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Frontier Mining well placed for re-rating, says XCap

Fri, 03 Feb 2012 10:53:00 +0000

XCap Securities analyst Tim Freeborn expects to see a re-rating of Frontier Mining (LON:FML), which is about to start producing copper from its Benkala project in Kazakhstan.

Freeborn said one of the best times to buy a mining share is in the run up to production and Frontier is currently at that stage.

Freeborn said it was complicated in Frontier’s case as the company deferred the start-up from last autumn to March 2012, but the company now has a clear schedule.

The analyst also addressed funding concerns that have held the share price back. Frontier has recently sold its Maminskoye gold mine for US$37 million and secured total facilities of US$29 million from Russia’s Sberbank, which Freeborn said banished the issue.

Another issue that depressed the group’s market value was selling by lenders to two large shareholders. BMF International and Teratorn, which hold a combined stake of 9.4 percent in Frontier, have pledged their shares to their lenders.

Of the total 175 million shares, 160 million have been sold back to the two companies as the lenders are obliged to return the shares back to the holders when their three year loans are repaid.

“This means that not only is the source of selling largely exhausted but there is also the prospect of a serious squeeze,” said Freeborn.

Earlier this week, Frontier secured all construction approvals and permits, allowing it to commission all the equipment in the plant at the Benkala project.

Once the mine is established Frontier plans to expand production, taking it from 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

Speaking about the mining operation, Freeborn said the surface oxide mining at Benkala is “literally only scratching the surface” as the sulphide ore directly below holds seven times as much copper.

The analyst estimates capital expenditure for mining this ore at between US$250 and US$400 million.

Under the current copper price, Freeborn expects Frontier to be able to fund this fully by 2017 using the oxide cashflow.

XCap currently has a 10 pence target price for Frontier, which values the company at £186 million, compared to the current market cap of £64.6 million.

Frontier Mining receives approvals and permits for Benkala copper plant

Tue, 31 Jan 2012 08:22:00 +0000

Frontier Mining (LON:FML) told investors that it can now commission all the equipment in the plant at the Benkala copper mine development.

This morning the company reported that all construction approvals and permits have now been received. It will now commission all the equipment on site.

“This represents for Frontier the completion of another key milestone in the Benkala project timeline,” said chief executive Erlan Sagadiev.

“Progress at the site continues at pace as we enter the next stage of commissioning prior to the commencement of production."

Earlier this month Frontier unveiled a new US$29 million financing arrangement that will help support the development of the Benkala mine.

Once the mine is established Frontier plans to expand production, taking it from 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

Frontier Mining completes acquisition of South Benkala copper deposit - UPDATE

Mon, 23 Jan 2012 13:07:00 +0000

---Adds broker comment---

Frontier Mining (LON:FML) today confirmed that it has completed a deal to acquire additional land near the Benkala copper mine in Kazakhstan.

The land hosts the South Benkala deposit which is estimated to contain 609,600 tonnes of copper.

The deal was originally agreed in May last year and today Frontier confirmed that it has now been approved by the Kazakh authorities.

Frontier has now paid US$2.5 million to the vendor PromSnab2030 LLP and the acquisition is now complete.

South Benkala is located 10 kilometres south of the existing Benkala operation.

Frontier plans to incorporate South Benkala’s copper reserve into its current Benkala project development. This will see the life of the mine’s SX-EW plant, which is currently being built, extend from seven to eleven years.

Or alternatively South Benkala’s oxide resources may expand Benkala’s production capacity from 20,000 to 30,000 tonnes of cathode copper per year.

Earlier this month Frontier unveiled a new US$29 million financing arrangement that will help support the development of the Benkala mine.

Plant commission work began at Benkala last month following an official opening ceremony. The final approval on all construction and infrastructure is expected shortly.

Once the mine is established Frontier plans to expand production, taking it up from 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

Mining analyst John Meyer at City broker Fairfax said: "This is a significant addition to the Benkala copper project and should add meaningful value to the mine and to the company."

He pointed out that the firm had recently agreed a financing package for the expansion of the Benkala mine to 20,000tpa (tonnes per annum) of copper.

"The mine started commissioning in mid December and news of new production is expected shortly following the official opening of the mine last week at the 7,000tpa," said Meyer.

Frontier Mining completes acquisition of South Benkala copper deposit

Mon, 23 Jan 2012 08:17:00 +0000

Frontier Mining (LON:FML) today confirmed that it has completed a deal to acquire additional land near the Benkala copper mine in Kazakhstan.

The land hosts the South Benkala deposit which is estimated to contain 609,600 tonnes of copper.

The deal was originally agreed in May last year. Today Frontier confirmed that it has now been approved by the Kazakh authorities.

Frontier has now paid US$2.5 million to the vendor PromSnab2030 LLP and the acquisition is now complete.

South Benkala is located 10 kilometres south of the existing Benkala operation.

Frontier plans to incorporate South Benkala’s copper reserve into its current Benkala project development. This will see the life of the mine’s SX-EW plant, which is currently being built, extend from seven to eleven years.

Or alternatively South Benkala’s oxide resources may expand Benkala’s production capacity from 20,000 to 30,000 tonnes of cathode copper per year.

