TORONTO, May 8, 2014 /CNW/ - In advance of the annual general meeting of shareholders to be held
today in Luxembourg, Frontier Rare Earths Limited (TSX: FRO) (US:FREFF)
("Frontier" or the "Company") is pleased to provide an update on the
prefeasibility study (the "PFS") being carried out at its Zandkopsdrift
rare earth element project in South Africa ("Zandkopsdrift") and on
other corporate developments.
"We are encouraged by the good progress being made on the PFS for our
Zandkopsdrift rare earths project," said James Kenny, CEO for Frontier
Rare Earths. "We look forward to announcing the results of the PFS
later in 2014, and believe that this, backed by our strong balance
sheet and partnership with Korea Resources Corporation, makes the
Company well positioned to reach its objective of being among the
lowest cost new producers of high purity separated rare earths outside
China."
Zandkopsdrift is being developed by Frontier in partnership with Korea
Resources Corporation ("Kores"), the wholly-owned mining and natural
resource investment arm of the South Korean Government. Zandkopsdrift
is expected to be one of the first new major producers of high purity
separated rare earth oxides outside China and, significantly, to become
one of the largest producers of high demand critical rare earth oxides,
which comprise dysprosium, terbium, europium, neodymium and yttrium in
individual separated, high purity form.
Highlights:
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Prefeasibility Study Update
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Metallurgical test work conducted in Q4 2013 and Q1 2014 has confirmed a
number of process improvements to the PFS flow sheet that are expected
to have a significant positive impact on capital and operating cost
estimates.
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A revised flow sheet has now been finalised for the PFS incorporating
these improvements.
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Remaining engineering design work for the PFS scheduled to commence in
Q2 2014.
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Potential for low-cost production of a manganese sulphate by-product,
which could generate significant additional revenue, being evaluated
for inclusion in the PFS.
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PFS results expected to be announced in Q4 2014.
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Financial Position
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Working capital position remains strong with $32M cash and no debt.
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Kores funding 10% of all ongoing Zandkopsdrift project evaluation and
development costs.
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New Project Development
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The Company continues to identify and selectively develop a portfolio of
new projects in Africa. Commodities of specific interest include
graphite, tungsten and phosphate.
Prefeasibility Study Update
In Q4 2013 the Company reported that good progress had been made on the
various studies that are required for the PFS (the "PFS Studies"),
which cover all aspects of the proposed Zandkopsdrift development,
including design of the Zandkopsdrift Processing Plant and Saldanha
Separation Plant, power, water, roads, tailings, mining, reagent
supply, logistics and environmental management. The Company indicated
that a review of the PFS Studies had identified several areas where
potential engineering design and process improvements could be made
that could have a significant positive impact on the capital and
operating cost estimates for the PFS and that further test work would
be undertaken in Q4 2013 and Q1 2014 in order to validate these
improvements.
PFS Flow Sheet
The Company is pleased to report that this test work has now been
completed and has been successful in confirming a number of the
proposed engineering design and process improvements. As a result, a
number of changes have been made to the PFS flow sheets, which are
expected to have a significant positive impact on the current capital
and operating cost estimates for the PFS. The revised flow sheet for
the Zandkopsdrift Processing Plant, which has now been finalised for
the PFS, comprises the following:
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A front-end crushing and milling circuit. The selected milling
technology produces a sharply defined particle size distribution, with
downstream handling benefits.
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An impurity pre-leach circuit, which provides a significant mass
reduction with low rare earth losses, and a consequent reduction in
both capital and operating costs of the cracking and other downstream
processes.
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An acid contacting circuit in which concentrated sulphuric acid is mixed
with the feed material to produce a free flowing feed for the cracking
circuit.
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A cracking circuit in which the prepared feed is baked at elevated
temperatures, which decomposes the rare earth minerals, recovers
sulphur as SO2 and SO3, which is returned to the sulphuric acid plant, and stabilizes many of
the impurities, which prevents them from leaching with the rare earths
in the water leach circuit.
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A water leach circuit, in which the calcine is water leached to produce
a pregnant leach solution ("PLS") containing rare earth elements
("REEs") and residual un-stabilized impurities.
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An impurity removal circuit in which the PLS is purified by removal of
the residual un-stabilized impurities through precipitation and
filtration.
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A REE precipitation circuit in which the REEs are precipitated from the
purified PLS as a mixed rare earth product that is suitable for
processing through a conventional solvent extraction separation plant.
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A final stage of waste neutralization and disposal to the tailings
storage facility on site.
The remaining engineering design work for the PFS is scheduled to
commence in this quarter and this work is expected to be completed and
the results of the PFS announced in Q4 2014.
Manganese Sulphate By-product
The metallurgical test work recently completed by the Company has also
identified an opportunity for the production of potentially significant
quantities of manganese sulphate as a by-product at Zandkopsdrift.
