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FRONTIER LITHIUM INC. Management Reports 2025
44269_rns_2025-11-27_77ae65d6-9b67-4e73-9377-c6da3d732d48.pdf
Management Reports
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FRONTIER LITHIUM
FRONTIER LITHIUM INC.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
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Table of Contents
INTRODUCTION...3
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION...3
CAUTIONARY NOTE TO U.S. INVESTORS...3
I. OVERVIEW OF FRONTIER LITHIUM INC...4
II. HIGHLIGHTS FOR THE CURRENT QUARTER AND RECENT DEVELOPMENTS...6
III. OUTLOOK...10
IV. RESULTS OF OPERATIONS...11
V. LIQUIDITY AND CAPITAL RESOURCES...14
VI. CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIES...15
VII. OFF-BALANCE SHEET ARRANGEMENTS...15
VIII. PROPOSED TRANSACTIONS...15
IX. FINANCIAL INSTRUMENTS...15
X. RELATED PARTY TRANSACTIONS...16
XI. USE OF PROCEEDS...16
XII. ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTES...16
XIII. RISK FACTORS...17
XIV. QUALIFIED PERSON...17
XV. USE OF NON-GAAP FINANCIAL MEASURES AND RATIOS...17
XVI. INTERNAL CONTROLS OVER FINANCIAL REPORTING...18
XVII. OUTSTANDING SHARE DATA...18
XVIII. OTHER INFORMATION...19
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INTRODUCTION
This management's discussion and analysis ("MD&A") has been prepared as of November 27, 2025, and should be read in conjunction with Frontier Lithium Inc.'s (the "Company") unaudited condensed consolidated interim financial statements for the six months ended September 30, 2025 and 2024. Those condensed consolidated interim financial statements are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee. The Company's functional currency is Canadian dollars. Reference herein of $ is to Canadian dollars and US$ is to United States dollars.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
All statements, other than statements of historical fact, contained in this MD&A including, but not limited to, any information as to the future plans and outlook for the Company, constitute "forward-looking information" or "forward-looking statements" within the meaning of Canadian securities laws. Forward-looking statements are based on expectations, estimates and projections as of the time of this MD&A. The words "anticipates", "plans", "expects", "indicate", "intend", "scheduled", "estimates", "forecasts", "guidance", "initiative", "outlook", "potential", "projected", "pursue", "strategy", "study", "targets", or "believes", or variations of or similar such words and phrases or statements that certain actions, events or results "may", "could", "would", or "should", "might", or "way forward", "will be taken", "will occur" or "will be achieved" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, acting in good faith, as of the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates and assumptions may prove to be incorrect. Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied by any forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important risk factors, including but not limited to the risk factors contained under the heading "Risk Factors" in this MD&A and in the Company's Annual Information Form, and future events could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements.
Readers are cautioned that the foregoing lists of risk factors included in this MD&A are not exhaustive. The forward-looking information contained in this MD&A is expressly qualified by these cautionary statements. All forward-looking information in this MD&A speaks as of the date of this MD&A. The Company does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. All forward-looking information contained in this MD&A is expressly qualified in its entirety by this cautionary statement.
CAUTIONARY NOTE TO U.S. INVESTORS
This MD&A has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ materially from the requirements of United States securities laws applicable to U.S. companies. For U.S reporting purposes, the United States Securities and Exchange Commission (the "SEC") has adopted amendments to its disclosure rules in Regulation S-K (Subpart 1300) (the "SEC Modernization Rules") to modernize the mineral property disclosure requirements for issuers, referred to as "mining registrants," whose securities are registered with the SEC. These amendments became effective in February 2019 with compliance required for the first fiscal year beginning on or after January 1, 2021. While not applicable to the Company, the SEC Modernization Rules replace the historical property disclosure requirements for mining registrants that were included in SEC Industry Guide 7. Information concerning our mineral properties has been prepared in accordance with the requirements of Canadian securities laws, which differ in material respects from the requirements of the SEC set forth in Industry Guide 7. In
accordance with National Instrument 43-101 ("NI 43-101"), the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"). While the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are recognized and required by NI 43-101, and now recognized under the SEC Modernization Rules, SEC Industry Guide 7 does not recognize them. You are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic viability. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, you are cautioned not to assume that all or any part of measured mineral resources or indicated mineral resources will ever be upgraded into mineral reserves.
