Amara Mining Regulatory News (AMA)

27 March 2013 AIM:AMA / TSX:AMZ

Amara Mining plc

("Amara" or "the Company")

2012 AUDITED FULL YEAR RESULTS

Amara Mining plc, the dual AIM and TSX-listed West African focused gold mining company, is pleased to announce its audited results for the year ended 31December 2012.

HIGHLIGHTS:

Operational

·; Robust operational results in 2012 - production of 53,544 ounces at Kalsaka despite challenging conditions (total Group production for 2012: 54,925 ounces)

·; Rigorous control maintained on cash costs despite lower grades - US$961 per ounce produced at Kalsaka (excluding royalties)

·; Resource update delivered for the Baomahun Gold Project in Sierra Leone and feasibility study on track for completion in H1 2013

·; Preliminary Economic Assessment for Sega Gold Project delivered and trucking of material expected to commence in Q3 2013

·; Resources at the Yaoure Gold Project increased to 1.7 million Inferred ounces (34.6Mt at 1.52g/t) - further upside potential and second resource update expected in H2 2013

·; 2013 production guidance of 50,000-60,000 ounces maintained and production expected to strengthen in 2014 as Sega reaches steady state

Financial

·; Cash flow from operations of US$23.5 million with good conversion to Group EBITDA (US$24.0 million)

·; Record average realised gold price of US$1,667 per ounce sold

·; Solid financial position - closing cash and liquid assets of US$36.2 million

·; Adjusted EPS of 2.56c/share excluding exceptional items relating to exploration in Mali and regional exploration in Burkina Faso (Basic EPS: -0.22 c/share)

Corporate

·; Strategic partnership formed with Samsung C&T Corporation to provide potential framework for the long-term funding of Baomahun, plus other development opportunities

·; Board, management team and operational team strengthened, including appointment of John McGloin as Executive Chairman

Peter Spivey, Chief Executive Officer of Amara, commented:

"2012 was a year of significant investment for Amara, in both our assets and our people, and we have never been better positioned to deliver on our growth plans. We reached a number of key milestones and we ensured that production will continue at our Kalsaka/Sega mine in Burkina Faso, underpinning the development of our other assets. In 2013 we expect to unlock the value as a result of our investment, as we deliver the feasibility study for Baomahun and a further resource update for Yaoure, and move closer to our goal of becoming a mid-tier producer."

Management Conference Call

The Company will host a briefing for analysts at 9:30am UK at the offices of Pelham Bell Pottinger, 5th Floor, Holborn Gate, London, WC1V 7QD. A conference call and webcast will be held simultaneously. Dial in details are as follows:

Telephone number (toll free from UK): 0800 634 5205

Other parts of the world: +44 (0) 208 817 9301  

Passcode: 10325120

To log into the webcast please go to the homepage of the Company's website: www.amaramining.com. The webcast will subsequently be available for playback on this link.

A second conference call will be hosted at 9:30am EDT/2:30pm UK time for North American analysts. Dial-in details are as follows:

Canada 1866 404 5783

USA 1866 928 7517

Other parts of the world +44 (0)203 139 4830

Participant PIN Code: 96233843#

For more information please contact:

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE

About Amara Mining plc

Amara (formerly Cluff Gold plc) is a gold developer-producer with assets in West Africa. The Company generates significant cash flow through its Kalsaka gold mine in Burkina Faso, where the production profile has been enhanced by the recent acquisition of the neighbouring Sega project. Amara remains focused on its objective of becoming a mid-tier producer through the development of its Baomahun project in Sierra Leone and its Yaoure project in Côte d'Ivoire. With its experience of bringing new mines into production and a project pipeline spanning Burkina Faso and Côte d'Ivoire, Amara aims to further increase its production profile with its highly prospective exploration work across all assets.

CHAIRMAN'S STATEMENT

It is a pleasure to present my first Annual Report as Executive Chairman and also the first Annual Report for the newly named Amara Mining plc. 2012 was a year of significant investment for our Company across our assets and our people as we reached a number of key milestones and strengthened our team at all levels. We expect to reap the benefits of this investment by delivering growth in a robust, sustainable way throughout 2013. This investment has lowered the risk profile and bolstered the potential returns from Amara's pipeline of projects.

We closed the year with US$36.2 million in cash and liquid assets and no hedging, including the US$20 million debt facility from our long-term partner Samsung, which provides us with significant strategic flexibility to grow our Company. Although production at Kalsaka was slightly lower than anticipated at the start of the year (53,544 ounces), the integration of the Sega project with Kalsaka in mid-2013 is expected to deliver production growth and to continue to provide us with a robust cash engine to develop our business in the years ahead.

At our growth assets we completed the resource upgrade at Baomahun in November 2012 and our feasibility study remains on track for release in Q2 2013. At Yaoure our exploration programme has defined the footprint of a large-scale sulphide resource and the on-going infill drilling programme is expected to further define the recently announced resource later this year.

Market Outlook

Gold continued to dominate the headlines in 2012, although it did not reach the record levels experienced in September 2011. The global macroeconomic backdrop continued to be characterised by weakness, with the global easing of monetary policy, as well as large fiscal deficits, pointing to inflation and a depreciating US dollar in the long term. These conditions have lead to strong demand for gold, which is viewed as a hedge against inflation and has historically been inversely correlated to the US dollar. We continue to be positive on the long-term demand fundamentals for the precious metal as global growth remains subdued and Governments continue to attempt to revive their economies through inflation and monetary easing. 

Gold's outperformance in recent years has mirrored to some extent the rise in other commodities and thus an increase in input costs for the sector. The result of this has been that margins have been contained, or in some cases eroded, and the increase in the price of gold has not been matched by the performance of gold equities. As an industry we have failed to adequately convey this to investors and governments. This has led to dissatisfaction from investors regarding returns and concern from governments that they are not reaping the rewards for their country of a thriving mining industry. It is our intention as we grow into a mid-tier producer to show total production costs in addition to the cash costs commonly quoted by our peers, to provide a greater level of transparency for investors and governments alike.

It is worth noting that at current levels, our operation provides us with solid cash flow to continue growing our resource base through exploration and allows us the breathing space to position ourselves for growth. In addition we have established a strong strategic relationship with Samsung, as we look to de-risk Amara financially and move towards the next stage of development at Baomahun. We believe that this is important in light of the current investment sentiment that has put pressure on mining equities globally and in particular the smaller gold mining equities with the current sideways trajectory of the gold price, along with a move away from risk.

