Frontier Mining Sells One Asset To Fund Expansion Of Its Other Project
LONDON (Alliance News) - Frontier Mining Ltd Monday said it will sell its FML Kazakhstan LLP unit for USD30 million in cash, using some of the money to ramp up production at its second site, Benkala, where it hit its copper cathode production guidance in 2013.
The AIM-listed company with operations in Kazakhstan said it will sell FML, which is the owner of the Naimanjal licence area, to Union Transnationale Miniere SA, and will use the proceeds to pay down debt and ramp up copper production at Benkala.
The company currently has two projects, Benkala and Naimanjal.
It said it produced 1,702 tonnes of copper cathode at Benkala in 2013, in line with the target it had set out. It said it had improved production rates, cut production costs and kept going throughout winter even though temperatures hit a low of minus 36 degrees celsius.
"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," it said in its operational update.
Frontier said it wants to have Pads 4, 5 and 6 at Benkala completely stacked to six meters and to begin leaching by the end of the current financial year, which should ensure significantly higher production levels throughout the winter of 2014 and beyond.
"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," Chairman and Chief executive Yerlan Aliyev said.
"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," he added.
Frontier Mining shares were up 18.4% at 1.599 pence early Monday, one of the top gainers on AIM.