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What: The share price of Amara Mining (LSE: AMA) rose as much as 14% to 25p in early trading this morning following the announcement of “exceptional drilling results” from its Yaoure Gold Project in Côte d’Ivoire.
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So what: Amara is clearly pleased with these results as it only deemed its two previous drilling announcements to be “encouraging” rather than “exceptional”. Highlights from the today’s results included a couple of particularly high-grade sections: 2m at 45.8 g/t (grams per tonne) and 5m at 17.01 g/t.
All the results from Amara’s recent drilling programme will be used to calculate its first Mineral Resource update, which is due next month. Amara said drilling was likely to continue until early October, so that a second Mineral Resource update could be provided in the final quarter of this year.
The new resource figures will then be plugged into the pre-feasibility study for Yaoure that is being targeted for early 2015. Pre-feasibility is one of the major stages all new mines have to pass through before construction can begin.
Now what: Amara, formerly known as Cluff Gold, reckons the current resource for Yaoure is 6.3 million ounces, and it is hoping the two updates soon to be released will increase both the amount of gold and the grade of the resource.
The preliminary economic assessment of the mine’s prospects was that it may be able to produce 325,000 ounces a year, which would catapult it into the top twelve mines in Africa. It would be a few years before this goal is reached, and the fact that Amara recently had to put its Kalsaka/Sega mine in Burkino Faso into liquidation serves as a stark reminder of the risks investors in this sector face.