Best RE project outside of ChinaThe multiple delays in the release of the PFS are probably one of the main reasons for the past performance for this stock. On multiple occasions management announced that the PSF will be released by certain date to later announce another delay driving away many of the initial shareholders.
At last it seems that at management at Frontier is ready to publish the long awaited PFS. This could be the catalyst for this stock to move much higher, potentially into the multiple dollar range. Some of the factors to consider:
- The PFS will include the result of extensive drilling program that was done after the PEA. The amount of drilling was huge compared to what was incorporated in the PEA and could dramatically expand the size of this project. The inclusion of the result from drilling into the PFS could have a large impact on the net present value (NPV) for this project(see https://www.proactiveinvestors.com/genera/files/sponsor_files/frontier_corporate_presentation_jan_feb_2014.pdf)
- Frontier has a very tight float, with around 15 million or less shares available for free trading. Over 80% of the shares are controlled by insiders and institutions. This means that when buyers, including institutions, decide they want to be part of this project they will have to buy at the ask pushing the price up.
- Together with the PFS we might get details on the result on many of the permits that Frontier has applied for in the past and that should start to materialize by now
- The release of the PFS will also have a potential impact on the dynamics of the KORES contract and/or open the door for a third party to enter the picture (even though KORES is committed to their current 10% position and an option on another 40%.....FRO has the right to seek out better terms and has a refusal clause on that 40% option. Frontier has done every single study possible to eliminate risk from this project, with a well prepared PFS Frontier should have a good negotiating card)
- Frontier has indicated as part of previous NRs that the studies for the PFS have identified improvements to the flow sheet as well as securing access to an improved rare earth separation plant process technology package that is expected to significantly reduce the capital and operating costs of the SSP and to allow the production of wider range of individual separated REEs and at higher purity levels. This improved process technology package is now proposed to be included in the SSP PFS design. These changes could have a significant impact on the economics of this project
- Frontier also indicated that there is a “Potential for low-cost production of a manganese sulphate by-product, which could generate significant additional revenue, being evaluated for inclusion in the PFS.”
- All of the above does not even mention any of the intrinsic values that makes this project probably the best RE project outside of China