NASDAQ:FMST | CSE:FAT
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Foremost Lithium (NASDAQ:FMST) (CSE:FAT) is poised to benefit from the expected structural supply-demand imbalance of lithium for EV batteries, bolstered by incentives designed to encourage North American-sourced lithium. The company is developing hard rock lithium projects located primarily in the vicinity of Snow Lake, Manitoba, Canada.
Management is focused on further resource development at its flagship Zoro Project. Through exploration efforts, Foremost’s properties are now known to host 25 confirmed spodumene-bearing pegmatite dykes. A 10,000m (45-hole) diamond drill campaign is scheduled to begin in February 2024.
SUMMARY
➢ Foremost Lithium is one of the lithium resource companies poised to benefit from legislative incentives designed to encourage North American-sourced lithium for EV batteries. For example, part of the $7,500 tax credit available to consumers in the U.S. is contingent to the source of the EV’s battery components (free trade counties versus a “foreign entity of concern”) in 2024, which will expand to critical minerals within the EV battery in 2025.
➢ The spodumene-bearing pegmatite Dyke 1 has several characteristics that indicate the resource meets industry and market specifications
o A NI 43-101 Technical Report (and a SK-1300 report) that provides an Inferred MRE 1,074,567 tonnes grading 0.91% Li2O, 182 ppm Be, 198 ppm Cs, 51 ppm Ga, 1212 ppm Rb, and 43 ppm Ta at a cut-off of 0.3% Li2O (lithium oxide) with contained 9,700 tons Li2O and 24,000 tons contained Li2CO3 (lithium carbonate) at a cut-off of 0.3% Li2O.
o Metallurgical studies on a blended bulk sample collected from Dyke 1 were amenable to produce near battery-grade 6% Li2O concentrate.
o Management plans to monetize ore through a Direct Shipping Ore (DSO) procedure.
o In addition to the Zoro Project’s Dyke 1, which remains open in all directions, there are an additional 24 confirmed spodumene-bearing pegmatite dykes on Foremost’s Lithium Properties.
▪ 100% interest in 3,390-hectare Zoro Project in Snow Lake, Manitoba
▪ 100% interest in 6.339-hectare Grass River Claims in Snow Lake, Manitoba
▪ option to acquire 100% interest 6,757-hectare PEG North in Snow Lake
▪ option to acquire 100% interest in 1,002-hectare Jean Lake Property in Snow Lake
▪ 100% interest in 25-hectare Jol Claim in Snow Lake, Manitoba
▪ 100% interest in 4,792-hectare Lac Simard South in Québec
➢ Foremost Lithium also holds a 100% interest in the 2,800-acre Winston Gold & Silver Project located in New Mexico. Management anticipates spinning out this Project to shareholders after conducting another drill program.
➢ Recent financings include
o The completion of an underwritten public offering of 800,000 Units, which provided gross proceeds of USD $4.0 million and helped fund the uplisting process to NASDAQ.
o A third grant from MMDF grant of CND$300,000, which will assist toward financing the forthcoming winter drill campaign scheduled to commence in February 2024.
➢ A 10,000m diamond drill campaign is scheduled to begin in February with 30 holes (7,500m) at the Zoro Lithium Project in order to expand the existing resource at Dyke 1, along with further exploring Dyke 8 and Dyke 16, and 15 holes (2,500m) at the Jean Lake Lithium/Gold Property to bolster the B1 and B2 spodumene-bearing pegmatite occurrences and to test the potential for further gold mineralization.
➢ Management continues to raise awareness of Foremost Lithium among investors by attending and/or presenting at Analyst Conferences. Recent events include:
o LD Micro Main Event XVI (October 4, 2023)
o The ThinkEquity Conference (October 19, 2023)
o Virtual Roadshow Webinar (November 2, 2023)
o CCMEC (Central Canada Mineral Exploration Convention) 2023 (November 6 – 7, 2023)
The company also plans to attend PDAC 2024 in Toronto (March 5 – 6, 2024)
➢ The common shares of Foremost Lithium were uplisted and began trading on NASDAQ on August 22, 2023 under the ticker symbol FMST. The common shares of Foremost Lithium continue to trade on the Canadian Securities Exchange (CSE) under the ticker symbol FAT.
FMST: Foremost Lithium Resource & Technology Ltd, which holds 22,305 hectares (55,118 acres) within six lithium projects, five of which are situated in western central Manitoba, which the company has dubbed “Lithium Lane.” Management is focused on advancing its flagship Zoro Project, along with exploring the properties of the Grass River Claims, PEG North, Jean Lake and the Jol Claim in Manitoba, in conjunction with the Lac Simard South Property in Quebec. The company also holds the Winston Gold-Silver Project in New Mexico. Comprised of the Little Granite Mine and the Ivanhoe & Emporia claims, the Winston property is situated in the historically prolific Black Range (Chloride-Grafton) Mining District.
