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.
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.
"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 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.