Frontier Mining’s plans for Benkala given $5m boost
June 15. Proactive Investors
Frontier Mining Ltd (AIM:FML), the gold and copper exploration and development company with a focus on Kazakhstan and Russia, has secured $5m via a copper off-take agreement. The funds will be used to support plans to take its key Benkala copper project through to production.
The off-take agreement has been struck with Red KiteMine Finance, a specialist in the financing of mining projects and covers a period of four years from start of production at Benkala.
Of the total funding of $10m, $5m has already been received by Frontier. The additional amount is conditional on certain conditions being met, which Frontier is confident of achieving.The funding is via a loan with no warrants involved.
Erlan Sagadiev, chief executive of Frontier Mining, said the financing is “a further step in the advancement of the Benkala project. We welcome Redkite’s involvement and funding in the project and this news further ensures that we will proceed to plan.”
The company’s 100% owned Benkala copper mine is located in Kazakhstan and is currently under development with initial production planned for the third quarter of 2011.
Independent analysis of the resource by Wardell Armstrong International last year indicated that the oxide section of the Benkala project, which represents development of only around 10% of the total resource at Benkala, has a net present value of $190 million, based on 0.5% diluted copper grade, 63% recovery and 185,000 tons of contained metal at a $US6,000 per tonne copper price.
The total proven and probable ore is estimated at 30,506 kilotonnes with total copper ore at 159,153 tonnes. The overall grade of the proven and probable ore stands at around 0.52 percent. Based on these reserves, Benkala has a mine life of seven years, with appropriate ramp-up in production in the first two years.
Other Frontier assets include the Maminskoye gold deposit in the southern Ural region of Russia currently under exploration.
In early trade Frontier shares were up 0.32p to 3.94p.
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.