Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Frontier Rare Earths Limited (TSX: FRO) jumped 10% on Tuesday on higher than usual trading volumes, after the company said it is in advanced talks with Korea Resources Corporation – owned by the Asian nation’s government – to expand a JV first signed last year.
By mid-morning was trading up just over 10% at $0.65 on the Toronto big board. The tightly held counter it now worth $57 million, but is still trading down more than 20% for 2012.
Frontier is advancing the Zandkopsdrift rare earth project in South Africa and in December sold 10% of the venture to Kores for $23.8 million.
Frontier announced Wednesday that Kores wants to further expand the deal and that its board will conclude negotiations this month.
Kores already has the option to acquire a further 10% interest in Zandkopsdrift and a 10% interest in Frontier following completion of a definitive feasibility study, which is expected end-2013.
These options, if exercised, would give Kores off-take rights for a total 31% of rare earth production from Zandkopsdrift.
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