Frontier announces positive Preliminary Economic Assessment for its Zandkopsdrift Rare Earth Project in South Africa

Transcription

1 Frontier announces positive Preliminary Economic Assessment for its Zandkopsdrift Rare Earth Project in South Africa February 21, 2012 Toronto, Ontario: Frontier Rare Earths Limited (TSX: FRO) (TSX: FRO.WT) ( Frontier or the Company ) is pleased to announce the results of a Preliminary Economic Assessment ( PEA ) prepared in accordance with National Instrument ( NI ) on the Zandkopsdrift rare earth element ( REE ) project in South Africa ( Zandkopsdrift or the Zandkopsdrift Project ). 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. Frontier is now well-positioned to achieve our objective of becoming one of the first significant new producers of separated rare earths outside China by 2015, said Mr. James Kenny, President and CEO of Frontier Rare Earths. The results of our PEA demonstrate the economic attractiveness of our project, and we have a world-class partner in Korea Resources Corporation ( KORES ), the Korean Government-owned mining and natural resources investment company. KORES intends to invest in Zandkopsdrift, provide technical and financial assistance, and secure off-take of up to 31% of Zandkopsdrift production. 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 optimised mine design and mine schedule, SGS Minerals Services ( SGS ) for metallurgical flow sheet development, and SNC-Lavalin (Pty) Ltd ( SNC ) for engineering design and capital and operating cost estimates. All capital and operating cost estimates are to an intended level of accuracy of +/- 30%. All dollar amounts are in U.S. currency. HIGHLIGHTS 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 Pre-feasibility study ( PFS ) under way, with completion scheduled for Q4 2012

2 Table 1: Zandkopsdrift PEA Financial Summary (All $ figures in US currency) Post-Tax 11% discount rate $3.65bn Post-Tax NPV attributable to Frontier $3.59bn Post-Tax IRR 52.5% Pre-Tax 11% discount rate $4.34bn Pre-Tax IRR 57.6% Annual post-tax free cash flow in full production $711m Project payback from commencement of full production 2 years Total Estimated Construction Capex* $910m Start-up costs* $27m Estimated basket price per kg of separated REO $58.23 Estimated cash operating costs of mining, concentrating and cracking per kg of REO* $6.05 Estimated operating costs of separation plant per kg of REO* $7.03 Total estimated cash operating costs per kg of separated REO* $13.08 *excluding contingency; an overall contingency of 15% has been added to both capital and operating cost estimates in the PEA financial model and valuation Based on the Zandkopsdrift Project development plan as outlined in the PEA and the published development plans of other potential western producers, Frontier would become one of the largest producers of rare earths outside China after Molycorp and Lynas, and the second largest producer of scarce heavy rare earth oxides ( HREO ) outside China. The Board of Frontier has authorised a PFS to be carried out on Zandkopsdrift. Work has already commenced on the PFS, which is scheduled for completion in Q The Company s current cash resources of approximately $38 million are expected to be sufficient to complete the PFS, at an estimated cost of $7.5 million, and to complete a Definitive Feasibility Study ( DFS ) in Mr. Kenny added, This is the first NI compliant independent economic study on a rare earth project published by any company encompassing mining through to separation of individual rare earth oxides. The PEA indicates that the Zandkopsdrift project demonstrates robust economics over a range of discount rates and that the development of mining, rare earth processing and separation facilities are both economically and technically viable. With a positive PEA in place, a strong working capital position and the benefit of a significant strategic partnership with KORES, Frontier is very well positioned to meet its objective of becoming a major global supplier of rare earths, starting in In compliance with regulatory requirements, the NI compliant Independent Technical Report prepared by Venmyn on the results of the PEA will be filed by Frontier on SEDAR ( in March 2012 and will also be made available on the Company s website at Background to the Zandkopsdrift Project Frontier s flagship asset, the Zandkopsdrift rare earth carbonatite, is located 420 km north of Cape Town in the Northern Cape Province of South Africa and is recognised as one of the largest undeveloped rare earth deposits worldwide. The deposit s favourable location and geological setting are expected to provide significant advantages in relation to capital and operating costs and development time compared to other rare

