Frontier Lithium Inc. announced the successful closing of Tranche 1 of the joint venture partnership with Mitsubishi Corporation ("Mitsubishi"). This joint venture for the PAK Lithium Project marks a significant milestone in advancing the first fully integrated lithium mining and processing operation in Ontario, Canada. Through the joint venture partnership, as initially announced on March 4, 2024, Mitsubishi has acquired an initial 7.5% interest in the Project for CAD 25 million.

This strategic investment underscores the confidence in the size, quality, and strategic importance of the Project to the North American EV supply chain. Frontier plans to utilize the funding from Mitsubishi to progress the Project towards a vertically integrated Definitive Feasibility Study (DFS), which is expected to be completed in 2025. The joint venture is structured to facilitate the majority of equity funding for the planned mine and mill, with Frontier being able to reduce its share of development costs for the whole project, while maintaining at least 75% of future off-take optionality.

This partnership aligns with the recent Memorandum of Cooperation signed between the governments of Canada and Japan to encourage value-added investments that will help establish sustainable and reliable battery supply chains between two countries. Key points of the joint venture transaction: Frontier has contributed all assets pertaining to the Project in exchange for a 92.5% stake in the JV and has assumed the role of JV manager. Following the completion of the DFS, Mitsubishi will have the option to increase its interest in the JV up to a 25% interest at a valuation based upon, among other things, the net asset value of the Project outlined in the DFS ("Tranche 2").

Mitsubishi will collaborate closely with Frontier in securing debt financing to ensure full funding for the Project's production. The completion of Tranche 2 investment is contingent upon certain preconditions, such as obtaining material infrastructure permits and other customary approvals. Frontier expects these conditions to be met in 2025.