Earlier this month Frontier unveiled a new US$29 million financing arrangement that will help support the development of the Benkala mine.

Plant commission work began at Benkala last month following an official opening ceremony. The final approval on all construction and infrastructure is expected shortly.

Once the mine is established Frontier plans to expand production, taking it from 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

Frontier Mining has overcome a major obstacle, says broker

Thu, 12 Jan 2012 10:55:00 +0000

In securing new debt financing Frontier Mining (LON:FML) has overcome a major obstacle that faces most junior mining companies, according to XCap Securities.

This morning the Kazakh focused miner unveiled a new US$29 million financing arrangement that will help support the development of the Benkala copper mine.

The firm’s subsidiary KazCopper has agreed the loan with Russia’s Sberbank. Through the arrangements it will receive a US$20 million investment loan and a US$9 million working capital credit facility.

Frontier has already used some of the cash to pay off its debt to HSBC and the rest is being earmarked for the expansion of the Benkala mine, once production is in full swing.

“Today's announcement is significant for Frontier in that not only will the refinancing of the existing HSBC loans marginally reduce the current interest expense but demonstrates the progress the company has made at the Benkala project with the SX-EW plant currently in the final stages of construction,” said XCap analyst Sam Brindle.

“Securing debt financing is a major obstacle for most junior mining companies, particularly in the current economic climate.

“We believe this financing demonstrates both the robustness of the project and provides equity investors with some comfort that additional cash calls will not be required in the short term.”

The loan will last for 48 months and it carries an interest rate of 9%. Meanwhile the working capital credit facility lasts 36 months and its interest rate varies from 7.5 to 8.5%.

Frontier said that the loan has already been partially drawn on to fully repay the company's US$8 million loan with HSBC.

The rest of the funds will be put towards the Benkala project's expansion, in particular to help pay for the ongoing drilling programs at Benkala and South Benkala.

Plant commission work began at Benkala last month following an official opening ceremony. The final approval on all construction and infrastructure is expected shortly.

Once the mine is established Frontier plans to expand production, taking it up to 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

"In spite of the worsening credit markets we have been able to significantly increase the credit available to the company and improve its terms,” said chief executive Erlan Sagadiev.

“We believe these new facilities reflect the progress achieved in construction to date; as well as in the financial and technical robustness of the Benkala project and represent an excellent start to 2012."

Frontier Mining agrees US$29 mln financing for expansion of Benkala copper mine

Thu, 12 Jan 2012 07:33:00 +0000

Frontier Mining (LON:FML) today unveiled a new US$29 million financing arrangement that will help support the development of the Benkala copper mine in Kazakhstan.

"In spite of the worsening credit markets we have been able to significantly increase the credit available to the company and improve its terms,” said chief executive Erlan Sagadiev.

Frontier said that the loan has already been partially drawn on to fully repay the company's US$8 million loan with HSBC.

The rest of the funds will be put towards the Benkala project's expansion, in particular to help pay for the ongoing drilling programs at Benkala and South Benkala.

The loan will last for 48 months and it carries an interest rate of 9%. Meanwhile the working capital credit facility lasts 36 months and its interest rate varies from 7.5 to 8.5%.

Plant commission work began at Benkala last month following an official opening ceremony. The final approval on all construction and infrastructure is expected shortly.

Once the mine is established Frontier plans to expand production, taking it up to 7,000 to 10,000 tonnes a year, and later expanding to 20,000 tonnes a year.

Frontier Mining's Benkala copper project officially opened

Mon, 19 Dec 2011 08:01:00 +0000

Frontier Mining (LON:FML) is looking forward to starting production from its Benkala copper mine in Kazakhstan as the commissioning process has now begun.

The project was officially opened last Friday (December 16) in a ceremony by a delegation of the Aktobe region's Governor's office, it said.

Afterwards, the plant commissioning group began work on inspecting and commissioning the plant on the site.

The group's approval on all construction, including buildings and infrastructure, is expected early in the new year, it added.

Chief executive of the company Erlan Sagadiev said: "Bringing the Benkala project to this stage has been a long journey for the company and we are delighted to begin commissioning of the plant.

"Frontier is now able to look forward to starting production at Benkala in 2012, which looks certain to become a milestone year for the company."

Previously, the company has said that once Benkala is in production it plans to immediately move to expand the annual capacity from 7,000 to 10,000 tonnes, and subsequently to 20,000 tonnes.

UPDATE: Frontier Mining to start commissioning Benkala copper mine next month

Mon, 14 Nov 2011 13:44:00 +0000

Frontier Mining (LON:FML) told investors that it will begin commissioning the Benkala copper mine in Kazakhstan on December 16.

Construction activities are well advanced, it said.

All the major equipment has been delivered to the site and Frontier is in the final stages of assembly. Additionally many of the plant systems are now operational.

The group’s mining activities will continue throughout the winter months, it said.

The company explained that it will start loading the leach pads as soon as weather permits in 2012. Cathode production will begin shortly thereafter, it said.

"We are excited to begin commissioning our SX/EW plant,” said chief executive Erlan Sagadiev.

“Although we had hoped to see our first copper in 2011, delaying the commencement of the leaching cycle until spring of 2012 is a prudent step in the face of the risks associated with the weather.

