Amara Mining PLC Yaoure drilling and optimisation update (2980Z)

TIDMAMA

RNS Number : 2980Z

Amara Mining PLC

17 September 2015

17 September 2015 AIM:AMA

Amara Mining plc

("Amara" or "the Company")

2015 DRILLING PROGRAMME RESULTS AND PFS OPTIMISATION UPDATE FOR

YAOURE GOLD PROJECT

Amara Mining plc, the AIM-listed West African focused gold mining company, is pleased to announce the results of its 11,904 metre 2015 drilling campaign at its Yaoure Gold Project ("Yaoure") in Côte d'Ivoire. The Company also announces an update on the optimisation work following the completion of the Pre-Feasibility Study ("PFS") for Yaoure, which was announced on 14 May 2015.

HIGHLIGHTS

-- 2015 drilling programme and ongoing optimisation studies have demonstrated Yaoure's potential to become a large, low cost gold mine

-- Amara's confidence has increased in the opportunity for a starter pit in the northern area of the Yaoure Central zone. Key benefits include:

o Reduction in the requirement for pre-stripping contributing to a lower upfront capital cost

o Increased head grade and a smaller processing plant yielding robust returns

o Lower operating costs

-- Drilling in the northern area of the Yaoure Central zone has established the presence of near surface mineralisation. Significant intercepts include:

o 14m at 3.1g/t from 53m and 5m at 39.6g/t from 163m in hole YDD0444

o 14m at 2.4g/t from surface and 4m at 34.0g/t from 75m in hole YDD0428

o 36m at 3.1g/t from surface in hole YDD0436

o 21m at 3.7g/t from 30m in hole YDD0434

o 23m at 3.4g/t from 43m and 2m at 13.7g/t from 118m in hole YDD0455

-- Results from an extensive mapping and channel sampling programme on the Yaoure Central pit floor better constrain the major mineralised structures and further demonstrate strong continuity of gold mineralisation in the northern area. Significant results include:

o 8m at 9.7g/t in channel YRP0132

o 21m at 3.5g/t in channel YRP0119B

o 5m at 14.6g/t in channel YRP0114

-- High grade intercepts also reported from in-fill drilling in the central, southern and far northern areas of the Yaoure Central zone

   --     Mineral Resource update expected to be delivered in Q4 2015 

-- Final results of the PFS optimisation work to be published thereafter, with Amara remaining well-funded to advance the Bankable Feasibility Study ("BFS")

A drilling map and a selection of section diagrams are available on the recently relaunched Amara website at http://www.amaramining.com/operations/yaoure/maps-sections/

John McGloin, Chairman and Chief Executive Officer of Amara, commented:

"Our drilling and optimisation work indicates that we can significantly reduce the upfront capital cost, whilst improving head grade, as we move Yaoure forwards to becoming a large, low cost gold mine. The strong results received from the 2015 drilling programme further increase our confidence in the Yaoure deposit. They demonstrate the presence of a higher grade core within the Yaoure Central zone, which, allied with the selectively mined ore from the CMA zone, will increase the head grade of the ore going to the processing plant. The presence of ore from surface in the Yaoure Central zone also underlines the opportunity for a starter pit in the northern area, which can be mined at a low strip ratio and significantly reduces the need for pre-stripping. This is expected to yield an even more compelling project with robust financial returns and a lower capital requirement. I look forward to delivering the Mineral Resource update and optimisation study results in the coming months."

Overview of drilling in northern area of Yaoure Central zone

As part of the optimisation recommendations generated by the PFS, Amara undertook an 11,904 metre diamond drill ("DD") programme at Yaoure between April and August 2015. The drilling programme targeted the Yaoure Central zone, which is a North-South trending zone of mineralisation approximately 200 metres thick and dipping at 30 degrees to the east.

The Yaoure Central zone can be viewed as four distinct areas: the far northern area, the northern area, the central area and the southern area. The objective of the 2015 drilling programme was to better define the mineralisation in the northern area to determine its suitability as a potential starter pit and to infill other areas of the Mineral Resource.

Drilling results from the northern area are very encouraging, with significant higher grade intercepts including 5m at 39.6g/t from 163m and 4m at 34.0g/t from 75m.

