DRAFT

Zandkopsdrift – the next major western RE producer

November 2012

Frontier Rare Earths Limited

TSX:FRO

Safe Harbour Statement

Certain statements contained in or incorporated by reference into this presentation constitute “forward-looking statements”.

Officers and representatives of Frontier Rare Earths Limited (the “Company”) may, in their remarks or in response to

questions regarding this presentation, make certain statements which are “forward-looking statements” and are prospective.

Forward-looking statements are neither promises nor guarantees, but are subject to risks, uncertainties and assumptions

that may cause the actual results, performance or achievements of the Company, or developments in the Company’s

business or its industry, to differ materially from the anticipated results, performance, achievements or developments

expressed or implied by such forward-looking statements. Forward-looking statements are based on management’s beliefs

and opinions at the time the statements are made or presented, and undue reliance should not be placed on any of these

forward-looking statements. There should be no expectation that these forward-looking statements will be updated or

supplemented as a result of changing circumstances or otherwise, and the Company does not intend, and does not assume

any obligation, to update these forward-looking statements.

2 │

Forward-looking information

Topics

Rare Earth Market

Frontier Rare Earths overview

Background to the Zandkopsdrift Rare Earth Project

Preliminary Economic Assessment and Project Development Plans

Strategic Partnership

Outlook

Appendices

3 │

Rare Earths – Overview

Series of 15 chemically similar elements that occur and are recovered together

Distribution of elements varies from deposit to deposit

Two distinct categories based on atomic weight: Light Rare Earths and Heavy Rare Earths

Each element has a range of distinctive physical properties which allow them to be

used in a variety of technological applications

Magnetic, optical, electrical, catalytic and metallurgical

Underpin the “green” technology economy

Hybrid motor and battery technology

Energy efficiency

Wind power

Consumer electronics

Defense

Transport

Most have no substitutes and are indispensable in many applications

4 │

37%

31%

14%

5% 4% 4%

3% 2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Magnets Phosphors Metal Alloys Catalysts Ceramics Polishing Other Glass

Value of RE usage by application

Rare Earths – Uses

Biggest, fastest-growing use is for magnet applications which, together with

phosphors and metal alloys, accounts for >80% of demand by value

Source: Roskill

5 │

Rare Earth Market Developments

China

Continued restructuring of export quota system, forced industry

consolidation and clampdown on illegal mining & processing

likely to have significant price implications

China has confirmed only 15-20 years reserves of heavy and

medium REOs and are expected to be a net importer of these

elements by 2015

Chinese export quotas have been reduced significantly since 2005

however export quotas have stabilised at c.30kt per annum

US/ Europe and Japan have jointly lodged a complaint with the

WTO in respect of China’s quota system and export taxes on rare

earths

Rest of World

Plans by several countries including China, Japan, South Korea

and US announced to stockpile rare earths

Major industrial users seeking to lock in long-term

supply/partnership from credible potential producers i.e.

Frontier/KORES, Lynas/Siemens

6 │

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2006 2007 2008 2009 2010 2011 2012E

To

nn

es R

EO

Chinese Export Quota

0

50

100

150

200

250

300

Frontier Basket $/kg Since 2010

3 Year Avg FOB

Spot Price FOB

Global Supply and Demand (tonnes REO)

Rare Earths – Supply/Demand Forecasts

Demand CAGR projected at 6-10% through 2016 and beyond

China’s domestic demand, particularly for medium and heavy rare earths, forecast to

increase faster than domestic supply

Future supply deficit widely forecast

Significant opportunity for new producers of separated rare earth oxides outside of China

Source: Roskill,Freedonia Group

7 │

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

2004 2005 2006 2007 2008 2009 2010 2011 2015f 2020f

China supply ROW supply China demand ROW demand Total demand

Frontier Overview

Flagship asset is the Zandkopsdrift Rare Earth project in South Africa

World-class deposit in terms of size, rare earth grade, distribution and value

Preliminary Economic Assessment competed March 2012

confirms Zandkopsdrift’s potential to become a major low cost RE producer

NPV11% of $3.7bn generating a post-tax IRR of 53% and 2 year payback

Pre-feasibility Study targeted for completion in Q1 2013 and Definitive Feasibility Study

scheduled 9-12 months thereafter

Strategic Partnership signed with Korea Resources Corporation

Frontier is the only rare earth junior advancing a major rare earth resource with a definitive strategic

partnership agreement in place

Initial Kores investment of $23.8m for 10% interest

Kores option to acquire up to a 50% interest in Zandkopsdrift if arranges project finance for development