“It will also enable comprehensive testing of all plant systems and facilitate a smooth start up, advancing our goal of establishing Frontier as a premier mid-tier copper producer."

Frontier said that once Benkala is in production it plans to immediately move to expand the annual capacity from 7,000 to 10,000 tonnes, and subsequently to 20,000 tonnes.

In a note, broker Fairfax said: "Frontier is rapidly transforming the company into a copper and gold producer with potential to expand significantly once the initial production target is met.

"We expect the management team to continue to expand the business within Kazakhstan and to build on their new operational expertise."

Frontier Mining to start commissioning Benkala copper mine next month

Mon, 14 Nov 2011 08:34:00 +0000

Frontier Mining (LON:FML) told investors that it will begin commissioning the Benkala copper mine, in Kazakhstan, on December 16.

Construction activities are well advanced, it said.

All the major equipment has been delivered to the site and Frontier is in the final stages of assembly. Additionally many of the plant systems are now operational.

The group’s mining activities will continue throughout the winter months, it said.

The company explained that it will start loading the leach pads as soon as weather permits in 2012. Cathode production will begin shortly thereafter, it said.

"We are excited to begin commissioning our SX/EW plant,” said chief executive Erlan Sagadiev.

“Although we had hoped to see our first copper in 2011, delaying the commencement of the leaching cycle until spring of 2012 is a prudent step in the face of the risks associated with the weather.

“It will also enable comprehensive testing of all plant systems and facilitate a smooth start up, advancing our goal of establishing Frontier as a premier mid-tier copper producer."

Frontier said that once Benkala is in production it plans to immediately move to expand the annual capacity from 7,000 to 10,000 tonnes, and subsequently to 20,000 tonnes.

Frontier Mining on-track towards becoming mid-tier copper producer

Thu, 29 Sep 2011 10:06:00 +0100

Frontier Mining (LON:FML) is entering a "very exciting period" with full commissioning of its Benkala copper plant in Kazakhstan scheduled for next month or November this year.

Funding has now been secured for the project's transition into a producer and full production is anticipated in 2012, said the firm.

In its interim results statement, frontier's chief executive Erlan Sagadiev was upbeat about the company's position.

"We are confident that Frontier is fully on-track towards its goal of becoming a mid-tier copper producer and has a solid project pipeline for future growth."

In the six months to June 30 this year, revenue was US$1.2 million (2010: nil) with a net operating loss of $2.8mln (2010: US$11.1mln).

Operating expenses of US$1.7 million were in line with previous years (2010: US$1.5mln).

The finance costs of US$1.6mln for the period (2010: US$0.6mln) were the main contributor to the operating loss, said the company.

After the period end, the company secured the full funding for Benkala's move into production - achieved primarily through the sale of the Maminskoye gold deposit in Russia to Stanhigh Limited of Cyprus for $37.45 million in cash, it said.

Progress on the bankable feasibility project for Benkala has been substantial and it is close to being published.

At the Baitemir project on the Naimanjal licence in Kazakhstan, 10,000 metres have been completed and the firm has started another 10,000 metre programme. Frontier is confident that Baitemir will be a substantial copper asset.

It is working to further define the mineral inventory and anticipating a JORC compliant resource in 2012. The company also believes there is potential to use the other deposits within the Naimanjal licence area as satellite feeders to Baitemir.

At Koskuduk, also on Naimanjal, in the first six months of the year, 735 ounces of gold and 2,555 ounces of silver were produced generating $1.2 million in revenue.

Operations at Koskuduk continue but Frontier's strategy is now firmly focused on copper, bringing the Benkala mine into production and continuing exploration at Baitemir, it said

Frontier Mining – pushing forward to production

Mon, 12 Sep 2011 13:07:00 +0100

If Frontier can meet both its own and its brokers’ expectations and deliver steadily growing post-tax annual earnings from Benkala, culminating in $50 million in two year’s time, then today’s market cap of just $92 million will look a little silly.

Frontier Mining to publish bankable feasibility study for Benkala copper project shortly

Mon, 05 Sep 2011 08:13:00 +0100

Kazakhstan-focused copper and gold exploration and development company Frontier Mining Ltd (LON:FML) said it expects to publish the bankable feasibility study for the Benkala project shortly.

In a statement prepared ahead of today’s AGM, the group said it is making good progress in the commissioning of the Benkala SX-EW plant (solvent extraction and electrowinning), with crushing expected to commence in October and copper production before the end of the current financial year.

Chief executive Erlan Sagadiev said: “All equipment is now on site and we are confident that Frontier will be producing copper before the end of the year. Frontier is in a strong financial position and we fully anticipate moving the company forward to the next stage in its development."

The group also reported ontinued progress at Koskuduk and Baitemir operations. At Baitimir the company has commenced a 6,000 meter drilling program to further define the mineral inventory, anticipating the generation of a JORC compliant resource in 2012.

Last month, Frontier received the second US$5 million tranche of the US$10 million funding for Benkala it announced in mid-June.

The deal is part of a copper off-take agreement with Red KiteMine Finance. The agreement is for four years from the commencement of production at Frontier’s Benkala copper oxide project.

Benkala is a 32.6 million tonne copper oxide resource, grading at 0.54 percent copper.

