Frontier Mining Ltd said its joint venture partner on the Benkala deposit, Coville Intercorp Ltd, has agreed to further defer payment of US$7.7 million owed by Frontier in connection with becoming partner in Benkala.
Coville has agreed to defer repayment of the loan note until January 18 2009, after last month already agreeing to deferment until December 19. The convertible loan note agreement between Frontier and Coville as part of the payment for the Benkala transaction last year originally required Frontier to repay the sum by November 19 2008.
To date, Frontier has entered into various discussions to arrange an alternative source of funding to repay the loan note. These negotiations are currently ongoing. “The extension serves to give us a more comfortable timeframe to conclude negotiations that may allow the company to repay the loan note,” the company said in today’s statement.
Its internal financial resources are presently inadequate to repay Coville, therefore an extension of the repayment and completion of alternative funding arrangements are imperative to ensure that Frontier Mining remains a going concern.
A further announcement will be made in due course, Frontier added.