TIDMAMA
RNS Number : 3312B
Amara Mining PLC
06 January 2015
6 January 2015 AIM: AMA
Amara Mining plc
("Amara" or "the Company")
63% INCREASE IN INDICATED MINERAL RESOURCES AT YAOURE GOLD
PROJECT
Amara Mining plc, the AIM-listed West African focused gold
mining company,is pleased to announce an updated National
Instrument ("NI") 43-101 compliant Mineral Resource estimate for
its 100% owned Yaoure Gold Project ("Yaoure") in Côte d'Ivoire.
HIGHLIGHTS
-- Total Mineral Resources at Yaoure of 6.8million ounces(1) :
4.4 million ounces Indicated (106.3Mt at 1.29g/t) and 2.4 million
ounces Inferred (63.0Mt at 1.19g/t)
o 65% of Yaoure's Mineral Resources are in the higher confidence
Indicated category, de-risking the deposit
o Yaoure is the largest gold development project in West Africa
by Mineral Resource
o Amara's total Mineral Resources are 9.6 million ounces - the
largest resource base of any London-listed junior miner(2)
-- 1.7 million ounce (63%) increase in higher confidence
Indicated Mineral Resources compared to the Mineral Resource update
announced on 29 September 2014
-- Higher grade Indicated Mineral Resources contained within
US$950 and US$800 per ounce pit shells
o US$950/oz pit shell contains 3.1 million ounces (64.8Mt at
1.48g/t) in the Indicated category, a 32% increase compared to the
September resource update
o US$800/oz pit shell contains 2.6 million ounces (50.7Mt at
1.57g/t) in the Indicated category, a 44% increase compared to the
September resource update
-- Further exploration upside as the deposit remains open along
strike with indications of additional gold in parallel structures
to the West (towards surface), as well as the opportunity to
convert further Inferred Mineral Resources to the Measured and
Indicated categories
NEXT STEPS
-- Comprehensive metallurgical test work programme underway
focused on recovery rate, reagent consumptions and comminution
requirements
-- Pre-Feasibility Study ("PFS") expected in March 2015 -
anticipated to confirm compelling economics outlined in the
Preliminary Economic Assessment ("PEA") due to Yaoure's excellent
existing infrastructure, including the availability of low-cost
hydro-electric power
Notes
1. Based on a pit optimisation using a US$1,500 gold price, and
reported at a 0.5g/t cut-off. Compared to the 6.3 million ounce
Mineral Resource (62.0Mt at 1.36g/t for 2.7 million ounces
Indicated and 86.6Mt at 1.30g/t for 3.6 million ounces Inferred)
with an effective date of 23 September 2014.
2. A junior miner is defined here as an explorer/developer or a
producer with projected FY2014 production of less than 200,000
ounces.
John McGloin, Chairman and Chief Executive Officer of Amara,
commented:
"The delivery of the Yaoure Mineral Resource update is the first
step towards completing the PFS, which is expected in March 2015.
The 2014 infill drilling programme has improved our understanding
of the controls on the mineralisation and highlighted the potential
for further parallel structures to the West of the current pits.
The results we received from the programme correlated strongly to
the original resource model, confirming the robustness of the
Yaoure deposit, and it is encouraging to see that the higher grade
zones have strong continuity within a moderate grade matrix of
mineralisation. This gives me confidence that there will be a
strong conversion of the Indicated resources to Mineral Reserves
when we release the PFS. I look forward to delivering the PFS later
this quarter, which is expected to maintain the powerful economics
outlined in the PEA through the combination of Yaoure's large
Mineral Resource, simple metallurgy and the excellent existing
infrastructure, including low cost power, close to site."
Section diagrams are available at
www.amaramining.com/Operations/Yaoure. Information on Yaoure's
geology and Mineral Resource classification is included in Appendix
1 and Appendix 2.
Increase in Yaoure's total Mineral Resource estimate
With 6.8 million ounces of Mineral Resources, Yaoure is the
largest gold development project in West Africa. Amara's total
resources have increased to 9.6 million ounces, which represents
the largest resource base of any London-listed junior gold mining
company.
Today's Mineral Resource estimate represents an increase of
485,000 ounces compared to the estimate released in September 2014,
with 65% included within the higher confidence Indicated category.
It is from these Mineral Resources that Mineral Reserves can be
defined.
The Mineral Resource estimate is reported above a 0.5g/t cut-off
and constrained within an open pit shell derived using a long term
gold price of US$1,500 per ounce. The project is robust at higher
cut-off grades as demonstrated in the table below.
