Amara Mining reveals significant drill results from Yaoure

Amara Mining, an Ivorian gold mining firm has revealed ‘significant’ results from the Yaoure project in Cote d'Ivoire. 

Amara says the results have, so far, confirmed the potential for a large moderate grade sulphide deposit. This mineralisation lies beneath the previously mined oxide resources.

It revealed that 90 holes have been drilled and all of them have encountered mineralisation.

The highlight results had significant intercepts with lengths of between eight and 28 metres with grades ranging from 3.24 to 9.47 grams per tonne gold.

Amara is on-target to complete an update for Yaoure’s inferred resource in the first quarter of next year. Also, a new exploration campaign is planned to continue step-out drilling to get a better understanding of the area’s prospectivity.

“These latest drilling results from Yaoure continue to confirm our belief in the project's potential,” said its chief executive, Peter Spivey.

“We expect the remaining assays in the coming days and we intend to update our sulphide resources in Q1 2013.

“By using our cash flow 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.”

Asa Bridle, analyst at City broker Seymour Pierce, said the drill results were positive but he reckons the market is mainly waiting for news of the Baomahun project in Sierra Leone, where a feasibility study is due next year.

Westhouse Securities meanwhile repeated its ‘buy’ recommendation and 124p a share price target following this morning’s encouraging announcement.

“The next step for the company is to undertake some metallurgical test work, to verify the anticipated non-refractory nature of the mineralisation, before releasing an initial inferred resource in Q1 2013,” analyst Rob Broke said in a note.

“During this process Amara will continue with step-out drilling and various geological surveys on the project in order to get an understanding of the scale of the deposit and the prospectivity of the surrounding region.

“We anticipate that this work will highlight Yaoure’s potential to host a stand-alone project in the long-term.” 

The Yaoure project is located on the site of a past producing mine where 2.9mln tonnes of oxide ore was mined with an average grade of 3.9 grams per tonne. The mine closed in 2003.

Amara currently operates the maturing Kalsaka gold mine in Burkina Faso, and a new project to bring on the Sega project will extend the life of that operation.

But the flagship project is Baomahun. This 2.24mln ounce gold mine development project promises to dramatically increase the scale of Amara’s production which is expected to be more than double, up to 140,000.