3 earth projects currently being evaluated, and make Frontier very well positioned to become one of the first significant new producers of separated rare earths outside China after Molycorp and Lynas. Frontier plans to produce 20,000 tonnes per annum of separated rare earths from Zandkopsdrift, with production scheduled to commence in H Preliminary Economic Assessment The development of the Zandkopsdrift Project will be undertaken through the following three related components: 1. An open cast mine, processing plant and associated infrastructure on the REE enriched Zandkopsdrift carbonatite, located southwest of the town of Garies, in the Northern Cape Province of South Africa (the Zandkopsdrift Mine ), which will produce a high purity mixed rare earth carbonate. The Zandkopsdrift Mine will be owned and operated by Sedex Minerals, in which Frontier has a 74% shareholding and a current 95% economic interest. 2. A finance, technology, trading, sales and marketing company which will source finance and technical expertise for the development and operation of an REE separation plant, arrange off-take agreements for the REE products produced by the separation plant, and provide general sales and marketing services; and 3. A rare earth separation plant to be located at Saldanha Bay (the Saldanha Separation Plant ), (approximately 300 kms from Zandkopsdrift) which will process the mixed rare earth carbonate and produce high purity separated rare earth oxides. The following table sets out the key operational assumptions and parameters used in the PEA: Table 2: Key Operational Assumptions and Parameters Target annual mining rate 1 Mt/yr Average stripping ratio* 3:1 Target annual production rate 20,000t TREO/yr Average in-situ grade (within proposed mining area) 3.12% TREO Mining dilution 7.50% Metallurgical recovery 67% Life of mine 20 years Production start-up H Time to full production 1 year * includes both material between the 1% TREO cut-off and 2% TREO, and waste Mine Design and Mining Operations A high grade zone of mineralisation within the overall Zandkopsdrift resource, referred to as the Central Zone, was defined as the basis for a mine design that would allow the production of 20,000 tonnes of separated rare earth oxides per annum over an initial life of mine ( LoM ) of 20 years. The Central Zone consists of the mineralisation above a grade of 2.0% TREO, with an average grade of the Indicated Mineral Resources of 3.1% TREO and an average grade of the Inferred Mineral Resources of 2.9% TREO. The PEA mine design focused only on exploiting the Central Zone, and where other material grading between the cut-off grade of 1.0% TREO and 2.0% TREO is removed during mining operations, it will be stockpiled as potential future plant feed, which could be used to extend the LoM beyond the initial 20 years. The mine design consists of a conventional open pit layout with a single entry access ramp. As the portion of the Zandkopsdrift carbonatite to be mined is highly weathered, excavation will consist of a mix of free digging, ripping and conventional drill and blasting methods. Mining will be undertaken by excavator, with loading of

