Frontier Files NI 43-101 Technical Report for the Preliminary Economic
Assessment on its Zandkopsdrift Rare Earth Project in South Africa
March 13, 2012
Toronto, Ontario: Frontier Rare Earths Limited (TSX: FRO)
(TSX: FRO.WT) ("Frontier" or the "Company") is pleased to
announce the filing on SEDAR of a National Instrument ("NI")
43-101 compliant technical report on the results of the
Preliminary Economic Assessment ("PEA") carried out on the
Company's Zandkopsdrift rare earth element project in South
Africa. Highlights of the results of the PEA, previously
reported by Frontier on February 21, 2012, are set out
below:
HIGHLIGHTS of the Zandkopsdrift PEA:
Net Present Value ("NPV") of $3.65 billion, after tax and
royalties, at an 11% discount rate.
Internal rate of return ("IRR") of 52.5% , after tax and
royalties, and 2 year payback from start of production.
Average production of 20,000 tonnes of separated rare earth
oxides ("REO") per annum, generating average annual revenues
of $1.1 billion and an estimated operating margin of 78%.
Twenty year mine life, supported by the mining and processing
of 19.5 million tonnes of material with an average in-situ
grade of 3.12% total REO ("TREO") at an average metallurgical
recovery of 67%.
Capital costs of $910 million for a 1 million tonne per annum
open-pit mining operation and concentration and rare earth
separation plant facilities.
Rare earth oxide 'basket price' of $58.23/kg used for
Zandkopsdrift production, based on an average of three-year
China Free on Board average REO prices and Roskill's
mid-point 2015 REO forecasts applied to Zandkopsdrift's in
situ REO relative distribution.
Estimated average operating costs of $13.09/kg of separated
REOs.
Conventional metallurgical process, comprising comminution,
flotation, sulphuric acid cracking and solvent
extraction.
Potential for life of mine to be extended beyond initial 20
years, as the PEA mine plan only exploits circa 60% of the
current estimated TREO resource at Zandkopsdrift..
The PEA was carried out by Venmyn Rand (Pty) Ltd ("Venmyn"),
one of South Africa's leading independent advisors
specialising in the technical and economic evaluation of
mineral projects, with contributions from a number of
specialist consultants, including The MSA Group ("MSA") for
resource estimation, Sound Mining Solution ("SMS") for the
mine design and schedule, SGS Minerals Services ("SGS") for
metallurgical flow sheet development, and SNC Lavalin Group
("SNC") for engineering design and capital and operating cost
estimates. Fiona Harper, Pr.Sci.Nat, is the independent
qualified person from Venmyn responsible for the PEA, and has
reviewed and approved the technical and economic information
provided in this release.
A copy of the technical report will also be available on the
Company's website at www.frontierrareearths.com
Note: The Company cautions that the PEA referred to in this
announcement is preliminary in nature, includes some inferred
mineral resources that are considered too speculative
geologically to have the economic considerations applied to
them that would enable them to be categorized as mineral
reserves, and that there is no certainty that the PEA will be
realized. Caution: mineral resources that are not reserves do
not have economic viability. All dollar amounts are in U.S.
currency.
About Frontier Rare Earths Limited (TSX: FRO) (TSX:
FRO.WT):
Frontier Rare Earths Limited is a mineral exploration and
development company exclusively focused on the development of
rare earths projects in Africa. Frontier's flagship asset is
the Zandkopsdrift rare earth project, which is located in the
Northern Cape Province of South Africa and is one of the
largest undeveloped rare earth deposits worldwide.
Zandkopsdrift's favourable location is expected to provide
significant advantages in relation to capital costs and
development time compared to other rare earth projects
currently being evaluated, and makes Frontier well positioned
to become one of the first significant new producers of
separated rare earths outside China. Frontier has a direct
74% interest and a current 95% economic interest in
Zandkopsdrift.
Frontier is listed on the main board of the Toronto Stock
Exchange and currently has 89,562,781 shares outstanding.
Frontier is well funded, with approximately $37m cash and no
debt, and this strong working capital position will finance
the proposed work programme of the Company and the expected
completion of a Preliminary Feasibility Study (scheduled for
Q4 2012) and a Definitive Feasibility Study for the
Zandkopsdrift Project (scheduled for Q3 2013).
In December 2011 Frontier completed a definitive strategic
partnership agreement with Korea Resources Corporation
(KORES) in relation to the development of Zandkopsdrift.
KORES, which is controlled by the Korean Government, is
currently finalising the formation of a consortium of leading
Korean companies to also participate in the Frontier KORES
joint venture and which is expected to include Samsung Group,
GS Group, Daewoo Shipping & Marine Engineering Group and AJU
Group. Frontier plans to commence production of separated
rare earth oxides from Zandkopsdrift in H2 2015 at a rate of
20,000 tonnes per annum.
For further information visit www.frontierrareearths.com,
e-mail the Company at IR@frontierrareearths.com or contact
Paul McGuinness, CFO, at +352 208 80249 or Joe Racanelli, TMX
Equicom, at 416 815 0700 x243.