I. OVERVIEW OF FRONTIER LITHIUM INC.
Frontier Lithium Inc. was incorporated as 646215 Alberta Inc. on March 13, 1995, under the Business Corporations Act (Alberta) and is headquartered in Sudbury, Ontario. The Company was formerly called Houston Lake Mining Inc. and changed its name by Certificate of Amendment dated May 19, 2016. In February 2024, the Company incorporated three wholly owned subsidiaries – Frontier Integrated Lithium Holdings Inc., Frontier Lithium Resources Inc. and Frontier Lithium Advanced Materials Inc. to effect the Mitsubishi Corporation joint venture partnership, as referenced in section "Mitsubishi Joint Venture Partnership" of this MD&A. In October 2024, the Company incorporated subsidiary Frontier Lithium Property Holdings Inc. under the Business Corporation Act (Ontario), which holds title to the land for the proposed lithium conversion facility. The Company's registered address is 1250, 639 - 5th Ave. S.W, Calgary, Alberta T2P 0M9 and its head office address is located at 2614 Belisle Drive, Val Caron, Ontario, P3N 1B3.
The Company's shares are publicly traded on the Toronto Venture Exchange ("TSX-V") under the symbol "FL", the U.S. based OTCQB Venture Market under the symbol "LITOF" and the Frankfurt Stock Exchange under the symbol "HL2".
The Company is engaged in the acquisition, exploration and development of lithium mineral properties in Ontario, Canada.
PROJECT OVERVIEW
The Company's flagship asset is the PAK Lithium Property (the "PAK Lithium Project") located 175 km north of Red Lake, Ontario in the Red Lake Mining District and covers an area of 27,886.4 hectares comprising of four mining leases and 95 mining claims. The Company maintains one of the largest land positions on the "Electric Avenue", an emerging premium lithium-mineral district which is hosted in the Canadian Shield of northwestern Ontario. The Electric Avenue is a major structural corridor in northwestern Ontario that divides two geological domains for hundreds of kilometers and hosts multiple rare metal occurrences containing high levels of lithium in the mineral called spodumene. Chief among these known occurrences are the PAK and Spark pegmatite deposits, located at the southeastern end of the Electric Avenue on the Company's PAK Lithium Project (Figure 1).
The Company has been actively involved since February 2013 in the exploration and development of the PAK Lithium Project, which hosts at surface one of the highest quality spodumene lithium hard rock deposit in North America (Figure 2) at the PAK deposit. The PAK and Spark deposits combined are among the highest-grade resources with the lowest iron impurity levels in North America (e.g., iron levels less than 0.15% Fe₂O₃ in the lattice of the spodumene crystals).
Figure 1: Project Location
During the year ended March 31, 2025, title to the Company's land tenure were transferred to the Frontier Lithium Resources Inc. subsidiary as part of the Mitsubishi joint venture transaction referenced in section "Mitsubishi Joint Venture Partnership" section of this report. This includes a group of 35 single cell claims (667 ha) that were subject to conversion from mining claims to a mining lease. A letter of intent to convert the claims to lease was submitted to the Ministry on June 28th, 2022. All due diligence and surveying have been completed, and the Mining Lease was granted effective September 16, 2025.
The area between the Knox Lake claims and the main claims to the east became open and an additional 24 mining claims were staked in March 2025 making all claims and leases contiguous. In August 2025, 1,238 of the single cell claims were re-grouped into 68 multi-cell claims.
Figure 2: Surficial Exposure of PAK deposit
BUSINESS OBJECTIVES
The Company's objective is to become a strategic domestic supplier of spodumene concentrates for the battery-grade lithium hydroxide and other chemicals conversion to the growing electric vehicle and energy storage markets in North America. The Company maintains the largest land position and resource in a new premium lithium mineral district located in Ontario's Great Lakes region.
LEADERSHIP TEAM
The Company's leadership team's successful mining ventures include a multi-decade track record in funding, partnering, constructing and operating mining and refining companies in North America.
II. HIGHLIGHTS FOR THE CURRENT QUARTER AND RECENT DEVELOPMENTS
EXPLORATION
DRILL PROGRAM
There has been no drilling on the project since September 2024. A complete description of all drilling results from Phase I to Phase XIV (2013 to 2024) can be found in the NI 43-101 Technical Report filed on July $9^{\text{th}}$ , 2025.
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OTHERS
The Company continues to work on environmental baseline studies, a step that will enable it to advance project permitting.
RESULTS OF THE MINE AND MILL FEASIBILITY STUDY
The Company published a feasibility study on July 9th, 2025 with an effective date of May 28th, 2025 (the "Mine and Mill FS"). This technical report outlines the feasibility assessment of the PAK Lithium Project. The Mine and Mill FS models a standalone mine and mill operation producing spodumene concentrate producing 200,000 tonnes of 6% Li₂O spodumene concentrate ("SC6") per year.
The results of the Mine and Mill FS include a post-tax net present value ("NPV") of $932 million, at an 8% discount rate, and a post-tax internal rate of return of 17.9%.