Financing Strategies

Given Amara's ability to generate cash from its existing operations, we have no need to raise finance to continue our exploration strategy. We only reach a financing decision at the point at which we move the Baomahun development forward. In fact, if were we to stop our discretionary exploration spend, the Company's cash balance would grow, albeit at the expense of Amara's optionality.

One of the questions we are asked frequently is how we are planning to fund the construction of Baomahun given the current challenging market conditions. Our partnership with Samsung has been significant in de-risking the project, and I was delighted when Amara's partnership with Samsung was recognised at the Mining Journal Outstanding Achievement Awards in December 2012 as the winner of the Development Funding Award. However, we are aware that it is important not to over-leverage ourselves and it is likely that we will need to finance a portion of the estimated US$200 million capital investment through other instruments. The market expectation of this event has continued to weigh on our share price this year.

Fortunately, we are in a position of flexibility and have been exploring options to minimise long-term equity dilution. In addition to equity we have a number of options. Unlike Kalsaka/Sega and Yaoure, which are subject to a 10% free carry for the host government, we own 100% of Baomahun. Selling a small portion of the project equity to a third party or bringing in a joint venture partner for the project could form the basis of a sustainable and non-dilutive financing strategy, with our Yaoure project continuing to provide a strong growth pipeline. We appointed debt advisors in H1 2012 to evaluate strategic options, without the need for gold hedging, and although our alliance with Samsung has been an important step forwards, they remain focused on this goal.

Investing In Our People

Our ethos at Amara is that a company is only as good as its people. In 2012 we continued to strengthen the management team both in London and West Africa.

In January 2012 we appointed Richard Quarmby as Group Project Manager. Prior to joining Amara, Richard worked for Randgold Resources, where he was instrumental in developing the Morila and Loulo greenfield projects in Mali into highly successful gold mines. A year later in January 2013 we were pleased to welcome Bruce van Brunt to our team as Group Manager of Technical Services and Business Development. Bruce has more than 30 years' experience in mine development and evaluation, most recently with Teranga Gold Corp at its Sabodala mine in Senegal. Bruce is based in West Africa and will be working alongside Richard and Peter Spivey to manage the smooth transition of Baomahun from exploration to construction. He will also be focused on the integration of Kalsaka and Sega to ensure production continues uninterrupted.

We have also consolidated our exploration team, further strengthening our technical capabilities. At the end of 2011 Peter Brown joined Amara as Group Exploration Manager and during the past year he has appointed Ludie Henning, Hamish McClaren and Paul Nuttall to manage the Kalsaka/Sega, Baomahun and Yaoure projects respectively. Between them, Ludie, Hamish and Paul have over 75 years' of African exploration experience, including previous roles with AngloGold Ashanti and Gold Fields.

In addition to upgrading our operational expertise, we also expanded our corporate team. In order to further advance our commitment to promoting and developing the skillset of our employees, we appointed a Group Human Resources Manager in June 2012. Gina Scorteanu's experience of working in West Africa and her guidance in terms of best practice are helping to ensure that our people, our Company and our host countries reap the benefits of a more highly trained workforce. Further initiatives for employee development will be introduced during 2013.

One of my roles when I joined Amara was to enhance our ability to communicate with our shareholders and the financial markets in London and North America. As part of this process, we appointed Katharine Sutton as Head of Investor Relations in July 2012. She has introduced a greater degree of structure to all of our investor activities and in 2013 we will be looking to expand our investor footprint in Europe and Asia, as well as in our traditional markets.

Board Changes In Line with Amara's Growth

As I reported in the 2011 Annual Report in my role as Chairman Elect, in early 2012 I initiated a thorough review of the Board, its structure and effectiveness. The Company is at a crucial time in its development and in order to economically exploit our asset base and to take advantage of the opportunities that may arise, the skills of our leadership team must be aligned to this growth path.

It was with pleasure that in May 2012 we welcomed Hennie Faul as a Non-Executive Director, whose global experience as Group Head of Mining for Anglo American plc and track record in the African mining industry adds strong technical expertise to our team. More recently in March 2013, the Right Honourable Peter Hain MP also joined our Board. Peter will focus on the corporate social responsibility, community relations and environmental aspects of our business together with broader African political relations. He brings valuable experience in African politics, including three years as Minister of State at the Foreign Office.

I would again like to thank Algy Cluff for his vision in building the Company, particularly in gathering assets and nurturing a team of people who are poised to take Amara to the next stage of its development. Algy resigned as Non-Executive Chairman in May 2012 to pursue an alternate natural resources venture and I wish him well for the future. Later in the year, Ronald Winston, Bobby Danchin and Nicholas Berry chose to step-down as Non-Executive Directors as part of the review. I thank them all for their good counsel during the Company's formative years. Today the Board comprises three Executive Directors and four Non-Executive Directors, a more appropriate number for a company of Amara's size.

In Partnership with West Africa

We are committed to working with the highest level of respect for the communities and environments in which we operate, while pursuing value for our shareholders. Peter Hain's appointment to our Board is testament to this commitment. In particular, Amara has continued to support initiatives focused on three key areas: education (particularly of women), healthcare and agriculture. Throughout the year we have continued to strengthen our existing commitment to corporate social responsibility across our assets in Burkina Faso, Sierra Leone and Côte d'Ivoire and our country managers regularly meet with our stakeholders to ensure that our financial support generates the maximum possible impact.

The Year Ahead

The change of our Company's name from Cluff Gold to Amara Mining symbolises the beginning of our transition into a mid-tier gold producer and 2013 promises to be an exciting year. In 2012 we invested in our growth and in 2013 we expect to unlock the value as a result of it. The transformation of our company from a small-scale junior producer to a larger, more sustainable business will continue, as we deliver the Feasibility Study for Baomahun, integrate the Sega deposit with our Kalsaka mine, and continue to grow our resources at Yaoure.

We have strengthened our team to deliver a viable economic project at Baomahun. The work that has been conducted over the last year leaves me in no doubt that we have a significant high grade gold deposit with a lower grade halo that will be developed into Sierra Leone's first open pit gold mine. There is, I believe, a robust opportunity to extend the mine life beyond the open pit by targeting thick high grade zones at depth. These have been identified by wide spaced drilling and are currently categorised as Inferred resources, not suitable for a Feasibility Study. Our intention is to continue exploration as we develop the mine and have a better understanding of the geology and rock mechanics. This is a low risk approach and will offer additional upside to our Feasibility Study, which is on track for delivery in June.

