Amara Mining PLC Larger Mineral Reserve at higher grade at Yaoure (7970M)

TIDMAMA

RNS Number : 7970M

Amara Mining PLC

25 January 2016

25 January 2015 AIM: AMA

Amara Mining plc

("Amara" or "the Company")

MINERAL RESERVE UPDATE DELIVERS 22% MORE OUNCES AT 37% HIGHER GRADE AT

YAOURE GOLD PROJECT

Amara Mining plc, the AIM-listed West African focused gold mining company, is pleased to announce a Mineral Reserve update for its Yaoure Gold Project ("Yaoure") in Côte d'Ivoire.

HIGHLIGHTS

-- Significantly stronger Mineral Reserve of 3.2 million ounces (62.3Mt at 1.62g/t) at Yaoure, using a 0.5g/t cut-off grade, further de-risking the project

o 1.1 million ounces in Proven category (18.1Mt at 1.82g/t)

o 2.2 million ounces in Probable category (44Mt at 1.54g/t)

-- 22% increase in contained ounces and 37% increase in head grade of Mineral Reserve compared to previous Mineral Reserve estimate announced on 14 May 2015 (70.4Mt at 1.18g/t for 2.7 million ounces)

   --     Pre-Feasibility Study ("PFS") optimisation results expected later in Q1 2016 

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

"Building on the updated Mineral Resource estimate announced in November 2015, we have seen improvements to both tonnes and grade translate into our updated Mineral Reserve. With increased ounces and, most importantly, an improved grade, today's reserve estimate further underscores Yaoure's potential to be a large scale, low cost gold mine. I anticipate that it will deliver significantly stronger economics, even in this lower gold price environment. I look forward to announcing the results of the PFS optimisation work later this quarter and bringing Yaoure one step closer to becoming one of Africa's largest gold mines."

Mineral Reserve Update

In comparison to the previous estimate, the Mineral Reserve has increased by 583,000 ounces (22%) and the head grade has increased by 0.44g/t (37%) to 1.62g/t.

The Mineral Reserve estimate is based on the National Instrument ("NI") 43-101-compliant Mineral Resource estimate announced on 24 November 2015 and on capital and cost estimates generated in the PFS announced on 14 May 2015. The Mineral Reserve is the portion of the Measured and Indicated Mineral Resource that falls within a pit design, which was based on an optimised pit shell corresponding to a gold price of US$880 per ounce. Today's Mineral Reserve estimate is shown in the following table:

 
 Category    Tonnes (Kt)   Grade (g/t)   Content (Koz) 
----------  ------------  ------------  -------------- 
 Proven        18,069         1.82           1,057 
----------  ------------  ------------  -------------- 
 Probable      44,214         1.54           2,189 
----------  ------------  ------------  -------------- 
 Total         62,282         1.62           3,246 
----------  ------------  ------------  -------------- 
 

Notes to Mineral Reserve table

1. Canadian Institute of Mining and Metallurgy and Petroleum ("CIM") definitions were used for the Mineral Reserve.

2. The Mineral Reserve was estimated by the contents of a resource block model within a pit design. This design was based on an optimisation, in which only Measured and Indicated Resources were enabled. The optimised shell selected corresponded to a gold price of US$880/oz, using costs based on the PFS announced on 14 May 2015.

3. The Mineral Reserve is reported at a cut-off grade of 0.5 g/t Au. This cut-off has been derived from the breakeven level corresponding to a gold price of US$1,000/oz.

4. Dilution and ore loss have been applied by adding a dilution skin of 0.5m laterally and 0.25m vertically to ore blocks neighbouring waste in addition to dilution inherent in the regularisation of the ore blocks to 6.25m x 6.25m x 5m. This results in an overall dilution of 17% and a mining recovery of 94% within the reserve.

5. The Mineral Reserves were estimated based on the NI 43-101 Mineral Resources, effective as of 24 November 2015.

   6.     A 90.2% metallurgical gold recovery was used. 

Amara's Mineral Resource statement is included in Appendix A.

Next Steps

Amara is continuing with optimisation work on the PFS, the results of which are expected to be released later in Q1 2016. Amara has been reviewing ways to reduce the upfront capital cost of the project in light of the current capital constrained market environment, with a range of lower throughput scenarios compared to the original 6.5Mtpa PFS. Since publication of the PFS, quotations received from suppliers have confirmed that the prices of many consumables have declined significantly, which will have a further positive impact on the overall project economics.

Following the announcement of the PFS optimisation results, Amara will select which scenario to move forward towards a Bankable Feasibility Study for Yaoure.

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 & Broker) 
  Matthew Armitt                              [phone] 
  Ross Allister                                8900 
 CTF Communications 
  (Media Relations)                           [phone] 
  James MacFarlane                             6455 
 

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 underground mining opportunity. Amara aims to further increase its production profile with highly prospective opportunities across both assets.

Mario Rossi is a "Qualified Person" within the definition of National Instrument 43-101 and is responsible for the estimation of the Yaoure Mineral Resource. He has reviewed and approved the relevant technical information relating to the resource estimates in this release. Mr Rossi (Fellow AusIMM, Member CIM, Member SME) is Principal Geostatistician of GeoSystems International, Inc.

Adam Wheeler is a "Qualified Person" within the definition of National Instrument 43-101 and is responsible for pit optimisation aspects of the Yaoure Mineral Resource and Mineral Reserve. He has reviewed and approved the relevant technical information relating to the resource and reserve estimates in this release. Mr. Wheeler (Fellow IOM(3) , C.Eng) is an Independent Mining Consultant.

Appendix A

Yaoure Mineral Resource estimate within a US$1,500 per ounce pit shell with a cut-off of 0.5g/t as of 24 November 2015

 
 Resource Category    Tonnes (Mt)   Grade (g/t)   Content 
                                                   (Koz) 
-------------------  ------------  ------------  -------- 
 Measured                18.6          1.86        1,114 
-------------------  ------------  ------------  -------- 
 Indicated               85.5          1.47        4,042 
-------------------  ------------  ------------  -------- 
 Measured and 
  Indicated              104.1         1.54        5,155 
-------------------  ------------  ------------  -------- 
 Inferred                47.7          1.41        2,156 
-------------------  ------------  ------------  -------- 
 

Notes

1. The effective date of the Yaoure Mineral Resource estimate is 24 November 2015, prepared by Mario E Rossi, GeoSystems International, Inc.

2. The gold price used in the Mineral Resource estimate is US$1,500 per ounce, assuming an open pit mining scenario, processing via tank leaching. Recoveries have been assumed at 90%. Pit Optimisation was completed by A. Wheeler for all prices shown here and parameters otherwise as derived in the 2015 PFS.

   3.   Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. 

4. There are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may materially affect the resource estimates.

5. Totals and average grades are subject to rounding to the appropriate precision and some columns or rows may not compute exactly as shown.

6. The stated resources include dilution in the block model that relates to the level of selectivity envisioned in an open pit operation, with the block model regularised to a block size of 6.25m x 6.25m x 5m.

   7.     Numbers may not add correctly due to rounding. 

Glossary

A "Mineral Resource" is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

An "Inferred Mineral Resource" is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

(MORE TO FOLLOW) Dow Jones Newswires

January 25, 2016 02:00 ET (07:00 GMT)