Quarterly Activities/Appendix 4C Cash Flow Report

Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) is pleased to provide its quarterly activity report for the quarter ending 30 September 2023.

HIGHLIGHTS

• Frontier signed a binding agreement to acquire Waroona Energy Inc. (Waroona) to create a large-scale Australian renewable energy company. Transaction is on track for completion during the December quarter
  • The transaction combines two highly synergistic projects, located adjacent to each other and in close proximity to key infrastructure
  • Combining the projects simplifies financing and applications for potential government grants
  • Upon implementation, Frontier Shareholders will hold ~67% of the Merged Group and Waroona shareholders ~33%
• The Australian Energy Market Operator (AEMO) released its annual Electricity Statement of Opportunities Report, highlighting an urgent requirement for additional generating capacity
  • Over the next decade demand is forecast to increase by at least 78% (Expected Case), with High Case demand increasing by more than 220%
  • Meanwhile generating capacity is forecast to decline, resulting in deficits forecast for every single year over the entire forecast period
  • Wholesale electricity prices continued to increase in the quarter, up 25% Year-on-Year
• Waroona Energy’s study assessing a 120MW Dual Fuel (Green Hydrogen) peaking plant commenced
  • Dual Fuel Peaking Plants are a mature technology and are used to supply energy to a market typically during peak periods of high demand (and pricing) for electricity
  • Given Waroona Energy’s existing connection to the South West Interconnected System (SWIS), a dual fuel peaking power plant is a clear potential first consumer of green hydrogen
• Frontier meets key criteria for the Federal Government’s ‘Hydrogen Headstart’ program and intends submitting its Expression of Interest (EOI) in the December quarter
  • Demonstrating a clear offtake pathway, such as fuelling a peaking power plant, is a key requirement for the subsidy
• Waroona Energy commenced a Definitive Feasibility Study (DFS) for a 120MWdc Solar Facility (Stage One) due for completion in early 2024
  • The DFS will finalise the detailed design, including capital cost estimate (accurate to ±15%), for a Stage One solar development
  • Waroona’s landholding is located closest to the nearby electricity terminal and is logically the first project to be developed
• As at 30 September 2023, Frontier had cash of $6.9m (unaudited)
  • On implementation of the Waroona acquisition, Frontier’s cash will be supplemented by Waroona’s cash (~A$11.9m as at 30 September 2023)
  • Cash outflows in the quarter included land acquisition cost of ~$1.1m

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