16th Jun 2010 07:00
FRONTIER MINING LTD
("Frontier" or the "Company")
Completion of Independent Technical Review of Benkala and Maminskoye Projects
Frontier Mining Ltd (AIM: FML), the AIM listed gold and copper exploration and development company focused on Kazakhstan, is pleased to announce the completion by independent consultant Wardell Armstrong International ("WAI") of a technical review and preliminary economic assessment for the Company's 50% owned Benkala Copper development project in north-western Kazakhstan and the Maminskoye gold project in southern Russia.
The Wardell Armstrong report provides a comprehensive review of the technical work done to date on the two projects, a current resource assessment and preliminary economic assessments for the projects reflecting current capital and operating parameters. The report also reviews current development activities and work programmes and will shortly be available on Frontier's website (www.frontiermining.com).
Benkala Copper Project - Kazakhstan
The Benkala Copper Project is managed and 50% owned by KazCopper LLP ("KazCopper"), the joint-venture company. The other 50% of Benkala is owned by Colville Intercorp Ltd. ("Colville"), a private Kazakh mining group with whom the Company has previously announced a proposed merger targeted for completion in the third quarter of 2010. The project is located in northern Kazakhstan in the Ural Mountain Chain and has been the subject of considerable exploration and evaluation dating from the Soviet era. The region is an established mining district and the site has excellent infrastructure. Based on historical Soviet data and the available assay results from the current drilling programme, WAI has reviewed and confirmed its 2007 estimates for Benkala copper oxide and sulphide resources.
The secondary ore resource was initially estimated at a 0.15% Cu cut-off which has resulted in a large tonnage at low grade. Increasing the cut-off to 0.25% Cu increases the grade towards 0.5% and reduces the tonnage towards 30Mt, approximately 180,000 tonnes of contained copper. The Company plans to use a 0.55% average diluted ore for the oxide production process. Analysis of recent assay samples sent to Geoplasma Kazakhstan and Alex Stewart Laboratories show good correlation with previous drilling. The majority of the Geoplasma Kazakhstan and all the Alex Stewart assays have now been received by the Company, and the results will be published by the Company in due course. The Company intends to carry out further work on the Benkala oxide resource in 2010 with the aim of issuing a JORC compliant resource estimate by the year end.
WAI has also reviewed Frontier's plan initially to develop the Benkala oxide copper resource with construction of an open pit mine, leach facility and solvent extraction-electro winning (SX-EW) facility capable of processing approximately 5,000 tonne per annum of copper cathodes. . The Company intends to commence trial mining in the summer of 2010 and to complete an updated resource assessment for the oxide project by the end of the year. Frontier will use the production platform of the SX-EW project to finance the further evaluation and potentialdevelopment of the significant Benkala sulphide resource. The Company has commenced further metallurgical testing with a goal to build upon the 2007 metalurgical tests undertaken by VNIITsvetmet, and to improve the technical parameters of the project.
Wardell has provided a preliminary economic assessment for an oxide copper project at Benkala. Based on a 5 Mtpa ore mining rate, average grade of 0.36% copper and 63% overall recovery, the Benkala oxide copper project is estimatedto have an NPV of US$191 million using a 10% discount rate and an internal rate of return (IRR) of 116% based on initial CAPEX of $55M and a $6,000/mt copper price. TheWAI reportdescribes the oxide project as "robust" and confirms the development steps contemplated by management to advance the project to production.
