Frontier signs deal with KORES on rare earth project
By Julie Gordon
TORONTO (Reuters) - Frontier Rare Earths Ltd FRO.TO said on Monday it signed a definitive agreement to partner with Korea Resources Corp (KORES) to fast-track the development of the Zandkopsdrift rare earth project in South Africa.
Shares of the exploration company soared more than 27 percent to C$1.34 per share at market open on the Toronto Stock Exchange, and were trading at C$1.26 later on Monday.
The deal will see KORES invest in both Frontier and the Zandkopsdrift project, creating an off-take agreement that could commit up to 31 percent of future production.
"This actually alleviates a good deal of risk within the company and within the project," said Byron Capital Market analyst Jon Hykawy. "They've gotten an excellent, excellent deal here with KORES."
KORES, along with a consortium of five other Korean companies, will provide Frontier with technical and operational help to develop Zandkopsdrift.
Frontier will work with the group to investigate downstream rare earth production, including metals, alloys and magnets.
"This deal opens up opportunities for us to investigate and pursue downstream opportunities," Chief Executive James Kenny told Reuters.
"I think this puts us heads and shoulders above what one might regard as the chasing pack behind Lynas and Molycorp," he added. Continued...