Frontier Mining receives second US$5 million tranche for Benkala copper project

Tue, 16 Aug 2011 07:37:00 +0100

Kazakhstan-focused copper and gold explorer and producer Frontier Mining (LON:FML) said today that it had received the second US$5 million tranche of the US$10 million funding it announced in mid-June.

The funding deal is part of a copper off-take agreement with Red KiteMine Finance. The agreement is for four years from the commencement of production at Frontier’s Benkala copper oxide project.

Benkala is a 32.6 million tonne copper oxide resource, grading at 0.54 per cent copper. It is located in north-west Kazakhstan, closer to the Russian border, in an area that the company says presents favourable geography. The water table is within 25 metres of the surface and the flat landscape makes it ideal for heap leach processing.

In May 2010 Frontier commissioned an engineering firm to create a detailed design of a 20,000 metric tonne per year production facility. Pre-stripping of the mine and the commencement of site works also began last year.

Frontier reported recently that as of the beginning of June, construction for entire project was approximately 65 per cent complete. First production is expected in late 2011.

“Having already secured full funding for the Benkala project, these additional funds will further strengthen Frontier's balance sheet and enhance our ability to operate,” said Erlan Sagadiev, Frontier’s chief executive officer.

Frontier Mining: Three directors boost holdings in firm

Wed, 03 Aug 2011 12:36:00 +0100

Kazakhstan-focused Frontier Mining (LON:FML) revealed today that three directors in the company had increased their stakes in the firm.

All three transactions took place last Friday - July 29, said the company.

Chief financial officer George Cole bought 1.5 million shares. He now holds 2.3 mln shares in the firm, or 0.12 percent of the company.

Greg Vojack, a non-executive director, acquired an indirect interest in 3,637,956 shares and now holds 28 million shares representing 1.5 percent of the company.

Finally, non- executive director Randy Eppler bought 500,000 shares and now holds 1 million company shares - representing 0.05 percent of the share capital.

Last Thursday - July 28 - the firm said it had sold its Maminskoye gold deposit in Russia for US$37.45 million in a “transformational transaction”.

The news triggered a buying spree, driving shares in the company up 21.5 percent in early deals in London.

The location of Maminskoye is outside of Frontier’s focus area and the costs required to develop the project were the main reasons behind the decision to sell.

The sale will enable Frontier to fully focus on Kazakhstan and give it the funds to launch the solvent extraction/electrowinning (SX-EW) plant at its flagship Benkala project.

UPDATE: xcap retains "strong buy" rating for Frontier Mining after Maminskoye sale

Thu, 28 Jul 2011 10:22:00 +0100

Adds comments from xcap....

Frontier Mining (LON:FML) has sold its Maminskoye gold deposit in Russia for US$37.45 million in a “transformational transaction”.

The news triggered a buying spree, driving shares in Frontier up 21.5 percent in early deals in London.

The location of Maminskoye is outside of Frontier’s focus area and the costs required to develop the project were the main reasons behind the decision to sell.

The sale will enable Frontier to fully focus on Kazakhstan and give it the funds to launch the solvent extraction/electrowinning (SX-EW) plant at its flagship Benkala project.

“I believe that uncertainty about Frontier's capacity to complete Benkala has weighed on our share price and that this monetization of value will encourage investors to focus on the significant value that Frontier offers to investors,” said chief executive of Frontier Mining Erlan Sagadiev.

The Maminskoye property was acquired by Frontier as part of its acquisition of Coville Intercorp assets in 2010.

That deal consolidated Frontier's and Coleville's interests in the Benkala copper deposit in Kazakhstan and included Coville’s wholly owned Maminskoye deposit.

Maminskoye currently has a resource of 27,177 kilograms of gold.

Last month, Frontier hired Calder Maloney to design the SX-EW plant at Benkala.

The proposed plant will be developed in two stages.

It is intended that Phase 1 will have a production capacity of 25 tonnes per day, equating to 7,000 tonnes per year.

Once the plant has been successfully commissioned, and has been operating and producing at that rate, the Phase 2 development will commence.

Analyst at xcap Austin McKelvie was encouraged by the sale, saying that it “considerably de-risked” the Benkala copper mine by removing the funding and timing doubts that surrounded the project.

“The sale of Maminskoye is of enormous importance o Frontier Mining. Not only does the sale allow Frontier to strategically focus solely on copper in Kazakhstan, but the (cash proceeds) allow Frontier to take the Benkala Copper Mine to full production at a rate of 29,000 tonnes of SX-EW copper cathode per annum,” said McKelvie.

The analyst envisages the first copper production of 3 kilotonnes of LME cathode grade copper in 2011 with the output rising to 18 kilotonnes per annum by 2013.

Based on today’s news and the strong copper price, which currently stands at US$4.42/lb, McKelvie upheld his “strong buy” recommendation for the stock. He also upheld his target price for the stock of US$14 pence, which was based on a copper price of US$3/lb.

Shares in Frontier rallied 0.78 pence (21.5 percent) to 4.38 pence this morning, giving the company a market cap of £81.4 million.

Frontier Mining sells Maminskoye gold project in Russia for US$37.45mln

Thu, 28 Jul 2011 08:35:00 +0100

Frontier Mining (LON:FML) has sold its Maminskoye gold deposit in Russia for US$37.45 million in a “transformational transaction”.