The Mine and Mill FS is based on an updated mineral resource estimate completed by Schadrac Ibrango, P.Geo.
The commodity price assumption for chemical grade lithium concentrate of 6.0% Li₂O (CG_SC6.0) was US$1,475 per tonne, and the foreign currency assumption for the US dollar was $1.37 USD/CAD.
The Mine and Mill FS considers 31 years of mine life with 3.9 million tonnes of ore from PAK mineral reserves and 27.2 million tonnes of ore from Spark mineral reserves. The life of mine grades at PAK and at Spark are 1.96% and 1.44% Li₂O, respectively.
The C1 cost, comprising all production related expenses including mining, processing, services, tailings handling, royalties, and general and administrative, plus treatment charges, penalties, transportation and other selling costs is $602 per tonne of concentrate sold. The Mine and Mill FS demonstrates a highly competitive C1 cost driven by the low stripping ratio of 3.7 and high lithium grade.
Refer to the NI 43-101 technical report prepared by DRA Americas Inc. for the Mine and Mill FS, filed under the Company's profile on SEDAR+ at www.sedarplus.ca.
CONVERSION FACILITY FEASIBILITY STUDY
On July 31st the Company announced Fluor Canada Ltd. as the successful proponent for a feasibility study for the lithium conversion facility (the "Lithium Conversion Facility FS") which will process the SC6 into battery salts. The Company expects to deliver the Lithium Conversion Facility FS in the first half of 2027.
MITSUBISHI JOINT VENTURE PARTNERSHIP
In March 2024, the Company entered into a definitive agreement with Mitsubishi Corporation ("Mitsubishi") to establish a joint venture partnership for the PAK Lithium Project (the "PAK JV"). Under the terms of the definitive agreement, Mitsubishi would acquire a 7.5% equity interest in the PAK JV in exchange for cash considerations of $25 million ("Tranche 1"). Upon completion of the Mine and Mill FS, Lithium Conversion Facility FS and receipt of material permits, Mitsubishi would have the right to increase its equity interest to 25% in the PAK JV ("Tranche 2") (Figure 3). Mitsubishi also has the right to provide pro-rata capital contributions for the ongoing development of the PAK JV.
Figure 3: Pro Forma Asset Ownership (Post-Tranche 2)
In April 2024, the Company completed the structuring and transferred the PAK Lithium Project mineral interest and accompanying assets into the operating subsidiaries of Frontier Lithium Resources Inc. and Frontier Lithium Advanced Materials Inc., and signed a Unanimous Shareholders Agreement (the "USA") with Mitsubishi to close Tranche 1 of the PAK JV.
This PAK JV is a strategic partnership that recognizes the size, high quality and strategic importance of the PAK Lithium Project to the North American EV supply chain. Mitsubishi, a global conglomerate with a market capitalization of more than JPY13 trillion and having a portfolio of large-scale mineral resource assets with world-class cost competitiveness and quality, makes its first step into upstream lithium production to contribute to the growing needs of the battery materials supply chain. The PAK JV is structured to cover the equity funding for the planned mine and mill while allowing the Company to maintain at least $75\%$ of future off-take. This long-term partnership supports the initial development of mining at the PAK Lithium Project, and future expansions downstream with chemical processing.
The Company will continue to be the operator of the PAK Lithium Project and will be responsible for its development and delivery and subsequent operation.
Funding of Tranche 2 is subject to certain terms and conditions precedent, including receipt of material permits and other customary approvals. There is no guarantee or assurance that Tranche 2 will be consummated and/or the accompanying capital will be provided by Mitsubishi to the Company.
As outlined in Note 2(b) "Basis of Preparation" of the Company's consolidated financial statements for the years ended March 31, 2025 and 2024, the Company controls the subsidiaries associated with PAK JV and consolidates their accounts into its consolidated financial statements. Mitsubishi has access to returns associated with the PAK JV and its share of the subsidiaries' net assets are recognized as non-controlling interest.
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LAND PURCHASE AGREEMENT
On February 25, 2025, the Company issued an unsecured convertible loan (the "Convertible Loan") for proceeds of $3.35 million. Proceeds from the Convertible Loan were used to purchase a vacant industrial site on Mission Island in Thunder Bay, Ontario on which the Company plans to build a lithium conversion facility. The Convertible Loan matures 18 months from its date of issuance and the Company has the option repay all outstanding principal and accrued interest prior to its maturity date. The Convertible Loan bears interest at Canadian Overnight Repo Rate Average plus 3.0% per annum, compounded annually and payable at maturity (September 30, 2025 – 5.75%, and March 31, 2025 - 5.88%).
