DRAFT

Developing Zandkopsdrifta world-class rare earth project

February 2012Frontier 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.

February 2012

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Forward-looking information

Topics

The Rare Earths Market

Frontier Rare Earths and Background to the Zandkopsdrift Project

Preliminary Economic Assessment and Project Development Plans

Korea Resources Corporation Joint Venture

Outlook

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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 economyHybrid motor and battery technology

Energy efficiency

Wind power

Consumer electronics

Defense

Transport

Most have no substitutes and are indispensable in many applications

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Value of RE usage by application

Rare Earths – UsesBiggest, fastest-growing use is for magnet applications which, together with phosphors and metal alloys, accounts for >80% of demand by value

Source: Roskill

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Rare Earth Market DevelopmentsChina

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

2012 quotas appear to have stabilised at c.30kt per annum, however:

2012 quota applies to a wider range of products

First -time introduction of quotas for heavy (13%) and light REOs (87%) which is likely to increase the shortage of these critical rare earths outside China

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

Although FoB China prices have declined in recent months, there has been a significant increase in REO prices over the last 12 months

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Global Supply and Demand (tonnes REO)

Rare Earths – Supply/Demand ForecastsDemand CAGR projected at 7-10% through 2015 and beyond

China’s domestic demand increasing faster than domestic supply

Supply deficit widely forecastCirca 70t of REO required from non-China sources by 2015 and 115kt by 2020

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

Source: Roskill,Freedonia Group

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Frontier OverviewFrontier's flagship asset is the Zandkopsdrift Rare Earth projectWorld-class deposit in terms of size, rare earth grade, distribution and value

Preliminary Economic Assessment confirms Zandkopsdrift’s significant potentialPEA is the only integrated NI 43-101 compliant study covering mining through separation of REOs

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

Supports Frontier’s objective to become a major low cost producer of separated REOs by 2015

Definitive joint venture signed with Korea Resources Corporation (KORES) in Dec ’11Frontier is the only rare earth junior advancing a major rare earth resource outside China with a definitive

strategic partnership agreement in place

KORES forming a consortium expected to include Samsung Group, GS Caltex, Daewoo Shipbuilding & Marine Engineering Group and AJU Group to participate in the Frontier Joint Venture

Pre feasibility Study scheduled Q3 2012 and Definitive Feasibility Study Q3 2013

Strong financial position: c.$38m cash and fully funded through Pre & Definitive Feasibility Studies

Experienced Board, management and technical teams

Well developed corporate and product strategy

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Zandkopsdrift Project LocationProject 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 in local communities for the development of the Zandkopsdrift

Frontier controls c.60,000 ha prospecting right area and owns c.4,500 ha of land on which the Zandkopsdrift rare earth deposit and carbonatite complex is situated

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Zandkopsdrift Project Area

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Zandkopsdrift carbonatite

complexGravel road to N7

N7 tarred roadto Cape Town

Bitterfontein rail head(~44 km by road)

Exxaro Resources Namakwa Sands Mine

(~45 km)

Zandkopsdrift Deposit

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Zandkopsdrift Project OverviewA world-class rare earth deposit

Carbonatite complex and one of the largest known rare earth deposits globally with approx. 950k TREO

Significant higher grade “Central Zone” identified within the deposit (average in situ grade 3.1% TREO ) extending from surface and amenable to preferential mining

Zandkopsdrift principally contains “conventional” RE minerals (97% monazite) for which commercial extraction processes exist

Metallurgy now well understood, and utilises established extractive processes

Rare earth minerals in many new projects have never had commercial processes developed, which is key to development time, costs and process risk

Potential for rapid development and production start-upGood regional infrastructure will also facilitate development

Targeting annual production of circa 20,000 tonnes of separated rare earths commencing in H2 2015

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PEA Financial Highlights

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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 & IRRPre-Tax Net Present Value @ 11% discount rate $4.3bn

Pre-Tax Internal Rate of Return 57.6%

Revenue and CashflowAverage annual revenue $1.1bn

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 and cost/kg Separated REO

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

Total cash operating cost/kg separated REO $13.08

Zandkopsdrift Project Rare Earth Operations and Infrastructure

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Koeburg Nuclear Power StationKoeburg Nuclear Power Station