Strong financial position: c.$30m cash (excl. Kores investment) and fully funded through completion

of DFS

Listed on the Toronto Stock Exchange

Experienced Board, management and technical teams

8 │

Zandkopsdrift Project Location

Zandkopsdrift is well-situated in the

Northern Cape Province, South Africa’s

oldest mining region

Excellent mining and related infrastructure

available

Close to N7 highway from Cape Town

(c.450 km)

35km to nearest railhead (Bitterfontein)

300km north of deep water port of Saldanha Bay

Strong support in local communities for

the development of the Zandkopsdrift

Frontier controls mineral rights over

c.60,000 ha around Zandkopsdrift and

owns the land on which the deposit is

located

9 │

Cape Town – a first world destination

10 │

Satellite Image of Zandkopsdrift Carbonatite

11 │

Zandkopsdrift

carbonatite

complex

Gravel road to N7

N7 tarred road

to Cape Town

Bitterfontein rail head

(c.35 km)

Exxaro Resources

Namakwa Sands Mine

(c.45 km)

Zandkopsdrift Deposit

12 │

The Zandkopsdrift Deposit

The biggest intrusion in a complex of carbonatite intrusions

One of the largest known rare earth deposits, containing approx. 950k tonnes TREO

Contains significant high grade zones extending from surface that will allow preferential mining

The majority of rare earths in Zandkopsdrift (~ 97%) are contained in monazite

Proven commercial extraction processes

Metallurgical test work to optimise process flowsheet on going in Canada, South Africa and China

Rare earth minerals in many other new RE projects have never had commercial processes developed,

which will increase their development time, cost, and process risk

Attractive distribution of light and heavy rare earths and very low radioactivity

Potential for rapid development and production start-up

Good regional infrastructure available (road, rail, power and water) will also facilitate development

Targeting total annual production of 20,000 tonnes of separated rare earths

13 │

Geological Interpretation

14 │

The Zandkopsdrift deposit is a REE enriched carbonatitic breccia pipe

Occurs as a 1km diameter circular intrusive rising 40 meters above the surrounding plain

Extensive drilling in excess of 20,000 meters completed

313 boreholes drilled for a total of 21,037 meters

19,166 meters assayed at 1 meter intervals for resource estimation purposes

Good understanding of geology and controls on mineralisation

Series of vertical to sub vertical RE-enriched dykes (“REDs”) intruded into a RE bearing carbonatitic

phlogopite breccia phase (“CPB”)

The CPB and REDs have undergone several stages of alteration and deep weathering resulting in

the development of supergene enriched high grade REE-bearing horizons from surface to 80-100m

depth (see slide 53)

Geologically similar to Lynas’ Mount Weld deposit in Australia

Zandkopsdrift Geological Map and Drill Locations

15 │

Assay results from final phase

of resource drilling (14,200

meters drilling) to be

incorporated into a revised

resource estimate for PFS, and

are expected to upgrade the

majority of the resource into

the Measured and Indicated

resource categories

Zandkopsdrift Resource Estimate

Large, high confidence resource estimate(c.950k tonnes TREO) with c.80% of the contained TREO at the

Indicated Resource level (2011)

Final phase of resource drilling (14,200 meters) at Zandkopsdrift completed in Q4 2011

Assay results from final phase of drilling expected to advance majority of the 2011 resource into the

Measured and Indicated categories and PFS will convert such resources to Proven and Probable reserves

reserves

Relative distribution of REOs in Zandkopsdrift is shown on page 54.The resource estimate is NI 43-101 compliant and presented in accordance with CIM definitions The mineral resource

estimates reflect 100% of the estimated resources at Zandkopsdrift. Frontier’s 74% owned subsidiary, Sedex, has complied with the BEE equity ownership requirements as laid down by the

Mining Charter and MPRDA, through shareholder agreements with historically disadvantaged South African individuals and entities that together hold the remaining 26% of the issued share

capital of Sedex. In addition to Frontier’s direct interest in the Zandkopsdrift Project through its 74% shareholding in Sedex (prior to Kores’ initial 10% acquisition), Frontier shall also be

entitled to, in consideration for Frontier’s funding of the BEE Shareholders’ share of Sedex’s expenditure on the Zandkopsdri ft Project up to bankable feasibility stage, a payment from

certain of the BEE Shareholders following the completion of the bankable feasibility study equal to 21% of the then valuation of the Zandkopsdrift Project. This gives Frontier an effective

95% interest in the Zandkopsdrift Project until such payment has been received.

