Amara Mining plc (AIM:AMA)(TSX:AMZ), the dual AIM and TSX-listed West African focused gold mining company, is pleased to announce the production results for its Kalsaka Gold Mine ("Kalsaka") in Burkina Faso.
Peter Spivey, Chief Executive Officer of Amara, commented:
"2012 was a defining year for Amara, with transformation across the Company. We are pleased to begin the New Year by announcing that our revised FY2012 production guidance has been met, despite challenging conditions in Burkina Faso, and we look ahead to uninterrupted production in 2013 as the Sega project comes online. With a resource update expected for Yaoure in Q1 and the feasibility study for Baomahun anticipated later in H1, we will move closer to our goal of becoming a mid-tier producer."
Kalsaka generated strong cashflow in 2012 and coupled with the US$20 million unhedged debt facility from Samsung C&T Corporation, Amara ended the year with a record US$36.2 million in cash and liquid assets. This represents a 10% increase on 2011 (US$32.9 million) and a 59% increase on 2010 (US$22.7 million).
Although annual gold production was weaker than in 2011, reflecting Kalsaka's approach to the end of its minelife and an unusually heavy wet season in Burkina Faso, the average headgrade of the ore processed in 2013 is expected to strengthen as material from Sega becomes available and as the higher grade transitional ore is processed at Kalsaka. The trucking of material at Sega is expected to commence in mid-2013, before Kalsaka's remaining reserves are exhausted, ensuring production continues uninterrupted. The environmental permit for Sega is expected to be received from the Burkina Faso government in Q1 2013, although management recognises this is an aggressive timeline given the recent change of government following elections in Burkina Faso in December 2012. It is anticipated that the mining licence will be received shortly after the environmental permit.
Amara expects to continue to generate robust cashflow in 2013 and full year production guidance from Kalsaka/Sega is 50,000-60,000 ounces.
Exploration at the Kalsaka-Sega complex is a primary focus for Amara. Exploration work on the Kalsaka permit in 2012 focused on areas east of the existing K-zone pits along the K-zone shear structure at the Zoungwa and Z-R prospects. Following this work, additional resources were defined and have been included in Kalsaka's mine plan for 2013.
Although these resources have a lower headgrade than the remaining Kalsaka reserves, they will provide a two month extension to Kalsaka's minelife, further assisting a smooth handover to the processing of material from Sega.
Drilling results received to date from the Sega licence give confidence that there is further upside potential to Sega's current resources, with encouraging intercepts logged at the Touli prospect. This upside potential adds further confidence that production will continue at the Kalsaka/Sega complex until production commences at Baomahun, which is expected in H2 2015. Amara intends to delineate additional resources from Touli and include them in Sega's mine plan. Although this may increase the timeline until the mine plan is complete, management believes Sega's value will be best realised through a thorough understanding of the project's mine life.