Company: FMST
Filing Date: 2025-06-20
Form Type: 20-F
Source: 0001171843-25-004004
Chunk: 61

Company: Foremost Clean Energy Ltd.
Filing Date: 2025-06-20
Form: 20-F
Item: Item 4
Chunk 61
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 the risk of the failure of additional drilling to provide confirmation of our indicated and inferred resource is great. To date, a limited amount of capital has been invested in our Lithium Lane Projects and the future success of the project will rely heavily on the availability of additional capital which may not be available to us on favorable terms, if at all. Receiving capital investment in the future may result in dilution of your investment in our common shares and a failure to confirm our resource may result in the failure of our business and the complete loss of your investment.

Lithium Industry and Competition

The market for the lithium sector has entered a challenging phase that has spanned throughout 2024 and into early 2025, with prices hitting multi-year lows due to persistent oversupply and softer-than-expected demand from key industries like electric vehicles (EVs) Market analysts suggest this downturn may represent a bottoming-out period, with conditions expected to tighten by 2026 through to 2030 as production cuts take effect and demand gradually recovers.

Global lithium carbonate production has surged dramatically since 2020, increasing from 82,000 metric tons to 240,000 metric tons in 2024 - a 192% increase. However, lithium sales data shows that demand has failed to match this rapid expansion, leading to significant oversupply, with surpluses of 175,000 metric tons in 2023 and 154,000 metric tons in 2024. Analysts predict a narrower surplus of just 10,000 metric tons in 2025, followed by a potential deficit of 1,500 metric tons in 2026.

Prices have reflected this imbalance, with lithium carbonate (CIF North Asia) dipping below $9,550 per metric ton in February 2025 - its lowest level since 2021. At current price points, roughly a third of lithium producers are operating at a loss. The price slump has forced major producers to scale back operations, with Pilbara Minerals deferring expansion plans for what would have been the world's largest lithium mine and reducing FY2025 capex guidance to AU$615-685 million.

Similarly, Albemarle has reportedly paused its expansions at its Kemerton plant in Australia and idled its Chengdu facility in China while cutting 2025 capex by $100 million to $800 million.

Figure 16. Lithium Prices See a Controlled Declined over Historic Highs over the Rest of this Decade (Source: Wood MacKenzie)

Despite these market headw