There are 16 known spodumene-bearing pegmatite dykes at the Zoro Project. Two more are situated at the Jean Lake Property and another seven at the Grass River Claims.
Equity Events
The company changed its name from FAR Resources Ltd to Foremost Lithium Resource & Technology Ltd. on January 7, 2022 in order to better reflect the company’s focus on lithium resources in the area of Snow Lake, Manitoba.
The common shares of Foremost Lithium were uplisted from the OTC Pink Sheets to the OTCQB Venture Market in February 2022 (OTCQB:FRRSF). Subsequently, Foremost Lithium was uplisted and began trading on NASDAQ on August 22, 2023 under the ticker symbol FMST. The common shares of Foremost Lithium continue to trade on the Canadian Securities Exchange under the ticker symbol FAT. The NASDAQ listing should enhance and expand awareness of Foremost Lithium and facilitate the trading of the company’s shares among US investors, both retail and institutional. Foremost Lithium has joined a select group of Canadian-domiciled hard rock lithium junior mining companies that trade in the U.S. on NASDAQ.
ZORO LITHIUM PROJECT (100% interest)
The Zoro Project consists of 16 claims encompassing a total of 3,390 hectares (8,377 acres), which host 16 known spodumene-bearing pegmatite dykes. The Zoro Project is contiguous with Snow Lake Lithium’s (NASDAQ:LITM)Properties, which have a MRE of approximately 9.08 million tonnes grading at 1% Li2O and an Inferred Resource of approximately 1.97 tonnes grading at 0.98% Li2O.i
Dyke 1 is the largest and main spodumene-bearing pegmatite dyke discovered at the Zoro Project. Dyke 1 has a near vertical body that is trending in roughly a north-to-south direction and extends for at least 280m along strike with a maximum thickness of roughly 35m.
Ownership
The area surrounding the Zoro 1 pegmatite dyke (approximately 52 acres) was first staked in 1953. After a series of holders, including Green Bay Mining & Exploration Ltd. and Dalton Bruce Dupasquier, among others, Foremost Lithium optioned the Zoro 1 claim on April 28, 2016. In addition, Foremost Lithium entered into two other option agreements concerning 15 other contiguous claims later in 2016 and 2017 with Strider Resources Limited. Foremost Lithium acquired 100% interest in all 16 claims that now comprise the Zoro Project by fulfilling the terms of all three option agreements.
Synopsis of Prior Exploration
In addition to several airborne surveys, blasting trenches and rock chip sampling, Green Bay Mining & Exploration conducted diamond drilling programs consisting of 78 holes (8,469m on Dykes 1, 2, 3,4, 5 and 7, with the majority (6,001m) targeting Dyke 1.ii Subsequently, Force Energy, which had optioned the Zoro 1 claim from Dalton Bruce Dupasquier between 2009 and 2012, collected 165 channel samples from 16 historic trenches in 2012. Assay results from the chip and grab samples had weighted average lithium concentrations of 0.33%-0.72% Li2O and 0.74-1.78 Li2CO3 in 13 of the 16 trenches investigated on the Zoro 1 claim.iii
Exploration Conducted by Foremost Lithium
Exploration programs conducted by Foremost Lithium at Zoro have included prospecting in 2016, soil geochemical surveys in 2017 and 2018, six (6) diamond drill programs (2016-2022) that totaled 8,466m in 60 holes and both a UAV-assisted magnetic survey and an airborne LiDAR survey in June 2022. In 2016, there were seven (7) known dykes, and through subsequent exploratory efforts, additional dykes were discovered: D8 in 2018, eight in 2019 (D9-D15) and D16 in 2022, bringing the total of confirmed spodumene-bearing dykes to 16 today at the Zoro Project.
In late October 2016, the company completed a 7-hole (1,142m) drill program on Dyke 1 in order to verify historic drilling conducted by Green Bay in 1956. The weighted averages of the best intercepts ranged between 1.18% Li2O and 1.46% Li2O in six of the seven holes, comparing well with the historic data.
