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Frontier Mining: pit study underlines quality of Benkala project

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: pit study underlines quality of Benkala project

Frontier Mining's (LON:FML) plans for its potentially 'transformational' Benkala copper project took a step forward today as it reported the findings of a pit optimisation study, which underlined the quality of the mine.

The study is an essential component of the bankable feasibility study (BFS) and takes the project a step further towards production.

CEO of the AIM-listed company, which is focused in Kazakstan and Russia, Erlan Sagadiev welcomed the results.

"The report confirms and further reinforces the quality of the Benkala deposit and shows more than acceptable mining parameters," he said.

"This allows us to continue the ongoing development of the deposit while we wait for the completion of the remaining components of the BFS."

In the report, Wardell Armstrong has estimated the mineable oxide reserve for the open pit using the compliant oxide resource previously announced.

The total proven and probable ore in the pit study 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.

The firm used a cut-off of 0.176% Cu and mining losses of 4% and dilution of 4%, revealed Frontier.

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

A mining schedule for the designed open pit has also been disclosed in the report, which targets full operational capacity of 18,000 tonnes of copper each year.

The BFS for Benkala is being undertaken by KazCopper LLP and the pit study is a key component. It is the latest in a series of developments at advanced Benkala, which have sharpened focus on the project.

Benkala is a copper-moly-gold deposit in the Urals gold/copper belt in north-western Kazakhstan close to the Russsian border.The copper deposit was discovered in 1968.

Frontier hopes to add the copper mine to its production portfolio later in 2011, alongside the Koskuduk ‘test-stage’ gold mine, which achieved its first gold pour in July 2010.

The company has long thought of Benkala as its transformational asset and it recently seized full control of the project  - by buying out its JV partner Coville Intercorp.

Recently 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 this year, a  new JORC resource upgrade for the project was unveiled, revealing 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.

In total, the update added 75,260 tonnes of contained copper - split between oxide (9,720 tonnes) and sulphide (65,540 tonnes).

Importantly it included a significant move up into the measured resource category for both ore types and the project now has 38,000 tonnes of contained copper in measured resources.

The inferred resource also got a meaningful uplift, adding 42,800 tonnes, or 7.6 percent, to 607,000 tonnes.

Edison Investment Research analyst Charles Gibson said at the time that Frontier was on target to produce 3,000 tonnes of LME grade copper from the mine by the end of 2011 and that the upgrade opened the door to the next tranche of funding to take the Benkala development forward.

"2011 is set to be a crucial year for the junior mine developer," he said.

Last month Frontier completed the acquisition of Coville Intercorp and its 50 percent interest in the Benkala copper project after receiving the nod from the Kazakh government.

The company had been waiting for regulatory approval since agreeing to buy out Coville early this year and in March 2011 Tauken-Samruk – Kazakhstan’s state-owned mining company – decided to waive its pre-emptive right to acquire Coville, removing a major obstacle.

In February, Gibson reckoned that Frontier was heavily discounted - , around 53 percent to its peers. Gibson claimed the market had not yet factored in the added-value from the Coville transaction.

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Frontier Mining Timeline

January 23 2015

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