Government approvals have been given to Frontier Mining’s Kazakhstan subsidiary KazCopper LLP to complete its purchase and transfer of the sub-surface use contract for the South Benkala copper deposit.
The US$2.5 million contract’s transfer from PromSnab 2030 LLP to KazCopper has received a green light from Kazakhstan’s Industry and Trade Ministry and Inter-Ministerial committees.
South Benkala is about 10km south of Frontier’s existing Benkala licence area and will be incorporated into the Benkala project development to extend the life of the SX-EW plant which is under construction. Frontier opened and commissioned the Benkala copper project in December 2011 after it was included in the national program of accelerated industrial development of Kazakhstan for 2010-2014.
The company’s chief executive officer Erlan Sagadiev says, “Bringing the Benkala project to this stage has been a long journey for Frontier and we are delighted to now look forward to starting production in 2012, which looks certain to become a milestone year.”
Combining the South Benkala oxide resources with the current operation will add four years life to the plant and expand annual production capacity from 20,000 to 30,000 tonnes of cathode copper.
KazCopper has begun infill drilling at South Benkala with two rigs at the site to further define the deposit’s oxide resource.
Benkala is about 450km east of Aktobe and 100km south of Zhitigara in the country’s northwest, close to the Russian border. There is a new highway in the local area, as well as the main Aktobe-Kostanai railway line and a new 550kv power line.
The oxide section of the prospect represents about 10% of the total resource and is estimated to have a NPV of US$190 million, based on a 0.5% diluted copper grade, 63% recovery and 185,000 tonnes of contained metal. Frontier says it will use production from the SX-EW project to finance further evaluation and technical studies required to advance development of the significant sulphide resource.