Amara (formerly Cluff Gold plc), the dual AIM and TSX-listed West African focused gold mining company, has announced the results of the Preliminary Economic Assessment (“PEA”) and an exploration update for its Sega Gold Project (“Sega”) in Burkina Faso. A technical report supporting the results of the PEA will be filed on SEDAR within 45 days the company said on Tuesday.
The PEA prepared by Richard Quarmby, Group Project Manager of Amara with the input of three independent contractors: SENET, SRK and Digby Wells Environmental “confirmed” the potential viability of mining oxide and transitional material at Sega, located 20km north of Kalsaka, and transporting its existing heap leach operation at the Kalsaka Gold Mine (“Kalsaka”) for processing.
Company also intends to maintain cash flow as a key priority and with Sega’s resources located 20km north of Kalsaka, production Amara stated further is “expected to continue in Burkina Faso to help fund Amara’s development pipeline (Baomahun and Yaoure) and ensure that the Company maintains its status as a gold producer”.
The company reported an internal rate of return (“IRR”) of 48%, with a post-tax net present value (“NPV”) of US$49.5 million using a gold price of US$1,500 per ounce and a discount rate of 10%. The Sega asset contained gold of 162,825 ounces over the 21 month initial mine life with Cash cost per ounce produced excluding royalties indicated at US$821 per ounce. Sega’s Mining licence expected to be received in Q1 2013 and mining at Sega anticipated to commence in H1 2013.
Drill results to date confirm potential for substantial upside to current Sega resources the company disclosed, with significant intercepts at the Touli prospect on the Sega licence area include; 26m at 3.05g/t from 8m in hole SRB0232, 26m at 2.14g/t from 24m in hole SRC0119, 18m at 3.49g/t from 18m in hole SRB0290. Exploration also continues at Kalsaka, with encouraging results received at the Rondo, Zoungwa and ZR prospects.
Peter Spivey, Chief Executive Officer of Amara said:”The delivery of the Sega PEA is a key step in ensuring that cash flow is maintained at our producing mine Kalsaka. The resources at Sega, which are located within trucking distance of our existing plant, will significantly increase Kalsaka’s mine life with limited capital investment required. In addition, the exploration results received from the Kalsaka-Sega complex have confirmed that there is significant upside resource potential. Amara is committed to its strategy of using its cash flow to develop its growth assets, providing flexibility to the Company as it grows into a mid-tier producer.”
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