Frontier Mining (LON:FML) currently presents investors with a mix of pluses and minuses, but that there is significant potential in this Kazakh copper miner is beyond doubt.
Perhaps the biggest 'tick' for the junior is the sheer scale of its flagship Benkala asset, which as executive director Yerlan Minavar recently told Proactive Investors has a resource of over 360 million tonnes of mineable ore, with potential for more.
It has good infrastructure, power, even its own railway on site and its solvent extraction-electro winning (SX-EW) plant has now been upgraded to process 10,000 tpa (from 7,000tpa).
On the downside, teething problems, which have now lasted many months, means the firm is exploiting only a fraction of that capacity - with, in the six months to end June, output standing at just 390 tonnes of copper.
The firm has earmarked production to be in the range between 1,700 and 2,100 tonnes by the end of 2013.
This is some way short of the 3,500 tonnes of copper that house broker RFC Ambrian had forecast for the company, although the City broker concedes this was always going to be a difficult target given the volumes of material heading to the plant.
That said, there were positives to be drawn from Frontier's latest interims, including low production costs, which stand at US$3,625 per tonne of copper excluding general and admin costs.
"As production volumes grow, the fixed G&A costs will decrease per tonne of copper produced and we should see positive cashflows from operations," said RFC Ambrian.
Benkala started producing in August 2011 to much fanfare but its progress since then has not been convincing.
Minavar emphasised that Benkala was still going through, in effect, what was a "start-up stage".
"Our experts say it's normal to have a two to two-and-a-half years commissioning process," he said.
Minavar says Frontier is now trying to optimise operations on site and tests are currently underway in this regard.
"We are confident that we have enough ore, which is economically extractable and we will be able to produce copper for profit."
One of the sticking points has been the high clay content within the ore, which the firm has been laying on the leach pads, meaning the percolation of acid through to release the copper has been hindered.
A technical consultant Adam Moroney has been brought in tasked with improving these sort of issues and the firm has said progress is being made.
Minavar also told investors that the oxide layer of the ore, where the clay content is the highest, had now in fact been passed, which means things should improve.
He explained how the leach pads could now be stacked higher and the latest had been built to six metres (of ore) - in line with other similar projects around the world.
"Assuming stack heights of 6 metres and a head-grade of 0.7% copper, Pads 3 and 4 would contain 4,000t of recoverable copper and set Frontier up well for 2014," notes RFC Ambrian analyst Craig Foggo.
Another issue lurking in the background is the fact that the company has confirmed it needs what it called a "small amount" of financing to ensure further optimisation work at Benkala is carried out, and says conversations are "well progressed" in this regard with different investors.
Foggo believes this cash-call could be required soon.
"In a new development, the requirement to list in Kazakhstan may provide Frontier with some scope to raise additional funds, and may also assist liquidity," he adds, referring to a corporate update in the company's half year results.
RFC Ambrian, which currently rates the firm 'hold', gives a guarded picture of what may be next for Frontier, though it does suggest the share price could rise.
"Frontier’s share price could be close to bottom if operations are now producing at the rates desired.
"However, even if operations have turned the corner, there are still significant ‘unknowns’ as news on the latest debt terms has not been announced and alternative financing has not yet been finalised.
"Should these corporate matters be resolved soon, we may see Frontier’s share price lift," said Foggo.
Minavar said among the firm's key goals in the near future was also to advance its South Benkala project and its other project Baitemir, by extending and defining a compliant resource number.
It is also reviewing whether it can run the main Benkala operations all year round, rather than close down during the freezing winter and improve the transparency in reporting of the project.
Frontier shares are unchanged today - changing hands at 1.425p.