Yaoure Mineral Resource estimate within a US$1500 per ounce pit
shell, including cut-off grade sensitivity, as of 5 January
2015
Indicated Inferred
-------- -------------------------- --------------------------
Cut-Off Tonnes Grade Content Tonnes Grade Content
g/t (Mt) (g/t) (Koz) (Mt) (g/t) (Koz)
Au
-------- ------- ------- -------- ------- ------- --------
0.5 106.3 1.29 4,416 63.0 1.19 2,405
-------- ------- ------- -------- ------- ------- --------
0.8 62.5 1.75 3,526 37.4 1.57 1,883
-------- ------- ------- -------- ------- ------- --------
1.0 46.7 2.05 3,070 26.9 1.83 1,580
-------- ------- ------- -------- ------- ------- --------
Notes
1. The effective date of the Yaoure Mineral Resource estimate is
5 January 2015, prepared by Mario E Rossi, GeoSystems
International, Inc.
2. The gold price used in the Mineral Resource estimate is
US$1,500/oz, assuming an open pit mining scenario, processing via
tank leaching. Pit slopes are 44 in oxide, 53 in sulphide.
Recoveries have been assumed at 90%. Pit Optimisation was completed
by A. Wheeler for all prices shown here.
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 low selectivity envisioned in an open pit
operation, assuming 10m bench heights.
The Mineral Resource update is NI 43-101 compliant and a
technical report will be published on Amara's website within 45
days of today.
63% increase in Indicated Mineral Resources at Yaoure
The objective of the 2014 Yaoure drilling programme was to
upgrade the most economic part of the Mineral Resource defined in
December 2013, which was primarily Inferred, to the higher
confidence Indicated category. The 2014 drilling campaign, which
was conducted between April and October 2014, saw a total of
85,574m drilled (including 2,957 metres of geotechnical drilling).
This reduced the average sample spacing from 100m to 50m across the
Yaoure deposit. The Indicated portion of the deposit contains the
highest grade areas and will form the basis for Mineral Reserves.
From these, Amara will deliver a PFS for Yaoure, which is expected
in March 2015.
The Yaoure deposit now contains 4.4 million ounces of gold
within the Indicated category (106.2Mt at 1.29g/t). The Mineral
Resource remains strong at higher cut-off grades, with 3.1 million
ounces (46.7Mt at 2.05g/t) above a 1.0g/t cut-off grade in the
Indicated category. This significant upgrade in categorisation of
Mineral Resources substantially de-risks the Yaoure deposit and
increases Amara's confidence in it.
Mineral Resource remains robust in lower gold price pit
shells
Amara used pit shells priced at US$800 per ounce and US$950 per
ounce as the basis for the different scenarios of the PEA released
in March 2014. Following today's Mineral Resource update, these pit
shells remain robust, with almost 80% of contained gold within the
Indicated category.
Yaoure Mineral Resource estimate within a US$950 per ounce pit
shell, including cut-off grade sensitivity, as of 5 January
2015
Indicated Inferred
-------- -------------------------- --------------------------
Cut-Off Tonnes Grade Content Tonnes Grade Content
g/t (Mt) (g/t) (Koz) (Mt) (g/t) (Koz)
Au
-------- ------- ------- -------- ------- ------- --------
0.5 64.8 1.48 3,079 20.2 1.28 831
-------- ------- ------- -------- ------- ------- --------
0.8 42.4 1.92 2,620 14.1 1.55 706
-------- ------- ------- -------- ------- ------- --------
1.0 33.9 2.18 2,377 10.5 1.78 602
-------- ------- ------- -------- ------- ------- --------
Yaoure Mineral Resource estimate within a US$800 per ounce pit
shell, including cut-off grade sensitivity, as of 5 January
2015
Indicated Inferred
-------- -------------------------- --------------------------
Cut-Off Tonnes Grade Content Tonnes Grade Content
g/t (Mt) (g/t) (Koz) (Mt) (g/t) (Koz)
Au
-------- ------- ------- -------- ------- ------- --------
0.5 50.7 1.57 2,560 15.6 1.35 676
-------- ------- ------- -------- ------- ------- --------
0.8 35.2 1.98 2,241 11.7 1.58 595
-------- ------- ------- -------- ------- ------- --------
1.0 28.8 2.22 2,058 8.9 1.80 513
-------- ------- ------- -------- ------- ------- --------
Notes
1. Mineral resources calculated using the same basis as
US$1,500/oz pit shell - see notes above.