The news triggered a buying spree, driving shares in Frontier up 21.5 percent in early deals in London.

The location of Maminskoye is outside of Frontier’s focus area and the costs required to develop the project were the main reasons behind the decision to sell.

The sale will enable Frontier to fully focus on Kazakhstan and give it the funds to launch the solvent extraction/electrowinning (SX-EW) plant at its flagship Benkala project.

“I believe that uncertainty about Frontier's capacity to complete Benkala has weighed on our share price and that this monetization of value will encourage investors to focus on the significant value that Frontier offers to investors,” said chief executive of Frontier Mining Erlan Sagadiev.

The Maminskoye property was acquired by Frontier as part of its acquisition of Coville Intercorp assets in 2010.

That deal consolidated Frontier's and Coleville's interests in the Benkala copper deposit in Kazakhstan and included Coville’s wholly owned Maminskoye deposit.

Maminskoye currently has a resource of 27,177 kilograms of gold.

Last month, Frontier hired Calder Maloney to design the SX-EW plant at Benkala.

The proposed plant will be developed in two stages.

It is intended that Phase 1 will have a production capacity of 25 tonnes per day, equating to 7,000 tonnes per year.

Once the plant has been successfully commissioned, and has been operating and producing at that rate, the Phase 2 development will commence.

Shares in Frontier rallied 0.78 pence (21.5 percent) to 4.38 pence this morning, giving the company a market cap of £81.4 million.

Frontier Mining continues to make good progress at Benkala; releases 2010 results

Mon, 27 Jun 2011 08:39:00 +0100

Kazakhstan-focused Frontier Mining (LON:FML) says progress continues monthly at its Benkala copper project and it is confident it will secure funding so that the project will be producing in late 2011.

The firm released its results for the year to 31 December 2010 today, in which it almost doubled revenues to US$5.7 million (2009: US$2.9mln).

Frontier also added that it had obtained US$22.8 mln in financing, in 2010 consisting of a US$5,8 million equity placing and US$17mln debt facility and repaid US$11.8 million of existing debt by warrant conversion and cash.

US$19.1 million has already been directly invested into the Benkala and Koskuduk (a gold mine in Kazakhstan) projects, it said.

The loss for the year stood at US$31.3 million, compared to US$30.6mln in 2009.

One of the major highlights of the year was the acquisition of the assets of JV partner Coville Intercorp Ltd, which gave the firm the remaining 50 percent of Benkala.

It also offered Frontier 100 percent of the Maminskoye gold project in the southern Ural region of Russia and an experienced mining team, it said.

Maminskoye is open pittable, with recoveries of up to 90 percent and which carries a net present value of US$110 million.

Other highlights of 2010 were a JORC resource statement for Benkala, where since the beginning of 2011, a bankable feasibility study has begun.

Since the year end, the firm has also obtained an additional US$14 million of financing, with US $5 million more conditional, it said.

CEO Erlan Sagadiev said: "The company is confident that, with the upcoming release of the Bankable Feasibility Study, the full funding required for Benkala to meet its stated 2011 production targets will be secured.

"The management team is committed to being successful in these efforts, with the goal of solidly establishing Frontier as a premier mid-tier copper producer with a solid project pipeline offering an attractive platform for regional growth."

Last month, the firm reported the findings of a pit optimisation study, which underlined the quality of the Benkala mine. In the report, the total proven and probable ore was put at 30,506 kilotonnes with total copper ore (proven and probable) at 159,153 tonnes. The overall grade of the proven and probable ore was 0.52 percent.

Based on these reserves, the "life of mine" was seven years, with appropriate ramp-up in production in the first two years.

Frontier Mining's plans for Benkala given $5m boost

Wed, 15 Jun 2011 08:10:00 +0100

Frontier Mining Ltd (AIM:FML), the gold and copper exploration and development company with a focus on Kazakhstan and Russia, has secured $5m via a copper off-take agreement. The funds will be used to support plans to take its key Benkala copper project through to production.

The off-take agreement has been struck with Red KiteMine Finance, a specialist in the financing of mining projects and covers a period of four years from start of production at Benkala.

Of the total funding of $10m, $5m has already been received by Frontier. The additional amount is conditional on certain conditions being met, which Frontier is confident of achieving.The funding is via a loan with no warrants involved.

Erlan Sagadiev, chief executive of Frontier Mining, said the financing is “a further step in the advancement of the Benkala project. We welcome Redkite's involvement and funding in the project and this news further ensures that we will proceed to plan."

The company’s 100% owned Benkala copper mine is located in Kazakhstan and is currently under development with initial production planned for the third quarter of 2011.

Independent analysis of the resource by Wardell Armstrong International last year indicated that the oxide section of the Benkala project, which represents development of only around 10% of the total resource at Benkala, has a net present value of $190 million, based on 0.5% diluted copper grade, 63% recovery and 185,000 tons of contained metal at a $US6,000 per tonne copper price.

The total proven and probable ore is estimated at 30,506 kilotonnes with total copper ore at 159,153 tonnes. The overall grade of the proven and probable ore stands at around 0.52 percent. Based on these reserves, Benkala has a mine life of seven years, with appropriate ramp-up in production in the first two years.

