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Introduction

 

Frontier Rare Earths Limited is a mineral exploration and development company that is exclusively focused on rare earth elements in Southern Africa. Rare earth elements such as neodymium, dysprosium and terbium are critical for many high tech applications such as high strength permanent magnets used in electric motors, electric generators, wind turbines, hybrid cars, iphones and other consumer and industrial electronics. Other rare earth elements such as europium, ytterbium and gadolinium are critical elements in energy efficient lighting, plasma screens and LCD televisions. Lathanum is critical for batteries in hybrid and electric cars and cerium is also used as a cracking catalyst in petroleum refining.

Frontier’s flagship asset is the Zandkopsdrift rare earth project which is one of the largest undeveloped rare earth deposits worldwide containing 950,000 tonnes TREO1. The Zandkopsdrift B Zone has the highest TREO grade and the highest grade of high value HREOs2 of significant advanced deposits3 outside of China.

 

The Company's directors, senior management and consultants have extensive experience in mining and exploration in South Africa, particularly in the Namaqualand region, which is one of the longest established mining regions in South Africa.

 

 

The Company’s principal asset is the Zandkopsdrift rare earth deposit in the Namaqualand region of the Northern Cape Province of South Africa. Zandkopsdrift is believed to be one of the largest known rare earth resources outside of China classified under international resource reporting standards. The Company believes that the combination of deposit size, grade, rare earth distribution, geological setting and location close to infrastructure gives Zandkopsdrift the potential to become a significant producer of rare earths. The resource at Zandkopsdrift is considered by the Company to be large enough to target supplying up to 20,000 tonnes per annum of rare earth oxides per annum commencing in 2015, which is broadly comparable to the largest non-Chinese rare earth projects currently under development.

 

Zandkopsdrift’s favourable location is expected to provide significant advantages in relation to capital costs, operating costs and development time compared to other rare earth projects currently being evaluated.

 

1 TREO = total rare earth oxides and includes the elements lanthanum to lutetium expressed as trivalent oxides
2 HREO = heavy rare earth oxides; high value HREOs are europium, terbium and dysprosium
3 Significant advanced deposits are those with >200,000 tonnes TREO under SAMREC, JORC, CIM or equivalent international codes

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Objectives

Frontier’s primary objectives are as follows:

  • Accelerate the evaluation and development of Zandkopsdrift with the objective of completing a preliminary economic assessment by the end of Q3 2011, a pre-feasibility study by Q1 2012; and subject to the outcome of the pre-feasibility study, completing a definitive feasibility study by the end of 2012; and, subject to the results of the definitive feasibility study, commencing production of rare earths in 2015.
  • Evaluate the 30 satellite intrusives that have already been identified immediately around Zandkopsdrift for their rare earth potential and carry out regional scale exploration elsewhere in the Zandkopsdrift prospecting right area. With substantial tonnage already identified at Zandkopsdrift to support a significant mining operation, the primary objective of this work will be to identify rare earth mineralization with higher grades and/or higher value rare earth distributions.
  • Capitalize on the Company’s extensive knowledge of the Namaqualand region of South Africa to identify new areas that have the potential to host rare earth deposits. The Company believes that there is considerable rare earth potential elsewhere in the Namaqualand region and one such area has already been identified by the Company; a prospecting right application has been submitted in respect of this area.
  • Seek acquisition and joint venture opportunities selectively in Southern Africa that would present a good strategic fit with Zandkopsdrift and Frontier’s broader strategic and corporate objectives.

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Black Economic Empowerment

The prospecting right for Zandkopsdrift is help by Sedex Minerals (Pty.) Limited (“Sedex”), a South African company that is 74% owned by Frontier. In accordance with the relevant South African Black Economic Empowerment (“BEE”) legislation, 26% of Sedex is held by BEE shareholders, with 21% owned by the Namaqualand Empowerment Trust, a broad-based community trust established for the benefit of historically disadvantaged South Africans ('HDSA') principally in the Namaqualand region of the Northern and Western Cape Provinces of South Africa and 5% by another HDSA. Under the terms of the sedex shareholders agreement, the BEE shareholders will receive a free carry through to definitive feasibility study at which point the Namaqualand Empowerment Trust will be required to pay market value for its 21% interest in Zandkopsdrift. This gives Frontier a current effective 95% economic interest in the Zandkopsdrift project until such payment is received.

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© Frontier Rare Earths Limited, 9 Allée Scheffer, L-2520 Luxembourg, Luxembourg.  T: +352 208 80249  F: +352 246 11172  E: info@frontierrareearths.com
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