In addition, there remains significant exploration upside
potential at Yaoure. The 2014 drilling campaign identified three
North-South structures within the Yaoure Central Zone, which are
parallel to the CMA zone and are seen to have similar alteration
suites and mineralisation. The most westerly of these structures
(Y3) was recorded in the intercepts from the deepest boreholes on
the western margin of the Yaoure Central pit and the projection to
surface has been the site of artisanal activity. Only limited near
surface testing of this structure has been carried out and it
remains a target for future exploration. There is also potential to
upgrade further Inferred Mineral Resources to the Measured and
Indicated categories due to the presence of near surface Inferred
resources in the US$950 per ounce and US$800 per ounce pit
shells.
Next Steps
Amara is on track to deliver a PFS for Yaoure in March 2015 with
work underway on all elements including an extensive metallurgical
test work programme focused on confirming Yaoure's recovery rate,
reagent consumptions and comminution requirements.
The PFS will be based on the results of this Mineral Resource
update and the metallurgical test work, and will take into account
the excellent existing infrastructure at Yaoure, which has a
positive impact on upfront capital costs and operating costs. In
addition, maiden Mineral Reserves for the sulphide zone at Yaoure
will be reported.
Background on Yaoure Gold Project
Amara delivered a Preliminary Economic Assessment for Yaoure in
Q1 2014. It demonstrated:
-- Yaoure has the potential to be one of the top 10 gold mines
in Africa by production and top 50 in the world
-- Forecast average production of 325,000 ounces per annum over
a 12 year mine life and all-in sustaining costs of US$691 per
ounce
-- Headline 8Mtpa scenario delivers an IRR of 32% at a gold
price of US$1,250 per ounce and an NPV of US$688 million (8%
discount rate)
-- Yaoure is one of the few development projects in West Africa
that remains resilient at low gold prices, with an IRR of 23% at
US$1,100 per ounce
-- The project is flexible and delivers similarly strong returns
over a range of alternative throughput scenarios
The compelling economics are driven by the excellent existing
infrastructure in Côte d'Ivoire, with low cost hydro-electric power
from the Kossou dam (5km from site) and a tarred dual carriageway
to within 40km of site.
For more information please contact:
Amara Mining plc
John McGloin, Chairman and Chief Executive
Officer
Pete Gardner, Finance Director
Katharine Sutton, Head of Investor +44 (0)20 7398
Relations 1420
Peel Hunt LLP
(Nominated Adviser & Joint Broker)
Matthew Armitt +44 (0)20 7418
Ross Allister 8900
GMP Securities Europe LLP
(Joint Broker)
Richard Greenfield +44 (0)20 7647
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 Company 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 the Company progresses it through to
Pre-Feasibility Study and Bankable Feasibility Study. At Baomahun,
this will be achieved by gaining an improved understanding of the
exploration upside potential and underground opportunity. With its
experience of bringing new mines into production, Amara aims to
further increase its production profile with highly prospective
opportunities across both assets.
The RC and DD drilling programmes at Yaoure were undertaken by
two independent drilling contractors. 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 are
being carried out at ALS Geochemistry in Johannesburg, South Africa
and Vancouver, Canada. The laboratories used are independent of the
Company.
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.
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. He has reviewed and
approved the relevant technical information relating to the
resource estimates in this release. Mr. Wheeler (Fellow IOM(3) ,
C.Eng) is an Independent Mining Consultant.
Appendix 1: Yaoure's Geology
Yaoure is a structurally controlled, mesothermal,
quartz-carbonate vein-style gold deposit hosted by Early
Proterozoic (Birimian) basaltic metavolcanics, granodiorite
intrusions and subvolcanic intrusive rocks, at greenschist facies
metamorphic grade.
The North-South trending CMA mineralisation is a discrete
continuous body, on average 13m thick, within a 20m to 45m wide
brittle-ductile shear zone, dipping between 24 degrees and 30
degrees to the east. The North-South trending Yaoure Central
mineralization is a 200m (150-250m) thick zone, approximately 140m
(70-220m) below the CMA zone, dipping at approximately 30 degrees
to the east. The Yaoure Central mineralisation reaches its peak
under the Yaoure Central pit where the moderately dipping Yaoure
Central zone intersects a subvertical N-S trending granodiorite
stock. The principal mineralised zones at both Yaoure Central and
in particular at CMA, are centred on low-angle, brittle-ductile,
reverse shear zones which acted as first-order conduits for
hydrothermal fluid flow.
