16 July 2013 AIM:AMA / TSX:AMZ. Amara Mining plc ( Amara or the Company )

Transcription

1 16 July 2013 AIM:AMA / TSX:AMZ Amara Mining plc ( Amara or the Company ) RESULTS OF METALLURGICAL TESTWORK AND FURTHER DRILLING RESULTS FROM YAOURE GOLD PROJECT Amara Mining plc, the dual AIM and TSX-listed West African focused gold mining company, is pleased to announce the results of the second phase of its metallurgical testwork programme and the latest drilling results from the Yaoure Gold Project ( Yaoure ) in Côte d Ivoire. HIGHLIGHTS Yaoure mineralisation is simple and non-refractory, demonstrating strong recoveries Two potential processing routes have been identified: whole ore leach through traditional carbonin-leach ( CIL ) / carbon-in-pulp ( CIP ) and froth flotation Work has commenced to refine both processing routes in advance of the release of the Preliminary Economic Assessment ( PEA ) Hydro-electric power ( HEP ) is available at Yaoure and work will be undertaken to optimise both processing routes on the basis of cheap, readily available power In-fill drilling completed and assays continue to generate encouraging results a further Mineral Resource update is expected to be released in Q4 2013, along with the PEA Peter Spivey, Chief Executive Officer, commented: We are encouraged by the results of the metallurgical testwork which further confirm the potential Yaoure has to become a highly economic mine. In the next few months we will further refine our testwork to evaluate the optimal processing route for Yaoure, weighing the benefits of strong recoveries against the necessity for low capex and opex. Yaoure is one of the most ideally located projects in West Africa, with excellent infrastructure including a HEP station 5km from site. The simple, non-refractory mineralisation adds further strength to the potential of the project and the investment case. We have largely completed our current phase of investment into Yaoure and are now focused on the delivery of a PEA in Q to further demonstrate the project s robust economics. Objective of the Metallurgical Testwork Programme The aim of the metallurgical testwork programme was to understand the leaching kinetics of the mineralised material at Yaoure. The phase one testwork confirmed that the metallurgy is simple and nonrefractory, with a recovery rate through a traditional CIL circuit of over 90%. The aim of the second phase was to identify the optimal processing route for the material, which included comminution testwork together with an analysis of the amenability of the material to heavy medium separation, gravity and flotation. 1

2 Results of Phase Two Testwork The phase two testwork identified three potential processing options: whole ore leach through traditional CIL/CIP, froth flotation and heap leach. Each route offers strong benefits, however there is a trade-off between the expected recovery rate and lower capex/opex. This will be examined in greater detail as part of the PEA. The material demonstrated a recovery rate of 91% through CIP with 80% of the material passing at a grind size of 75 microns, which is the standard starting point when exploring the optimal grind size. This is assisted by the Bond Ball Work Index for the material, which gave a value of 13.9kWh/t. This is relatively low and compares well to other gold projects in West Africa (see Appendix A), which tend to have slightly harder ore that is less friable. In a flotation circuit, preliminary float tests produced a recovery rate of 89% with a mass pull of 1.4%. This means that for every 100 tonnes of material milled, only 1.4 tonnes of material would need to be leached post-flotation, as this small proportion of the material contains 89% of the mineralisation. The further post-flotation intensive leach recovered 91.6% of the gold in flotation concentrate, resulting in an overall gold recovery of 81.4%. Regrinding of the float concentrate has the ability to improve the overall recovery and the Company will undertake further work on this as part of the PEA. While this recovery rate is lower than through traditional CIL, flotation offers significant benefits in terms of capex/opex. While large mills would be needed to grind the material before flotation, the leaching circuit that would treat the concentrate emanating from the flotation circuit could be substantially smaller and cheaper to build and operate than a whole ore CIL/CIP circuit and would require significantly less reagents. In addition, there is the potential to introduce a Gekko In-Line Leach Reactor, which would allow the solution to go directly to the electro winning stage, further reducing the initial capex requirement. It is expected that a gravity circuit would also form part of the eventual processing flowsheet as this will further improve recoveries and lower the operating costs of both processing options. Leach tests were also conducted using 14 day bottle rolls with coarsely crushed material to simulate a heap leach plant. The material was found to have a recovery range of 60-73%, which is in line with similar heap leach recoveries from other sulphide orebodies. The capex/opex for a heap leach plant is expected to be significantly lower than for a CIL/CIP or flotation plant, although at the expense of lower recovery. Next Steps The testwork to date has demonstrated that the Yaoure orebody is flexible and amenable to a number of processing routes. The ultimate processing method will be chosen taking into account the availability of HEP for the project and the other excellent infrastructure, including tarmac roads and an abundant water supply, and the positive impact that this will have on Yaoure s overall economics. Amara has begun work to further refine each processing method in advance of the release of the PEA for Yaoure, which is expected in Q The Company will test the use of different reagents to influence recoveries and explore grind size further. The phase two testwork suggested that a coarser grind is not appropriate for Yaoure as it sacrifices recoveries significantly. However, as coarser grinding has associated power cost savings, Amara will evaluate it further. In terms of the flotation route, the Company will conduct testwork that explores regrinding the float and gravity concentrate as this is expected to improve recoveries. In addition, Amara will test the amenability of lower grade material to each processing route, as the anticipated head grade of the Yaoure material is moderate at g/t i, which is slightly lower than the average grade of the ore tested in the first two phases of the testwork. 2