As a geologist by background, I am particularly excited by the exploration results we have received since the start of 2012 from Yaoure, and I expect to see this project becoming an increasingly important part of our portfolio of assets. Extensive drilling was done at the project during 2012 to identify the footprint of the mineralisation and the potential quantum of the project before closing down the spacing to define a resource. While the deposit remains open to the northwest, the final phase of drilling last year has allowed us to announce the initial resource of 0.3 million Indicated ounces (8.0Mt at 1.31g/t) and 1.7 million Inferred ounces (34.6Mt at 1.52g/t). This Mineral Resource is drawn from 40% of the defined mineralised system. Further drilling in 2013 will allow us to further define this and to better understand the continuity of the high grade zones within the system. Very little value is currently attributed to Yaoure by the market, creating an opportunity for a re-rating of our stock as we continue to deliver results. I believe that, while of moderate grade, Yaoure will ultimately be one of the largest gold deposits in Côte d'Ivoire. Amara remains positive on the outlook for the gold industry and committed to advancing our position as a responsible and profitable West African gold producer.

Finally, I would like to thank my fellow Board members for their hard work, dedication and valuable guidance throughout the year. It has been a particular pleasure working alongside my fellow Executive Directors, Peter Spivey and Pete Gardner, and I am confident that together we can realise the potential of our assets.

My first year at the helm of Amara has been everything I hoped for and more. Despite challenging market conditions our Company is now well-positioned to deliver its next phase of growth. I look forward to updating you over the course of 2013 as we continue along our path to becoming a mid-tier producer.

John McGloin

Executive Chairman

CHIEF EXECUTIVE OFFICER'S STATEMENT

I began building and operating mines in Africa 13 years ago and I am very familiar with the challenges of our industry. As a result, my priority as Chief Executive over the past 12 months has been to lower the risk while maximising the growth potential of our assets. I believe that as we currently stand, Amara offers investors the lowest risk exposure to growth in the gold industry in West Africa. This has required significant investment and in 2013 we will start to see the results, as well as maintaining our focus on a sustainable business model that offers benefits to all stakeholders; investors, governments and local people.

We are geographically diversified, with assets in three countries across West Africa. I have lived in the region for seven years and while I believe it is one of the best areas in the world to be operating, our strategy is to ensure we are not overly exposed to any one jurisdiction. We are also diversified in terms of our growth pipeline, with assets at all stages of exploration, development and production. Through operating cashflow from our operation in Burkina Faso we are able to support our exploration programmes across our assets, which will in turn form our future growth. In 2013 we will further develop our portfolio approach as our Mineral Resources at Yaoure grow alongside Kalsaka/Sega and Baomahun.

Amara's core focus for 2012 was to achieve a number of key milestones across our asset base in order to deliver on our growth potential in the short, medium and long term. The Company we are today is very different from the one I reported on a year ago, with changes to our leadership, projects, financial outlook and even our name. We have made good progress along our path of evolution and growth. I strongly believe we have never been better positioned to deliver on the value of our assets, which is testament to the hard work of our Board, corporate team and operational workforce.

Operating and Financial Performance

The Kalsaka gold mine continued to operate profitably in 2012 despite the challenges inherent in a mine approaching the end of its life. It produced 53,544 ounces of gold at a cash cost (excluding royalties) of US$961 per ounce, generating strong EBITDA of US$35.2 million.

The average head grade processed at Kalsaka in 2012 was 15% lower than in 2011, which contributed to the 25% reduction in gold produced. Despite this, Amara maintained good control of its operating costs which increased by 17% in the year, in-line with the falling grade and less than the fall in total production. As a result, we achieved a healthy pre-tax cash margin at Kalsaka of US$703 per ounce sold.

Importantly, we continued to build on our strong safety record during the year, in line with our commitment to ensuring international best practice for health and safety across all areas of our business. We achieved five million man-hours worked without a lost time injury at Kalsaka in July 2012 and six million man-hours in January 2013. I'd like to thank all of our operational team at Kalsaka for their commitment to reaching this milestone as our goal continues to be for every employee to go home safe at the end of every shift.

Development and Growth Projects

We invested a record amount in exploration in 2012, with the US$34 million of expenditure signifying a 11-fold increase on our investment level from three years ago (2009: US$3.0 million). Exploration is the lifeblood of a mining company and a key element of Amara's strategy is to continue to use operating cashflow from Kalsaka/Sega to support our exploration campaign and thus our future growth. Amara is committed to maintaining a sustainable business model and in 2013 the total exploration budget is US$20 million, a significant reduction on 2012, as our assets enter a more evaluative period. In 2013 Amara will ensure its investments in exploration and infrastructure more closely align to the cash in flow from operations.

Our exploration team's primary focus in 2012 was Yaoure, with 29,988 metres drilled in 2012 to advance our exploration of the sulphide potential at this project. The recently announced Mineral Resource update from this drilling has significantly increased Amara's resource base, with the opportunity for further growth in 2013. In the coming year we expect to fully realise the value of our investment in 2012 as we demonstrate the potential scale of the project through the delivery of a Preliminary Economic Assessment ("PEA").

Strong progress was made at Baomahun with the delivery of a Mineral Resource update in November 2012 and I have been delighted by the subsequent results from our project development team. The on-going optimisation and scheduling work on the project will soon culminate in the issuing of a Mineral Reserve statement as the basis of our feasibility study, which remains on track for completion in Q2 2013.

Following initial promising exploration from the Mamoudouya project in western Mali, the results from the 2012 drilling campaign were not significant enough to warrant further investment, so we have chosen to divest our interest in this project and focus our efforts on exploration opportunities in our three core countries. We have grassroots exploration assets in eastern Burkina Faso and we are assessing other early stage opportunities in Sierra Leone and Côte d'Ivoire in order to maintain our pipeline of projects in the long term.

Addressing Costs

Containing our cash costs is a key focus for Amara. The continued strength in fuel prices and other consumables, together with the number of new projects coming on-stream in Africa, have introduced considerable cost pressures across our industry. We have particularly seen this in Burkina Faso, where the price of fuel has increased over 27% from US$1.21 per litre at the start of 2012 to US$1.54 per litre when we published the results of the PEA for Sega in October. Fortunately, we are well positioned to absorb this higher cost as our heap leach plant only requires 1MW of power and the stripping ratio at Kalsaka fell 25% to 4.97 in 2012. Savings realised in key consumables, such as cement, also assisted with our overall cost control. Once material from Sega begins to be processed in mid-2013 we expect our cash costs to reduce further, despite additional costs associated with trucking, due to the higher grade material available.

