Overview

Frontier Rare Earths Limited (TSX:FRO) is a mineral exploration and development exclusively focused on the development of rare earths projects in southern Africa.  Frontier’s flagship asset is the Zandkopsdrift rare earth project (95% economic interest held by Frontier), which is located in the Northern Cape Province of South Africa and is recognised as one of the largest undeveloped rare earth deposits worldwide measured under international reporting standards. The Zandkopsdrift B Zone has the highest TREO⁽¹⁾ grade and the highest grade of high value heavy rare earths (HREOs)⁽²⁾ of significant advanced deposits⁽³⁾ outside China after Molycorp’s Mountain Pass and Lynas’ Mount Weld projects.

Zandkopsdrift’s favourable location and geological setting is expected to provide significant advantages in relation to capital costs, operating costs and development time compared to other major rare earth projects currently being evaluated, and makes Frontier well positioned to become one of the significant new producers of rare earths, commencing in 2015. The significant resource already defined at Zandkopsdrift, which remains open both laterally and at depth, will allow Frontier produce and supply up to 20,000 tonnes of separated rare earth oxides per annum.  Frontier filed a NI 43-101 report on Zandkopsdrift in October 2010, which included a resource estimate of circa 43m tonnes at an average grade of 2.2% and containing approximately 950,000 tonnes TREO applying a 1% cut-off, of which 56% is in the Indicated Resource category.

In July 2011, Frontier announced a major strategic partnership agreement with Korea Resource Corporation (“KORES”)(www.kores.or.kr) designed to accelerate the development of the Zandkopsdrift rare earth project. Zandkopsdrift is KORES’ only investment in a rare earth mine development to date.

Notes

(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 a resource >200,000 tonnes TREO classified under SAMREC, JORC, CIM or equivalent international codes

Investment Highlights

• Plans to complete a pre-feasibility study and an economic assessment in Q1 2012
• Fully funded company
• Zandkopsdrift is one of the largest, highest grade rare earth deposits in the world
• 947,000 tons of total rare earth oxides identified at Zandkopsdrift (NI43-101, 2010)

Principal Project

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Zandkopsdrift Project – Northern Cape Province, South Africa

Frontier’s principal asset, and major focus of Frontier’s activity to date, is the Zandkopsdrift rare earth deposit in the Namaqualand region of South Africa’s Northern Cape Province. Namaqualand is the longest established mining province in South Africa with over 150 years of mining history. The property covers approximately 60,000 ha of carbonate-rich, magmatic rock containing significant rare earth element bearing mineralization within outcropping and near surface, deeply weathered phases. The Zandkopsdrift Project comprises a large, rare earth-bearing carbonatite and 30 smaller satellite intrusives, a number of which are known to be rare earth-bearing. Zandkopsdrift is well situated approximately 450km north of Cape Town and 230km north of the deep water port of Saldanha Bay. The property is well-served by infrastructure which should be of considerable time and cost advantage to Frontier as it moves Zandkopsdrift into the production phase . Zandkopsdrift is recognised as one of the largest rare earth deposits in the world measured under international reporting standards.

Historical work on the property, which date back to the 1970s, was principally carried out by Anglo American in two phases, most recently in the mid-1980s when Zandkosdrift’s rare earth potential was initially investigated. After securing the prospecting rights for the Zandkopsdrift Project in 2006 Frontier subsequently identified and acquired the extensive rare earth related dataset from Anglo American’s work, which included extensive drilling, bulk sampling, metallurgical testing and related analyses, as well as the original available cores, pulps, and other samples. In October 2010, an NI 43-101 report was filed, determining a resource estimate of circa 43m tonnes at an average grade of 2.2% and containing 950,000 tonnes of total rare earth oxides (TREO) applying a 1% cut-off, of which 56% was in the indicated resource category.