Maminskoye Gold Project - Southern Russia
Colville acquired 100% of the Maminskoye Gold Project, which is also located in the Ural Mountain Chain, in 1998and has conducted considerable exploration and metallurgical testing to advance understanding of the project. The deposit comprises fine-grained, primary gold mineralization, principally contained in quartz veinlets and aggregations. The mineralized zone is currently understood to be some 300m wide, 650m long and is known to a depth of over 250m. The full extent of the deposit has not yet been fully delineated in any direction. Wardell has confirmed earlier resource estimates prepared in the Soviet era as well as the work conducted by current management. Coville haspassed first stage reserve approval with State Reserve Committee of Russia (GKZ) and expects to receive full State Reserve Approval within 3 months. Following the receipt of Reserve Approval, Coville will continue the development of Maminskoye deposit into production. Covillealso continues exploration on the highly prospective Gabiyevskaya zone which is a satellite of the Maminskoye deposit. Frontier intends to report an updated JORC resource estimate for Maminskoye by the end of the year.
The Maminskoye ores have been subjected to extensive metallurgical analysis and pilot plant test work. These studies have confirmed that the ore is non-refractory and a standard CIL process has been developed for ore treatment. Gold recoveries are estimated at 93.5% for the oxide ore and 92.5% for the primary ore. Wardell has evaluated a preliminary project model contemplating development of an open pit mine operating at an initial mining rate of 700ktpa for the first three years, increasing to 1Mtpa for a 14 year project life. Based on an estimated capital cost of $75M and a $950/oz gold price Wardell estimates an attractiveproject with an NPV of US$110.9 million using a 10% discount rate and IRR of 48% with a 3 year payback.
Environmental
The Wardell Armstrong report addresses a number of minor environmental issues. The Company will undertake appropriate ecological studies on both Benkala and Maminskoye to comply with local and international regulations.
Commenting on the Wardell Report, Erlan Sagadiev, CEO of Frontier Mining said: "We are extremely pleased with the positive tone of Wardell Armstrong's technical review of Benkala and Maminskoye. Wardell's work confirms our belief in the quality of the Benkala deposit and reaffirms our decision to focus on this oxide resource and bring it into production."
Enquiries:
Frontier Mining Ltd |
George Cole |
+44 (0)20 7898 9019
|
Libertas Capital |
Sandy Jamieson |
+44 (0)20 7569 9695
|
Walbrook PR |
Leah Kramer |
+44 (0)20 7933 8780 |
About Frontier Mining Ltd:
Frontier Mining Ltd. is a mineral exploration and development Company that was incorporated in the state of Delaware, USA, on 5 August 1998 for the purpose of exploring 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 currently owns two licenses in Kazakhstan. They are the Naimanjal exploration and mining licence, held by FML Kazakhstan, and, 50% of U.S. Megatech BVI which holds the Benkala licence. FML Kazakhstan is a wholly-owned subsidiary of Frontier Mining Ltd. Frontier has one producing gold mine, Naimanjal; one pre-feasibility stage gold project, Koskuduk; and the recently acquired 50% interest in the Benkala copper mine.
Frontier also has a potential copper porphyry deposit with associated gold and molybdenum, Baitimir; and several copper/gold prospects along a 25-km trend including both VMS and porphyry types. Metallurgical tests on its Beschoku and Yubileiny copper projects confirm the oxide copper ore is amenable to extraction using low cost SX-EW technology.
Frontier owns a 50% interest in KazCopper LLP, the joint venture company that owns the Benkala copper-molybdenum-gold deposit located in north-western Kazakhstan within the Urals gold/copper ore belt. A Competent Persons Report ("CPR") on the Benkala project completed by Wardell Armstrong International ("WAI") in March 2007 estimated 47.75 Mt at an average grade of 0.36% Copper ("Cu") for the oxide mineralization, and 873.75 Mt at an average grade of 0.30% Cu for the sulphide mineralisation, representing some 2.8 million tonnes of contained copper. A conceptual study team and advisory team have both been appointed to fast track the development of this project forward towards a pre- feasibility study, with a view to beginning production in 2011.
Issued Share Capital
Frontier Mining's shares are traded on the AIM market of the London Stock Exchange.
Frontier now has 917,336,219 issued and 21,812,009 reserved options giving 939,148,228 fully diluted ordinary shares.
For further information please visit; www.frontiermining.com
Related Shares:
FML.L