CRITICAL MINERALS INFRASTRUCTURE FUND CONTRIBUTION AGREEMENTS
In March 2025, the Company announced that it has secured up to $6.0 million in non-repayable funding under the Federal Critical Minerals Infrastructure Fund ("CMIF"). Pursuant to the CMIF contribution agreements (the "Contribution Agreements"), the Company will be entitled to receive the following amounts, which shall be reimbursed at 50% of eligible expenditures for two key infrastructure projects, over the course of four years:
- Mine Access Road Development, total grant funding of $2.8 million – Preconstruction activities, including environmental studies, for an all-season, 56-kilometer, two-lane access road linking the PAK Lithium Project to the Ontario highway system.
- Power Transmission Infrastructure, total grant funding of $3.2 million – Engineering, design, and permitting studies for a substation and transmission line to enable grid connection from the PAK Lithium Project to the Wataynikaneyap Power transmission line.
As at November 2025, the Company has received close to $1.0 million of reimbursements from the CMIF program, including $0.9 million of reimbursements recognized in the six months ended September 30, 2025.
CONDITIONAL GOVERNMENT FUNDING FOR LITHIUM CONVERSION FACILITY
In March 2025, the federal government and Ontario provincial government announced at the Prospector and Developers Association of Canada's annual conference in Toronto that it is willing to commit up to $120 million each of funding to support the Company's proposed lithium conversion facility, for total conditional fundings of $240 million. The combined support aims to cover a significant portion of the required capital expenditures required to build the Company's lithium conversion facility in Thunder Bay, Ontario.
FIRST PROJECT UNDER ONTARIO'S "ONE PROJECT, ONE PROCESS" FRAMEWORK
In October 2025, the Company announced it has been selected to participate in Ontario's One Project, One Process ("1P1P") Framework Guidance initiative. 1P1P is an important step in modernizing and streamlining Ontario's provincial permitting process for advanced mineral development projects.
The 1P1P framework is designed to reduce government review timelines by up to 50 percent for advanced exploration and mine development projects in Ontario, ensuring more timely and consistent permitting decisions. The 1P1P initiative promotes a coordinated and efficient regulatory approach that supports Ontario's critical mineral strategy by fostering greater collaboration among provincial ministries and agencies and Indigenous peoples. Frontier's participation in the framework underscores its readiness to advance its PAK Lithium Project responsibly within this modernized system, helping accelerate the path from exploration to development while maintaining high standards of environmental stewardship and Indigenous engagement.
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III. OUTLOOK
The Company's objective is to become a strategic supplier of battery-grade lithium hydroxide and other lithium chemicals to the growing electric vehicle and energy storage markets in North America.
The PAK Lithium Project is one of the highest quality at surface lithium spodumene mineral resources in North America due to its high lithium content and low impurities. Low iron spodumene is less common than higher iron spodumene increasing its market value. Low iron spodumene is also particularly well suited to producing the high-quality lithium concentrates used to produce battery quality lithium chemicals. Spodumene has a cost advantage over the alternative brine sources that require extra chemical processing conversion steps when used to produce lithium hydroxide.
The Company is primarily in an exploration and development phase with a FS showing a positive NPV for mine and mill producing SC6. The positive results of the Mine and Mill FS are based on a traditional crush, sort, float flowsheet described in the July 9, 2025 NI 43-101 technical report. The Lithium Conversion Facility FS will study the feasibility of building a conversion facility producing lithium hydroxide on Mission Island in Thunder Bay, Ontario, and is expected to be completed in the first half of 2027.
The Company is assessing the construction of a demonstration and innovation lithium chemical plant in the Province of Ontario. This plant, if constructed would be used to perform research and development for the future commercial lithium chemical plant, train operators, and demonstrate the process to produce battery grade lithium chemicals suitable for downstream cathode and battery makers.
The Mine and Mill FS shows a development approach tied to the construction of an all-season road. The road construction is not considered a Company project, however preliminary engineering and consultation on the route options are being advanced using CMIF funding with the objective of facilitating construction by the Province of Ontario.
To advance its plans, the Company will seek to negotiate agreements with the Indigenous rights holders near the PAK Lithium Project. The agreements will likely cover various topics, including the facilitating development work on its property interests. The intent of these agreements is to extend beyond those established during the exploration phase of mining. The agreements will involve costs that are not fully known at this time.
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IV. RESULTS OF OPERATIONS
SELECTED ANNUAL INFORMATION
The following table represents select financial and operating results of our company for the six months ended September 30, 2025 and 2024.