Other Frontier assets include the Maminskoye gold deposit in the southern Ural region of Russia currently under exploration.

In early trade Frontier shares were up 0.32p to 3.94p.

Frontier Mining welcomes Yerlan Aliyev to board

Mon, 06 Jun 2011 07:59:00 +0100

Kazakhstan-focused Frontier Mining (LON:FML) says it has appointed Yerlan Aliyev as a non- executive director.

The 42-year-old is one of the principals of Coville Intercorp Ltd - Frontier's largest shareholder, and is a board member of Kazakhstan's JSC Delta Bank.

Until recently, Aliyev was board chairman at Russian commercial bank JSC StarBank and before that he was first vice president and then finance director of JSC Mangistaumunaigaz - one of Kazakhstan's largest oil and gas companies.

Frontier's CEO Erlan Sagadiev said: "Mr Aliyev, with his extensive experience in finance and corporate affairs will prove an invaluable addition to our board as we seek to bring Benkala into production and further develop our additional prospects.

"We are therefore delighted to welcome Mr. Aliyev to the board of Frontier and look forward to working with him."

Aliyev studied computational mathematics and cybernetics at Moscow university. He graduated in 1991.

He later returned to Moscow state university's business school in 2003 to study for his MBA which he received in 2005.

Frontier Mining was established in August 1998 to acquire, explore and develop mineral deposits in the Republic of Kazakhstan.

Shares in the company rallied 9.5 percent to 4 pence today.

Full steam ahead says Frontier Mining as 2011 promises "key decisions"

Wed, 01 Jun 2011 10:15:00 +0100

Despite the fall in its share price recently, AIM-listed miner Frontier, which is focused on Kazakhstan and Russia, shows no sign of being downhearted. Indeed it has lots to look forward to in 2011, as CEO Erlan Sagadiev told Proactive Investors.

Erlan Sagadiev from Frontier Mining says Frontier’s low share price makes no sense

Tue, 17 May 2011 14:00:00 +0100

Erlan Sagadiev, CEO and Chairman at Frontier Mining (LON:FML), tells Proactive Investors that he does not understand why the shares in the company have fallen. and value remains. The $1.5mln tonnes of copper at the Benkala project remains the company’s main priority and selling the gold projects is a viable option. Production is expected to start in September 2011.

Frontier Mining: pit study underlines quality of Benkala project

Mon, 16 May 2011 09:05:00 +0100

Today sees the publication of the pit optimisation study for Frontier Mining's flagship Benkala copper project, which, said the company, "further reinforces the quality of the Benkala deposit and shows more than acceptable mining parameters".

Frontier Mining registers Maminskoye’s Russian resource estimate with govt

Thu, 12 May 2011 08:30:00 +0100

Frontier Mining (LON:FML) told investors that a Russian resource estimate has now been approved and registered to the State Balance of the Russian Federation.

It said that the estimate covers just one of the project’s three deposits - Maminskoye, Gabievskoye and Bezimyanny-Vostochny.

Estimated to Russian reporting standards the Maminskoye deposit has a total of 27,176.64 kilograms of gold – about 960,000 ounces – in C1+C2 resources. That comes from 11.5 million tonnes grading on average 2.64 grams per tonne gold.

Frontier reminded investors that it plans to produce an initial JORC report – which will estimate the deposit’s size to western reporting standards - on in 2011. This will then be followed by a bankable feasibility study (BFS) in 2012.

"While the Maminskoye deposit represents a substantial commercial discovery of close to 1 million ounces of gold, the registered reserve under the deposit represents exploration of only a small portion of the deposits within the Maminskoye Exploration License Area,” said chief executive Erlan Sagadiev.

“We are therefore confident that we will have further success from our ongoing exploration activities on the Bezymyannoe and Gabievskoye zones."

Maminskoye is the smallest but most explored of the three deposits that make up the project, Frontier said.

It is 300 metres wide, 650 metres long and the mineralisation currently has a known depth of over 250 metres. As such it represents about 8 percent of Frontier’s targeted exploration ground.

The company said that the other two exploration targets are considerably larger and they display similar geological characteristics to Maminskoye, but they have been explored extensively yet.

Frontier Mining boosts finances with US$5 funding and US$10 mln loan extension

Mon, 09 May 2011 08:59:00 +0100

Frontier Mining’s (LON:FML) has boosted its finances with a US$10 million loan extension and a new US$5 million funding.

It has extended its existing US$10 million loan with the Zere Group. It will loan an additional US$10 million taking the total to US$20 million and the term of the loan has been increased – it will now last until 31 December 2012 rather than 18 December 2011.

Separately Frontier has issued US$5 million worth of loan notes to a consortium of institutional and private investors. The securities will pay 12 percent interest and they also give investors warrants – exercisable at 8 pence a share for 2 years – for a total of 16 million new shares.

The financing news followed this morning’s announcement of a deal to acquire a new deposit that will help expand the Benkala copper mine in Kazakhstan.

It has agreed a deal with a company called PromSnab2030 LLP to buy the subsurface use contract for the South Benkala mining deposit - which is 10 kilometres from the Benkala mine and plant - for US$2.5 million.

The company said that it has acquired the significant asset at a highly competitive price. It will pay just 20 percent upfront with the rest due once due diligence and government approval is complete.

