First Phosphate picks Quebec site for lithium-iron plant

First Phosphate (CSE: PHOS; US-OTC: FRSPF) has taken a step closer towards producing a key material for lithium iron phosphate (LFP) batteries in Quebec for the North American battery and energy storage market, the company said Friday.

The company has secured a renewable 10-year lease for a 10,000-tonne-per-year iron phosphate plant, 20 km from the deep-sea port of Saguenay, Que.

The plant will serve as part of the company’s vertically integrated operation, transforming phosphate from its proposed mines into cathode active material (CAM).

Production from the plant — called First Saguenay — is expected to begin in early 2026.

“This plant is the first link in the LFP Battery Valley in Saguenay-Lac-St-Jean,” Eric Larouche, chairman of the Board of Promotion Saguenay, said in a release. “Our goal is to facilitate the creation of this North American value chain, right here at home in Saguenay-Lac-St-Jean … from the phosphate mine, to LFP cathode powder and, eventually, to the LFP battery itself.”

Quebec, already a hotspot for such critical minerals as lithium, graphite and nickel, hopes to make the Saguenay-Lac-St-Jean region a major centre for phosphate mining and an integral player in North American battery production.

The facility’s initial feedstock will be sourced from third parties but will eventually come from the company’s second property, Bégin-Lamarche, starting as early as 2028, First Phosphate CEO John Passalacqua told The Northern Miner in an email.

Well-equipped facility

The 28,000-sq.-metre industrial plant offers wastewater treatment, natural gas, high-voltage electricity and direct rail access. It also sits on a large plot of green-field industrial land where the company can expand operations and is a few kilometres from Canadian Air Forces NATO Base Bagotville.

First Phosphate has until the end of next April to come up with the estimated US$65 million required to retrofit and start operating the plant and is considering financing possibilities, including non-dilutive options.

The facility is expected to create 100 jobs in the region, with support from local organizations like the Saguenay-Le Fjord Chamber of Commerce and the Pekuakamiulnuatsh First Nation.

First Phosphate has started a feasibility study with Ultion Technologies to finalize infrastructure requirements. The plant’s technology has already been proven at two other facilities globally, allowing First Saguenay to move directly to large-scale production without a pilot phase.

In January, First Phosphate inked a deal with American Battery Factory of Utah and U.K.-based Integrals Power to produce lithium iron phosphate cathode material and LFP battery cells.

Project backed by PEA

First Phosphate has two main properties: Bégin-Lamarche and its flagship, Lac à l’Orignal, 70 km and 84 km from Saguenay, respectively.

A preliminary economic assessment last year estimated Lac à l’Orignal would produce an average of 425,000 tonnes of phosphate concentrate a year with a phosphate content of over 40%, 280,000 tonnes of magnetite and 97,000 tonnes of ilmenite over a 14-year mine life.

The project would generate an after-tax net present value at a 5% discount rate of $511 million and an internal rate of return of 17.2%. Pre-production capex was pegged at $550 million with an after-tax payback of just under five years.

Lac a l’Original has an open-pit constrained resource of 15.8 million indicated tonnes grading 5.18% phosphate (P₂O₅), 23.9% iron oxide (Fe₂O₃) and 4.23% ilmenite. Inferred resources measure 33.2 million tonnes grading 5.06% P₂O₅, 22.55% Fe₂O₃ and 4.16% ilmenite.

At Bégin-Lamarche, First Phosphate has discovered four main zones with multiple open-pit accessible phosphate-bearing layers and has completed more than 30,000 metres of drilling over the last year and a half.

Company shares gained 13.6% to 25¢ apiece on Friday at mid-day, valuing the company at $18.7 million. Its shares traded in a 52-week range of 15¢ to 48¢.