16 │

17

Zandkopsdrift Absolute and Relative RE Distribution

Element

Tonnes

Relative Distribution

Lanthanum 240,833 25.37%

Cerium 418,225 44.06%

Praseodymium 43,870 4.62%

Neodymium 150,723 15.88%

Samarium 21,538 2.27%

Europium 5,597 0.59%

Gadolinium 13,441 1.42%

Terbium 1,570 0.17%

Dysprosium 7,364 0.78%

Holmium 1,230 0.13%

Erbium 3,015 0.32%

Thulium 377 0.04%

Ytterbium 2,090 0.22%

Lutetium 283 0.03%

Yttrium 39,145 4.12%

TTt 949,301 100.00%

Zandkopsdrift Resource Block Model (2011)

18 │

Zandkopsdrift Sample Geological Section

19 │

7.98% TREO over 16 meters

with 17.98% TREO over 1 meter

Weathered CPB intruded by weathered RE enriched REDs

20 │

Weathered CPB

1-3% TREO

Weathered REDs

6-8% TREO

Contact Between REDs and CPB in Bulk Sample Trench

21 │

Weathered REDs

4-5% TREO

Weathered CPB

1-3% TREO

Bulk Sample Trench for Pilot Testwork (Q1 2012)

22 │

Average XRF TREO grade 3% for 174 metre trench

Preliminary Economic Assessment - March 2012

23 │

PEA Financial Highlights

Post-Tax NPV & IRR

Post-Tax Net Present Value @ 11% discount rate $3.65bn

NPV attributable to Frontier Rare Earths $3.60bn

Post -Tax Internal Rate of Return 52.5%

Pre -Tax NPV & IRR Pre-Tax Net Present Value @ 11% discount rate $4.3bn

Pre-Tax Internal Rate of Return 57.6%

Revenue and Cashflow Average annual revenue $1.1bn

Annual after-tax free cashflow in full production $711m

Capital Expenditure

Total construction Capex excluding contingencies $910m

Start-up costs excluding contingency $27m

Project payback from commencement of full production 2 years

Revenue/kg and cost/kg

xSeparated REO

“Basket price” per kg of separated REO from Zandkopsdrift $58.23

Total cash operating cost/kg separated REO $13.08

Location of Zandkopsdrift Project Components

24│

Saldanha Bay Rare Earth

Separation Plant-20,000 tonnes

p.a. TREO

Mixed rare earth carbonate

transported 300kms by road (N7)

to Saldanha Bay

Mining, flotation and cracking

plants to produce mixed rare

earth carbonate

PEA Operating Assumptions and Parameters

25 │

PEA Operating Assumptions and Parameters

Mining

Target annual mining rate 1 m tonnes

Average stripping ratio* 3:1

Life of mine 20 years

Average production grade 3.1% TREO

Mining dilution 7.50%

Processing

Target annual production rate 20,000t separated TREO

Metallurgical recovery 67%

Production start-up H2 2015

Time to full production 1 year

* including all stockpiled <2% grade material and waste

Zandkopsdrift Preliminary Mine Pit Design (looking southwest)

26 │

• 19.5 mt to be mined over 20 years

• Average 3:1 stripping ratio

• Significant LoM extension possible, as only

60% of current resource is exploited

Pit Dimensions (approx.)

