Statement re Re-Domicile

18 October 2010 AIM: FML

Frontier Mining Ltd

("Frontier" or "the Company")

Proposed Re-domicile to the Cayman Islands and Proposed Acquisition of Interests in the Benkala Copper Project and the Maminksaya Gold Deposit

The Directors of Frontier are pleased to announce the Company's intention to re-domicile the holding company of the Group from Delaware, USA to the Cayman Islands (the "Re-domicile") and the proposed acquisition of interests in the Benkala copper deposit in northern Kazakhstan currently under development (the "Benkala Copper Project") and the Maminksaya gold deposit in the southern Ural region of Russia currently under exploration (the "Maminksaya Gold Project") (the "Asset Acquisition") (together, the "Proposals").

Shareholders of the Company will shortly be sent a circular (the "Circular") convening a Special Meeting (the "Special Meeting") of the Company to be held on 8 November 2010 to approve the proposals relating to the Re-domicile. The Circular sets out further details of the Re-domicile and the Asset Acquisition, including the proposed cancellation of the existing shares of the Company and the admission to AIM of the shares of the new Cayman Islands incorporated holding company, ("FML (Cayman)"), also to be called Frontier Mining Ltd. Shareholders are also being sent an Appendix to the AIM Schedule 1 announcement that is being released today, which sets out further details of FML (Cayman). The Circular and the Appendix are available for download on the Company's website: www.frontiermining.com.

The Re-domicile

The reason for a Delaware company being the holding company of the Group is that on its initial establishment, the Company anticipated establishing operations in the United States in addition to its operations in the Republic of Kazakhstan. Incorporation in the State of Delaware was therefore considered to be the most appropriate location to allow for effective management of the Company and its operations.

The Company has refocused its strategy and now intends to develop by expanding its operations in Kazakhstan and other members of the Commonwealth of Independent States. As such, the Board believes that having the Group's holding company incorporated in Delaware is no longer efficient from a commercial or financial perspective, that it restricts the trading of its shares which are listed in London and that it could potentially restrict access to future opportunities for the Group by rendering its operation and potential future acquisitions inefficient from a tax perspective leaving it potentially liable to U.S. taxation on its foreign operations. The Board believes that by streamlining its corporate structure it will be able to maximise cost efficiency, enhance the tax efficiency of the Group and achieve a greater degree of corporate flexibility while facilitating the ease of trading in its securities worldwide and providing access to a broader range of financing opportunities. The Board is therefore making the Proposals to enhance the cost, tax and corporate efficiency of the Group and to align the structure of the group with its current plans for development and expansion in Kazakhstan and other members of the Commonwealth of Independent States.

The Board has carefully considered several options and believes the Cayman Islands to be the most suitable place to incorporate the Group's holding company and that the Cayman Islands appeals to international investors from whom the Group intends to attract future investment.

The Acquisition

On 6 February 2010 Frontier signed a memorandum of understanding with its joint venture partner, Coville Intercorp Ltd ("Coville"), in which the Company set out its intention to establish a consolidated mining and smelting company by acquiring certain assets of Coville.

On 6 September 2010, Frontier and Coville entered into a conditional agreement pursuant to which Frontier agreed to, following the merger of the Company and FML (Cayman) (the "Merger"), issue 873,215,000 shares to Coville which is equal to approximately 48.77 per cent. of the number of FML (Cayman) shares that would be issued and outstanding following completion of the proposed Re-Domicile and Asset Acquisition. The value of the shares to be issued to Coville pursuant to the proposed Asset Acquisition, based on the mid closing share price of the Company on 15 October 2010, is £54,575,938. Following completion of the proposed Asset Acquisition, the issued share capital of FML (Cayman) will therefore compromise approximately 1,790,551,206 ordinary shares (the "Enlarged Share Capital").

The Asset Acquisition is a related party transaction under the AIM Rules for Companies by virtue of Coville's 50 per cent. shareholding in US Megatech Inc., the holding company of the Benkala Copper Project. The Directors of the Company have consulted with Libertas Capital Corporate Finance Limited, the Company's nominated adviser, and have concluded that the terms of the Asset Acquisition are fair and reasonable insofar as the shareholders of the Company are concerned.

The completion of the Asset Acquisition will result in FML (Cayman) acquiring (i) the 50 per cent. interest in the shares of US Megatech Inc held by Coville, thereby giving FML (Cayman) a 100 per cent. indirect interest in the Benkala Copper Project and (ii) the 100 per cent. interest in the shares of Maminksaya Mining Enterprise, which wholly owns the Maminksaya Gold Project, held by Coville.

