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Frontier Mining shares soar as agrees to sell Naimanjal licence

Frontier Mining shares shot up over 22% on Monday as investors welcomed news it is selling its Naimanjal licence area in Kazakhstan for US$30mln to repay debt.
Frontier Mining shares soar as agrees to sell Naimanjal licence

Frontier Mining (LON:FML) shares shot up over 22% on Monday as investors welcomed news it is selling its Naimanjal licence area in Kazakhstan for US$30mln to repay debt.

The miner said it intended to solely focus of stabilising operations at its flagship Benkala copper mine and developing the South Benkala resource.

Frontier has agreed to dispose of subsidiary FML Kazakhstan, which holds Naimanjal, to Union Transnationale Miniere SA (UTM).

The transaction is subject to Kazakhstan regulatory approvals.

The licence encompasses four commercial discoveries covering 529 square kilometres, including Baitemir, Yubileiny and Beschoku.

Frontier's chairman and chief executive Yerlan Aliyev told investors: "Given the market environment and position of our current financing counter parties, sale of assets was identified as the best method by which to finance capital expenditures at Benkala and pay back existing debts."

He added: "The proceeds of this transaction will allow us to optimise copper cathode production at the Benkala SX-EW plant, paving the way towards increased production in the near future."

Operationally, the firm said that in the 12 months to end of December 2013, 1,702 tonnes of copper cathode was produced as the firm continued its work to boost production rates and reduce costs.

This was in line with previous guidance.

Looking ahead, Frontier said the focus for the rest of the first half was on continuing to improve the production rate at Benkala and to remove operational bottle necks.

"By the end of the current financial year, the company's ambition is to have pads 4, 5 and 6 completely stacked to six meters and to begin leaching, which should ensure significantly higher production levels throughout the winter of 2014 and beyond," it said.

Frontier shares added 22.22% to go to 1.65p.

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Frontier Mining Timeline

January 23 2015

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