East -West extent 830m

North-South extent 900m

Maximum no. benches planned 12

Zandkopsdrift Mine Detailed Layout

27 │

Zandkopsdrift Mine Concentrator Plant -

Metallurgical flow sheet

28 │

Zandkopsdrift Mine Process Plant Layout

29 │

• “Conventional” metallurgical

process

• Crush, grind, float and sulphuric

acid crack

• 99% pure mixed rare earth

carbonate produced

Zandkopsdrift Mine Acid Cracking Plant –

Metallurgical flow sheet

30 │

Saldanha Bay- (300km from Zandkopsdrift)

31 │

Sichen to Saldanha iron ore export rail line

Exxaro ilmenite smelter-Saldanha Bay Arcelor Mittal Saldanha Steel Works

Saldanha Port

Saldanha Bay Industrial Development Zone

32 │

Rare Earth Separation Plant Location and Layout

33 │

Saldanha Separation Plant-Metallurgical flow sheet

34 │

Saldanha Separation Plant-Illustrative Production and

Revenue Contribution by REO

35│

*Big 5 – Neodymium ,Praseodymium ,Europium, Terbium and Dysprosium

**Revenue contributions are calculated using current FOB China prices from Metal Pages as at 1 November 2012

No value is attributed by Frontier to the five heavy rare earths from Holmium to Lutetium

Assumes production of

20k tonnes separated

REOs p.a. and elemental

recovery in line with in

situ Zandkopsdrift

distribution

Zandkopsdrift has an

attractive distribution of

both the high value light

and heavy rare earth

elements (the “Big 5”)

These Big 5 elements

represent c.22% of

illustrative production

volumes but contribute

c.69% of project revenue**

Cerium and lanthanum

would represent c.70% of

the illustrative production

volume but contribute only

21% of potential project

revenue**

7.4%

13.6%

7.4%

25.4%

2.3%

19.2%

2.2% 5.2%

11.7%

5.6%

0.0%

68.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Co

ntr

ibu

tio

n t

o r

ev

en

ue

5,083

8,833

910

3,154

462 118 288 34 154

814 150

4,370

-

2,000

4,000

6,000

8,000

10,000

To

nn

es p

er

An

nu

m

Environmental Assessments Completed for PEA

Preliminary Environmental Assessments completed

Botany

Archaeology

Air and water quality

Human health risk and radiology impact

Uranium and Thorium are at very low levels

Although the rare earths at Zandkopsdrift are contained (97%) in monazite the grades of

both uranium (60-70ppm) and thorium (215-235ppm) are unusually low

Uranium and thorium removed by precipitation and disposed to double-lined tailings

disposal facility at Zandkopsdrift

Environmental studies concluded that “the environmental impact of the radionuclides will

be negligible”

36 │

Zandkopsdrift Project Capital Expenditure Estimate

Total construction Capex PEA

estimate of $910m* (including

c.$100m for sulphuric acid and

seawater desalination plants)

Split 67% for the Saldanha Bay

rare earth separation plant &

infrastructure and 33% for

Zandkopsdrift mining,

concentration plant, sulphuric

acid plant and infrastructure

Additional $27m required in

start-up and indirect Capex on

commissioning

*excludes contingency but contingency is

included in the PEA financial model and valuation

37 │

Sulphuric acid plant, $87.7m

(9.6%) Mining and

infrastructure at Zandkopsdrift, $79.4m (8.7%)

Concentrator Plant, $132.1m

(14.5%)

Infrastructure at Saldanha,

$112.6m (12.4%)

Separation plant, $498.4m (54.8%)

Zandkopsdrift Project Capex versus Western Peers

38 │

(1) Capex based on refurbishment of existing mine and infrastructure

(2) US$/A$ exchange rate of 1.07

Actual & Forecast Capex of Projects to produce separated REOs Total Capex for

Zandkopsdrift compares well

with similar scale projects

worldwide

Circa 2/3rds of Capex relates

to the Saldanha Separation

Plant and data from peers

indicates comparable capital

split

Separation Plant

Mine & Concentrator

Start-up Capex

$645m

$895m

$937m $1,128m $1,213m

$2,046m

-

500

1,000

1,500

2,000

2,500

US$

m

Zandkopsdrift Project Operating Cost Breakdown (PEA)