Test work on waste streams produced by the impurity pre-leach circuit
test work, of which manganese is one of the principal constituents, has
indicated that a simple, low cost, evaporation and crystallization
process can produce a manganese sulphate product.
Manganese sulphate is used as a micronutrient in animal feed and in
fertiliser and is also used as a chemical intermediate. Its high
solubility in water makes it particularly desirable for the animal feed
and fertiliser applications. Manganese sulphate is typically produced
via a sulphuric acid leach of manganese ore, which is similar to the
process used in the impurity pre-leach circuit at Zandkopsdrift.
The test work completed to date has resulted in the production of
manganese sulphate that meets the specifications for animal feed and
fertiliser applications. Additional test work is currently being
undertaken by HPD Systems, a division of Veolia Water Solutions &
Technologies, a leader in evaporation and crystallization
technologies. Based on the results of this test work, which is not
expected to delay completion of the PFS, the PFS may also include
provision for the production and sale of a manganese sulphate
by-product which could potentially generate significant additional
revenue streams for the Zandkopsdrift project.
Corporate Development
While Frontier's primary focus remains on the development of
Zandkopsdrift, the Company has, as previously announced, identified and
is currently evaluating other opportunities to expand its mineral
project portfolio in South Africa, Mozambique, Uganda and elsewhere in
Africa. These opportunities are considered to be highly prospective
and to have the potential for significant value creation for Frontier
at relatively low risk and cost, and cover a range of minerals
including graphite, tungsten and phosphate. Good progress has been
made in Mozambique in particular where, as previously announced,
Frontier has acquired a 70% interest in a private company that holds
three exploration licences that are considered highly prospective for
graphite. The Company is currently evaluating the historical
exploration data for these licences and expects to be able to provide
an update on the potential of the licences and the Company's plans for
them later in 2014.
The Company has stated that it does not believe that the trading price
of the Company's shares on the Toronto Stock Exchange appropriately
reflects the inherent value of the Company and its assets. As a result
the Company has indicated that it intends to review alternatives that
would allow it to maximise the potential long-term value for its
shareholders, and will provide updates on developments in this regard
as appropriate.
Cash Position and Working Capital Adequacy
The Company's working capital position remains strong with approximately
$32M in cash at end April 2014 and no debt. The Company remains fully
funded through completion of both the PFS and the definitive
feasibility study planned to be undertaken on Zandkopsdrift.
Kores Joint Venture
Kores holds a 10% interest in Zandkopsdrift and is responsible for a pro-rata share of on-going Zandkopsdrift project evaluation, development and
operating costs. In addition to the $23.8M paid for its initial stake
in Zandkopsdrift Kores has also provided additional funding of $1.6M to
cover its 10% share of costs from July 2012 to December 2013. In
addition, Kores is also currently providing other valuable inputs to
Frontier including carrying out additional metallurgical test work on
material from Zandkopsdrift at its facilities in Seoul at Kores' own
cost.
Qualified Person
The technical information in this release has been approved by Dr.
Stuart Smith BSc, PhD. who is a "Qualified Person" in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects.
About Frontier Rare Earths Limited (TSX: FRO US: FREFF)
Frontier Rare Earths Limited (www.frontierrareearths.com) is a mineral exploration and development company principally 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, highest grade undeveloped rare earth deposits worldwide.
Frontier has a direct 64% interest and an 85% economic interest in
Zandkopsdrift following the acquisition by its strategic partner Korea
Resources Corporation of an initial 10% interest in Zandkopsdrift. In
March 2012 Frontier filed a Preliminary Economic Assessment ("PEA") on
the Zandkopsdrift project prepared in accordance with National
Instrument 43-101. The results of the PEA indicated that the proposed
development of the Zandkopsdrift Project is both technically feasible
and economically robust with a low risk profile. In conjunction with
the PEA a mineral resource estimate for Zandkopsdrift confirmed 42.5m
tonnes at an average grade of 2.23% containing approximately 940,000
tonnes total rare earth oxides (applying a 1% cut-off) and with 78% of
the mineral resource in the indicated category. Mineral resources that
are not mineral reserves do not have demonstrated economic viability.
Fiona Harper, Pr.Sci.Nat, was the independent qualified person from
Venmyn Rand (Pty) Ltd. responsible for the PEA. For additional quality
assurance program and the quality control measures applied, as well as
other relevant technical information in respect of the Zandkopsdrift
project, please refer to our technical report entitled "Amended
Independent Technical Report on the Results of a Preliminary Economic
Assessment of Frontier Rare Earths Limited's Zandkopsdrift Rare Earths
Project, Located in the Northern Cape Province Of South Africa", dated
March 30, 2012, which is available on SEDAR at www.sedar.com.
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 $32 million in cash and no debt, and this strong
cash position is expected to be sufficient to fully fund the completion
of Prefeasibility and Definitive Feasibility Studies on Zandkopsdrift
and work on Frontier's other proposed exploration and development
programs.
SOURCE Frontier Rare Earths Ltd.