Significant intercepts from the northern area of the Yaoure Central zone

 
 Borehole    Section   From (m)   To (m)   Interval   Au (g/t) 
  ID            mN                          (m)(1) 
 YDD0436      7250        0         36        36        3.1 
 YDD0444      7200        53        67        14        3.1 
 YDD0428      7250        75        79        4         34.0 
 YDD0434      7300        30        51        21        3.7 
 YDD0434      7300        60        65        5         6.0 
 YDD0455      7100        43        66        23        3.4 
 YDD0455      7100       118       120        2         13.7 
 YDD0452      7150        92       109        17        4.0 
 YDD0433      7300        64       103        39        0.9 
 YDD0435      7350        82        2         2         17.5 
 YDD0428      7250        0         14        14        2.3 
----------  --------  ---------  -------  ---------  --------- 
 

If these intercepts are aggregated, including all internal waste, there is significant mineralisation from surface in a number of holes including YDD0444 (168m at 1.6g/t from surface) and hole YDD0428 (79m at 2.3g/t from surface). This demonstrates strong potential for highly economic production in this northern area.

The full set of DD results is included in the Appendix.

Potential to increase head grade and reduce upfront capital cost

The drilling results and initial optimisation work have increased Amara's confidence in the potential for a starter pit in the northern area of the Yaoure Central zone where mineralisation is present from surface. This is expected to deliver the following benefits:

-- Significant reduction in the requirement for pre-stripping - the mine plan in the PFS envisages that mining would start in the CMA zone, which would require 15Mt of pre-stripping at a capital cost of US$33 million. By commencing mining in the ore at surface in the Yaoure Central zone, the pre-strip would significantly decrease and this would assist in reducing the upfront capital cost of the project

-- Increased head grade and smaller processing plant - by combining the more continuous, higher grade mineralisation from the northern area of the Yaoure Central zone with the selectively mined ore from the CMA zone, Amara expects to be able to increase the head grade of the ore going to the processing plant. This in turn suggests the opportunity for a smaller processing plant that would still deliver robust levels of production and strong financial returns, but at a lower upfront capital cost and with a faster payback period

-- Lower operating costs - the PFS mine plan takes ore from all areas of the Yaoure Central zone, however the 2015 drilling programme has demonstrated the strongest continuity and highest grades in the northern area, where strong intercepts are reported from surface. By focusing the initial mine plan on this area, operating costs would be reduced. This also supports the use of a smaller mining fleet, further reducing the upfront capital cost

Furthermore the potential would still exist to expand the processing plant in the future, funded by the cash flow from early production, to ensure that Yaoure's long-term value is fully realised.

Overview of channel sampling programme in Yaoure Central zone

In conjunction with the drilling programme and following the de-watering of the previously mined Yaoure Central pit, Amara conducted 4,659 metres of channel sampling in the Yaoure Central zone.

The channel sampling results further demonstrate the strong continuity of the gold mineralisation within the structures in the northern area of the Yaoure Central zone.

Significant results from channel sampling

 
 Channel ID    Interval (m)   Au (g/t) 
 YRP0132            8           9.7 
 YRP0119B           21          3.5 
 YRP0114            5           14.6 
 YRP0008B           12          5.3 
 YRP0025T3          4           13.3 
 YRP0156            7           7.5 
 YRP0118C           9           5.5 
 YRP0127            3           16.1 
 YRP0122B           12          4.0 
 YRP0015            6           7.7 
 YRP0060B           5           8.7 
 YRP0036            13          3.2 
 YRP0109            12          3.4 
 YRP0090            13          2.9 
 YRP0012            11          3.0 
 YRP0128            5           6.6 
 YRP0057            5           5.7 
------------  -------------  --------- 
 

Although the structural controls on mineralisation are relatively complex in the Yaoure Central zone in comparison to the more continuous CMA zone, the geological structures can be viewed, mapped and sampled in the bottom of the pit. This reduces the exploration risk for Yaoure as the structures visible at surface can be traced and drilled at depth. It also increases Amara's confidence in the geological model for Yaoure as the Company moves the project along the value curve.

The full set of channel sampling results is included in the press release on the Amara website.

Results from other areas of Yaoure Central zone

Drilling was also conducted in the far northern, central and southern areas of the Yaoure Central zone. Some strong intercepts were reported but overall drilling has shown less continuity than in the northern area. Amara chose not to complete its planned drilling in this area and instead focus on the more continuously mineralised northern area.

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While these other areas are unlikely to be mined initially as Amara focuses on a smaller, more robust first phase, these areas could help to feed an expanded plant later in the mine's life or extend the project's mine life.

