Procurement and EPC Contract Nearing Conclusion as Peak Energy Prices Hit Record Highs

CEO Adam Kiley commented: “A key risk for any project is an escalation in capital costs through the procurement process. It’s pleasing that cost estimates for all major long lead items have either been in line with expectations or, in most cases, actually fallen.

Only tier one suppliers have been invited to tender. Good quality equipment supplied by reputable suppliers helps us ensure the facility will start-up and operate as expected and importantly will be reliable.

In addition, the Company is also quickly progressing our funding strategy, as both the debt financing and the potential strategic divestment process well advanced. The Company will provide a more detailed update regarding both processes in the coming weeks.”

Procurement process for key long lead items indicates a fall in estimated capital costs

As part of the financing process a key requirement is to ensure a high level of certainty with capital cost estimates. The Company can ensure this by locking in prices for key long lead items with reputable providers. This will ensure minimal risk / price movement in total capital cost estimates, while also ensuring only high-quality equipment is supplied.

The Company therefore issued a request for tender for solar panels, battery energy storage system and inverters, to a select number of trusted global providers. The combined cost of this equipment accounts for ~50% of the total project capex.

The Company has received proposals from the tender process, including updated pricing. All pricing from suppliers has either been in line with or lower than capital cost estimates in the DFS. In addition, all suppliers have indicated they can supply equipment within the specified schedule.

The Company anticipates finalising this procurement process in the coming months.

EPC process advancing towards shortlisting of preferred parties

For the development of Stage One, the EPC contractor will be responsible for integrating key equipment and delivering a complete and operable facility that will be required to pass a performance test prior to handover. Frontier will be responsible for the purchase of the equipment to be supplied to the EPC contractor.

An expression of interest process was used to identify potential EPC contractors. The Company received strong interest from multiple highly regarded and experienced contractors that have a history of developing and delivering industrial scale solar farms and other renewable energy assets.

The Company is currently assessing these proposals to ensure they have the appropriate experience, safety record, and balance sheet to execute the works.

Following this process, the Company plans to issue the tender documents to the pre-qualified contractors, receive and evaluate the submissions. The Company aims to have the EPC contract ready for execution by mid-2024.

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