39 │

$0.86

$5.06 $0.06 $0.07

$7.03

$0.00

$5.00

$10.00

$15.00

Mining Concentrator& H2SO4

Plant

Other costs Transport SeparationPlant

PEA estimates total cash

operating cost per

kg/separated REO from

Zandkopsdrift at $13.08

The main opex components are

c.54% for the separation plant

and c.39% for the

concentration plant, the bulk of

which comprises reagent costs

and the operation of the

sulphuric acid plant

Mining and shipping costs are

low due to the ease of mining,

the high grade and the

availability of infrastructure

Opex estimate excludes 15%

contingency but this

contingency has been included

in the Zandkopsdrift PEA

financial model and valuation

PEA Rare Earth Pricing Methodology (March 2012)

40 │

At 1 November 2012, the Zandkopsdrift basket price (China FoB) was $47.81/kg

Applying the trailing 3 year FoB China prices, the Zandkopsdrift “basket price” per kg of separated REO is $85.49/kg

Applying the mid-point of Roskill’s 2015 price forecast ranges for the principal REOs, the Zandkopsdrift basket price is $52.10/kg

The PEA utilised the average of the 3 year China FoB price (to Dec 2011) and the mid-point of Roskill’s 2015 price forecast. This

methodology reduces the impact of the high rare earth prices in 2011 and resulted in a Zandkopsdrift PEA basket price of $58.23/kg

No value assumed in Zandkopsdrift price basket for five heavy rare earths (holmium, erbium, thulium, ytterbium and lutetium)

Rare Earth Oxide

FOB China Price

(1 Nov 2012)

FOB China 3yr Avg (Nov 2009-Nov 2012)

China Domestic Price

(1 Nov 2012)

Roskill 2015 Price forecast

Lanthanum 12 49 7 20-35

Cerium 15 48 7 10-15

Praseodymium 82.5 115 54 80-120

Neodymium 82.5 129 54 80-120

Samarium 29.5 59 8 *

Europium 1810 1877 812 1,000-1,200

Gadolinium 64.5 84 18 *

Terbium 1300 1555 607 1,000-1,200

Dysprosium 615 866 379 800-1000

Yttrium 52.5 82 18 40-60

Zandkopsdrift ‘Basket Price’/kg $47.81 $85.49 $26.04 $52.10

Korea Resources Corporation

Korea Resources Corporation (“KORES”) is wholly-owned by the Korean government

Objective of becoming a global top 20 mining company by 2020, principally through

international investments and joint ventures

Policy mandate to further Korea's access to strategically important mineral resources

Works with major Korean industry groups and assembles consortia of Korean companies to

participate with KORES in commercial ventures

Korean government has designated rare earths as a strategic raw material for Korea’s future

economic growth and selected Zandkopsdrift source of their future rare earth supply

“In order to support Korea’s high technology, automotive and other industries, the development of

Zandkopsdrift will be a strategic priority project for the KORES Consortium and a critical element of

KORES’ efforts to secure a long term, stable source of rare earth supply for Korean industry.”

Shin-Jong Kim, Kores President and CEO (Dec 2011)

41 │

KORES Joint Venture Highlights

KORES to acquire initial 10% interest in Zandkopsdrift for $23.8m in cash (Nov 2012)

KORES options on completion of a positive Definitive Feasibility Study for Zandkopsdrift:

Kores may increase participation up to a 50% interest* in Zandkopsdrift, together with an off-take right and

obligation for up to 50% of production from Zandkopsdrift (the “50% Option”)

The exercise of the 50% Option will be conditional upon Kores arranging project finance for entire

Zandkopsdrift development on best available market terms and, if such project finance is accepted by the

Frontier Board in its absolute discretion, Kores providing its pro rata funding for the portion of Zandkopsdrift

development costs not covered by the project finance

Alternatively, Kores may acquire an additional 10% interest in Zandkopsdrift at the DFS project valuation

(NPV) and, if so acquired, Kores may then also acquire 10% shareholding in Frontier at market price. If

these options are exercised by Kores in full it will also procure an off-take right and obligation for 31% of

production from Zandkopsdrift

Frontier may introduce an Alternative Strategic Partner into Frontier/Zandkopsdrift prior to the exercise of

the above options by Kores and in such event the 50% Option will be cancelled

Kores will provide technical and operating experience for the design, construction and operation of the

Zandkopsdrift facilities

Frontier and Kores will cooperate in relation to downstream opportunities in the area of rare earth metals,

alloys and magnets

Zandkopsdrift is Kores’ only investment in a rare earth mine development worldwide.

