recent discussions with md p.mcneil

Given the recent surge in interest I thought it might be worthwhile to repost recent discussions I have had with Peter McNeil

Summary

Newcrest Asking for Data Set on PNG Projects
Drilling Update Monday and again week after
Resource Upgrade Around 20th June



Hello Peter,

I am currently a member of a couple of share forums where quite a few members are holders of Frontier stock and we were discussing getting in contact with you, with a list of questions that you maybe willing to answer, rather than everyone bombarding you with individual questions. Any information would be appreciated.



Here are the list of questions.



1. How many metres of drilling (roughly) are yet to be reported on from the Kodu drilling that have already been completed?

2. Are you having long delays with assay results from the labs?

3. In a recent bloomberg report it was discussing Chinese companies taking stakes in companies exploring PNG, has Frontier has any discussions with the Chinese or any JV partners regarding taking a stake in some of your PNG projects?

4. Has the company had any thoughts about listing on the Toronto stock exchange which seems to value large deposit low grade explorers more highly than the ASX?

5. Is the company relying on the conversion of options to fund the rest of the 07/08 drilling campaign?

6. Would it be possible to get a copy of a recent Top 20 shareholders list?

7. When would be a realistic timeframe to expect a drilling updaet on Kodu, days, weeks, months?

8. Have the company been approached about JV's or purchases on any of your projects in PNG/Australia?

9. Have the company plans to have an investor roadshow or presentation to increase the profile of FNT and its projects?

10. What would be a realistic timeframe before a mining operation could be established in PNG?


Thanks in Advance

Michael and the members of (Australian Stock Forums) and (Hot Copper) that currently hold shares in FNT!!


Hello Michael

Thanks for your email and the consideration RE ‘repetition’ of effort. The statements below are accurate to the best of my knowledge, so I don’t think there is any problem in disseminating it. There are forward looking statements and it must be understood that they may not be achieved etc and that this email does not constitute investment advice (my required ‘without prejudice’ disclaimer).



1.Unbelievably 2,681m to be reported in holes KFD004 extension through KFD013. Drilling has stopped temporarily and we are cutting a track to KFD 014 site now which is targeting the annulus from the eastern side for tonnage expansion. The second rig is moving to the Elo prospect tomorrow.


2.Yes – it takes a month from when the samples actually hit the lab in Townsville. We both air freight and sea freight samples depending on perceived priority. Unfortunately it also takes a week normally to get customs clearance + the actual shipping time. Then there is the occasional incompetence factor where samples are short shipped or ‘lost’ by the shippers and not found until we notice and then force a search issue. This happened with the Bukuam trench samples that were only just re-located last week and re-shipped. We have the Bukuam soils and some rocks now and are trying to find time to compile, contour and report them as it will be a month before the other trenches (what we really wanted!) arrive.


3.No discussions with Chinese, but some data has been submitted to various companies via the PNG Mining Authority. I presented to a Korean delegation last year. Problem is these guys take forever to do anything and its not really in our best interest to have a JV partner such as them yet. An equity partner –perhaps.


4.Yes it was discussed briefly last week, along with the possibility of AIM. Problem with AIM is that it is expensive in every aspect. The added regulatory regime is also an impediment, but could be worth it. We have no firm view on moving in this direction, though it is possible. We experience with the TSX-V so that is not an issue, just the relative ‘value’ of doing it.


5.No, we just finalised the placement of all the entitlements issue shortfall (total of 5.74M raised over last 3 months), with a bit less than 5M remaining now [we were close to the bottom and have had some major capital purchasing (used sat phones, bulldozer, continued rig construction and vehicles) as all our originally second hand vehicles in PNG were dying regularly and paid for all our accounting and corporate secretarial work for 2007]. So we are well funded for about 2 years, relative to what work programs we run. It would be very nice I must admit to get option conversion, as it would bring in a large amount of money, but we are not relying on it. We are working towards trying to achieve this, but there is only so much we can do to make it happen. Toward this end, the Andewa gold vein drilling is scheduled to commence as soon as can be organised RE drill shipping etc (likely realistic start date is mid July) to define around a 50,000oz probably indicated resource is planned. The Elo drilling is also hoped to peg something of economic significance and give us a leg up. We will have to wait and see.


6.I will request one be obtained and forwarded to you (Paige – please supply) as possible. We have some new large shareholders from the placements, but I believe my interests are still the largest at about 7.5% and Bob McNeil’s substantial at maybe 3%? Macmin Silver has a substantial holding also.


7.We have assays for KFD004 extension and will be reported when I can write it up – Monday? and just received assays from KFD005, 005a, 007 and 009, but these will take a while to enter into the data base, sort and produce plans and sections – say 1 week to 10 days after KFD004. Plan and section production is the time killer and hold-up, as only the exploration manager can produce these.


8.Yes, for both the Tasmanian projects and the PNG projects. There are tyre kickers everywhere and they can waste a lot of our time. Newcrest are after data on several PNG projects now and I have to find time to compile and send to them. New Guinea Gold are interested in our East New Britain application, but Im not certain it is in our best interest to JV it to them as the contained Doilene gold prospect is on coast and effectively drill ready (ie relatively cheap and ready to test by drilling). In the end, nothing substantive in terms of JVs in the waiting though at this stage.


9.Roadshow per se - no at this stage, however, I recently did an AMEC Investors show in SYD and MEL, am doing the AMEC National Congress in Perth next week – free entry for investors on Sat, and a Gold Coast Investors show 14-15 June – again free entry and lunch! The chairman is doing a roadshow in Europe in early July for New Guinea Gold (TSX-V) and briefly discusses Frontier also, as the companies have quite separate types of profiles for investors so can be done together for effectively no cost to us. Im planning on doing Munich gold show in early Nov and was invited to speak at a sovereign risk conference in August but haven’t decided or accepted yet.


10.For Kodu, realistically is very difficult to say, so this is totally hypothetical. Say pre-feasibility commences August 2007 and is completed March 2008, resource definition and reserve conversion drilling would be required to continue until say end of 2008 or longer depending on number of rigs used with an initial target resource of 150-200 million tonnes for a reserve (depending on results from the revised Inferred Resource of course), initiate studies required for granting of a Mining lease after pre-feasibility- ie a full feasibility study- that would take perhaps a year to complete, apply for Mining Lease maybe end of 2009 at earliest, ML granted end of 2010 at earliest and construction commences early 2011? – at earliest. As this equates to only a bit more than 3.5 years it may be fairly difficult to achieve.


You didn’t ask about this one, but I feel it is of definite interest to you also - Im in Tasmania now reviewing progress on the revised Inferred Resource estimate. We expect this to be released about say 20th June.


The landowners support our exploration operation 100%, we have a very good repore with them (there are up’s and downs as with every relationship and the Koiari are historically known to be difficult to deal with – they made it very difficult when the Track was being ‘put in’ as they were still cannibals!). They have indicated to me they would unequivocally support the development also. They have now had 3 years of ‘our’ operation and a decade of ‘significant’ trekking to compare the benefits from both and we win hands down in terms of direct and indirect benefit to the community – it is not even comparable, regardless of what rubbish the eco-trekkers and KTA espouse. This is the landowners stated opinion in addition to mine! PNG needs mine development acutely and there are no known environmental issues with the deposit and its location.


All the best and if you want to call to ask about anything else please feel free to do so (08 9295 0388). Im quite happy to talk to shareholders and explain anything that I reasonably and legally can.

Regards Peter

Peter McNeil

Managing Director

Frontier Resources Ltd