*updated with share price added
Frontier Rare Earths'
(TSE:FRO) shares rallied over five per cent Friday, after the company
reported that final assay results from its 2011 drilling program at its
Zandkopsdrift rare earth project in South Africa have yielded total rare
earth oxide (TREO) grades as high as 19.5 per cent.
Shares were trading at 50 cents as at about 12 pm EDT.
Grades in excess of 10 per cent and as high as 19.5 per cent TREO
were identified in many holes, supporting the “significant economic
potential” of Zandkopsdrift, as outlined in the company’s preliminary
economic assessment (PEA) released earlier this year.
Results were received from 5,563 metres of diamond core drilling and
8,632 metres of reverse circulation percussion drilling, which were
completed in the second half of 2011.
Frontier said the results have confirmed the presence of "extensive
high grade rare earth mineralization and continuity of mineralization"
from surface to an average depth of about 80 metres.
"We are very encouraged by the results of the latest resource
drilling, which confirms Zandkopsdrift as one of the largest
international resource code-compliant high grade rare earth deposits in
the world," said CEO James Kenny.
"With 97 per cent of our rare earth mineralization contained in
monazite, for which commercially proven metallurgical extraction
processes exist, and with our prefeasibility study on schedule for
completion in [the fourth quarter] Q4 2012, we remain confident of
achieving our objective of being the next major producer of rare earths
outside China after Molycorp (NYSE:MCP), and Lynas (ASX:LYC) by end 2015."
Frontier’s latest drill results include grades ranging from 5.4 to
10.1 per cent TREO over depths of 10 to 31 metres. Among the highlights
was 6.9 per cent TREO over 11 metres, including the highest grade
interval of 19.5 per cent TREO at a minimum interval length of one
Other notable results included 10.1 per cent TREO over 10
metres, including the highest grade interval of 17.8 per cent TREO at a
minimum interval length of one metre; 8.1 per cent TREO over 12 metres,
the including highest grade interval of 18.6 per cent TREO at a minimum
interval length of one metre; and 6.2 per cent TREO over 19 metres,
including the highest grade interval of 18.6 per cent TREO at a minimum
interval length of one metre.
In addition, the company noted that
drilling identified "numerous continuously well mineralized intervals"
from surface, including grades of 3.5 to 4.6 per cent TREO from surface
to depths ranging from 51 to 81 metres.
Frontier said that the new assay results will be included into an
updated mineral resource estimate for Zandkopsdrift, the results of
which will be incorporated into the prefeasibility study currently under
way and on schedule for completion in the fourth quarter.
The company said it expects that the updated mineral resource
estimate will result in the majority of the mineral resources at
Zandkopsdrift being upgraded to the measured and indicated categories.
Frontier Rare Earths is a mineral exploration and development company exclusively focused on the development of rare earths projects in Africa.
Its 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.
Frontier has a direct 74 per cent interest and a current 95 per cent economic interest in Zandkopsdrift.
The company’s February 2012 PEA reported that Zandkopsdrift is
estimated to contain roughly 950,000 tonnes of TREO applying a one per
cent TREO cut-off, and gave a whopping net present value of $3.65
billion, after tax and royalties, at an 11 per cent discount rate.
Internal rate of return for the project was seen at 52.5 per cent,
after tax and royalties, with a two year payback from start of
Average production was pegged at 20,000 tonnes of separated rare
earth oxides per annum over a 20-year mine life with production due to
start in the second half of 2015.
Zandkopsdrift's "key to success" is mineralogy - as the property
contains conventional rare earth minerals, with 97 per cent being
monazite, for which commercial extraction processes already exist.