Managing energy costs is on the agenda of every mining company. At Amara we are actively addressing the need to decouple our gold production from the rising long-term oil price. In parts of West Africa there is a strong opportunity for hydro-electric power ("HEP") and both of our growth projects in Sierra Leone and Côte d'Ivoire are located close to bodies of water that have existing or the potential for low cost HEP.

Using HEP to provide the majority of Baomahun's power needs is expected to reduce our cash costs materially, exposing our shareholders to a rising gold price without seeing margins eroded by escalating fuel costs. However, we anticipate the Feasibility Study being based on a heavy fuel oil scenario, demonstrating that even without the benefits of HEP Baomahun is still highly economic.

In Côte d'Ivoire, our Yaoure exploration project is located 5km from Lake Kossou, the third largest body of water in West Africa, with a 150MW HEP facility already in operation and an announced expansion to the country's power generation. The implication for Amara is that there is a surplus of cheap power and electrical reticulation on our doorstep, which will significantly reduce the capital and operating cost requirements for our Yaoure project, thereby lowering the economic hurdle for development.

West African Politics

Living in West Africa with my family, I have a thorough understanding of the need for a company to maintain its social licence to operate. Amara has an outstanding country manager in each of its three main host countries and I have been very pleased with the progress they have made over the past year in engaging with our host governments, regional authorities and local communities.

Given the prevailing industry backdrop and current level of profitability of the mining sector we have proactively engaged with the Burkina Faso, Sierra Leone and Côte d'Ivoire Governments and other stakeholders to ensure we make a contribution commensurate with the financial performance of our business. During the year we paid a total of US$14.7 million in tax in Burkina Faso including corporate tax, royalties and indirect taxation. We have also contributed directly to Côte d'Ivoire and Sierra Leone in respect of indirect taxes paid despite our operations not yet generating revenue. We will continue to work with the relevant authorities in order to ensure we achieve the optimum long-term structure for our company and all of our stakeholders across our host countries.

We have also continued to contribute to community initiatives, and it was particularly rewarding for me to be involved with a ceremony to present the keys to two schools in Sierra Leone to the communities near Baomahun.

Outlook

Amara's aim for 2012 was to progress the development of our growth assets, while ensuring production continues in Burkina Faso in order to maintain our cashflow. Both of our growth assets are capable of sustaining over 100,000 ounces of annual gold production and the development of these kinds of projects, rather than smaller heap leach operations, is the key to realising our goal of becoming a mid-tier producer in the near term.

John McGloin's appointment has been pivotal to our company, with his experience as a resource geologist complementing my skills as a mine developer and the financial skills of Pete Gardner, our Finance Director. As a result of our continued investment across our assets and our people at all levels we enter 2013 in good shape, having further positioned our company for growth.

Finally, I would like to thank all of my colleagues for their enthusiasm, hard work and commitment throughout what has been a key year in the growth of our company. I would also like to thank the Board for their good counsel and support and I now feel strongly that we have the right team in place to transform Amara into a mid-tier producer. 2013 will be another important year for our company and we have the people, assets and robust balance sheet to deliver on our potential.

Peter SpiveyChief Executive Officer

REVIEW OF OPERATIONS

Kalsaka/Sega, Burkina Faso

Mineral Resource estimate for Kalsaka as of 31 December 2012

Amara's cash generating asset, the Kalsaka gold mine, continued to operate profitably in 2012 despite challenging conditions. The mine produced 53,544 ounces of fine gold and generated US$35.2 million in EBITDA to support the Company's exploration activities and general and administrative costs (G&A), underlining Amara's strategy of using its cashflow to fund the development of its growth assets.

Production was impacted by an unusually heavy rainy season in Burkina Faso, which negatively impacted production in H2 2012. While grades were forecast to fall at Kalsaka compared to 2011, the average reported headgrade for 2012 was 1.23g/t, 15% lower than achieved in 2011 (1.45g/t). This was greater than originally anticipated due to the heavy rainfall causing pit-wall failures and restricting access to high grade material in the K-zone 1 pit. Consequently, Kalsaka's operational team focused on opening lower grade pits, originally scheduled for mining in H1 2013, in order for production to continue. The lower production was also impacted by a temporary fall in recovery from the heap during Q4 2012 caused by a loss of water pressure in the reticulation circuit. Increased pumping capacity is being installed during H1 2013 that will allow all of the gold to eventually be recovered, which is expected to provide a boost to production in Q2 and Q3 2013.

In an industry-wide environment of cost pressures, Amara maintained rigorous control of its cash costs, despite the 25% reduction in production on 2011. The 15% reduction in head grade was offset by a 25% tightening of the strip ratio as the existing Kalsaka pits approached the end of their minelife, ensuring that the cost per ounce of contained gold mined rose only 5% in the year. Processing costs rose in part due to higher staff costs and increased maintenance costs, which off-set savings in cement realised with a change of supplier. Administration costs per ounce rose by only 15% despite the 25% fall in production, reflecting an absolute saving in the costs of running the Kalsaka mine.

A new jaw crusher has been installed and commissioned at Kalsaka, which will allow the higher grade oversize and transitional ore on the Kalsaka licence to be processed during H1 2013 and help Amara achieve its production targets.

Sega

Maintaining cashflow in Burkina Faso until production is scheduled to commence at Baomahun in 2015 is a key priority for Amara. The Company is committed to upholding its cash generative status, which lends flexibility to its development plans as it continues to grow its portfolio of assets. Accordingly, on 24 May 2012 Amara announced the completion of its acquisition of the Sega Gold Project from Orezone Gold Corporation.

Mineral Resource estimate for Sega as of 11 January 2010[i]

The results of the 'Preliminary Economic Assessment of the Sega Project in Burkina Faso' dated 30 November 2012, confirm the potential viability of mining oxide and transitional material at Sega, located 20km north of Kalsaka, and transporting it to Amara's existing heap leach operation at Kalsaka for processing. It will provide an immediate mine life extension to Kalsaka to ensure that production continues until H2 2015 as well as cost benefits derived from the higer grade material at Sega.

