FML.L Regulatory News (FML)

24 Sep 2007 11:38

Frontier Mining Ltd24 September 2007 24 September 2007 AIM: FML Frontier Mining Ltd Benkala Update On 6 September, Frontier Mining Ltd ("Frontier" or "the Company"), the AIMlisted Kazakhstan focused gold mining and exploration company, announced that ithad entered into a conditional purchase agreement with Coville Intercorp Ltd ("Coville") to acquire a 50 percent interest in the Benkala copper-molybdenum-golddeposit ("Benkala", or "the Benkala Project") located in northwestern Kazakhstanwithin the Urals gold/copper ore belt. The aggregate consideration payable forthe interest in Benkala is US$21 million comprising $18.5m payable in cash andthe issue of 6,250,000 shares of Frontier common stock of US$0.01 each ("Ordinary shares"). Rights to the Benkala deposit were won in January 2006 by a subsidiary ofCoville in an open government tender. Upon government approval, the contractwill cover an area of 1.194 km2 and will be effective for a four yearexploration period followed by a 25 year mining licence. Completion of the Frontier deal to acquire Benkala was conditional on a numberof conditions, including completion of an attendant Placing of new ordinaryshares, and receipt of all necessary Government approvals, specifically theregistration of the transfer of ownership of the mining rights to Benkala, (theSubsoil Use Contract, or "SUC") being received before 21 September 2007.Frontier is currently finalizing an extension of the Placing. License (SUC) Registration Update To date Frontier has received approval from all of the Ministries required toapprove the transaction, including the Ministry of Energy and Mineral Resources("MEMR"), and awaits the contract to be signed by the Minister of Energy andMineral Resources in order to be able to proceed to the stage of formalregistration of their SUC. On 27 August, three days before Frontier's SUC was due to be approved, theRepublic of Kazakhstan announced the appointment of a new Minister of Energy andMineral Resources. Unfortunately, as with any new Ministerial appointment, thishas resulted in some unavoidable administrative delays. Furthermore, the Republic of Kazakhstan's' Parliament is due to hold hearingssoon on new legislation affecting subsoil use. Frontier believes this newlegislative initiative may lead to further delays in the administrativeprocessing of SUC transfers. However, because Frontier's application is in anadvanced state of approval, the company expects that any further delay will beminimal. Management comment Brian Savage, CEO of Frontier, commented "Although these delays are unforeseen,Frontier is by no means the only company to be impacted by this situation. I aminformed by our Kazakh partners that all resource companies with operations inKazahkstan are also experiencing similar administrative delays. We intend toproceed with the various preparatory tasks that do not require Governmentapproval in order to keep the Benkala project as close to the original scheduleas possible. Our goal is to progress to the stage of being able to confirm thenear surface oxide resource base at Benkala to a JORC standard as soon aspossible, continue to test the deeper sulphide ore resource, and undertakeadditional metallurgical testwork with the intent of putting Benkala intoproduction as soon after Government approval is received as we can". Enquiries: Frontier Mining Ltd Brian Savage +44 (0)20 7898 9019Parkgreen Communications Louise Goodeve / Justine Howarth +44 (0)20 7851 7480Zimmerman Adams Ray Zimmerman / Jonathan Evans +44 (0)20 7060 1760 About Frontier Mining Ltd: Frontier Mining Ltd. is a mineral exploration and development company that wasincorporated in the state of Delaware, USA, on 5 August 1998 for the purpose ofexploring and developing gold and copper deposits in the Republic of Kazakhstan.Through its subsidiaries and affiliates, Frontier locates, evaluates,acquires, explores and develops mineral properties Frontier has two licenses in Kazakhstan. They are the Naimanjal exploration andmining licence, held by FML Kazakhstan, and the Baltemir exploration licence,held by Baltemir LLP. Both companies are wholly-owned subsidiaries of FrontierMining Ltd. Frontier has one producing gold mine, Naimanjal; onepre-feasibility stage gold project, Koskuduk; and one exploration stage goldprospect, Baltemir. Frontier also has one potential copper porphyry deposit with associated gold andmolybdenum, Baitimir; and several copper/gold prospects along a 25-km trendincluding both VMS and porphyry types. Metallurgical tests on its Beschoku andYubileiny copper projects confirm the oxide copper ore is amenable to extractionusing low cost SX-EW technology. Issued and Fully Diluted Ordinary Shares Frontier shares are traded on the AIM market of the London Stock Exchange. Priorto the completion of the Placing, Frontier has 132,581,587 ordinary sharesissued and 6,057,091 reserved and outstanding options and warrants, giving138,638,678 fully diluted ordinary shares. Further company information may be accessed at the Frontier Mining Ltd. websiteat: www.frontiermining.com This information is provided by RNS The company news service from the London Stock Exchange