LONDON (Alliance News) - Amara Mining PLC Tuesday said its pretax loss narrowed in 2014 on reduced costs and no impairments, and said it is fully funded until 2016 as it continues to advance its flagship Yaoure gold project in the Ivory Coast.
The gold miner with operations in Sierra Leone, Burkina Faso and in the Ivory Coast reported a pretax loss of USD7.9 million for the year ended December 31, compared to a USD11.2 million loss in 2013. The narrower loss resulted from the company making fewer impairments in the period whilst reducing costs.
General and administrative costs fell to USD5.9 million from USD7.8 million and financing costs dropped to USD838,000 from USD1.1 million. These were partially offset by other operating costs increasing to USD1.2 million from none the year before. Amara did not record any impairments in 2014 compared to USD2.6 million in impairments in 2013.
Amara reported a cash balance of USD2 million as at the end of December. It said it is fully funded through to the first quarter of 2016, including the delivery of a bankable feasibility study for the Yaoure gold project in the Ivory Coast, which should be completed in December 2015.
During the year, Amara transferred its attention from the Kalsaka/Sega mine in Burkina Faso to the Yaoure gold project.
"2014 marked an important transition for Amara with the closure of the Kalsaka/Sega mine in Burkina Faso and the emergence of Yaoure as the group's flagship development project. With the under-performance of Kalsaka/Sega in 2013 and 2014, driven by the weakening gold price, the closure represents a simplification of the group, and it allows management to focus on the true value within the development assets," Amara said.
The company said the focus in 2015 is to advance the Yaoure gold project through to a construction decision, and it plans to explore the potential upside of the project throughout the year.
The company will conduct closer spaced drilling, which could increase the total gold content, it said, targeting previously highlighted areas of the current block-model defined as waste where gold mineralisation may be present. The closer spaced drilling also is expected to upgrade a portion of the indicated resources to the measured category, Amara said.
In 2014, the company's drilling programme defined new structures at depth in the Yaoure deposit. The company will begin drilling these structures in 2015 which may result in the discovery of additional near-surface ounces, it said.
Amara also has begun a regional target generation programme. Currently, the resource at Yaoure is contained in a small portion of the company's total exploration licenses in the area. The programme will consist of further geological mapping, trenching and soil sampling to identify additional drilling targets with the potential to deliver satellite deposits for Yaoure.
The company had planned to conduct a drilling programme at the Baomahun project in Sierra Leone during 2014, but this was deferred due to the Ebola situation in the country. In 2015, Amara said it will try to gain a greater understanding of the high-grade core of the deposit and to evaluate the potential to grow the 2.8 million ounce mineral resource.
Amara will undertake a "small-scale, low cost drilling programme" which will try to demonstrate greater continuity of the high-grade mineralisation of the deposit, increasing in-pit resources and de-risking the project. However, the company said it will only conduct the drilling programme "if appropriate", dependent on the results from re-logging the core.
Amara said it also will channel its efforts to advancing the case for a smaller, higher grade scenario for the Baomahun project.
"Amara believes that Baomahun has the potential to be a compelling second project for the group. Once Yaoure is in steady state production, it will generate strong cash flow which could be used for the development of Baomahun," said the company.
Amara shares were up 9.7% to 15.50 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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