Amara Mining (TSX: AMZ) has increased the gold ounces and grade at its wholly owned Yaoure project in Côte d’Ivoire based on 70 diamond drill holes and 35 reverse-circulation holes drilled so far this year.
“The Yaoure project is emerging as one of Africa’s most promising future gold mines,” analysts at London-based Investec Securities write in a research note. “Financing this project remains a challenge in current market conditions, but ongoing drilling results of higher-grade zones are encouraging that the economics could strengthen.”
The company is fully funded to deliver a prefeasibility study in the first quarter of 2015. A feasibility study is expected before July 2015.
The resource was released on Sept. 29, but the company plans to move part of the inferred pit resource into the indicated category in a resource update due in December, once more assay results come in from the 2014 drill program.
Based on a US$950 per oz. economic pit shell and at a 0.5-gram-gold-per-tonne cut-off grade, the latest resource estimate in the indicated category comprises 50 million tonnes grading 1.45 grams gold per tonne for 2.34 million contained oz. gold, while inferred resources measure 44.9 million tonnes grading 1.50 grams gold per tonne for 2.16 million contained oz. gold.
The global resource (4.5 million oz. averaging 1.5 grams gold per tonne using the US$950 per oz. economic pit shell) represents a 269,000 oz. gold increase at a 5% higher grade than the resource estimate finished in January. (The company also provided resource estimates based on a US$800 per oz. economic pit shell and one based on a US$1,500 per oz. economic pit shell.)
The company says that the project — 50 minutes from Yamoussoukro, the political and administrative capital of the West African nation, and 6 km from a 150-megawatt power station on Lake Kossou — could become one of the top-10 producing gold mines in Africa and among the top 50 in the world.
A preliminary economic assessment (PEA) released earlier this year modelled an 8-million-tonne-per-year operation that would produce an average 325,000 oz. gold a year over a 12-year mine life, at all-in sustaining costs of US$691 per oz.
Yaoure’s geology consists of Birimian metavolcanic greenstones, intruded by a suite of small, mainly granodioritic bodies. The project’s syntectonic gold mineralization is associated with shear zones, injected by quartz veins and stockworks.
In a conference call earlier this year, executive chairman John McGloin called Yaoure “the largest project at the feasibility stage,” and said it would “produce more gold, over a longer period, than any of its peers.”
Yaoure’s upfront development cost would come in at US$274 million, with another US$92 million needed for an owner-operated mining fleet, according to the PEA.
The study demonstrated a 32% internal rate of return (IRR) and a US$688-million after-tax net present value (NPV) at an 8% discount rate, assuming a US$1,250 per oz. gold price. At a US$1,100 per oz. gold price, Yaoure returns a 23% IRR and US$406 million NPV.
Yaoure has a mining licence and environmental permits that could expedite the project’s development timeline.
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