Amara Mining plc, the dual AIM and TSX-listed West African focused gold mining company has announced the results of its Feasibility Study (“FS”) for its 100% owned Baomahun Gold Project in Sierra Leone which outlines a robust and economically viable project. According to the study the Baomahun Project is expected to generate a post-tax Internal Rate of Return (“IRR”) of 22% and a post-tax NPV of US$127 million at a discount rate of 8% and a gold price of US$1,350/oz whilst the Life of mine (“LOM”) average total cash costs of US$799 per ounce (inc. royalty and refining)
The Maiden Mineral Reserve defined for Baomahun of 1.21 million ounces (23.3Mt at 1.62g/t) at a gold price of US$1,100oz. Amara Mining intends to immediately investigate the recommendations generated by the FS to optimize capital intensity, initial capital outlay and payback period.
The FS is based upon an open pit operation with a mine life of 11.5 years and a processing capacity of 2 million tonnes per annum (“Mtpa”) through a conventional carbon-in-leach (“CIL”) plant.
Average production is expected to be 148,550 ounces per annum over the first six years at 2.53g/t head grade, with production of 203,970 ounces at 3.90g/t in the first year generating strong cash flow.
Peter Spivey, Chief Executive Officer of Amara, commented that “the Feasibility Study has demonstrated the economic strength of the Baomahun Gold Project. We intend to maximize the opportunity for further upside through optimisation which, in light of the current poor equity valuation environment and uncertainty over the outlook for the gold price, is a prudent strategy and in keeping with our approach of lowering risk.
This work he said will focus on opportunities highlighted by the FS including enhancing capital intensity, reducing initial capital outlay and shortening the payback period for Baomahun through exploring scenarios for a smaller plant and higher grade open pit, an earlier underground phase and hydro-electric power. We expect this to demonstrate an even more robust and deliverable project. He added
“Having proven the viability and value of Baomahun, we will now begin discussions with our partner, Samsung, and other interested parties with regards to funding the development in a non-dilutive fashion. The delivery of the Baomahun FS is an important step in demonstrating the intrinsic value in the Company’s portfolio of assets.”
It is estimated that Average gold production of 148,550 ounces per annum over the first six years at an average grade of 2.53g/t, with production of 203,970 ounces in the first year at 3.90g/t. Probable Reserves of 1.21 million ounces (23.3Mt at 1.62g/t) at a gold price of US$1,100 per ounce and Average recovery of 93.4% through a 2 Mtpa processing plant incorporating single stage crushing, SAG milling and a CIL circuit
The Project is fully permitted with a Mining Lease granted on 11 July 2008 for a period of 25 years and an Environmental Permit granted on 19 April 2012 with a financial Post-tax IRR of 22% and NPV of US$127 million at an 8% discount rate and a US$1,350 per ounce gold price.
A Strategic alliance with Samsung C&T Corporation (“Samsung”) with the potential to provide cornerstone financing for Baomahun project, capable of satisfying a significant portion of the total Baomahun financing needs
When contacted the Country Manager of Cluff Gold Sierra Leone Alusine Jalloh said that the company has completed exploration operations within the Baomahun Concession area after several years and believes there is huge gold potential for mining operations.
He said according to the feasibility study of the exploration there is maximum deposit of gold within the Cluff Gold concession area and the company is determined to commence mining after the completion of negotiations with the government for a mining lease agreement.
He said two major events occurred this year that resulted in staff reduction. The first was the completion of exploration work within the Baomahun concession area and the second was the sharp decline of the price of gold world-wide. Those two happened almost at the same time and hence the company was forced to reduce its workforce.
The Country Manager of Cluff Gold also said that despite the slump in the price of gold around the world, which seriously affected the company’s operations in Burkina Faso, “we remain committed and determined to start mining gold at Baomahun.”
He expressed gratitude to the local community for supporting Cluff Gold operations over the years within the Valunia Chiefdom and assured them of continuous collaboration for a successful investment that will create foreign direct investment for economic growth and sustainable development of the country.
Friday September 06, 2013
Figure 3. Impact on Gross Domestic Product of the SARS epidemic depending on whether economic decision-makers expect the risk of the disease to vanish or to persist. (Source: Lee and McKibbin) Click image for larger version.
Cluff Gold Sierra Leone, a (subsidiary of Amara Mining plc that is listed on the London Stock Exchange), [owner-operator of the Baomahun gold mine] 
Amara Mining plc, the dual AIM and TSX-listed West African focused gold mining company has announced the results of its Feasibility Study (“FS”) for its 100% owned Baomahun Gold Project in Sierra Leone which outlines a robust and economically viable project. According to the study the Baomahun Project is expected to generate a post-tax Internal Rate of Return (“IRR”) of 22% and a post-tax NPV of US$127 million at a discount rate of 8% and a gold price of US$1,350/oz whilst the Life of mine (“LOM”) average total cash costs of US$799 per ounce (inc. royalty and refining)