FRONTIER RARE EARTHS PROVIDES UPDATE ON JOINT VENTURE WITH KOREA RESOURCES CORPORATION

NEGOTIATIONS AT ADVANCED STAGE ON SIGNIFICANT EXPANSION OF STRATEGIC PARTNERSHIP AGREEMENT

October 1, 2012

Toronto, Ontario: Frontier Rare Earths Limited (TSX: FRO) ("Frontier" or the "Company") today provided an update on its strategic joint venture with Korea Resources Corporation ("Kores"), which is designed to advance the development of Frontier's Zandkopsdrift rare earth project. Kores is a Korean Government-owned mining and natural resource investment company and has a mandate to ensure that Korean industry has access to strategically important mineral resources.

Background

In December 2011 Frontier and Kores signed a definitive strategic partnership agreement to advance the development of Frontier's Zandkopsdrift rare earth element project ("Zandkopsdrift") in South Africa (the "Strategic Agreement"). Under the terms of the Strategic Agreement, Kores agreed to acquire an initial 10% interest in Zandkopsdrift, along with off-take rights for 10% of the rare earth production from Zandkopsdrift. The purchase price of the 10% interest in Zandkopsdrift is C$23.78m. As from 3 July, 2012, Kores has also been responsible for a 10% share of all operating costs and expenses related to the development of Zandkopsdrift.

Under the Strategic Agreement Kores has options to acquire a further 10% interest in Zandkopsdrift and a 10% interest in Frontier following completion of a Definitive Feasibility Study. These options, if exercised, would give Kores off-take rights for a total 31% of rare earth production from Zandkopsdrift.

Expanded Strategic Partnership Agreement

In August 2012 Kores approached Frontier with a proposal to significantly increase its potential interest in Zandkopsdrift and its involvement in the financing, development and operation of the proposed rare earth mining and processing operations. This proposal, which the board of Frontier considers to be of potentially significant benefit to the Company, has been the subject of extensive discussions and negotiations between Frontier and Kores. These discussions are now at an advanced stage and the Company expects them to be concluded in October 2012.

As a result of this development and the extensive involvement of both the Frontier and Kores management teams in negotiations, Kores has requested that the payment date for the C$23.78m due be extended from 30 September, 2012 to 30 November, 2012. In the event that for any reason agreement is not reached on the terms of the proposed expanded strategic partnership agreement on Zandkopsdrift, the terms of the Strategic Agreement as previously announced will remain binding and of full force and effect and the C$23.78m payment due by Kores to Frontier will be required to be paid by 30 November, 2012.

James Kenny, President and CEO of Frontier Rare Earths commented: "Frontier believes that the proposal from Kores to significantly expand our current joint venture arrangements is a strong vote of confidence in both the management of Frontier and the potential of our Zandkopsdrift project. While the existing agreement with Kores already offers significant benefits to Frontier and to our plans for the development of Zandkopsdrift, the possible expansion and deepening of our partnership with Kores, with whom we have developed a very good working relationship, would be very welcome."

Further details of the Strategic Agreement are set out in the press releases dated 5 December, 2011 and 11 July, 2012, which can be found at www.frontierrareearths.com/investors/latest-news.

For further information on Frontier visit www.frontierrareearths.com, e-mail the Company at IR@frontierrareearths.com or contact +352 208 80249.For further information on Kores visit www.KORES.or.kr.

About Frontier Rare Earths Limited (TSX: FRO) (TSX: FRO.WT): Frontier Rare Earths Limited (www.frontierrareearths.com) is a mineral exploration and development company principally 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, highest grade undeveloped rare earth deposits worldwide. Frontier has a direct 74% interest and a 95% economic interest in Zandkopsdrift prior to the acquisition by KORES of an initial 10% interest. In March 2012 Frontier filed a Preliminary Economic Assessment ("PEA") on the Zandkopsdrift project prepared in accordance with National Instrument 43-101. The results of the PEA indicate that the proposed development of the Zandkopsdrift Project is both technically feasible and economically robust with a low risk profile. In conjunction with the PEA a mineral resource estimate for Zandkopsdrift confirmed 42.5m tonnes at an average grade of 2.23% containing approximately 940,000 tonnes total rare earth oxides (applying a 1% cut-off) and with 78% of the mineral resource in the indicated category. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Fiona Harper, Pr.Sci.Nat, was the independent qualified person from Venmyn Rand (Pty) Ltd responsible for the PEA.

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 $30m cash (excluding funds to be received from Kores under the Strategic Agreement) and no debt, and this strong working capital position is expected to be sufficient to finance the proposed work programme of the Company and the completion of a Preliminary Feasibility Study and a Definitive Feasibility Study for Zandkopsdrift (scheduled for completion in Q4 2013).

About Kores (www.KORES.or.kr): Korea Resources Corporation ("Kores") is wholly-owned by the Korean government and has a stated objective of becoming a global top 20 mining company by 2020 principally through international investments and joint ventures. Kores is charged with a policy mandate to further Korea's access to strategically important mineral resources. Kores exclusively carries out the Korean government's mineral resources policy objectives by engaging directly or indirectly through joint ventures or in the form of investments, in overseas exploration, development and production of strategically important mineral resources, and managing Korea's stockpile of rare mineral resources. Kores works closely with all major Korean industry groups and plays an active role in assembling consortia of Korean companies to selectively participate with Kores in commercial ventures. The Korean government has designated rare earths as a strategic raw material for Korea's future economic growth and has undertaken considerable work to identify the most prospective sources of future rare earth supply worldwide.

Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. Readers can identify many of these statements by looking for words such as "will", "intends", "projects", "anticipates", "estimates", "achieving", or similar words or the negative thereof. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, including, but not limited to, the impact of general economic conditions, industry conditions, commodity prices, availability of financing for the Company and the Company's ability to raise additional capital, results of feasibility studies, dependence upon regulatory approvals,the estimation of mineral resources and the realization of mineral reserves based on mineral resource estimates and estimated future development, if any, and possible variations of ore grade or recovery rates; the Company development, if any, and possible expectations regarding competition from other producers globally, possible customer and supplier relationships, anticipated trends and challenges in the Company regarding competition; mineral resource estimates and supply outlook and growth opportunities, the future price of and future demand for rare earth elements, title disputes or claims including Black Economic Empowerment initiatives, and the timing and possible outcome of pending regulatory and permitting matters.

Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Actual results may differ materially from those anticipated. Readers are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Frontier disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable law.

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