*Full details of the Frontier Kores JV are set out in the news release dated October 23 2012

42 │

Zandkopsdrift Current Estimated Project Timeline

43 │

PEA Resource

2011 2012 2013 2014 2015

PFS/DFS Resource

PEA

Pre Feasibility

Study

Definitive

Feasibility Study

Financing

Construction

Production

Start-up

Corporate Information

TSX:FRO

Shares Outstanding: 89,562,781

Market Cap c.$53m

Share Price $0.60 (52 week hi/low $1.44 -

$0.43)

Working Capital c.$30m (excl. Kores $23.8m)

Research Coverage:

CIBC

Euro Pacific Capital

Cormark Securities

Byron

44 │

Frontier Relative Share Price (rebased)

0

20

40

60

80

100

120

Frontier Share Price

Peer Average (RER, Quest, Arafura & Avalon)

Industry Leader Average (MCP + LYC)

Frontier Peer Comparison

45 │

Company Lynas Molycorp Avalon Rare Element Quest Arafura Tasman Frontier

Deposit Mt Weld Mtn Pass Nechalacho Bear Lodge Strange Lake Nolan's Bore Norra Karr ‘Central

Zone’

Zandkops

drift

Location Australia California NW Territories Wyoming Quebec Australia Sweden South Africa

TREO Grade 8.08% 7.04% 1.70% 3.45% 1.20% 2.80% 0.54% 3.12% 2.28%

Tonnes per annum 11kt / 22kt 19kt / 40kt 10kt 10kt 12kt 20kt 6kt 20kt

Rare Earth Product Separated REO Separated REO Separated REO Concentrate Concentrate Separated REO Concentrate Separated REO

Project stage Commissioning Commissioning PFS PEA PEA PFS PEA PEA

Primary RE Mineral Monazite Bastnaesite Fergusonite Ancylite &

bastnaesite Kainosite

Fluorapatite &

Cheralite Eudialyte Monazite

Deposit type Pipe Pipe Tabular Dykes/veins Veins Veins Tabular Pipe

Mining Method Open Pit Open Pit Underground Open Pit Open Pit Open Pit Open Pit Open Pit

Climate Arid Arid Arctic Cold Cold Arid Moderate Good

Infrastructure Poor Good Poor Good Poor Poor Good Good

Industry Partner Yes Yes No No No No No Yes

Start-up year (est.) 2012 2012/13 2016 2016 2017 Unknown 2016 2015

Market Cap $1,222m $1,054m $171m $185m $76m $86m $85m $53m

Enterprise Value ($m) $1016m $684m $111m $149m $60m $59m $74m $23m

Summary

World-class rare earth deposit

high grade, attractive REE distribution, large tonnage, on surface, low radioactivity

Well positioned to become the next major, low cost producer of separated rare earth

aoxides and the largest non-Chinese producer of separated heavy rare earth oxides

Confirmed by results of PEA

PFS in progress and targeted for completion in Q1 2013

Only rare earth junior with a definitive agreement with a strategic industry partner

Experienced management and technical teams

Strong financial position and fully funded to complete PFS and DFS

Share price trading at significant discount to peers Share buy-back commenced late Q2 2012

46 │

DRAFT

Appendices

Senior Management Team

Senior Management team with extensive experience of exploration and development of

mineral projects in Southern Africa, rare earths, financing and corporate development

Philip Kenny B Eng, MBA Chairman

25+ years experience in natural resource sector.

Founder and former Executive Chairman and CEO of

Firestone Diamonds plc, an AIM-listed diamond mining

company focused which built and operated diamond

mines in South Africa, Botswana and Lesotho.

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

15+ years experience in minerals industry. Has managed

or prepared more than 30 independent reviews, scoping,

pre-feasibility and definitive feasibility studies in Africa

and Canada.

Ms Vivian Wu B Sc, EMBA Business Development Director- Greater China

20+ years experience in rare earth industry in senior

roles with China Minmetals Corporation, Rhodia (China)

Investment Co and Treibacher Industrie AG.