The PEA demonstrates that Sega has solid metrics, with a post-tax NPV of US$49.5 million using a gold price of US$1,500 per ounce and a discount rate of 10%. Including the initial acquisition costs, this delivers a strong internal rate of return of 48%. The upfront capital expenditure required for the project is limited at US$9.5 million, as the material from Sega will be trucked to Kalsaka and processed in the existing plant. Combined with the good existing infrastructure in place, this reduces the permitting hurdle and diminishes the timeline to production.

Based on the Mineral Resources delineated at Sega to date (450,366 Indicated ounces (8.3Mt at 1.7g/t) and 147,344 Inferred ounces (2.9Mt at 1.6g/t)), the mine plan delivers contained gold of 162,825 ounces over the 21 month initial mine life and a cash cost per ounce produced, excluding royalties, of US$821 per ounce.

The PEA confirmed that Amara will have access to material at Sega that is of a higher grade than the remaining reserves at Kalsaka. The weighted average resource grade of the oxide and transitional material at Sega is similar to the Kalsaka reserves. However, the Company's geological model shows that the grade of the material processed from Sega will be higher than that at Kalsaka due to the high grade core of the mineralisation, which can be selectively mined, reducing cash costs. The following mined tonnages were estimated to be contained in the engineered open pit design:

Tonnes of gold bearing material: 2.5Mt

Head grade: 2.0g/t

Ounces: 162,825 contained gold

Tonnes of waste: 17.3Mt

Strip ratio: 6.8:1

Following the general elections in Burkina Faso in December 2012 and the resultant change of government, the environmental permit for Sega is now likely to be received in Q2 2013, slightly later than expected. It is anticipated that the mining licence will be received shortly afterwards and we expect that the trucking of material from Sega will commence in mid-2013. In the event of a delay in the integration of the Sega deposit, additional ore sources which have been defined at Kalsaka will be processed. This ore is lower grade than the remaining Kalsaka reserves, which is the reason for the range of the production guidance of 50-60,000 ounces for 2013. In the event that this lower grade material is processed, cash costs for the full year are expected to be similar to 2012.

A full inventory of the key elements now complete at Sega and the work that is ongoing is as follows:

Exploration

Exploration at the Kalsaka-Sega complex to increase the oxide mine life is a primary focus for Amara, with US$7.6 million invested in exploration across the two licence areas in 2012.

At Kalsaka, work focused on areas east of the existing K-zone pits along the K-zone shear structure at the Zoungwa and Z-R prospects, which have delivered additional resources for Kalsaka's 2013 mine plan. Further near-mine targets are under active evaluation which will ensure flexibility in the handover to the processing of material from Sega.

In 2012, Amara completed 21,980 metres of RC drilling and 22,544 metres of RAB drilling on the 313km2 Sega licence area. This followed the 10,000 metre RC drilling programme conducted by Orezone in Q1 2012 prior to the project's acquisition by Amara. Drilling results received to date give confidence that there is further upside potential to Sega's current resources. This upside potential adds further confidence that production will continue at the Kalsaka/Sega complex beyond 2015.

Orezone's drilling campaign covered 11 targets with the most significant intercepts recorded were at the Touli, Sampella, Bangasilla and KNW prospects. The Touli prospect and the KNW prospects are in the centre of the mining licence close to the crushing plant. The Sampella target is located in the north-east of the Sega licence area at the north-east end of a regional fold, which appears to control mineralisation. Bangasilla lies to the west of Sampella. Amara conducted further drilling at each of these prospects and significant intercepts include:

·; 26m at 3.05g/t from 8m at Touli

·; 18m at 3.49g/t from 18m at Touli

·; 11m at 2.89 g/t from 25m at KNW

·; 5m at 3.48g/t from 96m at Sampella

·; 4m at 2.07g/t from 99m at Bangasilla

A significant intercept has a minimum width of 2m, a minimum grade of 0.4 g/t and a maximum internal dilution interval of 2m. In 2013 drilling has focused on the Touli prospect and a Mineral Resource estimate is expected in Q2 2013.

2013 Production Outlook

Amara expects to continue to generate robust cashflow in 2013 and full year production guidance from Kalsaka/Sega is 50,000-60,000 ounces. It is anticipated that gold production will be weighted towards H2 2013 due to the higher grade material that will be processed from Sega. The cashflow generated from Kalsaka/Sega differentiates Amara from its exploration-only peers and supports its corporate overheads and on-going exploration programme. The higher grade material coming on stream in H2 2013, combined with the Company's larger ownership of Sega (90% compared to 78% at Kalsaka), is expected to ensure that Amara continues to generate robust earnings in 2013 and beyond.

Baomahun, Sierra Leone

Amara's strategy for Baomahun remains focused on the near-term production opportunity whilst continuing to explore and demonstrate the long term resource potential for the area. The Baomahun project is approaching completion of the feasibility stage, with Indicated Mineral Resources of 2.24Moz (38.4Mt at 1.82g/t) and Inferred Mineral Resources of 0.54Moz (6.6Mt at 2.52g/t). The Feasibility Study is expected in Q2 2013, with the project anticipated to commence construction in Q4 2013 and the first gold pour in H2 2015.

2012 saw a number of transformational events for Baomahun, namely:

·; The signing of a strategic alliance with Samsung, which removes a significant degree of uncertainty surrounding the financing of the project

·; The Mineral Resource update following the re-analysis of the structural controls on the gold mineralisation in the formation of the deposit

·; The receipt of a new exploration licence in March 2012, Makong South, which is contiguously north of the existing Victoria exploration and Baomahun mining licences

Samsung Partnership

In 2012 Amara successfully moved to a more solid financial footing through an innovative funding deal with Samsung. The partnership will give Samsung access to a reliable supply of gold bullion, underpinned by Amara's strong operational and management team, whilst Amara will benefit from Samsung's financial support. The relationship is expected to result in the financing of a significant proportion of Baomahun's capital expenditure, subject to the outcome of the Feasibility Study, together with an ongoing commitment to jointly assess other opportunities in the region.

The alliance commenced with an initial US$20 million debt facility, which does not require recourse to expensive hedging or royalty financing. It will be used to strengthen the Company's balance sheet and ensure Amara remains well funded during the development of Sega and to continue the ongoing exploration and development work across its asset portfolio. It maximises returns to Amara's shareholders and ensures they are exposed to the upside of an appreciating gold price.