Appendix 2: Mineral Resource Classification
The Yaoure Mineral Resource classification was developed in two
stages:
1. The conditions for Measured, Indicated, and Inferred
categories were defined based on the data spacing, the geologic
model, and the amount of information used to estimate each block.
These criteria were expressed in simple terms, such as the number
of holes and composites required to exist within specific distances
and orientations for each category.
2. The classification was implemented through the estimation
passes aided by other algorithms applied on the block model that
reflect the criteria defined in the previous step.
Appendix 3: Resource Estimation Parameters
1. The estimates of Mineral Resources were calculated in
accordance with the definitions adopted by the Canadian Institute
of Mining Metallurgy and Petroleum ("CIM") and incorporated into NI
43-101. The Mineral Resource estimate was carried out by Mario
Rossi of GeoSystems International, Inc.
2. Block model preparation and resource estimation has been
completed using Datamine and GSLib. One-metre primary samples were
used to define mineralised outline wireframes, whilst two-metre
down hole composites were used for statistical analysis,
variography and resource estimation. High grade capping depended on
the estimation method used.
3. Resource estimation has been completed using a combination of
Multiple Indicator Kriging (MIK), Indicator-modified Ordinary
Kriging, and Inverse Distance Cubed, depending on the estimation
domain. Bulk density has been estimated into the block model using
Ordinary Kriging.
4. Ounces represent estimated gold content present in the tonnes
of material which would be mined and processed once they are
converted to a Mineral Reserve. Mining recovery, dilution and mill
recovery rates have not been applied in calculating the contained
ounces.
5. In accordance with the guidelines set out by the CIM and
contained within NI 43-101, this Mineral Resource estimate for the
Yaoure property uses a 0.5 g/t Au cut-off and a US$1,500/oz Au
"Resource Pit" to represent that portion of the resource which has
"reasonable prospects for economic extraction" from an open pit
mining scenario. The open pit mining scenario considers that both
oxides and sulphides assuming a Carbon-in-Leach process plant
economics. Pit slopes are 44 in oxide, 53 in sulphide; and
metallurgical recoveries have been assumed at 90%. The pit
optimisation was carried out by Adam Wheeler, Independent Mining
Consultant.
6. Amara's attributable portion of the Mineral Resource estimate
is 100%, although on development the Government of Côte d'Ivoire
will be entitled to a 10% free carried interest.
7. The classification methodology used was based on a
combination of drill density, data quality, and evaluations of the
statistical and spatial characteristics of the gold
mineralisation.
8. 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.
An "Indicated Mineral Resource" is that part of a Mineral
Resource for which quantity, grade or quality, densities, shape and
physical characteristics are estimated with sufficient confidence
to allow the application of Modifying Factors in sufficient detail
to support mine planning and evaluation of the economic viability
of the deposit. Geological evidence is derived from adequately
detailed and reliable exploration, sampling and testing and is
sufficient to assume geological and grade or quality continuity
between points of observation. An Indicated Mineral Resource has a
lower level of confidence than that applying to a Measured Mineral
Resource and may only be converted to a Probable Mineral
Reserve.
A "Measured Mineral Resource" is that part of a Mineral Resource
for which quantity, grade or quality, densities, shape, and
physical characteristics are estimated with confidence sufficient
to allow the application of Modifying Factors to support detailed
mine planning and final evaluation of the economic viability of the
deposit. Geological evidence is derived from detailed and reliable
exploration, sampling and testing and is sufficient to confirm
geological and grade or quality continuity between points of
observation. A Measured Mineral Resource has a higher level of
confidence than that applying to either an Indicated Mineral
Resource or an Inferred Mineral Resource. It may be converted to a
Proven Mineral Reserve or to a Probable Mineral Reserve.
The above definitions of "Mineral Resource", "Inferred Mineral
Resource", "Indicated Mineral Resource", and "Measured Mineral
Resource" conform to CIM Definition Standards - For Mineral
Resources and Mineral Reserves, as prepared by the CIM Standing
Committee on Reserve Definitions, and adopted by CIM Council on May
10, 2014, and as required by National Instrument 43-101, Standards
of Disclosure for Mineral Projects, of the Canadian Securities
Administrators.
This information is provided by RNS
The company news service from the London Stock Exchange
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