Financial Results
(in thousands of Canadian dollars, except for shares and per share figures)
| Three months ended September 30, | Six months ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024^{1} | 2025 | 2024^{1} | |
| REVENUE | $ - | $ - | $ - | $ - |
| EXPENSES | ||||
| Exploration and evaluation expenditures | $ (551) | $ (3,232) | $ (1,813) | $ (7,898) |
| General and administrative expenses | (1,332) | (1,743) | (2,461) | (4,162) |
| Interest income | 165 | 326 | 281 | 663 |
| Interest expense | (48) | - | (97) | - |
| Accretion expense on lease liabilities | (54) | (2) | (108) | (5) |
| Net loss and comprehensive loss | (1,820) | (4,651) | (4,198) | (11,402) |
| Net loss and comprehensive loss attributable to: | ||||
| Common shareholders | (1,786) | (4,390) | (3,986) | (10,332) |
| Non-controlling interest | (34) | (261) | (212) | (1,070) |
| Net loss and comprehensive loss | (1,820) | (4,651) | (4,198) | (11,402) |
| Net loss per share attributable to common shareholders | ||||
| Basic and diluted | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.05) |
| Weighted average number of shares outstanding | ||||
| Basic and diluted | 228,710,997 | 227,627,041 | 228,369,019 | 227,627,041 |
| Cash and cash equivalent | 14,949 | 25,528 | 14,949 | 25,528 |
| Total assets | 28,423 | 35,261 | 28,423 | 35,261 |
| Total non-current financial liabilities | 1,922 | 1 | 1,922 | 1 |
| Cash dividend declared | - | - | - | - |
- Refer to the section Restatement of Comparative Balances for retrospective adjustments to September 30, 2024 balances.
Three and Six Months Ended September 30, 2025 and 2024
The Company reported a net loss and comprehensive loss of $1.8 million ($0.01 per share) and $4.2m ($0.02 per share) for the three and six months ended September 30, 2025, respectively, compared to a net loss and comprehensive loss of $4.7 million ($0.02 per share) and $11.4 million ($0.05 per share) for the comparative periods.
The $2.8 million decrease for the three months ended September 30, 2025 mainly resulted from lower exploration and evaluation expenditures incurred and $0.9 million of CMIF reimbursements received in the current period.
The $7.2 million decrease for the six months ended September 30, 2025 mainly resulted from lower exploration and evaluation expenditures and general and administrative expenses incurred, plus $0.9 million of CMIF reimbursements received in the current period.
Exploration and evaluation expenditures on the PAK Lithium Property
(in thousands of Canadian dollars)
| Three months ended September 30, | Six months ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Personnel cost | $ 363 | $ 510 | $ 825 | $ 1,037 |
| Consulting fees | 88 | 1,794 | 717 | 5,101 |
| Drilling | - | - | - | 244 |
| Assay and sampling | 14 | 170 | 86 | 243 |
| Research and development, net of government assistance | 18 | 151 | 70 | 336 |
| Camp and equipment expenses | 4 | 53 | 8 | 90 |
| Travel and transportation cost | 64 | 554 | 107 | 847 |
| Total exploration and evaluation expenditures | $ 551 | $ 3,232 | $ 1,813 | $ 7,898 |
The Company reported total exploration and evaluation expenditures of $0.6 million for the three months ended September 30, 2025, a decrease of $2.7 million to the comparative period. The net decrease is mainly due to higher consulting fees associated with the Mine and Mill FS during the three months ended September 30, 2024, and no drilling and associated field activities during the three months ended September 30, 2025. The Company also received $0.9 million of CMIF reimbursements in the current period, which has been recognized as a reduction to exploration and evaluation expenditures.
The Company reported total exploration and evaluation expenditures of $1.8 million for the six months ended September 30, 2025, a decrease of $6.1 million to the comparative period. The net decrease is the result of similar factors between the three months period ended September 30, 2025 and September 30, 2024.
General and Administrative Expenses
(in thousands of Canadian dollars)
| Three months ended September 30, | Six months ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024^{1} | |
| Salaries, benefits and consulting | $ 442 | $ 462 | $ 964 | $ 966 |
| Share-based payments | - | 590 | - | 893 |
| Professional fees | 347 | 123 | 513 | 1,379 |
| Office, administration and other | 256 | 320 | 482 | 541 |
| Shareholder related fees | 81 | 110 | 92 | 128 |
| Depreciation | 206 | 138 | 410 | 255 |
| Total general and administrative expenses | $ 1,332 | $ 1,743 | $ 2,461 | $ 4,162 |
- Refer to the section Restatement of Comparative Balances for retrospective adjustments to September 30, 2024 balances.
The Company reported total general and administrative expenses of $1.3 million for the three months ended September 30, 2025, an overall decrease of $0.4 million to the comparative period. The decrease is mainly due to no non-cash share-based compensation expense recognized during the current period.
The Company reported total general and administrative expenses of $2.5 million for the six months ended September 30, 2025, an overall decrease of $1.7 million to the comparative period. The decrease is mainly due to transaction costs incurred relating to the Mitsubishi Investment during the September 30, 2024, and no non-cash stock-based compensation expense during the September 30, 2025 period.