In the first half of April of 2017, the company completed its second drill program on the Dyke 1 pegmatite. It consisted of 7 holes drilling 1,088m (FAR17-8-14) and designed to test Dyke 1 along strike to within 150m from surface. The program confirmed that Dyke 1 thickens at depth. The longest intersection assayed at 1.2% Li2O over 38.3m (FAR17-010) and two shorter intersections (4.6m and 2.1m) assayed at 2.3% Li2O and 2.6% Li2O respectively. During the summer of 2017, a field program, which included trenching and outcrop sampling, identified a spodumene-bearing dyke swarm in the vicinity of Dykes 5, 6, and 7. Between late-September and mid-October, a 5-hole (710m) drill program (drill holes FAR17-15-19) was completed at locations in areas where no modern drilling had taken place at Dyke 1. Two wider intervals of mineralization were intersected (1.43% Li2O over 20.6 m and 1.15% Li2O over 12.4 m). Two higher grade intervals were present in FAR17-18 (2.19% Li2O over 4m and 3.12% Li2O over 1m). There were also multiple narrow intersections of mineralization in all five drill holes.
A 19-hole (2,472m) winter diamond drill program (FAR18-20-38) that commenced in mid-January 2018 was completed in mid-March, and later a UAV-drone aerial magnetic survey was completed. The company’s fourth drilling program at Zoro tested Dyke 1 at depth (below 150m from the surface); assay results confirmed lithium mineralization to a depth of 365m. In addition, there was some infill drilling, which contributed to the maiden MRE announced in July and filed in September. Also, 10 drill holes tested under surface zones at Dykes 2, 4, 5 and 7 where there had been positive assay results from trench and outcrop sampling. Finally, a test of a MMI soil geochemical anomaly with holes FAR18-34 & FAR18-35 discovered Dyke 8 with mineralized interceptions of 20.7m and 36.5m, respectively.
The 2018 summer exploration program (end of July-early September) consisted of field work of a helicopter-assisted geological mapping effort and MMI soil geochemical surveys (784 soil samples using Dutch augers), along with drill core sampling and metallurgical drill core sampling. The MMI anomalies generated over 50 potential drilling targets.
The 2018 winter 22-hole (3,054m) diamond drill program, the company’s fifth in the Snow Lake region, commenced in mid-November and ended in mid-February 2019 (FAR18-43-47).
Due to constant downward pressure on the price of lithium from early 2018 through the third quarter of 2020, which was exacerbated by the COVID-19 pandemic, along other various reasons, further exploration of the Zoro Project was delayed until March 2022 when field operations commenced in preparation for 10-hole (1,509m) diamond drill program.
In mid-March 2022, Foremost Lithium commenced its sixth drill program at the Zoro Project. In late April, Dyke 16 was discovered having been intersected by two exploratory drill holes (DDH FM22-70 &70B) In June 2022, a drone-assisted 1,264.7-line km magnetic survey and a LiDAR survey was completed over the Zoro Project. The results of the surveys were visually integrated with prior exploratory efforts, including prospecting observations, MMI soil geochemical data and drill core data.
During 2023, in preparation for drill program, the company engaged Dahrouge Geological Consulting to conduct a 19-day Summer Exploration Program that occurred between late-August and mid-September. At Zoro, Dyke 1 was re-visited and eight pegmatite samples were collected, five of which presented visible spodumene. The top four lithium assays were 2.13%, 1.45%, 1.09% and 0.64% Li2O. The assays also revealed the presence of Cesium (Cs2O) and Tantalum (Ta2O5).
In 2024, the upcoming 30-hole (7,500m) diamond drill program in February will include infill drilling at the two most prominent dykes (Dyke 1 and Dyke 8). These dykes remain open at depth and along strike.
Maiden Resource Estimate
In July 2018, a NI 43-101-compliant maiden resource estimate (MRE) on a portion of dyke D1 was completed. Subsequently, the Technical Report concerning the MRE was filed as an S-K 1300-compliant Technical Report with the SEC in 2023. At a cut-off of 0.3% Li2O (lithium oxide), the Inferred Resource Estimate is 1,074,567 tonnes grading 0.91% Li2O, 182 ppm Be, 198 ppm Cs, 51 ppm Ga, 1212 ppm Rb, and 43 ppm Ta at a cut-off of 0.3% Li2O (lithium oxide) with contained 9,700 tons Li2O and 24,000 tons contained Li2CO3 (lithium carbonate). The spodumene mineralization has various geophysical signatures occurring both within laterally and vertically pegmatite dykes and hosted by both mafic volcanic and felsic sedimentary rocks.
Metallurgical studies
Three metallurgical studies have been performed on samples collected from Dyke 1 of the Zoro Lithium Project. In 2020, the first was conducted on a 489kg blended bulk sample collected from three spodumene-mineralized pegmatite zones of D1. The test work included heavy liquid separation (HLS), dense media separation (DMS) and dry magnetic separation. A technical paper concerning the metallurgical study was published in Mining Metallurgy & Exploration.