4 material on articulated dump trucks and haulage via the access ramp to the process plant. Initial geotechnical studies indicate that mining will progress from surface from the southwest of the deposit using bench heights of 6m, to a final pit depth of between 70m to 90m below surface. The pit optimisation study undertaken for the PEA defined a LoM of 20 years based solely on the exploitation of Central Zone material, and the LoM could be significantly extended beyond 20 years by the inclusion of the stockpiled and unmined material between 1.0% and 2.0% TREO into a future mining plan. This will be examined as part of the planned PFS. Recovery and Beneficiation The process plant at the Zandkopsdrift Mine will comprise a front-end physical upgrading section, which includes a crushing and milling section and beneficiation of a <15μm de-slimed fraction through a flotation circuit. The flotation concentrate is recombined with the de-slimed fraction and fed to the acid leach section. The acid leach section is supplied with concentrated sulphuric acid produced onsite at Zandkopsdrift, which is mixed with the concentrate feed and baked in a rotary kiln to decompose the rare earth minerals. The roasted concentrate is water leached and the REEs are precipitated as a 99% pure mixed rare earth carbonate. Thorium, uranium, iron and other contaminants are removed by precipitation and disposed of to a lined tailings disposal facility at Zandkopsdrift. The mixed rare earth carbonate will be transported by road to the Saldanha Separation Plant where it will be dissolved in hydrochloric acid into an aqueous solution. The resultant solution will undergo a complex multistage solvent extraction and stripping process to produce separated saleable REOs at purities of between 99% and %. (The final purities will be confirmed by additional testwork planned for 2012). The solvent extraction process is based on two solvent extraction modules, each with a capacity of 10,000tpa, to achieve an overall capacity of 20,000tpa of separated REO products. Each solvent extraction module is divided into 14 solvent extraction circuits to separate the mixed REE chloride bearing solution into the desired products. Each circuit consists of four process steps, namely; loading, extraction, washing and stripping and the number of stages for each step for each of the extraction circuits varies according to the feed composition and required product purities. Five of the heavy REOs, namely holmium, erbium, thulium, ytterbium and lutetium, will be co-precipitated as a mixed REO concentrate and stockpiled for potential future processing, sale or disposal. No revenue has been assumed from the production of these five REOs for the purposes of the PEA due to their current limited demand. Capital Expenditure The total construction capital expenditure ( Capex ) for the Zandkopsdrift Project is estimated at $910m. In addition, start-up costs, spares and the cost of skills and local development programmes totalling $26.7m have been estimated.

5 Table 3: Capital Expenditure Construction Capex US$ Mining & Concentrator Plant Mining equipment, surface infrastructure and pre-production costs $3m Concentrator plant $132m Other infrastructure $41m Tailings disposal facility $17m District roads upgrade $4m Rehabilitation and closure $2m Desalination plant and pipeline $13m Total mine and concentrator plant Capex $212m Saldanha separation plant Land and services $3m Separation plant $498m Other infrastructure $108m Evaporation ponds $2m Total separation plant Capex $611m Total mine, concentrator plant and separation plant Capex $823m Sulphuric acid plant $88m Total construction Capex $910m Start- up / indirect costs First fills $9m Spares $17m Skills and local economic development programmes $1m Total start-up costs $27m The above estimates do not include contingencies, but an overall contingency of 15% has been added to the Capex estimates in the PEA financial model and valuation. Operating Costs Operating costs at the Zandkopsdrift Project for producing separated REOs are estimated at $13.08/kg. The cost of reagents utilised in the concentrator and separation plants, in particular sulphuric and hydrochloric acid, are estimated to represent c.80% of the total operating costs. Other costs such as mining and transport are comparatively low and a significant escalation of these costs would not have a major impact on overall operating costs.