Significant intercepts from central, far northern and southern areas of Yaoure Central zone

 
 Borehole        Area        Section   From   To (m)   Interval   Au (g/t) 
  ID                            mN      (m)             (m) (1) 
 YDD0460        Central       7050      67      83        16        8.3 
 YDD0415        Central       6950      87     101        14        2.7 
 YDD0447        Central       6800      48      57        9         14.5 
 YDD0464        Central       6800      82      93        11        2.7 
 YDD0459        Central       6750      28      34        6         4.8 
 YDD0462     Far Northern     7500     178     180        2         13.8 
 YDD0418       Southern       6700     151     164        13        2.0 
----------  --------------  --------  -----  -------  ---------  --------- 
 

Next steps

Amara is continuing to work on the optimisation opportunities generated by the PFS, which include further reducing the upfront capital requirement and increasing the head grade going to the processing plant. The Company's objective is to demonstrate the potential for a large-scale, low-cost gold mine with robust financial returns that is financeable in a lower gold price environment.

Amara expects to announce a Mineral Resource update for Yaoure in Q4 2015 with the optimisation work concluding thereafter. Following the completion of this work, Amara will commence work on a BFS for Yaoure, which is expected to be delivered during 2016.

Notes to tables

1. Interval lengths are not true widths. Composite intersections are based on a minimum width of 2m and a cut-off of 0.40 g/t Au. Internal dilution of up to 2.00m at less than 0.40 g/t has been allowed for continuity

For more information please contact:

 
 Amara Mining plc 
  John McGloin, Chairman & Chief Executive 
  Officer 
  Pete Gardner, Finance Director 
  Katharine Sutton, Head of Investor          [phone] 
  Relations                                    1420 
 Peel Hunt LLP 
  (Nominated Adviser & Joint Broker) 
  Matthew Armitt                              [phone] 
  Ross Allister                                8900 
 GMP Securities Europe LLP 
  (Joint Broker) 
  Richard Greenfield                          [phone] 
  Alex Carse                                   2800 
 Farm Street Communications 
  (Media Relations)                           +44 (0)7593 
  Simon Robinson                               340 107 
 

About Amara Mining plc

Amara is a gold explorer/developer with assets in West Africa. The Group is focused on unlocking the value in its development projects. At Yaoure in Côte d'Ivoire, this will be done by increasing the confidence in the existing Mineral Resource and economics at the project as Amara progresses it through to Bankable Feasibility Study. At Baomahun, this will be achieved by gaining an improved understanding of the exploration upside potential and underground opportunity. Amara aims to further increase its production profile with highly prospective opportunities across both assets.

Peter Brown is a "Qualified Person" within the definition of National Instrument 43-101 and has reviewed and approved the information contained within this announcement. Dr Brown (MIMMM) is the Group Exploration Manager.

The DD drilling programme at Yaoure was undertaken by an independent drilling contractor. Typically samples for assaying were taken at one metre intervals. Sample preparation was carried out at the Company's facility at Yaoure, prior to fire assay at Actlabs in Ouagadougou, Burkina Faso. The samples were crushed down to minus 2mm and then pulverised down to 90% passing 75 microns, prior to analysis for gold by 50g fire assay. As part of the Company's QA/QC procedures, internationally recognised standards, duplicates and blanks were inserted. Check assays were carried out at ALS Geochemistry in Vancouver, Canada. The laboratories used are independent of the Company.

APPENDIX

Results of 62 DD holes

 
  Borehole    FROM    TO m   Interval    Grade      Location of hole 
     ID         m              m(1)      Au g/t     in Yaoure Central 
 
  YDD0410       5      19       14       1.04           Southern 
  YDD0410      26      37       11       0.97 
  YDD0410      59      61       2        2.12 
  YDD0410      67      70       3        0.52 
  YDD0410      87      90       3        0.56 
  YDD0410      104    106       2        0.91 
  YDD0410      199    206       7        0.87 
 
  YDD0411      58      66       8        0.75           Southern 
  YDD0411      86      88       2        0.62 
  YDD0411      116    119       3        3.65 
  YDD0411      127    129       2        1.84 
  YDD0411      188    190       2        6.60 
 
  YDD0412       7      9        2        3.70           Southern 
  YDD0412      106    121       15       1.23 
 
  YDD0413       0      2        2        0.84           Southern 
  YDD0413      39      41       2        1.99 
  YDD0413      47      49       2        1.03 
  YDD0413      60      62       2        1.52 
  YDD0413      66      70       4        1.38 
  YDD0413      96      98       2        1.05 
  YDD0413      133    135       2        6.37 
  YDD0413      151    155       4        1.22 
  YDD0413      170    179       9        2.05 
 