Frontier Drill Sites

The main host rare earth mineral at Zandkopsdrift ismonazite (with lesser amounts in the crandallite group and apatite)  similar to other rare earth deposits, most notably Lynas Corporation’s Mount Weld deposit in Australia. The Zandkopsdrift deposit has an indicated resource of approximately 22.92Mt containing 532,000t of TREO at an average grade of 2.32% and an additional inferred resource of 20.81Mt containing 415,000t of TREO applying a 1% TREO cut-off. The highest value heavy rare earth oxides (HREOs), namely europium, terbium, and dysprosium, and the highest value light rare earth oxides (LREOs) of praesodymium and  neodymium are also contained at elevated levels at Zandkopsdrift compared to major deposits being evaluated elsewhere. In addition, thorium and uranium levels (at 256ppm and 65 ppm respectively) are low both on an absolute and relative basis, which compares favourably to many more advanced rare earth projects and reduces potential environmental implications in the event of mine development.

Metallurgical test work is currently being undertaken on core recovered from Zandkopsdrift by SGS Minerals Services in Canada, who are recognised as one of the leading rare earth metallurgical consultants worldwide, are expected to define a flowsheet for the recovery of separated rare earth elements from Zandkopsdrift in Q3 2011. There are currently four drill rigs operational at Zandkopsdrift. In 2011 it is expected that approximately 17,000 meters of diamond and reverse circulation drilling will be completed.

Zandkopsdrift Project Area

Frontier has no debt, a strong working capital position and is fully funded to complete the work programme identified in the NI 43-101 compliant independent technical report  issued in October 2010 in order to move the Zandkopsdrift project through Preliminary Economic Assessment (‘PEA’) , Pre-Feasibility Study (‘PFS’) and, if positive, to complete a Definitive Feasibility Studies (‘DFS’). The Company expects to complete the Zandkopsdrift PEA in Q1 2012 with the PFS planned to follow approximately three months thereafter. Frontier intends to advance the Zandkopsdrift Project through to a DFS by end 2012. On this basis Frontier has estimated the commencement of rare earth production from Zandkopsdrift in 2015, which would be considerably ahead of many of the other major earth projects being advanced. At a production level of 20,000 tonnes of separated rare earth oxides per annum, Frontier would be one of the largest rare earth producers worldwide.

Management

James Kenny, B. Comm., M.B.S. – Director and Chief Executive Officer

James Kenny holds a Bachelor of Commerce (Honours) and a Master’s degree in finance (MBS) from University College Dublin. He has over 20 years of experience in the natural resources sector as an adviser, broker, and executive of various listed and private companies. Mr. Kenny is Chief Executive Officer of Frontier and has played a key role in the development of the Company since incorporation. Mr. Kenny’s investment banking experience included senior roles with ABN AMRO, Rothschild, NatWest/RBS, Collins Stewart, and Evolution Securities.

Until his appointment as Chief Executive of the Company in 2010 Mr. Kenny was Chief Executive Officer of Frontier Advisers Limited, a private company which has provided management, financing and other services to the Frontier Rare Earths since it commenced its operational activities.

Paul McGuinness, B.Comm. Mac., ACA -Director and Chief Financial Officer

Paul McGuinness holds a Bachelor of Commerce and a Masters’ degree in accounting from University College, Dublin. Mr. McGuinness is a chartered accountant and qualified with Arthur Andersen in 1999 where he gained experience predominantly in the financial services, oil and gas and logistics sectors. Mr. McGuinness also has extensive experience in finance and investment banking, having worked with a number of international firms including Schroders, Collins Stewart and Salomon Smith Barney, where he worked as a corporate adviser to various financial institutions in the United Kingdom, and in Australia to various energy, mining and infrastructure companies.

Since 2006 Mr. McGuinness has been Chief Executive of MG Capital Limited, a private consulting firm which provides advisory and financial control services to a number of clients, including Frontier. Mr.McGuinness was appointed Chief Financial Officer in November 2010.

Dr. Stuart Smith B.Sc., PhD. – Vice-President, Exploration

Dr. Smith has a Bachelor of Science (Geochemistry, First Class Honours) and a Ph.D in geology from the University of Cape Town and has over 30 years of experience in the minerals exploration with particular experience in rare earths, base metals, uranium, and diamonds. Dr. Smith held a number of senior positions in the Geochemistry Research Unit of the University of Cape Town over a 13-year period and then worked for ten years as an exploration manager and operations director extensively across Southern Africa.

Prior to joining Frontier, Dr. Smith worked as an independent consulting geologist since 2000, principally contracted to Fugro Survey, the international consulting group. Since joining the Company in 2007, Dr. Smith has managed the Company’s exploration activities at Zandkopsdrift and elsewhere.