James Kenny B Comm, MBS Chief Executive Officer

20+ years experience in natural resources sector as an

executive, adviser and broker. Co-founder of Frontier and

centrally involved in all aspects of Frontier's

development, corporate, strategic and financing activities

since incorporation.

Paul McGuinness B Comm, ACA Chief Financial Officer

15+ years experience in investment banking and

financial control with Arthur Anderson, Salomon Brothers,

Schroders, Collins Stewart and MG Capital.

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

30+ years experience in mineral exploration with

particular experience in rare earths, uranium, base

metals and diamonds.

48 │

Independent Non-executive Directors

Eamonn Grennan (Ireland) B.Sc, M.Sc (Ireland)

Independent consulting geologist with over 40 years

experience as an exploration manager, geologist,

consultant and senior lecturer. Former President of the

Irish Association for Economic Geology and member of

the Consultative Committee of the Irish Geological

Survey.

Anu Dhir (Canada) B.A., J.D. Former VP Corporate Development and Company

Secretary of Katanga Mining Limited. Managing Director

of Miniqs Limited, Non-executive Director of Anooraq

Resources Corporation and Non-executive Director of

Compass Asset Management.

Crispin Sonn (South Africa) B.A., B.Comm Executive Director of Old Mutual South Africa, the largest

integrated financial services company in South Africa.

Chairman of the Old Mutual Foundation, founding

Chairman of Foodbank South Africa and Non-executive

Director of Capespan (Pty) Ltd.

49 │

Principal Zandkopsdrift Consultants

50 │

Consultant Responsibility

Africa Geo-Environmental Services

Archaeological, botanical, air quality, human health risk and radiological impact assessments

Mine closure plan and estimate of financial provision

Water fatal flaw analysis and water baseline study

Africa Remediation Technologies Sea water desalination plant scoping study

Benchmark Risk Advisory Independent risk assessment

Cameron Cross Incorporated Environmental permitting legal opinion

Corli Havenga Transportation Engineers Access routes and logistics surveys

EHL Consulting Engineers Eskom bulk power supply application

Epoch Resources Tailings disposal facility design

KPMG Tax and corporate structure

Metallurgical Development Services Independent process consultant

MSA Group Geological model and mineral resource estimation

SGS Minerals Services and

Mintek SA Beneficiation and hydrometallurgical studies

SNC Lavalin Group Design of the concentrator, acid cracking, sulphuric acid and separation plants, including

associated infrastructure and services, and capital and operating cost estimates

Sound Mining Solution Geotechnical assessment and mine design

Venmyn Rand Technical and economic review of the project, preparation of financial model and project

valuation, preparation of independent technical report on the results of the PEA and the PFS

Zandkopsdrift opex versus peers

51 │

(1) Molycorp Q1 2012 actual cost. Molycorp forecasts a 90% reduction in opex but does not

break down costs between separation and other operating costs

(2) Based on a US$/A$ exchange rate of 1.07 and a USD/ZAR rate of 7.8

Opex of Projects planning to or producing separated REOs

Zandkopsdrift’s concentrator and

separation plant opex compares

well with other rare earth projects

globally

Opex primarily driven by reagent

and energy costs

The PEA assumes that HCL for the

Saldanha Separation plant will be

purchased at market rates and that

a sulphuric acid plant will be built at

the mine site which will also provide

power to operate the mine and

concentrator

Frontier will continue to further

optimise the Zandkopsdrift Project

opex including looking at ‘over the

fence’ reagent supply opportunities

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Lynas (2) Frontier (2) Arufura (2) Molycorp (1)

US

$ p

er

Kg

of

Se

para

ted

RE

O Separation cost per kg

Mining, conc. & transport cost per kg

Opex versus peers producing a mixed RE concentrate

52 │

Frontier’s operating cost for the

production of a mixed rare earth

concentrate is considerably lower than

for other projects that are planning on

producing a concentrate

The Opex cost advantage of

Zandkopsdrift deposit is driven by its

favourable location, relative ease of

mining, the monazite host mineral, and

the nature of the deposit.

