Frontier Lithium (TSXV: FL) this morning announced that it has acquired the net smelter royalty that was outstanding on its flagship PAK Lithium Project. The royalty, or NSR, was acquired via the payment of a combination of both cash and shares.
The repurchase of the royalty didn’t come cheap in terms of upfront costs, with the company effectively paying $5.0 million for the 2.5% royalty. Total consideration consisted of a cash payment of $4.0 million, as well as the issuance of 1.0 million shares at a price of $1.00.
The purchase of the NSR follows the release of a positive preliminary economic assessment for the property earlier this year. The PEA outlined a life of project revenue figure of $8.52 billion for the proposed mine to lithium hydroxide chemical/hydromet plant facility. The assessment effectively outlined a post tax net present value with an 8% discount of $974.6 million for the project, as well as an IRR of 21%.
Frontier Lithium last traded at $0.99 on the TSX Venture.
Information for this briefing was found via Sedar and Frontier Lithium. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