SELECTED QUARTERLY INFORMATION
A summary of selected financial information for the eight recently completed quarters is presented below. (in thousands of Canadian dollars, except for shares and per share figures)
| For the quarter ended | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 |
|---|---|---|---|---|
| Revenue | $Nil | $Nil | $Nil | $Nil |
| Income from operations | $Nil | $Nil | $Nil | $Nil |
| Exploration and evaluation expenditures | (551) | $(1,262) | $(3,058) | $(1,567) |
| General and administrative expenses | (1,340) | $(1,121) | $(3,300) | $(1,352) |
| Interest income | 165 | $116 | $155 | $220 |
| Net loss and comprehensive loss | (1,820) | $(2,378) | $(6,314) | $(2,803) |
| Net loss and comprehensive loss – Frontier Lithium Inc. shareholders | (1,786) | $(2,200) | $(5,953) | $(2,672) |
| Weighted average number of shares outstanding | 228,710,997 | 228,027,041 | 228,027,041 | 227,690,228 |
| Net loss per share, basic and diluted – Frontier Lithium Inc. shareholders | (0.01) | $(0.01) | $(0.03) | $(0.01) |
| For the quarter ended | September 30, 2024 | June 30, 2024¹ | March 31, 2024 | December 31, 2023 |
| --- | --- | --- | --- | --- |
| Revenue | $Nil | $Nil | $Nil | $Nil |
| Income from operations | $Nil | $Nil | $Nil | $Nil |
| Exploration and evaluation expenditures | $(3,232) | $(4,666) | $(5,244) | $(2,196) |
| General and administrative expenses | $(1,743) | $(2,419) | $(1,699) | $(2,600) |
| Interest income | $326 | $337 | $176 | $251 |
| Net loss and comprehensive loss | $(4,651) | $(6,751) | $(6,780) | ($4,532) |
| Net loss and comprehensive loss – Frontier Lithium Inc. shareholders | $(4,391) | $(5,942) | $(6,780) | ($4,532) |
| Weighted average number of shares outstanding | 227,627,041 | 227,627,041 | 227,627,041 | 227,627,041 |
| Net loss per share, basic and diluted – Frontier Lithium Inc. shareholders | $(0.02) | $(0.03) | $(0.03) | $(0.02) |
- Refer to the section Restatement of Comparative Balances for retrospective adjustments to September 30, 2024 balances.
The Company reported a net loss and comprehensive loss of $1.8 million ($0.01 per share) for the quarter ended September 30, 2025 and a net loss and comprehensive loss of $2.2 million ($0.01 per share) for the quarter ended June 30, 2025. Net loss for these two quarters were significantly lower than the six prior quarters due to lower consulting fees, drilling and associated camp activities and stock-based compensation expenses.
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V. LIQUIDITY AND CAPITAL RESOURCES
Condensed Interim Statements of Cash Flow
(in thousands of Canadian dollars)
| Three months ended September 30, | Six months ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Total cash used in operating activities | $ (624) | $ (4,703) | $ (3,368) | $ (10,823) |
| Total cash used in investing activities | - | (109) | - | (204) |
| Total cash provided by (used in) financing activities | 538 | (20) | 440 | 23,981 |
| Net change in cash | (86) | (4,832) | (2,928) | 12,954 |
| Cash and cash equivalents, beginning of period | 15,035 | 30,360 | 17,877 | 12,574 |
| Cash and cash equivalents, end of period | $ 14,949 | $ 25,528 | $ 14,949 | $ 25,528 |
As at September 30, 2025, the Company's net working capital deficit was $(19.0) million compared to $(12.3) million as at March 31, 2025. The working capital deficit is mainly attributed to the Put Right liability associated with the Mitsubishi JV investment in April 2024, and the decrease during the period ended September 30, 2025 was mainly attributed to the cash used in operating activities, offset by cash provided by financing activities.
Total cash used in operating activities were lower in the three and six months ended September 30, 2025 than the comparative periods mainly due to lower exploration and evaluation expenditures and general and administrative expenditures.
Total cash used in investing activities were lower in the three and six months ended September 30, 2025 than the comparative periods due to the purchase property, plant and equipment.
Total cash provided by financing activities were higher in the three months ended September 30, 2025 than the comparative period due to proceeds from exercise of stock options. Total cash provided by financing activities were lower in the six months ended September 30, 2025 than the comparative period due to Mitsubishi's investment in the PAK JV during the quarter ended March 31, 2024.
The primary objectives of the Company's capital management policy are to ensure that the Company raises sufficient funds to execute its business plan which is designed to maximize shareholder value.