The key terms of the initial US$20 million facility, which was drawn down on 24 October 2012, are as follows:

·; Initial term of 22 months, repayable evenly over the final 12 months from the Sega asset's cash flow

·; Interest payable of 2.5% above US LIBOR

·; Amara to sell 1,929 ounces of fine gold per month to Samsung at a 2.25% discount to the London Gold AM/PM LBMA dollar gold fixing price on the day prior to delivery. There are no hedging requirements as the price of gold is not fixed in advance in any way under the facility

·; Facility secured by a charge over the shares of Amara's subsidiary company, Amara Mining (Burkina) Limited, which holds the Company's interest in the Kalsaka/ Sega project

The total cost of the facility was estimated at 10% per annum based on the gold price at execution.

Amara's management remains committed to expansion while minimising dilution to investors and the delivery of this new form of financing is testament to its ability to think innovatively to benefit shareholders. In recognition of this, Amara received the Development Funding Award at the Mining Journal Outstanding Achievement Awards at the Mines & Money conference in December 2012.

Mineral Resource Update

During 2012 the Feasibility Study for Baomahun reached an advanced stage, with most of the key elements complete. On 19 November 2012, Amara announced the resource update for the project and the 'Baomahun Resource Update 43-101 Technical Report' dated 3 January 2013 was released shortly afterwards. Following an internal review, Amara commenced a re-analysis of the structural controls on the gold mineralisation in the formation of Baomahun led by Dr Leslie Wright, an expert in structural geology with previous knowledge of the licence area. The work involved the re-logging of core samples in conjunction with additional structural mapping of the deposit. It confirmed the close relationship of gold mineralisation with various structural domains and mylonitised shear zones. This thorough understanding of the structural controls is vital not only for resource modelling, but also to understand the potential for additional resources defined in the project area.

The new geological model was prepared with an improved understanding of the geometry of the resource and grade interpolation was completed using a local indicator kriging method. This is a more sophisticated method of mapping the grades into the block model than the ordinary kriging methodology previously employed, which can have a tendency to smooth the grade distribution. It also deals with the high grade values present in the Baomahun deposit by limiting their sphere of influence relative to the lower grade material and allows for a better definition of high grade shoots. This new model will allow a more realistic resource schedule and optimised open pit to be prepared for the Baomahun feasibility study.

The updated Mineral Resource is largely unchanged from the previous resource in terms of quantity of ounces, with Indicated resources of 2.24Moz (38.4Mt at 1.82g/t) and Inferred resources of 0.54Moz (6.6Mt at 2.52g/t).

Mineral Resource estimate for Baomahun as of 19 November 2012

1. Using a 0.5g/t cut-off within a US$1,600/oz open pit shell and a 2.0g/t cut-off for resources suitable for underground mining

Whilst the overall grade of the Mineral Resource is lower than previously estimated (due to the lower cut-off grade: now 0.5g/t, previously 1g/t), the high grade core of the mineralisation has been retained with Indicated Mineral Resources of 1.92Moz (23.0Mt at 2.60g/t) and Inferred Mineral Resources of 0.52Moz (5.0Mt at 3.25g/t) using the 1g/t cut-off grade. In addition, a significant number of additional tonnes of material previously regarded as waste have been interpolated as part of the updated resource to produce a lower grade ore domain between and surrounding the previously defined high grade domains. This will have a beneficial impact on the eventual strip ratio.

Feasibility Study

Work on the Baomahun Feasibility Study is well advanced and is expected to be completed in Q2. Amara was awarded its environmental permit for Baomahun in April 2012, which completed the permitting process for the project. Metallurgical testwork has demonstrated that Baomahun is a straightforward orebody with good recoveries of over 93% from a conventional CIL plant and no significant impediments to mine development. The bond work index of the ore is 15.6kWh/t and does not present an issue for the operation.

Work for the Feasibility Study is focused on the following:

·; Finalising the optimised open pit to define the open pittable reserves

·; Optimising the scheduling of the mine to allow the high grade core to be processed in the early years of production in the currently envisaged 2Mtpa plant to produce a robust payback

·; Finalising the engineering designs and re-validating the capital and operating cost estimates

In addition, a number of potential enhancements are being considered as follows:

·; Evaluating a coarser grind to increase plant throughput and allow lower grade material to be processed earlier in the mine life without reducing gold production or pay-back whilst reducing the working capital requirements for low grade stock-piles

·; Crystallising the longer term opportunity for hydro-electric power to provide a low cost production environment de-coupled from the long term oil price

The Mineral Resource update also highlighted the significant potential that lies at depth below the currently envisaged open pit. High grade shoots are seen to improve with depth and structural work undertaken suggests that these structures coalesce and could extend to a depth of at least a kilometre. Amara's intention is to also investigate the depth potential of the deposit to evaluate the opportunity to maintain the production rate once lower grade material is being fed from stockpiles by blending higher grade ore from underground sources. This will not form part of the initial Feasibility Study, but will be carried out to the level of a PEA under the guidance of consultants.

The Company invested US$18.5 million at the project during 2012, with US$10.9 million spent on exploration, US$2.1 million spent on the Feasibility Study and the balance spent on early infrastructure developments. This infrastructure work included an upgrade to the existing exploration camp, which will accommodate the construction team when work begins in Q4 2013, together with an upgrade of the 17km site access road from Mongeri to Baomahun. Exploration expenditure is expected to reduce in 2013 as Amara focuses on regional target generation, across all three licences, rather than resource drilling.

Following delivery of the Feasibility Study in Q2 2013 and, subject to suitable financing, construction is planned to commence at the start of the dry season in November 2013 with an 18 month construction period. The first gold pour is targeted for H2 2015 with steady state production anticipated in 2016.

A full inventory of the key elements now complete at Baomahun and the work that is on-going is as follows:

Hydro-electric power

Amara has been exploring alternative power options for Baomahun in order to de-couple the cost base from the long term oil price. Management believes that there is significant potential for the introduction of hydro-electric power within 40km of the mine. With the majority of the processing costs of a modern CIL plant associated with power, the availability of HEP could substantially reduce cash costs compared to a heavy fuel oil ("HFO") power plant.

In 2011 a Feasibility Study for a 24MW run of river HEP plant was completed by Knight Piesold in Vancouver. It is estimated that Baomahun's continual draw power requirements are approximately 12MW, but due to the impact of the dry season, when the river flow is reduced, it is expected that HEP would be able to provide approximately 72% of Baomahun's annual power requirement. Discussions are on-going with the Sierra Leone government and third party financiers to establish an independent power producer structure to fully fund the construction of the HEP plant, with a long term off-take agreement available for Baomahun.

