Developing a world-class rare earth deposit in South Africa

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Potential Capital Cost Cost Drivers Size of plant Geographic location Existing Infrastructure Mining method Ore type and process complexity Rare Earth Grade Zandkopsdrift‟s position The anticipated plant size at the Zandkopsdrift project is of globally significant scale (20ktpa TREO) South Africa is a mining friendly, lower cost jurisdiction with a benign (arid) year-round climate The ZC1 deposit is located in SA‟s oldest mining province, close to transport links and other relevant infrastructure As the Zandkopsdrift deposit outcrops on surface it can be mined on an open pit basis with a low/zero strip ratio The principal Rare Earth host mineral is monazite for which commercial extraction processes exist The deposit has several high/higher Rare Earth grade zones which are expected to reduce ore throughput and capex $ 2500 m Announced Rare Earth Project Capex costs (US$m) $ 2000 m $ 1500 m $ 1000 m Potential Zandkopsdrift capex range $ 500 m $ 0 m Quest 12kt** Lynas 11kt Lynas 22kt Molycorp 20kt Molycorp 40kt Arafura 20kt Avalon 10kt* Greenland 43.7kt * Includes costs of 10ktpa mine & processing plant and 25ktpa separating plant ** Quest capex of $562m only brings product to a 99% mixed RE concentrate 31 │
Comparative Valuation-Overview Company Lynas Molycorp Frontier Rare Element Arafura Avalon Quest Greenland Deposit Mt Weld Mtn Pass ZC1-C ZC1-B ZC1-A ZC1 Bear Lodge Nolans Bore Nechalacho Strange Lake Kvanefjeld Location Australia California S. Africa Wyoming Australia NW Territories Quebec Greenland Revenue driver Nd equivalent grade 4 5.23% 3.43% 3.02% 2.38% 1.71% 1.41% 2.06%2 1.74% 1.13% 0.81% 2 0.7% Size of Resource (Mt) 1.414 2.072 0.946 0.548 0.848 4.298 1.149 4.899 Market 3 $ 3,583 m $ 4,040 m $265m $ 389 m $ 442 m $ 649 m $ 320 m $ 317 m Capitalisation Project stage Construction Construction PFS 2011 PEA BFS in progress PFS PEA PEA Deposit type Pipe Pipe Pipe Dykes Veins Tabular Veins Massive Principal Time and cost drivers Mining method Open Pit Open Pit Open Pit Open Pit Open Pit Underground Open Pit Climate Arid Arid Arid Cold Arid Arctic Cold Arctic Open Pit Infrastructure Poor Good Good Good Poor Poor Poor None 1. Measured and Indicated shown where available; Inferred shown for projects with no M&I resources 2. Based on Inferred resource grade 3. Market Capitalisations as at 1 March 2011 4. The following assumptions have been made in calculating Nd equivalent grades: a) Calculated on an oxide-equivalent basis b) Assumes 100% metallurgical recovery c) Based on the REO distributions and grades in slide 27 d) Based on average REO prices for 2008-2010 slide 27 e) Non-REO by products excluded 32 │
Page 1 and 2: DRAFT Developing a world-class rare
Page 3 and 4: Topics 1 Frontier Overview 2 The Za
Page 5 and 6: Recent Rare Earth Market Developmen
Page 7 and 8: Project Location 6 │
Page 9 and 10: ZC1 Carbonatite 8 │
Page 11 and 12: Evaluation Work on ZC1 to date Ang
Page 13 and 14: ZC1 Total Resource - Indicated @ 2.
Page 15 and 16: ZC1-A Zone - Indicated @ 2.74% TREO
Page 17 and 18: ZC1-C Zone - Indicated @ 4.72% TREO
Page 19 and 20: Exploration and Resource Upgrade Po
Page 21 and 22: Resource Expansion Potential 20 │
Page 23 and 24: Metallurgical Sample Sites Drill si
Page 25 and 26: Project Development Plans - 2011/20
Page 27 and 28: Rare Earth Metallurgy Metallurgy i
Page 29 and 30: Big 5 Combined Absolute Grade % 2.0
Page 31: Project Comparison on Metal Equival
Page 35 and 36: Zandkopsdrift Summary World-class
Page 37 and 38: Rare Earths - Overview Series of 1
Page 39 and 40: Rare Earths - Historical Supply Ch
Page 41 and 42: Management Management team with ext
Page 43 and 44: ZC1 Historical Exploration 42 │
Page 45 and 46: ZC1-C Zone: Significant High Grade
Page 47: LREO HREO REO Prices and Relative D

Developing a world-class rare earth deposit in South Africa

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