Since inception, the Company has relied primarily on equity financings to fund its operations. The Company has had recurring operating losses since inception. See "Risk Factors" section and for further details on the risk factors affecting the Company.
When managing capital, which is a broader concept than the "equity" in the statement of financial position, the objectives of the Company are:
- To safeguard the Company's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and
- To maintain a strong capital base to support the exploration for and development of its mineral deposits.
There have been no changes in the Company's capital management when compared to the prior year. Management intends to optimize its cash management while continuing to fulfill its operating cash needs.
Liquidity risk is the risk that the Company will not be able to meet its payment obligations when they fall due under normal and stress circumstances. The Company monitors its liquidity risk by considering the maturity of its financial liabilities. The Company's ability to access debt and equity markets when required may be impacted by factors beyond its control, such as economic and political conditions that may affect the capital markets generally. The Company does not utilize financial instruments in managing liquidity risk.
Although the Company has been successful in raising funds to date, there can be no assurance that adequate funding will be available in the future. Should management be unable to raise sufficient capital to fund operations and growth there would be a material adverse effect on the Company's business, financial condition, results of operations and its ability to continue as a going concern.
VI. CONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIES
CONTRACTUAL OBLIGATIONS
Our future undiscounted obligations as at September 30, 2025 are as follows:
Maturity of Financial Liabilities
(in thousands of Canadian dollars)
| Due within 1 year | Due between 1 and 3 years | Due between 3 and 5 years | Due more than 5 years | Total | |
|---|---|---|---|---|---|
| Accounts payable and accrued liabilities | $ 7,076 | $ - | $ - | $ - | $ 7,076 |
| Current tax liability | 34 | - | - | - | 34 |
| Lease obligations | 350 | 700 | 700 | 1,400 | 3,150 |
| Put Right liability | 25,000 | - | - | - | 25,000 |
| Convertible loan | 3,465 | - | - | - | 3,645 |
| Total as at September 30, 2025 | $ 35,925 | $ 700 | $ 700 | $ 1,400 | $ 38,725 |
VII. OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements as at September 30, 2025 and the date of the report.
VIII. PROPOSED TRANSACTIONS
The Company does not have any proposed transactions as at September 30, 2025 and the date of the report, other than as disclosed elsewhere in this document.
IX. FINANCIAL INSTRUMENTS
The Company does not currently utilize complex financial instruments in hedging lithium price, foreign exchange or interest rate exposure. The Company will not hold or issue derivative instruments for speculation or trading purposes.
Where the fair value of financial assets and financial liabilities recorded in the consolidated financial statements cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
When measuring the fair value of an asset or liability, the Company uses observable market data to the greatest extent possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Details to the Company's financial instruments are included in Note 3 of the Company's audited consolidated financial statements for the years ended March 31, 2025 and 2024.
X. RELATED PARTY TRANSACTIONS
Key management personnel include members of the Board of Directors and certain senior officers. Remuneration of our key management personnel was as follows:
| (in thousands of Canadian dollars) | Three months ended September 30, | Six months ended September 30, | ||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Compensation – salaries, benefits and consulting | $ 481 | $ 482 | $ 481 | $ 964 |
| Exploration and evaluation and other expenditures¹ | - | 18 | - | 27 |
| Share-based compensation | - | 119 | - | 379 |
| Total | $ 481 | $ 619 | $ 481 | $ 1,370 |
During the six months ended September 30, 2025, lease payments of $88,000 were paid or accrued to a corporation controlled by a director (September 30, 2024 - $5,000), of which $53,000 of accretion expense was recognized as interest and accretion expense (September 30, 2024 - $Nil). At September 30, 2025, the carrying value of the lease obligation was $2.1 million (March 31, 2025 - $2.1 million).
At September 30, 2025, the Company recorded $3.5 million in Convertible Loan payable to a corporation controlled by a director of the Company.
Included in accounts payable and other liabilities is $33,000 (March 31, 2025 - $Nil) owing to corporations controlled by a director of the Company and key management personnel of the Company.
XI. USE OF PROCEEDS
On April 25, 2024, the Company closed Tranche 1 of the PAK JV partnership with Mitsubishi for cash proceeds of $25.0 million. Proceeds from this transaction has funded expenditures to complete the mine and mill FS and will continue to fund key programs that support the conversion facility FS.
Although the Company intends to allocate these proceeds as set out above, the amounts actually expended for the purposes described above could vary significantly depending on, among other things, general market conditions, spodumene and lithium prices, the results of further exploration, the results of any future estimation of mineral reserves, the Company's future operating and capital needs from time to time, and other factors referred to under "Risk Factors" herein and in the "Risk Factors" sections found in the Company's continuous disclosure documents that have been filed and can be found on the Company's SEDAR+ profile at www.sedarplus.ca.
