Frontier Mining : Proposed Cancellation and Notice of GM

RNS Number : 1731F

Frontier Mining Ltd

17 February 2015



FRONTIER MINING LTD

("Frontier" or "the Company")

PROPOSED CANCELLATION OF ADMISSION TO TRADING ON AIM

AND NOTICE OF GENERAL MEETING

Frontier Mining Limited (AIM:FML), the AIM listed copper production, exploration and development company focused on Kazakhstan, announces its intention to seek Shareholders' approval for the cancellation of admission of its ordinary shares of US$0.01 each ("Ordinary Shares") to trading on AIM ("Delisting"). An explanatory circular will shortly be posted to Shareholders setting out the background to and reasons for the Delisting, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the resolution on the Cancellation ("Resolution").

A general meeting ("General Meeting") of the Company will be held on 11 March 2015 at which the Resolution will be proposed to Shareholders for approval. A notice convening the General Meeting will be set out in the circular to Shareholders which will shortly be available on the Company's website at www.frontiermining.kz.

-ENDS-

1. Current Trading

The Company issued its unaudited Q3 financial statements for the nine month period ended 30 September 2014 on 7 November 2014. Those results can be found on the Company's website at www.frontiermining.kz and show that the Company incurred a loss before taxation of $21.6 million during this period, and had total debt of $92.2 million.

As announced on 23 January 2015, the Company was only able to sell a total of 1,276 tonnes of copper cathode in the 12 month period to 31 December 2014. Lower levels of production in the latter part of last year, exacerbated by falling world copper prices, have meant that copper sales have been insufficient to cover production costs. To conserve capital, and facing the difficult winter season, the Company has shut down production for the time being.

The Company continues to be cash constrained and is in discussions with various parties to enter into a partnership or some other agreement which, if successful, would provide the funds needed to increase copper production and provide working capital. This effort has been made more difficult because sanctions on Russian banking activity have diminished available capital sources and constrained the ability of Union Transnationale Miniere S.A., the purchaser of Naimanjal as announced on 10 March 2014, to complete the payment of the full cash consideration for the acquisition. Although there is no guarantee that the Company will be able to secure the funding it needs, the Directors believe that the Company will be in a better position as a private company to accomplish the necessary financial restructuring required for the Company to continue trading. At the same time, the Company continues to liaise with its creditors in order to manage its working capital requirements.

2. The Delisting

The principal reasons for the Admission of the Ordinary Shares to trading on AIM in 2004 were as follows:

· To enhance the Group's corporate status and profile with its customers (both existing and prospective) and its other stakeholders, including suppliers and potential partners by being a company traded on AIM;

· To provide it with finance to support the Company's growth strategy and to provide it with access to capital, if required, to support further growth in the future;

· To attribute a value to its Ordinary Shares so as to provide a mechanism of making available Ordinary Shares as a means of retaining and incentivising employees should this be deemed desirable in the future;

· broaden the Group's shareholder base; and

· achieve international profile and recognition.

The Board has recently undertaken a review of both the advantages (such as ability to raise new funds on AIM, the Company's enhanced profile as an AIM Company and ability to make acquisitions) and disadvantages (such as cost and management time) of maintaining the Admission. As the Company has largely been unable raise significant levels of new capital from the London market since the Admission, the Directors have concluded that the costs and regulatory requirements associated with maintaining a listing on AIM outweigh the benefits to the Company.

Pursuant to AIM Rule 41, the Delisting can only be effected by the Company after securing a resolution of Shareholders in a general meeting passed by a requisite majority, being not less than 75 per cent. of the votes cast by Shareholders (in person or by proxy). Under the AIM Rules, the Delisting can only take place after the expiry of a period of twenty Business Days from the date on which notice of the Delisting is given. In addition, a period of at least five Business Days following the Shareholder approval of the Delisting is required before the Delisting may be put into effect.

The Company has notified the London Stock Exchange of the proposed Delisting. In the event that Shareholders approve the Resolution approving the Delisting, it is anticipated that the trading in the Ordinary Shares on AIM will cease at close of business on 19 March 2015, with the Delisting taking effect at 7 am on 20 March 2015.

3. Effect of Delisting

The principal effect of the Delisting is that cancellation of trading in Ordinary Shares on AIM will substantially reduce the liquidity and marketability of Ordinary Shares. In addition, there would be no public stock market in the UK on which Shareholders can trade their Ordinary Shares, and the Company would no longer be required to comply with the AIM Rules. The Company's CREST facility will be cancelled and, although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST. However, the Company has retained the services of its Registrars, Computershare Investor Services (Jersey) Limited, to facilitate any private transfer of shares. All former Depositary Interest holders shall be issued with share certificates and should they wish to execute a trade they should confirm details with the Registrars by sending details of the trade and their share certificate to Computershare Investor Services (Jersey) Ltd, Queensway House, Hilgrove Street, St Helier, Jersey JE1 1E.

The Company also intends to cancel the listing of its Ordinary Shares on the Kazakhstan Stock Exchange. Therefore, following the Delisting, there will be no formal trading facility for dealings to take place in Ordinary Shares and no price for them will be publicly quoted. It is not the Board's intention to implement any form of dealing facility to enable trades in the Ordinary Shares to occur.

4. General Meeting

A General Meeting of the Company is to be held at the offices of Frontier Mining Ltd at Nurly Tau Business Centre, Block 4V, Office 1906, 15 Al Farabi Ave, Almaty, Kazakhstan at 9.00am (3.00pm Kazakhstan time) on 11 March 2015 at which the Resolution will be put to Shareholders.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

All of the times referred to in this document refer to London time unless otherwise indicated.

Dates set against events that are expected to occur after the expected date of the General Meeting assume that the General Meeting is not adjourned and that the Resolution is passed at the General Meeting.

All of these times and dates are subject to change at the Company's discretion. In the event of any change, the revised times and dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

The company news service from the London Stock Exchange

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