6 Table 4: Operating Costs $/t RoM $/kg REO Mining $16.58 $0.86 Concentrator Plant (including sulphuric acid plant) $98.03 $5.06 Tailings disposal facility $0.24 $0.01 Rehab and closure (operational) $0.23 $0.01 Rehab and closure (insurance) $0.01 $0.00 Road maintenance $0.27 $0.01 Transport $1.33 $0.07 Separation Plant $ $7.03 Administration costs $0.66 $0.03 TOTAL $ $13.08 The above estimates do not include contingencies, but an overall contingency of 15% has been added to the operating cost estimates in the PEA financial model and valuation. Infrastructure and Services Power for the Zandkopsdrift Mine will be supplied by co-generation from the steam produced in the sulphuric acid production plant that will be located on site. While the possibility exists that a significant portion of the Zandkopsdrift Mine water requirements can be supplied from local groundwater sources, which will be investigated for the PFS, for the purposes of the PEA it has been assumed that the total water requirements will be supplied by pipeline from a desalination plant to be located southwest of Zandkopsdrift on the coast. Power for the Saldanha Separation Plant will be supplied by Eskom, the South African national power authority, and water will be supplied by the local municipality. Environmental Assessment Preliminary environmental assessments of the Zandkopsdrift Mine and the Saldanha Bay Separation Plant were completed, including several environmental specialist fatal flaw analyses and impact assessments in terms of botany, archaeology, air quality, water, human health risk and radiology impact. Uranium and thorium are both present in the Zandkopsdrift deposit, at relatively low concentrations compared to many other carbonatite REE deposits being evaluated worldwide. The average grades within the defined mineral resource are between 60-70ppm uranium and ppm thorium. The uranium, thorium and other contaminants will be removed by precipitation and disposed of to a lined tailings disposal facility at Zandkopsdrift, and the environmental studies concluded that the environmental impact thereof can be effectively avoided or mitigated, reducing the impact of the radionuclides to a negligible level. Resource Estimate A revised NI compliant mineral resource estimate (the 2011 Resource Estimate ) was prepared by MSA for the purposes of the PEA. The 2011 Resource Estimate incorporates results from the first phase of the 2011 Zandkopsdrift drilling programme, which comprised 61 vertical reverse circulation boreholes for a total of 3,414m. This brought the total amount of drilling included in the 2011 Resource Estimate to 6,698m, of which 5,558m was sampled and assayed. The database included lithology, assays for all REEs, a selection of major element oxides and downhole survey data for some boreholes. The geological and mineralisation model was sufficiently understood to facilitate the generation of a grade only mineralised envelope for the purposes of the PEA. The 2011 Resource Estimate is presented below for the selected economic cut-off grade of 1.0% TREO, which includes the 2.0% TREO grade Central Zone. NI Compliant Mineral Resource Estimate for Zandkopsdrift (2011 Resource Estimate)

7 Table 5: Zandkopsdrift Resource Estimate TREO Cut-off grade TONNAGE (Mt) INDICATED MINERAL RESOURCES AVERAGE TREO GRADE CONTAINED TREO (t) 1.0% % 738, % (Central Zone) % 495,056 INFERRED MINERAL RESOURCES 1.0% % 210, % (Central Zone) % 129,162 - Mineral Resources reported inclusive of mineral reserves (no mineral reserves are reported for Zandkopsdrift in the PEA) - Mineral Resources that are not mineral reserves do not have demonstrated economic viability - In situ estimation assuming no geological losses - The effective date of the mineral resource estimate is 23 September 2011 The Indicated Mineral Resources in the 2011 Resource Estimate now constitute 78% of the total mineral resource at Zandkopsdrift, compared to 56% under the previous mineral resource estimate published in Results from a further 14,200 meters of drilling completed in 2011 that were received after the preparation of the 2011 Resource Estimate will be used for a further updated resource estimate for the PFS, at which time it is expected that substantially all of the Zandkopsdrift resource will be classified in the Measured and Indicated Mineral Resource categories. Table 6:Distribution by Rare Earth Element Rare Earth Element Rare Earth Oxide Relative Distribution (%) Absolute Grade (%) Lanthanum La 2 O Cerium Ce 2 O Praseodymium Pr 2 O Neodymium Nd 2 O Samarium Sm 2 O Europium Eu 2 O Gadolinium Gd 2 O Terbium Tb 2 O Dysprosium Dy 2 O Holmium Ho 2 O Erbium Er 2 O Thulium Tm 2 O Ytterbium Yb 2 O Lutetium Lu 2 O Yttrium Y 2 O TOTAL