Saldanha Bay Rare Earth Separation Plant

Saldanha Bay Rare Earth Separation Plant

Rare earth carbonate transported 300kms by road (N7)

to Saldanha Bay

Rare earth carbonate transported 300kms by road (N7)

to Saldanha Bay

Mining, flotation and cracking plants to produce mixed rare

earth carbonate

Mining, flotation and cracking plants to produce mixed rare

earth carbonate

Zandkopsdrift Updated Resource EstimateLarge, high confidence resource (c.950k tonnes TREO) with 78% of the contained TREO at the Indicated Resource level

Higher grade Central Zone (c.624k tonnes TREO at 2% cut-off and average in situ grade of 3.04%) identified within the deposit which will be the focus for the PEA mine plan

Additional 14,200 meters drilling at Zandkopsdrift completed in Q4 2011 which is expected to advance the current resource into measured and indicated categories

Relative distribution of REOs in Zandkopsdrift is shown on page 47.Resource 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, Frontier shall also be entitled to, in consideration for Frontier’s funding of the BEE Shareholders’ share of Sedex’s expenditure on the Zandkopsdrift 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 paymenthas been received.

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2011 Resource Estimate Cut-off Grade (TREO)

Tonnes (Millions)

Average Grade(TREO)

Contained TREO (tonnes)

Indicated Resource1% 32.4 2.3% 739k

2% 16.0 3.1% 495k

Inferred Resource1% 10.1 2.1% 210k

2% 4.5 2.9% 129k

Zandkopsdrift Resource Block Model

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Zandkopsdrift ‘Central Zone’ Block Model – 3.04% TREO

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PEA Operating Assumptions and Parameters

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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 2015

Time to full production 1 year

* including all stockpiled <2% grade material and waste

Zandkopsdrift Mine Pit Design (looking southwest)

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• 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

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Zandkopsdrift Mine Process Plant Layout

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• “Conventional” metallurgical process

• Crush, grind, float and sulphuric acid crack

• 99% pure mixed rare earth carbonate produced

Zandkopsdrift Mine Concentrator Plant -Metallurgical flow sheet

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Zandkopsdrift Mine Acid Cracking Plant –Metallurgical flow sheet

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Saldanha Bay

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Sichen to Saldanha iron ore export rail line

Exxaro ilmenite smelter-Saldanha BayArcelor Mittal Saldanha Steel Works

Saldanha Port

Saldanha Bay Industrial Development Zone

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Rare Earth Separation Plant Location and Layout

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Saldanha Rare Earth Separation Plant- Metallurgical flow sheet

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EnvironmentalPreliminary environmental assessments completed

Botany

Archaeology

Air and water quality

Human health risk and radiology impact

Uranium and Thorium at low levels

Grades are low, at 60-70ppm uranium and 215-235ppm thorium

Uranium and thorium removed by precipitation and disposed to lined tailings disposal facility

Environmental studies concluded that environmental impact of theradionuclides will be negligible

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Zandkopsdrift Project Capital Expenditure

Total construction Capex estimate of $910m* (including c.$100m for sulphuric acid and 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 included in the PEA financial model and valuation

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Zandkopsdrift Project Capex versus Peers

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(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 the Zandkopsdrift Project is comparable with similar scale projects worldwide

2/3rds of Capex relates to the Saldanha Separation Plant and published data from peers indicates comparable capital split requirements i.e. Lynas and proposed Arafura separation plants

Separation PlantMine & ConcentratorStart-up Capex

Zandkopsdrift Project Operating Cost Breakdown

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The total operating cost per kg/separated REO from Zandkopsdrift is estimated 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

Excludes 15% contingency but which has been included in the Zandkopsdrift financial model and valuation

PEA Rare Earth Pricing Methodology

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Applying trailing 3 year FoB China prices, the Zandkopsdrift “basket price” per kg of separated REO price is $64.36/kg

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

PEA utilised the average of the 3 year China FoB price and the mid-point of Roskill’s 2015 forecast. This methodology reduces the impact of recent high rare earth oxide prices and results in a Zandkopsdrift PEA basket price of $58.23/kg

At 31 December 2011, the PEA basket price represented a 58% discount to the China FOB price, a 20% discount to the China domestic price and a 9% discount to the 3 year average FoB China price

Rare Earth OxideFoB China Price

(1 Dec 2011)China Domestic

Price (1 Dec 2011)

3 Year Avg. FoB China Price

(Dec 2008-2011)

