October 19, 2022, Frontier Lithium shares closed at $2.15 and currently trade in a 52-week range of $3.89 and 92 cents.