Opinions Dennis da Silva
Frontier LithiumFL.VBUYJul 06, 2021
Dennis da SilvaStock price when the opinion was issued
As of Jun 09, 2026. Market Open.
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FL has hit a new high and is up 47% YTD. But we have no company news to report. In fact, there has not been a press release since November. We might have seen this as a small cap January bounce, but it did not exactly decline last year either, which is the typical reason behind a January bounce. There has been a bit of insider buying (insiders own 15%). Frontier Lithium is progressing its PAK Lithium Project in northern Ontario, targeting a final investment decision in late 2027 or early 2028 and first production by decade's end. Recent joint venture videos and updates highlight integrated mine-and-refinery plans, boosting investor confidence in execution timelines.
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FL is now $120M market cap, up 20% this year. It has no revenue yet, losses and negative cash flow. It has about $20M cash. Insiders own 16%. The study shows a 31-year potential mine life for its PAK Ontario Lithium project. The study talks up numbers a lot, but the expected rate of return is 17.9%, which is fairly low vs other studies, especially considering $1B in capital costs. This is not to say it is not a feasible project, but a higher IRR would be better. There is work to be done still here and of course financing will be needed. We would consider it OK, but there remains a lot of risks here too as well.
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FL has seen some executive turnover, including the CFO quitting. But it also in May released its pre-feasibility study on the PAK project, outlining life-of-minee cash flow of $8B on an initial ~$500M capital cost and net present value of $2.6B. Drilling is ongoing. Insiders, owning 20%, have been small net buyers in the past six months. There has been chatter of government assistance with its project in terms of infrastructure and/or construction. Things are moving forward nicely here. '
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