Frontier Mining
Frontier currently owns two licenses in Kazakhstan. They are the Naimanjal exploration and mining licence, held by FML Kazakhstan, and, 50% of U.S. Megatech BVI, which holds the Benkala, licence. FML Kazakhstan is a wholly owned subsidiary of Frontier Mining Ltd.
Frontier has one producing gold mine, Naimanjal; one pre-feasibility stage gold project, Koskuduk; and the recently acquired 50% interest in the Benkala copper mine.
Frontier owns a 50% interest in KazCopper LLP, the joint venture Company that owns the Benkala copper-molybdenum-gold deposit located in northwestern Kazakhstan within the Urals gold/copper ore belt. A Competent Persons Report on the Benkala project completed by Wardell Armstrong International in March 2007 estimates 47.75 Mt at an average grade of 0.36% Copper for the oxide mineralization, and873.75 Mt at an average grade of 0.30% Copper for the sulphide mineralisation, representing some 2.8 million tonnes of contained Copper. A conceptual study team and advisory team have both been appointed to fast track the development of this project forward towards a pre- feasibility study, with a view to beginning production at the end of 2010.
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.
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Other Frontier Mining articles
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14/12/09 Frontier Mining to shift focus to Koskuduk and Berschoku gold projects from Naimanjal, assay results from Benkala likely to meet expectations
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30/09/09 Frontier Mining confident all is in place to turn Benkala deposit into company-transforming asset
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30/07/09 Copper-Gold junior, Frontier Mining, audio interview transcript
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09/06/09 Everything to play for in Kazakhstan for Frontier Mining
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23/07/08 Frontier Mining is keeping quiet in Kazakhstan
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01/06/07 Frontier Mining: Gold and Copper in Kazakhstan
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01/09/06 Frontier Mining: Right on target!
Other Frontier Mining news
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16/02/10 Frontier Mining in early stage discussions to consolidate Benkala Copper Project
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15/12/09 Libertas raises forecasts for Frontier Mining after strategy revision
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26/08/09 Libertas Capital sees upside potential in Frontier Mining
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06/07/09 Erlan Sagadiev of Frontier Mining Talks to Proactiveinvestors
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30/06/09 Frontier Mining confident 2009 will be year of significant growth for company
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23/06/09 Frontier Mining starts gold production at Naimanjal in Kazakhstan
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16/06/09 Frontier’s Benkala JV to connect power to site and start building infrastructure
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02/06/09 Frontier Mining starts operations and Naimanjal gold and silver project
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01/05/09 Frontier Mining completes US$14 million financing
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23/04/09 Frontier Mining unaware of reasons for recent share price rise