Another metallurgical report was completed in 2022, and in 2023, more metallurgy work was conducted. In their totality, the metallurgical studies confirmed that the final product from the ore collected in Dyke 1 is amenable to produce near battery-grade 6% Li2O concentrate by employing a combination of two passes of Dense Media Separation and flotation of DMS middlings that achieved a spodumene concentrate grade of 5.93% Li2O with a global lithium recovery rate of 66.9%. The recovery rate after the DMS program was 81.6% after the DMS program.
Direct Shipping Ore Plan
Management has an approach to monetize ore through a Direct Shipping Ore (DSO) procedure whereby bulk ore (conventionally blasted from the ground) can be shipped directly to a mine (possibly the Tanco Mine, 825 km from Snow Lake and located only 180 km east of Winnipeg), where the ore can be processed into concentrate. Thereafter, this feedstock can be shipped via the NAFTA superhighway (a portion of which starts in Winnipeg, only 180 km west of the Tanco Mine) to North American battery manufacturing sites. Management has put forward a Zoro Project Timeline that anticipates the DSO could commence in the first half of 2026.
RECENT NEWS
Winter Drill Programs Announced for Zoro Project & Jean Lake Property
On December 23, 2023, Foremost Lithium announced the details of the company’s winter diamond drill program at the Zoro Property. The program is planned to be a 30-hole (7,500m) program that is particularly focused Dyke 1 and Dyke 8, along with Dykes 3 & 16. Work permits will be submitted at the Manitoba Mines Branch.
On December 19, 2023, the company announced that 15-hole (2,500-m) winter diamond drill program at its Jean Lake Lithium/Gold Property. A work permit (valid until April 30, 2026) was received soon thereafter. The program will target the B-1 & B-2 spodumene-bearing pegmatite dyke to test the extent of mineralization laterally and down plunge with the goal of better understanding the emplacement mechanisms at Jean Lake. There also will be drilling that will test for additional gold mineralization at depth based on the eight (8) drill holes that intersected gold mineralization at depths up to 110m below surface during the drill program that was conducted between December 2022 and April 2023.
Up to CDN$3.0 million in 12-18-month credit financing commitments have been secured in arrangements with some of the company’s vendors to fund the drill programs at Zoro and Jean Lake.
Grant Received from Manitoba Mineral Development Fund
On January 4, 2024, Foremost Lithium announced the receipt of a CDN$300,000 grant from the Government of Manitoba’s Mineral Development Fund (MMDF). This is the company’s third CDN$300,000 grant from the MMDF and will be used to help fund the winter drill program at the Zoro Project. The MMDF awards these grants to stimulate exploration activity for essential minerals (like lithium), thereby sponsoring the development of the mining industry in Manitoba, while contributing to job creation and promoting economic growth in the province.
VALUATION
There are over 30 junior mining lithium companies with spodumene deposits in the Tier 1 mining jurisdictions of the U.S. and Canada. Many of these companies are in the very early stages of exploration (geophysics, sampling, mapping, desk top studies, etc.) without having yet put drill to ground.
In an effort to be selective, we tightened the field to companies which have reduced exploratory risk by advancing the hard rock lithium project(s) beyond the very early stage to a certain point, namely with 100%-owned properties having discovered over 15 confirmed spodumene-bearing pegmatite dykes, completed an MRE and conducted metallurgical studies that demonstrate that the ore is amenable to produce battery-grade lithium concentrate. Some of those companies are Patriot Battery Metals (OTCQX:PMETF), Critical Elements Lithium (OTCQX:CRECF), Snow Lake Resources Ltd. (NASDAQ:LITM) and Foremost Lithium Resource & Technology Ltd (NASDAQ:FMST). It is noteworthy to observe that all have been uplisted to either NASDAQ or the highest tier of OTC markets, the OTCQX. Three juniors that have at least drilled their Canadian hard rock properties were also added: Power Metals Corp. (OTCQB:PWRMF), Rock Tech Lithium Inc. (OTCQX:RCKTF) and Winsome Resources Limited (OTCQB:WRSLF).
Currently, the P/B valuation range of these comparable companies is between 5.2 and 1.4. We believe that Foremost Lithium can attain at least an industry average price-to-book valuation of 3.0 times book, which indicates a target of $6.20 per share.
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i. Technical Report Summary, Initial Assessment of the Snow Lake Lithium Project, August 9, 2023, page 53.
ii. NI 43-101 Technical Report on the Zoro Lithium Project, July 6, 2018, page 43.
iii. Ibid page 42.
