AMN - COTE D’IVOIRE: Yaoure will deliver exceptional results

Amara Mining’s optimised prefeasibility study for its 100% owned Yaoure gold project in Côte d'Ivoire will deliver exceptional results.

“On first glance the optimised prefeasibility study results look very encouraging with the focus placed on a smaller, higher grade mine plan. The result is a 25% cut in upfront capex and a 153% increase in NPV at $1200/oz gold. It’s still a big project for a company of AMA’s current size, but based on these new economics it should attract interest from investors and the industry itself,” says Cantor Fitzgerald.

Highlights of the study are:

-          Optimised prefeasibility study confirms Yaoure is a compelling gold development project in the current capital constrained market environment

-          Based on the updated Mineral Reserve estimate announced on 25 January 2016, the optimised prefeasibility study successfully delivers an increased head grade, reduced upfront capital cost and robust economics at a conservative gold price

-          Optimised prefeasibility study, based on a smaller 4.5 million tonnes/year processing plant, achieves significant improvements when compared with Prefeasibility Study key metrics

-          Post-tax IRR of 38% and post-tax NPV of $555 million based on a discount rate of 8% and a gold price of $1200/oz

-          Project remains strong at a gold price of $1000 with a post-tax IRR of 25% and a post-tax NPV of $281 million

-          Average annual production of 248,000 oz in years 1-5 and average annual production of 203,000 oz over a 15 year life of mine from a single open pit containing 3.2 Moz

-          Average head grade processed of 1.62 grams/tonne based upon Mineral Reserve estimate announced on 25 January 2016

-          Upfront capital cost of $334 million, including $44 million contingency and $60 million for an owner-operated mining fleet

-          Life of Mine average total cash cost (including royalties and refining) of $618/oz and average all-in sustaining cost (AISC) of $667/oz

-          Payback period of 2.1 years with mining throughout this period focused on the higher grade, continuous CMA zone where 72% of Yaoure's Proven Mineral Reserves are located.

Amara chairman and CEO John McGloin says: "I am delighted to be able to deliver materially improved economics for our Yaoure gold project, including a 100% increase in the project's IRR at a $1200/oz gold price. The optimised prefeasibility study has achieved both of our key objectives for Yaoure: to significantly increase the average head grade going to the processing plant and to significantly decrease the upfront capital cost.

“As a result of the higher grade, Yaoure's strong production profile is maintained despite using a smaller processing plant, with average production of 248,000 oz in years 1-5 of the mine's life. The reduced capital cost is also better tailored to the current capital constrained market environment.

"Yaoure's other metrics have also improved substantially, cementing Yaoure's position as one of the few gold development projects that achieves an IRR of 25% at a $1000 gold price. Due to the excellent existing infrastructure of Côte d'Ivoire, it benefits from exceptionally low operating costs and we expect Yaoure to be among one of the lowest cost, largest new gold mines in Africa. We are completing work to confirm that 4.5 Mt/y is the optimal processing plant size in light of the significant reduction in the cost estimates we received during the optimisation work and I expect the results to further highlight the exceptional economics and versatility of the Yaoure Gold Project."

www.amaramining,com

News courtesy of International Mining