(Reuters) -Frontier Lithium has formed a joint venture with Japanese trading house Mitsubishi to help advance lithium mining and processing in Ontario, sending the Canadian miner’s shares up 15% on Monday.
The deal will help finance the PAK Lithium Project mine and a planned lithium chemicals conversion facility, Frontier said, as the company aims to become a major supplier of the key mineral used in EV batteries to the North American supply chain.
Frontier shares were trading at C$1.06 after briefly hitting a five-month high earlier in the session.
Mitsubishi will buy a 7.5% stake in the project for C$25 million ($18 million) with an option to increase it to 25%, as per the terms of the agreement signed last week.
“Mitsubishi has significant previous experience in resource JVs and this partnership should improve market confidence to FID (for PAK Project),” said Stifel Canada analyst Cole McGill.
The PAK Lithium project encompasses about 27,000 hectares of land in Ontario, with two spodumene-bearing lithium deposits delineated since 2013. Spodumene concentrate is a type of lithium mineral ore.
($1 = 1.3560 Canadian dollars)
(Reporting by Kabir Dweit in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)