(1) Based on a USD/Rand rate of 7.8

Projected Opex of projects producing RE concentrate

6.05

10.09 10.93 11.28

17.27

0

2

4

6

8

10

12

14

16

18

20

Frontier (1) Rare Element Tasman Quest Matamec

US$

per

Kg

of

Co

nce

ntr

ate

Capex versus peers producing mixed RE concentrate

53 │

Several of Frontier’s peers plan to produce a mixed

rare earth concentrate rather than separated rare

earth oxides

The production and sale of rare earth concentrate

may be a more challenging business model as, at

present, there are no available western separation

plants that can toll separate rare earth concentrate.

In addition sales of RE concentrate to China may

be impacted by the export quota system (and

therefore the price achievable for the RE

concentrate could be based on a discount to the

China domestic price rather than the China FOB

price as many projects have assumed)

The cost advantage of the Zandkopsdrift Project

can also be seen in the Capex cost of the

Zandkopsdrift mine and concentrator plants to

produce a mixed rare earth concentrate .

-

100

200

300

400

500

600

Frontier(20kt)

Matamec(5kt)

Rare Element(10kt)

Quest (12kt)

To

tal C

ost

US

$m

Mine & Concentrator - Total Costs

-

10

20

30

40

50

60

70

Frontier(20kt)

Rare Element(10kt)

Quest (12kt) Matamec(5kt)

To

tal C

ost

Pe

r K

t R

EO

- U

S$

m

Mine & Concentrator Costs per kt of RE product

Rare Earth Oxide REO price

($/kg)2

Lynas Molycorp Frontier Rare Element Arafura Avalon Quest

Mt Weld Mtn Pass Zandkopsdrift Bear Lodge Nolans Bore Nechalacho Strange Lake

LR

EO

Lanthanum $14 25.2% 34.0% 25.4% 27.1% 19.8% 17.1% 14.4%

Cerium $15 45.2% 48.8% 44.2% 43.7% 47.6% 39.5% 30.0%

Praseodymium $83 4.9% 4.2% 4.5% 5.1% 5.8% 4.9% 3.3%

Neodymium $83 17.1% 11.7% 15.8% 18.0% 21.2% 19.2% 12.2%

Samarium $33 2.4% 0.8% 2.3% 2.7% 2.4% 3.8% 2.2%

HR

EO

Europium $1810 0.6% 0.1% 0.6% 0.7% 0.4% 0.5% 0.0%

Gadolinium $65 1.5% 0.2% 1.4% 1.4% 1.0% 3.1% 2.2%

Terbium $1400 0.2% 0.0% 0.2% 0.0% 0.1% 0.4% 1.1%

Dysprosium $735 0.5% 0.1% 0.8% 0.3% 0.3% 1.8% 3.3%

Holmium* $0 0.1% 0.0% 0.1% 0.0% 0.0% 0.3% 1.1%

Erbium* $0 0.2% 0.0% 0.3% 0.0% 0.0% 0.8% 2.2%

Thulium* $0 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%

Ytterbium* $0 0.1% 0.0% 0.2% 0.0% 0.0% 0.6% 2.2%

Lutetium* $0 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0%

Yttrium $58 2.0% 0.0% 4.1% 1.0% 1.3% 7.8% 25.6%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total – HREO 5.1% 0.5% 7.8% 3.4% 3.1% 15.5% 37.8%

Total – ‘Big 5’ 23.3% 16.1% 21.8% 24.1% 27.9% 26.8% 20.0%

Relative REO Distribution of Major Western Deposits

54 │

*No value attributed to Holmium, Erbium, Thulium, Ytterbium and Lutetium as these elements have small markets, are typically produced to order and do not have regularly published prices.

REO prices from Metal Pages 1 November 2012

Peer group includes selected advanced rare earth projects with >200k TREO calculated on a code-compliant basis

Metallurgical Sample Recovery Sites ( Q1 2011)

55 │

Metallurgical sample recovery sites

Frontier/KORES

Joint Venture Signing December 2011

56 │

Shin-Jong Kim, President and CEO of KORES (seated lhs) said:

“In order to support Korea’s high technology, automotive and other industries, the

development of Zandkopsdrift will be a strategic priority project for the KORES Consortium

and a critical element of KORES’ efforts to secure a long term, stable source of rare earth

supply for Korean industry.”

Transition from Weathered to Fresh CPB (circa 90 meters depth)

57 │

Transition from Weathered CPB

Lower Grade Fresh CPB

High Grade Weathered CPB