EXCLUSIVE: Foremost Lithium CEO Says Price Slump Is Temporary, While 'Raising Capital Is Harder'

Lithium prices will only be low temporarily as long-term demand expectations for the key electric vehicle (EV) battery mineral remain robust, according to the chief executive of Canadian explorer Foremost Lithium Resource & Technology Ltd. FMST.

Tempered growth expectations for EVs amid high-interest rates have sent lithium prices plummeting after hitting record highs in 2022. Prices for key lithium products have fallen more than 80% in recent months, according to commodity price reporting agency Fastmarkets.

"It's a little harder to raise capital right now," Foremost CEO Jason Barnard told Benzinga this month at the yearly gathering of the Prospectors & Developers Association of Canada in Toronto. "It's just a short-term situation."

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That's because the short-term ups and downs in lithium prices don't affect the long-term demand outlook from electric vehicle manufacturers and battery makers, he said.

Another longer-term benefit, at least for North American lithium companies, is government programs aimed at bolstering domestic supply chains for minerals needed to decarbonize the economy, he explained.

Because China is the dominant player in EV minerals, the U.S. and Canada have incentives to build out supply chains domestically or with free-trade partnerships with friendly nations.

For example, Canada has launched a CAD 1.5 billion ($1.1 billion) Critical Mineral Infrastructure Fund to support clean energy and transportation infrastructure projects.

Foremost has submitted a proposal for CAD 10 million ($7.4 million) of that money to build a 9.5 kilometer-long (5.9 mile-long) road in Manitoba's resource-rich Snow Lake region to connect company properties to an existing roadway. The route would be used to transport lithium, nickel, gold, and timber, the company said. 

Foremost has also started drilling at its Jean Lake lithium and gold property near Snow Lake, Barnard said in the interview.

The company had previously said it plans a 15-hole, 2,500-meter drill program this winter, expected to commence in the first quarter.

"I'm always excited about drilling," Barnard said.

Drilling results combined with Canada's decision about funding the company road will inform Foremost's strategy for shipping ore, a development it is anticipating to start in late 2025 to early 2026.

Foremost's strategy for fast-tracking a revenue stream before fully developing a mine relies on blasting bulk ore from the ground and shipping it offsite for concentration.

Meanwhile, the company is continuing to talk with automakers and battery makers interested in sourcing lithium.

"We're always talking to these different companies," Barnard said.

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