The resulting power costs, estimated at between US$0.08/kWh and US$0.10/kWh, would represent a significant reduction compared to the current cost of HFO power generation estimated US$0.23/kWh. Amara would not need to provide equity or debt to finance construction. With a similar construction period to the mine, it is envisaged that low cost HEP could be available early in the mine life. However, as the HEP plant has not yet been constructed, the Feasibility Study will use a HFO scenario to demonstrate that Baomahun's economics are strong without the additional cost benefits of HEP.

Long term exploration potential along strike

Amara believes that there is significant long term exploration potential outside the currently defined Mineral Resource area at Baomahun. Exploration is currently focused on a number of new targets identified within the Makong South licence, located approximately 15km north of the existing resource area, together with new target generation along the entire belt. Sampling of the extensive artisanal workings and new trenches at Makong South has returned encouraging results, which has led to the implementation of a more aggressive trenching campaign. 2,300m of trenching has been completed and a further 8,200m is planned in 2013. Once all the assay data has been returned, this will be followed up with an initial drilling programme after the cessation of the wet season in Q4 2013 to enable Amara to obtain a better understanding of the controls on the mineralisation. The main target consists of a series of artisanal workings extending in a NNW-SSE direction for 1.9km.

Yaoure, Côte d'Ivoire

Yaoure is Amara's medium-term growth asset. 2012 was a year of significant investment in exploration at the project, which was warranted by encouraging drill results[ii] that continued to underline the potential for a large scale, moderate grade, sulphide deposit underlying the previously mined oxide resources.

In Q1 2013, Amara delivered a Mineral Resource update of 0.3 million Indicated ounces (8.0Mt at 1.31g/t) and 1.7 million Inferred ounces (34.6Mt at 1.52g/t), representing a significant increase on its previous Mineral Resources of 0.2 million Measured and Indicated ounces (4.9Mt at 1.6g/t). This Mineral Resource update is contained within 40% of the total mineralised volume drilled to date and represents an average discovery cost of approximately US$8/oz.

Yaoure Strategy

Whilst sulphide mineralisation had been identified earlier in the project's life and formed part of Yaoure's resource base, the Company's previous target was to bring an oxide operation into production rapidly, ignoring the significant sulphide potential. With the oxide operation put on 'care and maintenance' in 2011 following political instability in Côte d'Ivoire and with the appointment of a Group Exploration Manager, Peter Brown, in August 2011, Amara refocused its efforts on the project's sulphide potential.

Twenty three holes (1,967 metres) were drilled in 2011 and a further 83 holes (29,988 metres) were drilled in 2012. The drilling covered an area with an across-strike width of 1.1km over both the historic open pits (Yaoure Central and CMA) and an along strike length of 1.5km. The drill fence lines have an average space of approximately 160m by 160m, designed to delineate a large opportunity at Yaoure. The central portion of the drilling has a higher density and the resource update announced in Q1 2013 relates to this central area, which covers approximately 40% of the total mineralised volume drilled.

The Yaoure ore body is an mesothermal, quartz-carbonate vein-style gold deposit. The mineralisation is controlled by a thick zone of shearing (imbricate thrusting from the east), resulting in multiple zones of alteration, quartz veining and gold mineralisation. It is expected that the thinner, higher grade sub-vertical cross-cutting veins with frequent visible gold will enhance the overall grade of the orebody, although they were not the primary target of the drilling programme.

Amara's exploration expenditure in 2012 was US$34 million of which US$14 million was spent at Yaoure, reflecting management's faith that the project will become an important part of Amara's portfolio. In addition to the favourable geology, Yaoure's close proximity to existing infrastructure, including an abundant water source and a nearby hydroelectric dam capable of supplying low cost power, makes it one of the best located gold projects in West Africa.

Mineral Resource Update and Further Exploration

1. Using a US$1,500/oz open pit shell using a 0.8g/t cut-off

A total of 31,955 metres were drilled at Yaoure in late 2011 and 2012. Outside of the areas where an Indicated and Inferred resource has been defined, drilling has outlined an along-strike and down-dip exploration target of 2 to 3 million ounces of gold contained within 50Mt to 60Mt of mineralisation grading 1.3g/t to 1.5g/t. The potential tonnages and grade are conceptual in nature and are based on drill results that defined the approximate length, thickness, depth and grade of the deposit. There has been insufficient exploration to date to define this additional potential as a Canadian Institute of Mining and Metallurgy and Petroleum -compliant resource currently and the Company cautions that there is a risk that further exploration will not result in the delineation of a resource.

A significant portion of the exploration target relates to the continuation of the higher grade CMA zone, which is expected to increase the overall grade of the mineralisation if further drill results confirm the continuity and grade of this mineralisation.

Following the delineation of this Mineral Resource at Yaoure, Amara has commenced in-fill diamond drilling at the project to reduce the drill spacing. This campaign is focused on promoting the mineralisation lying outside the currently defined Inferred Mineral Resource envelope, which covers 40% of the total mineralised volume drilled. The Company expects to announce an updated Mineral Resource in H2 2013.

Future Potential

Alongside the 2011/12 drilling campaign, Amara conducted a metallurgical testwork programme at Yaoure to understand the leaching kinetics of the mineralised material. This reported a recovery rate through a traditional CIL circuit of 94%, confirming the non-refractory nature of the gold mineralisation. Phase two metallurgical testwork is expected to be completed by the end of May 2013, which is designed to identify the optimal processing route. This will include comminution testwork together with an analysis of the amenability of the ore to heavy medium separation, gravity and flotation.

In addition, Amara intends to begin assessing the economic potential of the updated Mineral Resource through a PEA that is expected to be completed in Q4 2013. The shallow dipping nature of the Yaoure mineralisation is expected to have a beneficial impact on the eventual stripping ratio, whilst Yaoure's location presents a number of advantages that will enhance the prospects for a CIL plant to be developed at site. These include excellent existing infrastructure, such as close proximity to the Kossou Barrage which offers the potential for lower operating and capital costs through the utilisation of hydro-electric power, and an abundant water supply. In addition, Yaoure benefits from an existing mining licence and environmental permits, which is expected to reduce the timeline from exploration to development.

FINANCIAL REVIEW

Financial Highlights

Despite operational challenges at Kalsaka, 2012 has been a robust financial year with strong cash in-flows from operations and the income statement showing a small profit after tax including exceptional items.