A technical review and preliminary economic assessment of the Benkala Copper Project and the Maminksaya Gold Project prepared by independent consultant Wardell Armstrong International can be found on the Company's website at www.frontiermining.com, as announced on 16 June 2010. The Wardell Armstrong International 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.

Coville

Coville is a BVI company, incorporated in 2006. The beneficial owners of Coville are Adil Tastanov and Erlan Aliyev, both citizens of Kazakhstan with extensive business experience in Kazakhstan and the CIS in the banking and natural resources area. Mr Tastanov currently works with KazCopper LLP, the intermediate holding company for the Benkala Copper Project, and it is anticipated that, subsequent to completion of the proposed Re-Domicile, he will be formally appointed to a senior operating role.

US Shareholders

The offer of FML (Cayman) shares to US shareholders (shareholders whose address as stated in the stock register of Frontier Mining Ltd. is an address located within the United States) ("US Shareholders") in exchange for Frontier Mining Ltd. shares would constitute an offering of securities in the United States under the United States Securities Act 1933 (the "Securities Act") and would therefore require registration with the United States Securities and Exchange Commission or an exemption therefrom. The Directors consider such registration not to be practical or desirable in this instance and not to be in the best interests of the Company's shareholders as a whole. The Directors are therefore seeking an exemption to this requirement by offering FML (Cayman) shares to US Shareholders only if they are "accredited investors" as defined under Rule 506 promulgated under the Securities Act ("Accredited US Shareholders").

The non-Accredited US Shareholders will receive cash consideration for their shares of 6.25 pence per share based on the average daily closing price on the London Stock Exchange for the twenty consecutive trading days prior to and including 15 October 2010. The Directors estimate that the maximum number of shares held by non-Accredited US Shareholders who will receive cash consideration is approximately 3,400,000 which is equal to 0.37 per cent. of the issued share capital of the Company based on Frontier Mining Ltd's stock register as at 14 October 2010 and the Directors belief regarding the status of certain of the US Shareholders.

If the Proposals are approved, Shareholders (other than non-Accredited US Shareholders) will receive one FML (Cayman) Share for each Frontier Mining Ltd. Share and non-Accredited US Shareholders will receive cash consideration, as defined above. The FML (Cayman) shares are then expected to be admitted to trading on AIM and the Frontier Mining Ltd. shares will be cancelled.

The Proposals at a glance

Certain of the Proposals and matters connected with them require approval of shareholders of the Company.

Certain of the Proposals and matters connected with them require permits, waivers and consents to be granted by the Kazakhstan Ministry of Industry and New Technologies and by the Agency of Kazakhstan on Protection of Competition (Antimonopoly Agency).

Following receipt of shareholders approval of the Merger and receipt of the required permit from the Kazakhstan Ministry of Industry and New Technology under the Subsoil Use Law of Kazakhstan in respect of the Merger, Frontier will be merged with and into FML (Cayman). The corporate existence of Frontier will cease and FML (Cayman) will be the surviving corporation.

By operation of the Merger, each outstanding Frontier share on the Merger Date will be converted into and represent the right to receive one FML (Cayman) Share, by being included in the register of members without any further action on the part of the Shareholders save that each outstanding Frontier Mining Ltd. shares held by a non-Accredited US Shareholder on the date of the Merger will be converted into and represent the right to receive cash consideration, as set out above.

Following completion of the Merger, FML (Cayman) will apply to have FML (Cayman) shares admitted to trading on AIM and Frontier will apply to have the admission of Frontier Mining Ltd. shares to trading on AIM cancelled. Admission of FML (Cayman) shares to trading on AIM is expected to commence on or around 23 November 2010.

Following completion of the Merger, FML (Cayman) will succeed to all the assets and benefits, and become responsible for all the liabilities and obligations of Frontier, including the Subscription Agreement, under which FML (Cayman) will receive, by way of contribution, Coville's shares in US Megatech Inc and Maminksaya Mining Enterprise in consideration for 873,215,000 FML (Cayman) shares which is equal to approximately 48.77 per cent. of the Enlarged Share Capital.

Following completion of the Merger and the receipt of the required permits under the Subsoil Use Law of Kazakhstan from the Kazakhstan Ministry of Industry and New Technology and the required consent from the Agency of Kazakhstan on Protection of Competition (Antimonopoly Agency) upon which the Subscription Agreement is conditional, the Company intends to complete the Asset Acquisition.

Enquiries:

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any jurisdiction. This announcement is not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States, Canadian, Australian or Japanese person and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction.