The definitive agreement involves an investment by the Kores consortium in both the Zandkopsdrift project and in Frontier, and an off-take arrangement that could commit up to 31% of future produc-tion. Under the terms of the agreement, the consortium will acquire an initial 10% interest in the Zandkopsdrift project and with such acquisition will secure off-take rights for 10% of the project’s rare earth production. The agreement provides that the consortium can also acquire a further 10% interest in Zandkopsdrift and up to a 10% share ownership of Frontier, which, if acquired, would give Kores off-take rights for an additional 21% of rare earth pro-duction from Zandkopsdrift.

Kores will provide technical, operat-ing, and other assistance relating to the design, planning, construction, and oper-ation of a rare earth mining and process-ing operation at Zandkopsdrift, and Frontier and the Kores consortium will investigate and rare-earth-related down-stream business opportunities, including, but not limited to, rare earth metals, rare earth alloys, rare earth magnets, and related products.

A preliminary economic assessment of the Zandkopsdrift project is scheduled for completion during the first quarter of 2012, and initial work has begun on a pre-liminary feasibility study. Current planning anticipates development of a conventional truck-and-shovel open-cast mine, with minimal drilling and blasting required. A concentrator at the Zandkopsdrift site will be designed to treat 1 million mt/y of mined ore. A separation plant with a pro-duction capacity of about 20,000 mt/y of separated rare earth oxides will be located at Saldanha Bay, approximately 250 km south of Zandkopsdrift.