Frontier Mining, a copper producer operating in Kazakhstan, has secured extensions on financing facilities from several loan note holders, a financing update has shown.
The group reported that Sberbank Kazakhstan had agreed to extend both the term of current facilities ($35m) by 34 months to October 2018 and the grace period for principal repayments until April 2014.
Frontier Mining said that deferment of principal repayments would reduce cash outflow by $7.0m in 2013.
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The group added that an additional loan to finance expansion of the SX-EW plant at Benkala and provide working capital had recently received local approval, in anticipation of credit committee approval from the Sberbank head office in Moscow.
Furthermore, following negotiations over the past 12 months, the company said it had been awarded a grant from DAMU, a Kazakhstan government fund established to support small and medium sized enterprises.
Frontier said that discussions remained ongoing with RK Capital Management, with the objective of restructuring the current loan notes. It said that RK has agreed to extend the term of the notes to allow arrangements to be finalised.
The term of the $2.4m loan note from Central Asian Education Services SA has been extended by three months to July 28th 2013 and the term of the $1.6m loan note from NNEF received an extension of four months to August 19th 2013.
Yerlan Aliyev, Chairman and Chief Executive Officer of Frontier Mining, commented: "The senior management team have worked tirelessly for several months, engaging in lengthy negotiations to ensure the financial stability of the company.
"I'm delighted to report that our endeavours have proved successful and that Frontier is well positioned to achieve the targets planned for 2013. The continued financial support we are offered should further encourage investors to take confidence in the long-term potential that Benkala presents to shareholders."
Frontier Mining's share price was up 5.77% to 2.75p at 13:11 on Thursday.
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