LONDON (Alliance News) - Amara Mining PLC Wednesday stopped mining at its Kalsaka/Sega gold mine in Burkina Faso and put the operation into liquidation ahead of its planned timetable, after default notices from the mining contractor on site.
The West Africa-focused gold mining company was due to begin the closure of its two subsidiaries in Burkina Faso in the fourth quarter, ahead of its scheduled cessation of production in the first quarter 2015.
However, a default notice to its local subsidiary in Burkino Faso, Seguénéga Mining SA, from BCM International, the mining contractor at Kalsaka/Sega, brought the process forward.
Amara Mining said that while the default notice accelerates the process, it does not represent a material change to the company's strategy for Kalsaka/Sega.
The company said processing activities carried out by its subsidiary Kalsaka Mining SA are continuing at the site in the short-term pending the appointment of a liquidator for Seguénéga Mining.
Amara Mining added that as a consequence of the company's transition from producer to developer status, Peter Spivey has resigned from his position as chief executive officer with John McGloin, the company's current chairman, becoming chief executive and chairman.
The company will become an explorer and developer and stop producing as it develops the Yaoure gold project in the Ivory Coast towards production.
Amara Mining said that, despite the changes, it remains focused on delivering two mineral resource updates for Yaoure in the second half and a preliminary feasibility study for the first quarter 2015, with its current activities still on track.
The company separately announced on Thursday that it has seen positive further drill results from its 2014 in-fill drilling programme at the Yaoure gold project.
Amara said the latest results continue to confirm the continuity of the deposit and the moderate grade nature of the Yaoure central zone, with localised strong grades, and the high grade nature of the CMA zone.
Results include a 31 metre space at 3.58 grams per tonne from 192 metres depth in the central zone and a 6 metre space at 6,76 grams per tonne from 169 metres depth at the CMA zone.
The news comes following a set of positive results from the Yaoure drilling programme in recent months, opening up the potential to expand its 6.3 million ounce resource base at the site, with a significant portion of waste expected to be converted into mineralised material.
On Wednesday the company also confirmed that it remains unaffected by the Ebola virus outbreak in West Africa. There have been no confirmed cases of the virus in Ivory Coast and Burkina Faso, and the company's Baomahun project in Sierra Leone is currently in an evaluation phase so is also not affected.
Amara Mining shares were down 12% to 17.00 pence, putting it amongst the top ten AIM All-Share fallers on Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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