  YDD0414       0      3        3        0.63           Southern 
  YDD0414      12      14       2        0.60 
  YDD0414      78      81       3        5.42 
 
  YDD0415      28      31       3        1.50            Central 
  YDD0415      46      49       3        1.71 
  YDD0415      59      67       8        0.40 
  YDD0415      87     101       14       2.70 
  YDD0415      145    154       9        1.29 
  YDD0415      161    168       7        0.92 
  YDD0415     172.8   181      8.2       0.96 
  YDD0415      188    191       3        7.06 
  YDD0415      194    202       8        1.15 
  YDD0415      213    216       3        1.03 
  YDD0415      225    227       2        0.56 
 
  YDD0416      14      17       3        5.28            Central 
  YDD0416      186    200       14       0.81 
 
  YDD0417      58      62       4        1.98            Central 
  YDD0417      99     104       5        0.71 
  YDD0417      107    111       4        0.56 
  YDD0417      128    133       5        0.62 
  YDD0417      150    152       2        0.92 
 
  YDD0418      53      57       4        1.37           Southern 
  YDD0418      97     100       3        3.19 
  YDD0418      124    126       2        1.16 
  YDD0418      151    164       13       1.98 
  YDD0418      199    203       4        1.44 
  YDD0418      208    219       11       1.60 
  YDD0418      225    227       2        3.40 
 
  YDD0419       0      2        2        0.85           Southern 
  YDD0419      21      26       5        1.62 
  YDD0419      97     102       5        0.99 
  YDD0419      134    139       5        1.09 
  YDD0419      174    177       3        0.91 
 
  YDD0420      129    132       3        1.14           Southern 
  YDD0420      147    151       4        0.59 
  YDD0420      158    160       2        1.35 
 
  YDD0421      63      68       5        2.08           CMA South 
  YDD0421      105    107       2        0.76 
 
  YDD0422      44      48       4        0.48           CMA South 
  YDD0422      54      61       7        4.17 
 
  YDD0423      34      38       4        0.47            Central 
  YDD0423      107    115       8        2.25 
  YDD0423      133    136       3        0.58 
 
  YDD0424       1      3        2        0.67         Far Northern 
  YDD0424      14      16       2        10.40 
  YDD0424      48      50       2        0.46 
  YDD0424      67      70       3        0.66 
 
  YDD0425      101    103       2        0.83            Central 
  YDD0425      107    116       9        2.34 
  YDD0425      124    126       2        0.82 
  YDD0425      134    137       3        1.07 
  YDD0425      157    160       3        6.36 
 
  YDD0426      11      16       5        1.67           Northern 
  YDD0426      37      40       3        0.51 
  YDD0426      117    119       2        2.93 
 
  YDD0428       0      14       14       2.39           Northern 
  YDD0428      31      33       2        0.68 
  YDD0428      39      43       4        1.09 
  YDD0428      50      56       6        0.58 
  YDD0428      65      67       2        2.70 
  YDD0428      75      79       4        34.00 
  YDD0428      97     106       9        0.73 
  YDD0428      148    159       11       0.71 
  YDD0428      178    182       4        0.40 
  YDD0428      189    194       5        1.00 
  YDD0428      232    242       10       2.09 
 
 
  YDD0430      43      45       2        11.89          Southern 
 
  YDD0431       4      13       9        0.66           Northern 
  YDD0431      31      44       13       0.63 
  YDD0431      53      55       2        0.85 
  YDD0431      96      98       2        1.18 
  YDD0431      109    118       9        0.74 
  YDD0431      128    143       15       1.20 
  YDD0431      154    156       2        1.52 
  YDD0431      165    167       2        1.27 
  YDD0431      171    175       4        0.55 
  YDD0431      249    254       5        1.14 
 
  YDD0432      16      20       4        2.97           Northern 
  YDD0432      37      39       2        2.22 
  YDD0432      110    124       14       0.67 
  YDD0432      164    166       2        2.00 
  YDD0432      191    198       7        1.16 
  YDD0432      213    220       7        2.62 
  YDD0432      230    236       6        0.68 
  YDD0432      261    269       8        1.24 
 
  YDD0433       5      11       6        1.61           Northern 
  YDD0433      14      25       11       1.25 
  YDD0433      34      56       22       0.69 
  YDD0433      64     103       39       0.91 
  YDD0433      114    116       2        7.78 

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