8 Rare Earth Pricing Historical average prices are commonly used as a basis for mineral price forecasts in economic studies for mineral projects. The trailing three year average China free on board ( FoB ) price to 1 st December 2011 includes both a significant period of time when rare earth prices were materially undervalued and the more recent period of higher prices seen in The Zandkopsdrift basket price applying the trailing three year average China FoB price to 1 st December 2011 would be $64.36/kg. In November 2011 Roskill Information Services ( Roskill ) published the 14 th edition of the authoritative publication Rare Earths & Yttrium: Market Outlook to Using the mid-point of Roskill s 2015 price forecast ranges for the principal REOs, the basket price for Zandkopsdrift production would be $52.10/kg. For the purposes of the PEA, the Zandkopsdrift basket price used was calculated using an equal weighting of the trailing 3 year China FOB price and the mid-point of Roskill s 2015 forecast. This methodology reduces the impact of more recent high rare earth prices on the basket price and results in a PEA basket price of $58.23/kg. At the rare earth pricing reference date for the PEA of 1 st December 2011, this estimate represented: a 58% discount to the China FoB price; a 20% discount to the China domestic price; a 9% discount to the 3 three year average FoB China price; and a 5% discount to the upper range Roskill 2015 forecast. Table 7: REO Historic, Current and Forecast Prices: Zandkopsdrift "Basket Price" Parameters Oxide FoB China Price (1 Dec 2011) 3 Year Avg. FoB China Price (Dec 08-Dec 11) China Domestic Price (1 Dec 2011) Roskill 2015 price forecast range Lanthanum Cerium Praseodymium Neodymium Samarium * Europium 3,790 1,207 2,048 1,000-1,200 Gadolinium * Terbium 2,810 1,016 1,517 1,000-1,200 Dysprosium 1, ,000 Yttrium Basket Price $/kg * Source: Metal Pages, Asian Metal, Roskill No prices are forecast and no revenue attributed to holmium, erbium, lutetium, ytterbium and thulium, as they are typically separated to order, have limited applications, and do not have regular market pricing data. *$52.10 is calculated using the mid-point of the Roskill forecast range and the 3 year trailing average prices of Samarium and Gadolinium, as Roskill does not forecast prices for these elements. Summary Financial Analysis and Valuation A valuation range of $3.01bn to $4.45bn was determined by Venmyn, with a preferred value of $3.65bn. On the basis of Frontier s economic interest in the Zandkopsdrift Project, this implies a preferred value for Frontier s interest of $3.59bn. The payback period is estimated at 2 years from start of production and the Zandkopsdrift Project generates a pre-tax IRR of 57.6% and a post-tax IRR of 52.5%. The Net Present Value of

9 the Zandkopsdrift Project using a discount rate of 11% becomes zero i.e. generates an 11% return on capital, at a basket price of $23.20/kg (a discount of 60% to the PEA basket price) and operating cash flow breakeven is reached at a basket price of $13.08/kg (a discount of 78% to the PEA basket price and a 91% discount to the FoB China price on the PEA pricing reference date of 1 December 2011). Specialist Independent Consultants Contributing to the PEA The various PEA studies undertaken were carried out by the specialist consultants set out in the table below. Table 8: PEA Consultants Company Africa Geo-Environmental Services (Pty) Ltd Africa Remediation Technologies (Pty) Ltd Benchmark Risk Advisory Cameron Cross Incorporated Corli Havenga Transportation Engineers CC EHL Consulting Engineers (Pty) Epoch Resources (Pty) Ltd KPMG Services (Pty) Ltd Metallurgical Development Services Ltd The MSA Group SGS Minerals Services SNC-Lavalin (Pty) Ltd Sound Mining Solution (Pty) Ltd Venmyn Rand (Pty) Ltd Responsibility Preliminary environmental assessment including archaeological, botanical, air quality, human health risk and radiological impact assessments Mine closure plan and estimate of financial provision Water fatal flaw analysis and water baseline study Sea water desalination plant scoping study Independent risk assessment Environmental permitting legal opinion Access routes and logistics surveys Eskom bulk power supply application Tailings disposal facility design Tax and corporate structure Independent process consultant Geological model and mineral resource estimation Beneficiation and hydrometallurgical studies Design of the concentrator, acid cracking, sulphuric acid and separation plants, including associated infrastructure and services, and capital and operating cost estimates Geotechnical assessment and mine design Technical and economic review of the project, preparation of financial model and project valuation, preparation of independent technical report on the results of the PEA Preliminary Feasibility Study Frontier has assembled a highly skilled, multi-disciplinary team of employees and consultants for the purposes of the PEA, and this team has already commenced work on some of the long lead items relating to the PFS. The Company expects to announce the results of the PFS in Q Notes: 1. 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. 2. The resource estimation procedure employed by MSA for the 2011 Resource Estimate was similar to that used for the NI compliant resource estimate that was disclosed in the Company's NI 43-