Roskill 2015 price forecast

PEA Basket PriceContribution to

PEA Basket

Lanthanum 64 17 42 20-35 35 15%

Cerium 54 19 41 10-15 27 20%

Praseodymium 20 100 81 80-120 91 7%

Neodymium 235 190 93 80-120 97 26%

Samarium 89 14 39 * 39 2%

Europium 3790 2048 1207 1,000-1,200 1154 12%

Gadolinium 133 36 56 * 56 1%

Terbium 2810 1517 1016 1,000-1,200 1058 3%

Dysprosium 1960 956 554 800-1000 727 10%

Yttrium 113 42 57 40-60 53 4%

Zandkopsdrift Basket Price/kg $137.93 $72.13 $64.36 $52.10* $58.23 100%

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

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Frontier/KORES Joint Venture December 2011

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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.”

KORES Joint Venture HighlightsKORES to acquire initial 10% interest in Zandkopsdrift

Consideration to be based on the Enterprise Value of Frontier using 15-day average share price post PEA publication, subject to a minimum share price of C$2.39

KORES options:

acquire further 10% interest in Zandkopsdrift at DFS project valuation

acquire 10% shareholding in Frontier at market price post DFS

If all options are exercised, KORES will have the off take right and obligation for 31% of Zandkopsdrift production

KORES to arrange

debt finance to cover development costs, and contribute their share of costs pro rata to equity interest

technical and operational assistance in relation to the development of Zandkopsdrift

Frontier and the KORES Consortium will investigate and pursue downstream business opportunities in the areas of rare earth alloys, rare earth metals and rare earth magnets

Zandkopsdrift is KORES’ only investment in a rare earth mine development worldwide to date

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Frontier Peer Comparison

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Company Lynas Molycorp Avalon Rare Element Quest Arafura Tasman Frontier

Deposit Mt Weld Mtn Pass Nechalacho Bear LodgeStrange

LakeNolan's Bore Norra Karr

Central Zone

Deposit

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 Concentrate Concentrate ConcentrateSeparated

REON/A Separated REO

Project stage Commissioning Commissioning PFS PEA PEA PFS Resource PEA

Primary RE Mineral Monazite Bastnaesite SyeniteAncylite &

bastnaesiteGranite

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

Market Cap $2.33bn $2.18bn $307m $277m $184m $139m $127m $103m

Enterprise Value ($m) $2.09bn $1.62bn $247m $231m $139m $110m $112m $65m

Zandkopsdrift Project Timeline

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PEA Resource

2011 2012 2013 2014 2015

PFS/DFS Resource

PEA

Pre Feasibility Study

Definitive Feasibility Study

Financing

Construction

Production Start-up

Corporate InformationTSX:FRO

Shares Outstanding: 89,562,781

Fully Diluted Shares: 90,072,765 (Feb 2012)

Market Cap c.$103m

Share Price $1.15 (52 week hi/low $3.75 - $0.87)

Working Capital c.$38m (no debt)

Research Coverage:

CIBC initiated coverage March 6 2011 - 12/18 month target price $7.30

Byron Capital initiated coverage March 17 2011 - 12/18 month price target $4.80

Jacob Securities initiated coverage June 8 2011 - 12 month price target $9.83

Cormark Securities initiated coverage Sept 13 2011 - 12 month price target $4.30

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Frontier Relative Share Price (rebased)

Senior Management TeamManagement team with extensive experience of exploration and development of mineral projects in Southern Africa, financing and corporate development

Philip Kenny B Eng, MBA Chairman25 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 review, scoping, pre-feasibility and feasibility studies in Africa and Canada.

James Kenny B Comm, MBSChief Executive Officer

20+ years experience in natural resources sector as an executive, adviser and broker. Centrally involved in Frontier's corporate strategy and development 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, PhDVice President, Exploration

30+ years experience in mineral exploration with particular experience in rare earths, uranium, base metals and diamonds.

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SummaryWorld-class rare earth deposit

Experienced management and technical teams

PEA confirms significant economic potential and low risk profile

Only rare earth junior with a strategic industry partner

Downstream opportunity in rare earth metals, alloys and magnets to be pursued with Korean consortium partners and others

Strong financial position (cash c.$38m) and fully funded through PFS and DFS

Share price trading at significant discount to peers and re-rating warranted post-PEA

Very well positioned to become the next major, low cost producer of separated rare xearth oxides commencing in 2015

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