Frontier Rare Earths to Vote on TSX Delisting

Frontier Rare Earths (TSX:FRO,OTCMKTS:FREFF) will hold a shareholders meeting on September 16 to discuss a resolution to delist the company from the Toronto Stock Exchange. The company believes that for the past three years, “the trading price of the Shares on the TSX did not fairly reflect either the inherent value of the Company or its assets.”
As quoted in the press release:

The Company believes that this valuation disparity has been principally due to the highly unfavourable market conditions for listed junior natural resource exploration and development companies that have been created by the depressed price levels of most commodities during this period.
With global demand growth for commodities slowing, commodity prices have continued to fall, with the Bloomberg Commodity Index, which comprises 22 commodities across seven sectors, recently closing at its lowest level in 14 years. Sentiment in relation to the listed rare earths sector has also been negatively affected by, inter alia, the significant financial and operational challenges that have been encountered by the two leading western rare earth producers, of whom one, Molycorp Inc., filed for Chapter 11 bankruptcy in June 2015 with debts of approximately $1.7bn. Rare earth prices have also recently hit five-year lows. These issues have resulted in a loss of confidence by the markets in the ability of any of the junior rare earth developers to secure the finance required to develop their respective projects through the conventional listed equity and debt capital markets.
As a consequence of these market conditions and notwithstanding the very considerable progress made by the Company in advancing the Zandkopsdrift project, Frontier’s share price on the TSX has remained low, with a market capitalisation close to or below the Company’s net cash balance, for an extended period of time, effectively attributing minimal value to the Company’s assets.
The Company has undertaken several initiatives over the past three years with the objective of ensuring that the trading price of the Shares better reflected what the Board believed to be an appropriate valuation of the Company and its assets. These included two normal course issuer bids (share buybacks) and various public relations, investor relations and other marketing campaigns. These initiatives have had very limited and only temporary positive impacts on the trading price of the Shares, and have been insufficient to overcome the considerable negative sentiment in the junior resource sector.

Click here for the full press release.