It will subsequently decide whether to use the new deposit to increase production rates from 20,000 to 30,000 tonnes per year or to increase the Benkala mine’s life span from 7 to 11 years.

"We are extremely excited to have had the opportunity to acquire the South Benkala deposit,” chief executive Erlan Sagadiev said.

“The synergies with our existing Benkala deposit are obvious and the company will now consider seriously whether, with no substantial additional cost, it should extend the SX-EW plant's life or increase capacity.

"Either way, this acquisition marks a very significant step for the company and will allow us to move forward."

South Benkala has an estimated 175.12 million tonne ore reserve – estimated to Soviet C2 standards, back in 1979 – containing copper, molybdenum and silver.

There is a snag, however, as access to 40-50 percent of Benkala South’s primary deposits (sulphide) are restricted by a railway line that crosses the property. Frontier said that it will need to relocate the railway line, at an estimated cost of US$12 million, to access all parts of the Benkala South deposit.

All the secondary (oxide) ore is largely accessible, Frontier said.

Frontier Mining acquires new deposit to expand Benkala copper mine

Mon, 09 May 2011 07:25:00 +0100

Frontier Mining (LON:FML) is set to expand output from the Benkala copper mine in Kazakhstan, with a deal to acquire a nearby 175 million tonne deposit.

It has agreed a deal with a company called PromSnab2030 LLP to buy the subsurface use contract for the South Benkala mining deposit - which is 10 kilometres from the Benkala mine and plant - for US$2.5 million.

The company said that it has acquired the significant asset at a highly competitive price. It will pay just 20 percent upfront with the rest due once due diligence and government approval is complete.

It will subsequently decide whether to use the new deposit to increase production rates from 20,000 to 30,000 tonnes per year or to increase the Benkala mine’s life span from 7 to 11 years.

"We are extremely excited to have had the opportunity to acquire the South Benkala deposit,” chief executive Erlan Sagadiev said.

“The synergies with our existing Benkala deposit are obvious and the company will now consider seriously whether, with no substantial additional cost, it should extend the SX-EW plant's life or increase capacity.

"Either way, this acquisition marks a very significant step for the company and will allow us to move forward."

South Benkala has an estimated 175.12 million tonne ore reserve – estimated to Soviet C2 standards, back in 1979 – containing copper, molybdenum and silver.

There is a snag, however, as access to 40-50 percent of Benkala South’s primary deposits (sulphide) are restricted by a railway line that crosses the property. Frontier said that it will need to relocate the railway line, at an estimated cost of US$12 million, to access all parts of the Benkala South deposit.

All the secondary (oxide) ore is largely accessible, Frontier said.

Frontier Mining restarts operations at Koskuduk early due to good weather

Wed, 27 Apr 2011 08:27:00 +0100

Kazakhstan-focused copper and gold explorer and developer Frontier Mining Ltd (LON:FML) said it has restarted mining and crushing operations at its Koskuduk gold deposit for 2011.

Koskuduk mining operations close down at the end of November for the winter period and restart in early May each year. This year the mine has reopened a week early as a result of good weather.

The first gold pour has been achieved from previously stacked ore and consisted of 286 ounces of gold and 1,260 ounces of silver.

Chief operating officer Adil Tastanov said: “I am pleased to announce we have restarted operations at Koskuduk ahead of schedule. The target for this year is 6,000 ounces of gold with silver equivalents and we are on track to achieve this."

Earlier this month, Frontier completed the acquisition of Coville Intercorp and its 50 percent interest in its flagship Benkala copper project in Kazakhstan, after receiving written and final approval from both the ministry of industry and trade of Kazakhstan and the inter-ministerial committee for the deal.

Benkala is one of Frontier’s most advanced projects in Kazakhstan. In February it unveiled a new JORC resource upgrade for the project, which now has a total JORC resource of 1.56 million tonnes of contained copper, with 183,000 tonnes from oxide ore and 1.37 million tonnes from sulphide ore.

Frontier also owns the Maminskoye gold deposit in the southern Ural region of Russia currently under exploration.

Frontier Mining appoints ex ENRC man as exec director, head of government relations

Mon, 18 Apr 2011 08:10:00 +0100

Frontier Mining (LON:FML) has appointed Yerbulat Tastanov to the board as an executive director, head of government relations.

In this position Tastanov will be responsible for overseeing Frontier's compliance with various regulations and its work with government agencies, and for developing the company's strategic and operational plans in Kazakhstan.

Tastanov is a member of KazAtomProm Technical Counsel and a Member of Mining Reserves Development Committee of the Ministry of Industry and Trade of Kazakhstan. From October 2008 to March 2011, he was president of the Kazakh State Academy of Science Center for Earth Sciences, Metallurgy and Ore Enrichment, which is the highest Kazakhstan State research center for mining.

From June 2005 to October 2008, Tastanov was general director of LLP Scientific Production Enterprise Manganese.

Prior to that, Frontier’s new executive director held various positions with Kazakhstan’s largest mining company and FTSE 100 constituent Eurasian Natural Resources (LON:ENRC).

“Tastanov, with his 30 years of theoretical research and practical experience in mining in Kazakhstan, will be one of our main human assets, helping us to do what we want to do both strategically and technologically,” said chief executive of Frontier Mining Erlan Sagadiev.