3 This testwork is expected to be completed during H and the results will further contribute towards the basis of the PEA. Exploration Update Following the delineation of the updated Mineral Resource at Yaoure, which was announced on 25 March 2013 ii, Amara undertook an in-fill diamond drilling campaign to reduce the drill spacing which has now been completed. This drilling programme focused on promoting the mineralisation lying outside the currently defined Inferred Mineral Resource envelope, which covers 40% of the total mineralised volume drilled to date. The results of the first 29 holes of the in-fill drilling campaign were announced on 22 May 2013 iii and the remaining 15 holes have generated further encouraging results, with significant intercepts including: 7.0m at 4.6g/t from 245.0m in hole YDD m at 2.2g/t from 160.0m and 6.0m at 4.7g/t from 191.0m in hole YDD m at 3.8g/t from 203.0m in hole YDD m at 25.5g/t from 64.0m and 10.0m at 5.8g/t from 317.0m in hole YDD m at 13.4g/t from 82.6m in hole YDD m at 3.8g/t from 156.0m in hole YDD0157 The results of all 15 holes are reported in Appendix B and the results of the re-assays will be reported in due course. A further Mineral Resource update is expected in Q For more information please contact: Amara Mining plc John McGloin, Executive Chairman Peter Spivey, Chief Executive Officer Pete Gardner, Finance Director Katharine Sutton, Head of Investor Relations Canaccord Genuity Limited (Nominated Adviser & Broker, London) Andrew Chubb Joe Weaving Tim Redfern Pelham Bell Pottinger (Financial Public Relations) Charlie Vivian James MacFarlane +44 (0) (0) (0) About Amara Mining plc Amara is a gold developer-producer with assets in West Africa. The Company generates cash flow through its Kalsaka gold mine in Burkina Faso, where the production profile has been enhanced by the acquisition of the neighbouring Sega project. Amara remains focused on its objective of becoming a mid-tier producer through the development of its Baomahun project in Sierra Leone and its Yaoure project in Côte d Ivoire. With its experience of bringing new mines into production and a project pipeline spanning three countries, Amara aims to further increase its production profile with highly prospective opportunities across all assets. 3

