superman, re: nature of the stock.... Here's the thing superman.....
The market has obviously been very cautious with Frontier thus far, for this JV with KORES has been lingering for over a year and a half. FRO announced the proposed JV agreement with KORES in July of 2011, eventually signed the definitive agreement in Dec of 2011 and the market has been waiting for KORES to consummate their earn-in obligation for a full year now. But there has been very good reasons for the delay in payment as I have alluded too on many occasions, but the money is now here, KORES has secured their first 10% interest and now working their way up to 50% possibly.
I believe conditions are about to change for the positive, with respect to FRO and their shareholders. For the market cannot ignore that KORES is now very serious about moving this project forward and have basically stated with their recent $24 million payment, that Zandkopsdrift is worth $240 million "today"!! At least that is what KORES is paying. And much more than that as FRO/KORES moves through each economic study.
Now when you look at Frontier's Enterprise Value [EV].....Market Cap [$61.8M] less Cash [$52.0M].....of only $9.8M, the market just can't ignore this undervalued fact any longer. Rare Earth companies like UCU, HRE, RES, QRM, AVL, etc all have much higher Enterprise Values, but no strategic partner or off take partners. In other words, no one there, has stepped up to the plate and offered to buy their product and help finance their project.
I am confident that this weeks trading activity will confirm our undervalued state. :) Sure the float is very tight, but I believe FRO has been on the radar of many interested parties. And now with KORES confirming their long term position in this project, these interesting parties are probably also thinking like yourself, that they can get in at $0.60 or less. But I can't see it myself......they are going to have to hit the ASK and move it up until they get filled.
Even at $1.00/share, the EV is only $37 million for Zandkopsdrift!! The market is paying far more than that for most of those other rare earth projects I mentioned above.
And some might be thinking that the quality or quantity of Zandkopsdrift's rare earths are not up to par with these other plays?? And I would counter by stating that FRO's "Big 5" rare earth elements are 21.8% of their total deposit, while the likes of Molycorp's Mountain Pass deposit is only 16.1%.
So go figure!! :)
And then you have RES sitting with a Market Cap of $163 million and they have no intention of separating their REE concentrate into rare earth elements and metals.
So go figure!! :)
And then you have FRO with an Operating Cost of only $6.05/kg at the concentrate stage, while RES is at $10.09/kg; TSM is at $10.93/kg; QRM is at $11.28/kg; and MAT at $17.27/kg.
So go figure!! :)