10 101 technical report entitled Amended NI Resource Estimate and Technical Report on the Zandkopsdrift Rare Earth Element (REE) Project, located in the Republic of South Africa dated 29 October 2010, which is available on Sedar at 3. The data and opinions disclosed in respect of the Mineral Resources, including sampling, analytical and test data underlying the data and opinions have been verified by an independent qualified person from MSA. Frontier s exploration programmes were independently designed, monitored and managed by MSA and a set of industry standard operating procedures was adopted, which ensured best practice and the integrity of the data. 4. 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 sections of this release. 5. This release contains some minor corrections from the original release dated 21 February 2012 principally amending the incorrect reference therein from SNC-Lavalin Group to SNC-Lavalin (Pty) Ltd and highlighting, as stated in the PEA, that capital and operating cost estimates have been prepared to a customary PEA +/- 30% accuracy. For further information please visit the Company at IR@frontierrareearths.com, or contact James Kenny, CEO, at 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 $38m 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 H at a rate of 20,000 tonnes per annum. Cautionary Statement Regarding Forward-looking Information: Certain information set forth in this news release may contain forward-looking information as defined in applicable securities laws. Such forward-looking information may involve substantial known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward-looking information. Such forward looking information includes, among other things, statements regarding anticipated completion dates for the PFS and the DFS, targets, estimates and/or assumptions in respect of mineral resources and/or mineral reserves, estimated capital expenditures and operating costs and statements relating to NPV and IRR, and are based on assumptions and/or estimates related to future economic, market and other conditions. Factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, the factors described or referred to under Description of the Business - Risk Factors in Frontier s

11 current annual information form filed on SEDAR at and include unanticipated and/or unusual events. Most of such factors are beyond Frontier s ability to control or predict. Readers can identify most forward-looking information by looking for words such as believe, expects, will, intends, projects, anticipates, estimates, continues, could or similar words or the negative thereof. This press release contains forward-looking information which may not be based on historical fact. Such statements reflect Frontier s current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Frontier, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Frontier s actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others: the Company s strategy, growth, development and acquisition opportunities, return on existing assets, operational excellence and financial management; the Company s expectations regarding its revenue, expenses and operations; the Company s anticipated cash needs and its estimates regarding its capital and operating expenditures, capital requirements, needs for additional financing and the Company s ability to raise additional capital; the Company s estimates of future cash flows, financial condition and operating performances of the Company and its subsidiaries; the estimation of mineral resources and the realization of mineral reserves based on mineral resource estimates and estimated future development and possible variations of ore grade or recovery rates; the Company s competitive position and its expectations regarding competition from other producers globally; the Company s ability to maintain customer and supplier relationships; anticipated trends and challenges in the Company s business and the markets in which it operates, including with respect to potential new rare earth projects, supply outlook and growth opportunities; limitations of insurance coverage; the future price of and future demand for rare earth elements; economic and financial conditions; interest rates and foreign exchange rates; performance of counterparties in fulfilling their obligations; and government regulation of mining operations, accidents, environmental risks, exploration risks, reclamation and rehabilitation expenses. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this press release are included for the purpose of providing investors with information to assist them in understanding the Company's expected financial and operational performance and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.