Frontier Mining (LON:FML) is convening a special shareholder meeting for November 8 to vote on the previously announced plans to re-domicile the company and its subsidiaries from Delaware in the US to the Cayman Islands.
The move was announced in early July, when Frontier made its case by saying it believes that being incorporated in Delaware is no longer efficient from a commercial or financial perspective.
When it initially incorporated the company in Delaware, in 1998, it planned to make acquisitions and establish operations in the United States, as well as the greater C.I.S. region. However, it has since refocused its strategy and now intends to develop by expanding its operations in Kazakhstan.
The company had also emphasised that by being incorporated in Delaware, the trading of Frontier’s shares in London is restricted, and it could potentially limit access to future opportunities by rendering the company's operations and potential future acquisitions inefficient from a tax perspective.
“The board has carefully considered several options and believes the Cayman Islands to be the most suitable place to domicile the group's holding company together with the enhanced tax efficiency resulting from the incorporation of intermediate holding companies in the Netherlands Antilles and the Netherlands.”
The change will be effected via a merger, involving a share exchange with a new Cayman Islands company. The new Cayman Island incorporated company will subsequently be admitted to trading on AIM.
In June, the company began the construction of the open pit mine at its Benkala copper project in Kazakhstan, where initial production is targeted for the first half of 2011.
Frontier is developing the Benkala project through its KazCopper subsidiary in a 50:50% joint venture with Colville Intercorp. The JV partners are currently working towards the completion of a merger, which will see Frontier take full control of Benkala and also adds another key development project to the portfolio, the Maminskoye gold project in Russia.