Derick de Wit (B. Tech. Chem. Eng.)- Vice-President, Project Development

Mr DeWit is a chemical engineer with considerable experience in the minerals industry, gained with GRD Minproc, Bateman Projects, De Beers Consolidated Mines and Venmyn Rand, and has been responsible for managing due diligence, scoping, prefeasibility and feasibility studies, mineral asset valuations and independent technical reports for listed and private companies in accordance with NI 43‐101, SAMREC and JORC reporting codes.

Over the past 15 years Mr de Wit has been involved in the preparation and/or management of more than 30 independent review, scoping, prefeasibility and feasibility studies for minerals projects, both in Africa and Canada.

Philip Kenny, B.E., M.B.A. –  Director and Non-executive Chairman

Philip Kenny is a graduate in mechanical engineering from University College, Dublin and holds postgraduate qualifications in engineering from Trinity College, Dublin, and a Master of Business Administration in finance from Boston College, Massachusetts. He has over 25 years of experience in the mining and oil and gas sectors in Southern Africa, Europe, and the United States.

Since 1998, Mr. Kenny has been the Chief Executive Officer of Firestone Diamonds plc, an emerging junior diamond mining and exploration company focused on South Africa and listed on the AIM market of the London Stock Exchange and in April 2011 was appointed Executive Chairman. Firestone Diamonds plc is the only listed diamond company outside of the majors to have discovered, developed and brought into production a kimberlite diamond mine.

Anu Dhir B.A., J.D. -Non-executive Director (Chairman of the Audit Committee)

Anu Dhir holds a Bachelor of Arts degree from the University of Toronto and a law degree (Juris Doctor) from Quinnipiac University, Connecticut, United States. Ms. Dhir has extensive experience in international business, operations and legal affairs in private equity and publicly held companies in the mining, oil and gas and technology sectors. From January 2006 to October 2009, Ms. Dhir served as Vice President, Corporate Development and Company Secretary at Katanga Mining Limited, a TSX-listed company and is currently Managing Director of Miniqs Limited, a private group primarily interested in resource projects that have the capability to grow into major producing operations.

Ms. Dhir is a non-executive director of Anooraq Resources Corporation, a South African platinum group metals producer listed on the TSX, NYSE Amex Equities, and the Johannesburg Stock Exchange and serves as a non-executive director of Compass Asset Management headquartered in Almaty, Kazakhstan.

Eamonn “Edward” Grennan B.Sc., M.Sc. -Non-executive Director

Eamonn Grennan has over 40 years of experience as an exploration manager, geologist, consultant, and senior lecturer. Mr. Grennan has worked on and managed exploration programs on four continents for a range of international clients and his experience covers industrial minerals, aggregates, precious metals and base metals.

His academic experience includes lecturing in a number of leading Irish third level institutions in applied geochemistry, mining engineering, economic geology, and environmental science, including at the Institute of Technology, Sligo, from 1995 to 2010. Mr. Grennan is a former president of the Irish Association for Economic Geology and a former member of the Consultative Committee of Irish Geological Survey and is currently an independent consultant geologist.

Crispin Sonn B.A., B.Comm. – Non-executive Director

Crispin Sonn has a Bachelor of Arts from the University of Cape Town and an Honors degree in Business and Administration from the University of Stellenbosch. Since 2003, Mr. Sonn has held various positions at Old Mutual South Africa, a subsidiary of Old Mutual plc, the London listed and largest integrated financial services company in South Africa. Currently, Mr. Sonn is an executive director of Old Mutual South Africa with responsibility for corporate affairs, marketing, and communications and is Chairman of the Old Mutual Foundation, the philanthropic arm of the Old Mutual group.

Mr. Sonn was the founding Chairman of FoodBank South Africa, a founding member of the FoodBank Foundation and currently acts as a non-executive Director of CapeSpan (Pty) Ltd, the largest fresh produce sourcing and distribution company in South Africa, and Old Mutual Kodak-Mahindra, a joint venture in India. Mr. Sonn is a member of the Board of Advisers for the Graduate School of Business at the University of Cape Town and served on the Council of the University of Cape Town for eight years.