Frontier Mining Ltd Disposal and Operational Update (8884B)

TIDMFML

RNS Number : 8884B

Frontier Mining Ltd

10 March 2014

FRONTIER MINING LTD

("Frontier" or "the Company")

Disposal and Operational Update

Frontier Mining (AIM:FML), the AIM listed Copper production, exploration and development company focused on Kazakhstan, announces a corporate and operational update for the 12 month period to 31 December 2013.

Corporate Update

The Company is pleased to announce that it has agreed to sell its 100% owned subsidiary FML Kazakhstan LLP, owner of the Naimanjal licence area, for a cash consideration of US$30 million to Union Transnationale Miniere S.A. ("UTM"), subject to regulatory approvals in the Republic of Kazakhstan ("RoK"). The Naimanjal licence area is located approximately 200 km West of Semey in North East Kazakhstan, with four commercial discoveries covering 529km(2), including Baitemir, Yubileiny and Beschoku.

The application for the approval of the transaction has also been submitted to the Ministry of Industry and New Technology of the RoK. The Ministry has the right of first refusal over the asset, where should it decide to purchase the asset, it would have to match the existing deal value.

All proceeds from the sale are expected to be used for repayment of maturing debt of the Company and financing capital expenditures for the ramp up of copper production at Benkala to maximum levels.

Benkala Operational Update

Management is pleased to confirm that 1,702 tonnes of copper cathode was produced in the 12 month period to 31 December 2013, in line with guidance communicated at the Interim Results in September 2013.

This production was achieved against a backdrop of continual improvement of the various processes to increase production rates, reduce production costs and improve efficiency across the site. In particular, operations were continuous throughout winter despite temperatures dropping to a low of -36 degrees Celsius.

Outlook

The focus for the remainder of the first half of the current year is on continuing to improve the production rate and to remove remaining operational bottle necks. Partial leaching with forced aeration trials has now commenced on Pad 4, with encouraging initial copper content results to date.

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.

Yerlan Aliyev, Chairman and CEO, commented: "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. Whilst the Naimanjal zone was viewed as a good future prospect for our Company; we now intend to focus entirely on stabilising operations at Benkala and developing the South Benkala resource. 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."

For further information, please contact:

 
Frontier Mining Limited 
Yerlan Minavar                Tel: +44 20 7898 9019 
 
Nomad 
Cairn Financial Advisers LLP 
Sandy Jamieson                Tel: +44 20 7148 7900 
 
Broker 
RFC Ambrian 
John Harrison                 Tel: +44 20 3440 6800 
 Stefan Murphy 
 
Walbrook PR and IR 
Paul Cornelius                Tel: +44 20 7933 8780 
Guy McDougall

This information is provided by RNS

The company news service from the London Stock Exchange

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