Frontier Mining’s Benkala mine reaches landmark with first copper

Aug 13. Proactive Investors UK

By Jamie Ashcroft

Frontier Mining’s Benkala mine reaches landmark with first copperWith its maiden copper production run from the Benkala plant Frontier Mining (LON:FML) today reached a major landmark in its development.

A glance at the share price shows little sign of fanfare, rising just half a per cent today, though the long awaited mine start up has driven a 50 per cent rise in the year to date.

This morning it told investors that the new electro-winning plant’s first copper sheets were produced at the Kazakhstan mine on Saturday. This comes after it successfully processed pregnant leach solution, and began plating the cathodes last week.

Frontier says that operations have continued at the plant since then. And work is now focussed on ramping up output.

“We view first production from Benakal as extremely positive for Frontier Mining as it is one of only a few copper developers on the AIM market to have made the successful transition to copper production,” said Austin McKelvie, analyst at City broker Daniel Stewart.

In a note to clients the analyst said that today’s ‘milestone event’ will result in valuable cashflows for the company, and he expects the market to ‘re-rate’ the stock.

Benkala’s SX-EW plant’s current capacity of 7,000 tonnes per annum is expected to be expanded to 10,000 in the future.

“The company has followed correct procedures at each stage of the commissioning process to ensure a safe start to this complex process, which has resulted in the successful production launch,” said chief executive Erlan Sagadiev.

“Now our team will turn its attention to ramping up the production level to the design capacity.”

Mining operations began at Benkala in April. Production is targeted at 3,500 to 5,000 of copper in 2012 and expected to increase to around 20,000 tonnes annually by 2014/2015.

Frontier already has off-take agreements in place for the produced copper and it has already built a stockpile of ore.

The mining operation is producing around 8,000 tonnes of ore per day.

Frontier has a 100 per cent interest in Benkala through its subsidiary KazCopper. It also owns Baitemir, a potential copper gold porphyry deposit in North East Kazakhstan.

The project was acquired from the Kazakhstan government as part of a privatisation programme in 2006.

Since then Frontier has establish a JORC compliant resource with 183,300 tonnes (or just over 400 million pounds) of copper contained within oxide ore – which is the source of the current production operation.

The project also has a sulphide deposit with 1.378 million tonnes (or 3 billion pounds) of contained copper. And it is currently working on a bankable feasibility study for the extraction and treatment of this resource.

Frontier Mining Limited is a copper exploration and development company with a focus on Kazakhstan. The Company’s main activity is the Benkala Copper Project in North West Kazakhstan, which forms part of the Urals copper gold ore belt. Frontier has a 100% interest in Benkala through its subsidiary KazCopper LLP.

http://www.proactiveinvestors.co.uk/companies/news/46752/update-frontier-minings-benkala-mine-reaches-landmark-with-first-copper-46752.html

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