Frontier Rare Earths Limited is a mineral exploration and development company that is exclusively focused on exploration projects in Africa.
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 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.
Zandkopsdrift’s favourable location and geological setting are expected to provide significant advantages in relation to capital costs, operating costs and development time compared to other rare earth projects currently being evaluated, and makes Frontier well positioned to become one of the significant new producers of separated rare earths globally.
In December 2011, Frontier signed a definitive joint venture agreement with Korea Resources Corporation (KORES), focused on the financing and development of Frontier’s Zandkopsdrift rare earth project in South Africa (“Zandkopsdrift”) .Under this agreement Kores acquired an initial 10% stake in Zandkopsdrift together with an offtake right and obligation for 10% of Frontier’s Zandkopsdrift rare earth production. The consideration for the 10% stake in Zandkopsdrift acquired by Kores was C$23.8m. Kores is the Korean Government-owned mining and natural resource investment company whose mandate is to ensure that Korean industry has secure access to strategically important mineral resources. As rare earths are critical raw materials needed to support Korea’s high technology industry and future economic growth, the Zandkopsdrift project is a strategic priority project for both Kores and Korea.
In October 2012, Frontier announced a significant expansion of their strategic partnership with Kores whereby Kores has an option to increase its participation in Zandkopsdrift from its current 10% interest up to a 50% or equal interest with Frontier in Zandkopsdrift, together with a pro-rata off-take right and obligation for up to 50% of production from Zandkopsdrift.
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 = >200,000 tonnes TREO under SAMREC, JORC, CIM or equivalent international codes
Frontier’s Growth Strategy & Mid-Term Milestones
- Preliminary Economic Assessment in Q1 2012 – COMPLETED
- Pre-feasibility study (PFS) in H1 2015 – COMPLETED
- Advance Zandkopsdrift rare earth resources into proven and probable reserves at PFS – COMPLETED
- Complete a definitive feasibility study 9 -12 months post PFS.
- Develop relationships with additional, complimentary strategic partners.
- Arrange project finance for Zandkopsdrift and secure all relevant permits for the development.
- Undertake regional scale exploration elsewhere in Namaqualand area, where Frontier controls prospecting rights, totalling 135,000 ha and selectively develop a new project portfolio.
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.