4 This report includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact included in this report, including, without limitation, the timing of the second Mineral Resource update, the update to the resource grade, the completion of the Preliminary Economic Assessment, future drilling, and future capital plans and objectives of Amara, are forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Amara s expectations include, among others, the Company s ability to delineate sufficient sulphide resources for the development of a CIL/CIP, froth flotation or heap leach operation, risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined as well as future price of gold. Although Amara has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Amara does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws. The diamond drilling programme at Yaoure was undertaken by an independent drilling contractor. Drill cores for assaying were taken at a maximum of two metre intervals, typically one metre, and were cut with a diamond saw with one-half of the core placed in sealed bags for assaying. The core samples were prepared at the Company s sample preparation facility at Yaoure and then sent to Intertek Minerals Ltd in Accra, Ghana for fire assay. The core samples were crushed down to minus 2 mm, with half the sample then being pulverised down to 85% passing 75 microns, prior to analysis for gold by fire assay using a 50 g sample. As part of the Company's QA/QC procedures, internationally recognised standards, duplicates and blanks were inserted. Check assays were carried out at ALS Geochemistry in Johannesburg, South Africa. The laboratories used are independent of the Company. Peter Brown is a Qualified Person within the definition of National Instrument and has reviewed and approved the information contained within this announcement. Dr Brown (MIMMM) is the Group Exploration Manager. Glossary Bond ball work index: Relates power consumption in crushing and grinding to the feed and product size distribution. Carbon-in-leach: A recovery process in which a slurry of gold ore, carbon granules and cyanide are mixed together. The cyanide dissolves the gold content and the gold is absorbed on the carbon; the carbon is subsequently separated from the slurry for further gold removal. Carbon-in-pulp: Similar to carbon-in-leach process, but initially the slurry is subjected to cyanide leaching in separate tanks followed by carbon-in-pulp. Carbon-in-leach is a simultaneous process. Froth flotation: A highly versatile method for physically separating particles based on differences in the ability of air bubbles to selectively adhere to specific mineral surfaces in a mineral/water slurry. The particles with attached air bubbles are then carried to the surface and removed, while the particles that remain completely wetted stay in the liquid phase. "Mineral Resource": A mineral resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth's crust in such form and quantity and of such grade or quality that it 4

5 has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. The above definition of a mineral resource conforms to Canadian Institute of Mining, Metallurgy and Petroleum ( CIM ) definitions as defined in the CIM Standards on Mineral Resources and Reserves - Definitions and Guidelines as required by National Instrument , Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators. APPENDIX A Bond ball work indices of comparable West African gold mines: Gold mine Company Country Bond Ball Work Index Agbaou 1 Endeavour Mining Côte d Ivoire kwh/t Inata 2 Avocet Mining Burkina Faso 17.1kWh/t New Liberty 3 Aureus Mining Liberia kWh/t Sabodala 4 Teranga Gold Corp. Senegal kWh/t Notes 1) Please see Endeavour Mining s technical report entitled Agbaou Gold Mine, Côte d Ivoire NI Technical Report dated 25 May ) Please see Avocet Mining s press release Year end Resource and Reserve Estimate, dated 07 March ) Please see Aureus Mining s technical report entitled New Liberty Gold Project, Liberia, West Africa Technical Report on Updated Mineral Resources and Mineral Reserves dated 22 October Further information on the BBWi of New Liberty is provided here: The hardness of the ore has demonstrated a high degree of variability - from the 13.3kWh/t measured in the MDM phase to the maximum of 22.1 kwh/t measured in the latest work by JKTech in Brisbane, Australia. The following averages were outlined from the 2012 comminution test work: SGS, Johannesburg: The testwork results, done at 106μm and 75μm, gave an average of 15.7 kwh/t for 106μm and 17.5 kwh/t for 75μm respectively JK Tech, Brisbane: The testwork results, done at 212μm and 75μm, gave an average of 16.4 kwh/t for 212μm and 19.2 kwh/t for 75μm respectively 4) Please see Teranga Gold Corp s technical report entitled Technical Report Sabodala Gold Project, Senegal, West Africa dated 07 June

6 APPENDIX B YAOURE DRILLING RESULTS BHID From m To m Interval m Au East North UTM RL UTM UTM Elevation Azimuth Dip EOH Diamond Drill Holes targeting Yaoure Central mineralisation YDD YDD YDD Diamond Drill Holes targeting CMA North mineralisation YDD YDD

7 YDD YDD YDD YDD YDD YDD

8 YDD Diamond Drill Holes targeting CMA Central mineralisation YDD Diamond Drill Holes targeting both CMA Central and Yaoure Central YDD YDD Notes 1) Interval lengths are not true widths. Composite intersections are based on a minimum width of 2m and a cut-off of 0.4g/t gold. Internal dilution of up to 2.00m at less than 0.4g/t has been allowed for continuity 2) Waiting for re-assay 8

9 i Yaoure has Indicated Mineral Resources of 339,000 ounces (8.0Mt at 1.31g/t) and Inferred Mineral Resources of 1,695 ounces (34.6Mt at 1.52g/t). See Technical Report entitled Yaoure Gold Project, Côte d Ivoire, Technical Report and Mineral Resource Estimate for Amara Mining plc dated 09 May 2013 ii See press released entitled Mineral Resource update for Yaoure Gold Project, dated 25 March 2013 iii See press release entitled Q1 Results 2013, dated 22 May