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Top broker Ocean Securities has published a buy note on Amara Mining (LSE:AMA) in which it suggests that investors buy the shares at 65p with a target price of 99p. I long followed Amara, formerly known as Cluff Gold on t1ps.com and I also regard the shares as very cheap. As I shall explain below.
Ocean Equities says that its target price “reflects the underlying value of Amara” but “it does not demonstrate the value of the operating assets or the exploration growth potential of Amara’s project portfolio. The resource growth at Yaoure is perhaps the most prominent growth asset in the Company’s stable and based on our peer group multiples and our assumed resource potential of 2Moz, this asset could add $70m to the underlying value of Amara. This would equate to £1.24/share currently.”
The newsflow from Amara in recent weeks has been encouraging. It recently published more positive drilling news regarding its Yaoure Project in Cote d’Ivoire.
In short the company confirms that the drilling results reveal potential for a large moderate-grade sulphide deposit underlying the previously mined oxide resources at Yaoure, with all of the 90 holes drilled having encountered mineralistation.
Significant intercepts include:
— 38.1m at 3.67g/t from 102.9m in hole YDD0068
— 8.0m at 9.47g/t from 69.0m and 43.2m at 1.78 g/t from 144.9m(i) in
hole YDD0073
— 29.0m at 3.24g/t from 196.0m in hole YDD0079
Amara confirmed that the inferred mineral resource update is now targeted for Q1 2013 with a further exploration campaign planned in the area for 2013 to continue step-out drilling and further understand the prospectivity.
On release of the news it seems Peter Spivey, Chief Executive Officer is satisfied, and is as ever keen to push the point of company potential and future growth:
“These latest drilling results from Yaoure continue to confirm our belief in the project’s potential. We expect the remaining assays in the coming days and we intend to update our sulphide resources in Q1 2013. By using our cashflow from Kalsaka to fund our exploration at Yaoure and at the Baomahun project in Sierra Leone, Amara is differentiating itself from other junior mining companies and delivering on its strategy to become a mid-tier producer.”
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Amara is regularly flagged by all the pundits as a red hot buy.
The share price however continues to do nothing, am i missing
something here??