Notwithstanding the proposed uses of available funds discussed above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary or prudent. It is difficult, at this time, to definitively project or allocate the funds necessary to effect the planned activities of the Company.
XII. ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTES
Please refer to the Company's audited consolidated financial statements for the year ended March 31, 2025, and unaudited condensed interim financial statements for the period ended September 30, 2025, which were filed on SEDAR+.
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RESTATEMENT OF COMPARATIVE BALANCES
During the three months ended June 30, 2024, the Company recognized $21,554,000 within equity reserves associated with the Mitsubishi investment described in Note 8 of the condensed consolidated interim financial statements for the three months ended June 30, 2025 and 2024. Subsequent to the end of the three-month period ended June 30, 2024, the Company noted that the Put Right included in the Mitsubishi investment met the definition of a financial liability subsequently measured at fair value through profit or loss. The difference between the fair value of the financial liability on initial recognition and the carrying amount of the investment represented the initial value of the non-controlling interest. Further, as the liability was measured at fair value through profit or loss, the transaction costs incurred related to the issuance of the Put Right was to be measured in profit or loss in the period the investment was made.
As a result of the correction, the following adjustments were made retrospectively.
(in thousands of Canadian dollars)
| Loss and Comprehensive Loss | Six months ended September 30, 2024 | ||
|---|---|---|---|
| Previously Reported | Adjustment | Restated | |
| General and administrative expense | $ (3,181) | $ (981) | $ (4,162) |
| Net loss and comprehensive loss attributable to common shareholders | (9,351) | (981) | (10,332) |
| Net loss and comprehensive loss | (10,421) | (981) | (11,402) |
| Net loss per share attributable to common shareholders (basic and diluted) | (0.04) | (0.01) | (0.05) |
XIII. RISK FACTORS
The Company's business activities are subject to a variety and wide range of inherent risks and uncertainties. Any of these risks could have an adverse effect on the Company, its business and prospects, and could cause actual outcomes and results to differ materially from those described in forward-looking statements relating to the Company. For further details on the risk factors affecting the Company, please refer to the Company's MD&A for the years ended March 31, 2025 and 2024, which is filed on SEDAR+.
XIV. QUALIFIED PERSON
Unless stated otherwise herein, all scientific and technical data contained in this MD&A has been reviewed, approved and verified by Garth Drever, P.GEO. who is the Company's in-house "Qualified Person" within NI 43-101 and is a member in good standing of the Professional Geoscientists Ontario. Mr. Drever is also the Company's Vice President, Exploration. Therefore, he is not considered to be independent under NI 43-101.
XV. USE OF NON-GAAP FINANCIAL MEASURES AND RATIOS
The Company's financial results are prepared in accordance with IFRS Accounting Standards. This document refers to a non-GAAP financial measure "working capital" which is not a measure recognized under IFRS Accounting Standards and does not have a standardized meaning prescribed by IFRS Accounting Standards.
This non-GAAP financial measure does not have standardized meanings under IFRS Accounting Standards, may differ from those used by other issuers, and may not be comparable to similar financial measure reported by other issuers. This financial measure has been derived from the Company's financial statements and applied on a consistent basis as appropriate. The Company discloses this financial measure because it believes they assist readers in understanding the result of the Company's operations and financial position and provide further information about the Company's financial results to investors.
This measure should not be considered in isolation or used in substitute for other measures of performance prepared in accordance with IFRS Accounting Standards.
Working capital: the difference between current assets and current liabilities.
XVI. INTERNAL CONTROLS OVER FINANCIAL REPORTING
The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have established processes to provide them with sufficient knowledge to support representations that they have exercised reasonable diligence that: (i) the financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the financial statements; and (ii) the financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented. In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the corresponding certificate for venture issuers does not include representations relating to the establishment and maintenance of disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR"), as defined in NI 52-109. In particular, the certifying officers of the Company do not make any representations relating to the establishment and maintenance of:
i. controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
ii. a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with IFRS Accounting Standards.
The Company's CEO and CFO are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in the corresponding certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
XVII. OUTSTANDING SHARE DATA
As at the date of report, the Company had the following common shares, stock options and warrants outstanding.
| Number of shares | Exercise price | Weighted average remaining contractual life (years) | |
|---|---|---|---|
| Common shares | 230,567,041 | - | - |
| Stock options | 18,003,218 | $0.74 - $2.73 | 1.32 |
| Total | 248,570,259 | - | - |
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XVIII. OTHER INFORMATION
Additional information regarding the Company is available on the Company's website (www.frontierlithium.com) and on the Company's profile on SEDAR+.
FRONTIER LITHIUM INC.
Trevor R. Walker, President & CEO
November 27, 2025