Frontier currently operates two licenses in Kazakhstan, Naimanjal and Benkala.

Earlier this month, Frontier announced that its acquisition of Coville Intercorp and its 50 percent interest in the Benkala copper project in Kazakhstan was complete after getting the nod from the Kazakh government.

In February Frontier unveiled a new JORC resource upgrade for the project, which now has a total JORC resource of 1.56 million tonnes of contained copper, with 183,000 tonnes from oxide ore and 1.37 million tonnes from sulphide ore.

Frontier Mining completes acquisition of Coville

Mon, 11 Apr 2011 08:45:00 +0100

Frontier Mining’s (LON:FML) acquisition of Coville Intercorp and its 50 percent interest in its flagship Benkala copper project in Kazakhstan is now complete after getting the nod from the Kazakh government.

The AIM listed gold and copper exploration and development company has received written and final approval from both the ministry of industry and trade of Kazakhstan and the inter-ministerial committee to complete the acquisition.

“We are delighted to have completed our merger with Coville and to have eliminated any uncertainty that may have remained regarding the transaction. This will allow our management to focus its entire efforts onto bringing our world class Benkala asset into production later this year as planned,” said chief executive of Frontier Mining Erlan Sagadiev.

Investors cheered the update, sending shares in Frontier up 9 percent to 5.88 pence in early deals.

Both Frontier and Coville, which have already been operating as a single unit, will now be able to complete their integration.

Coville's shares, which have been held in escrow pending completion of the acquisition, will now be released. Coville holds a 46.9 percent stake in Frontier.

Benkala is one of Frontier’s most advanced projects in Kazakhstan. In February it unveiled a new JORC resource upgrade for the project, which now has a total JORC resource of 1.56 million tonnes of contained copper, with 183,000 tonnes from oxide ore and 1.37 million tonnes from sulphide ore.

Frontier has been waiting for the regulatory approval since agreeing to buy out Coville in early 2010. Last month, Tauken-Samruk – Kazakhstan’s state-owned mining company – decided to waive its pre-emptive right to acquire Coville, removing a major obstacle to the deal.

Frontier Mining starts stockpiling ore at Benkala copper project

Wed, 23 Mar 2011 08:58:00 +0000

Frontier Mining (LON:FML) has started stockpiling ore at the Benkala copper mine development project.

The company highlighted that operations are progressing in-line with the schedule it set out in February. When it said that stockpiling would start in March with ore crushing starting in June.

Benkala is one of the AIM-listed mine developer’s most advanced projects in Kazakhstan. It has spent much of its time and effort converting Benkala’s Soviet-era resource into western standards, while simultaneously fast-tracking the mine into production.

In February it unveiled a new JORC resource upgrade for the project. Benkala now has a total JORC resource of 1.56 million tonnes of contained copper, with 183,000 tonnes from oxide ore and 1.37 million tonnes from sulphide ore.

Importantly Frontier is also trying to take full ownership of the project, after it agreed a deal with its joint venture partner Coville Intercorp.

It initially agreed to buy-out its joint venture partner - to get full control of the Benkala copper project and to acquire Coville’s wholly-owned Maminskaya gold project - in early 2010. Since then it has been waiting for the Kazakhstan authorities to approve the deal.

Earlier this week a mayor potential obstacle to the deal was removed as Tauken-Samruk – Kazakhstan’s state-owned mining company – decided to waive its pre-emptive right to acquire Coville.

Frontier Mining says Kazakh state co waives right to take Coville stake in Benkala copper project

Mon, 21 Mar 2011 08:18:00 +0000

Frontier Mining (LON:FML) said Tauken-Samruk, the Kazakhstan government owned mining company, has taken the key decision to waive its pre-emptive right to acquire Coville Intercorp Ltd's 50 percent interest in the Benkala copper project in the country.

Frontier had initially agreed to buy-out its joint venture partner - to get full control of the Benkala copper project and to acquire Coville’s wholly-owned Maminskaya gold project - in early 2010. Since then it has been waiting for the Kazakhstan authorities to approve the deal.

The decision removes a mayor potential obstacle to the deal. Investors liked the news, sending Frontier shares up 23 percent in early trade to change hands at 5.4 pence.

Final approval will be a written statement by the Ministry of Industry and Trade of Kazakhstan (MIT) that the government will not exercise its pre-emptive right to acquire Coville's interest in Benkala.

Frontier has previously reported that the transaction had been referred to Tauken-Samruk for review and subsequent ruling on whether or not it would like to be a part of the transaction.

Tauken-Samruk's decision will now be sent to the MIT and subsequently presented to the next Inter Ministerial Committee (IMC).

Frontier cannot say when the next IMC will take place. However, the company is hopeful that there will be a meeting in March or April 2011, whereupon its application for the acquisition will be presented for final approval. It is expected that there should be no more than two to three weeks between the IMC ruling and the MIT statement.

Chief executive Erlan Sagadiev said: "We are very happy to have received this key decision from Tauken-Samruk. We now expect rapid and straightforward progress towards receipt of final approval so that we can complete the acquisition and consolidate 100 percent of the Benkala project into the Frontier group."