www.frontiermining.com
Frontier Mining Ltd is a mineral exploration and development Company focussed on gold and copper deposits in the Republic of Kazakhstan. Through its subsidiaries and affiliates, Frontier locates, evaluates, acquires, explores and develops mineral properties. Frontier currently operates two licenses in Kazakhstan, Naimanjal (100% owned) and Benkala (50% owned). Naimanjal operations currently consist of five projects; a producing gold mine, a test stage gold production project, a potential copper porphyry deposit with associated gold and molybdenum, and copper/gold prospects along a 25km trend including both VMS and porphyry types. Benkala is a copper-molybdenum-gold deposit located in north-western Kazakhstan, within the Urals gold/copper ore belt.
Libertas Partners says “buy” Frontier Mining, sets target price at 9.13p
Broker Libertas Partners LLP was upbeat on Frontier Mining (AIM: FML) after the Kazakhstan operating gold and copper miner released “encouraging” interim results at the end of last month, reporting progress with evaluation of its flagship Benkala project, a total financing of US$14 million and a post-period revenue of US$1.57 million generated from the first sales of gold and silver from its Naimanjal project in Kazakhstan.
Libertas highlighted the successful refinancing, which helped Frontier redeem part of the US7.7 million note held by Coville Intercorp Ltd with the repayment of the final US$2.4 million due at the end of the current year. The company has drawn down US$3.7 million from its US$10 million facility with Zere JSC of Kazakhstan and has not issued shares under the US$5 million standby equity facility with YA Global Master SPV.
The refinancing is expected to help the company advance its key projects, including Benkala, where a total 6,700 metres of infill drilling has been completed over the past year with a JORC compliant resource statement expects in Q2 2010. First production at the project, which current has a net asset value of US$500 million, is slated for 2011.
The company has so far produced 1,499 ounces of gold and 4,886 ounces of silver at the Naimanjal, where mining operations restarted in June. Frontier expects to secure the government’s approval for full commercial production by the end of the year.
The broker noted that the Naimanjal has not met short term production targets, while full production at the project was dependent on obtaining a mining license from the government and that it was difficult to finance large capital cost projects like Benkala in the equity market.
However, the upside potential has outweighed the risk factors as Libertas retained its “buy” recommendation for the stock and set the price target at 9.13 pence per share.
Frontier last traded at 7.62 pence.