Income statement

Group revenue dropped by US$30 million (25%) to US$91.3 million, compared to US$121.7 million in 2011 due to a 30% fall in production in the year from Kalsaka and Yaoure. The average realised gold price increased by 7% to US$1,667/oz ensuring that the fall in revenue was restricted. A US$12.7 million reduction in cash operating costs off-set the revenue loss, resulting in an EBITDA reduction of US$19.6 million to US$24.0 million. The Group reported a profit before taxation of US$8.5 million and a tax charge in Burkina Faso of US$6.1 million. This resulted in a profit after taxation of US$2.4 million, which after accounting for minority interests represents a small loss per share attributable to equity shareholders.

An exceptional impairment charge of US$4.4 million was recognised in 2012 representing US$1.9 million in Mali and US$2.5 million in Burkina Faso. The Group's policy is to capitalise exploration costs pending determination of the feasibility of a project. In Mali, drilling of the encouraging geochemical anomaly at Mamoudouya did not generate results sufficient to warrant further investment and the Group has written off all costs associated with Mali and closed the regional office. In Burkina, a wide exploration campaign has been conducted on the Kalsaka permit since 2010 which did result in a number of additional areas suitable for mining. Costs directly associated with these areas were transferred to mining assets in 2012 with the remaining costs written-off.

Excluding the exceptional exploration write-off, the adjusted profit before tax totals US$12.9 million whilst the earnings per share represents a small profit of 2.56 US cents attributable to equity shareholders.

Kalsaka

At Kalsaka, production fell by 25% to 53,544oz due to a 15% fall in average grade combined with a 5% fall in stacking rates and a temporary increase in recoverable gold in the heap due to low water pressures in the processing circuit during Q4. Kalsaka's revenue fell by US$24.8 million, whilst the EBITDA reduction was limited to US$16.7 million due to a reduction in operating costs reflecting a lower strip ratio, savings in the total administrative costs, and a tight control of all costs in the year.

Cash costs at Kalsaka totalled US$961/oz in 2012, a 17% increase compared to US$823/oz in 2011 which primarily reflects the lower grade of material processed. On a cash basis, the operating margin at Kalsaka fell 6% to US$703/oz gold sold, generating EBITDA totalling US$35.2 million in the year.

Cash costs are only part of the total cost of producing gold, with significant up-front and sustaining capital expenditure, taxation and turnover royalties payable in addition to cash costs. The use of "all in" costs to explain the returns generated from gold miners to both investors and government is important, and as Amara transitions to a mid-tier producer it aims to ensure that its calculation of "all-in" costs are standardised and given equal prominence to cash costs in its reporting.

At this time Amara's "all in" costs for Kalsaka have been calculated to include capital expenditure, royalties and corporate taxes. No corporate overheads have been attributed due to the nature of the Group's activities, which are dominated by development assets. In addition, no amount has been included in respect of exploration in the year as this will be recorded against "all in" costs once the defined resources are mined and processed. On this basis, total "all in" costs for Kalsaka in 2012 were US$1,327/oz compared to US$1,181/oz in 2011, producing an after tax margin of US$342/oz in 2012 compared to US$405/oz in 2011.

The 2012 corporate tax charge in Burkina totalled US$6.1 million, an effective tax charge of approximately 30% on the pre-tax profit recorded in country under the principals of IFRS. The high effective tax rate, compared to the 17.5% headline rate for mining companies in Burkina Faso, is due to a number of issues:

In total, US$14.7 million of taxation was paid to the Burkina government in 2012 (2011: US$16.6 million) covering all forms of taxation. The 2009-2011 tax inspection applied a 500% penalty on approximately US$0.3 million of misapplied withholding tax primarily relating to 2009, the penalty on which is being contested but has been provided for in full. In addition, a further US$6.8 million of taxation including penalties has been claimed by the Burkinabe tax authorities. This amount is being contested and has not been provided on the basis that the Directors consider the majority of the claim to be factually incorrect and not binding. This is disclosed in the financial statements as a contingent liability.

Yaoure

At Yaoure, the old Angovia heap leach operation was discontinued in 2012, with production of 1,381oz in the year compared to 6,470oz in 2011. The decision to cease operations at Yaoure and focus efforts on exploration has been supported by the substantial increase in resources recently announced. As a result of the decision to discontinue heap leach activities, revenue at Yaoure fell US$7.6 million, costs fell by US$6.2 million and EBITDA losses increased by US$1.4 million compared to 2011.

During the year provisions against VAT recoverable in Côte d'Ivoire totalling US$1.5 million have been reversed following amounts received in Yaoure Mining SA and acknowledgment of repayment due for Cluff Gold (WA) Côte d'Ivoire SARL.

An on-going dispute with the previous mining contractor at the Yaoure project has not yet been resolved, and a contingent liability is noted in the accounts. The terms of the underlying contract clearly state that the rates set out therein apply regardless of the difficulty of performing the works and accordingly the Directors have provided for a settlement of US$1 million out of a total claim of US$22.9 million.

Cash flow and liquidity

A summary of the movement of cash and debt is set out below:

*exploration and Feasibility Study expenditure

In 2012 Amara invested heavily in its assets: acquiring the Sega property from Orezone for US$16.2 million, investing in infrastructure and equipment totalling US$8.3 million and investing in exploration and Feasibility Studies totalling US$36.0 million. A further analysis of this investment in the year is set out below.

This level of investment is 140% higher than in 2011 and represents a 12 fold increase compared to 2009. Amara chose to invest significantly in its assets in 2012 in order to create flexibility within its portfolio. However, this level of investment outstrips the cash generative capacity of the Group and, accordingly, additional finance was raised in 2012 in the form of both debt and equity. In 2013 Amara will ensure its investments in exploration and infrastructure more closely align to the cash inflow from operations. In addition to the acquisition of Sega, which will not recur in 2013, it is expected that exploration expenditure at all assets will reduce in 2013 and further infrastructure development will only be undertaken at Baomahun once suitable financing for the project development has been raised.

Details of the US$61.5 million investment programme in 2012 is set out below:

This investment has delivered Mineral Resource updates at Baomahun in Q4 2012 and at Yaoure in Q1 2013, furthered the Feasibility Study at Baomahun and prepared the site infrastructure for the upcoming construction phase and extended the mine life at Kalsaka/Sega by an initial two years with further exploration targets identified for the future.

Group Resources and Reserves

Resources shown as inclusive of reserves

1. As at 31 December 2012; reserves shown as oxide and transitional only. Resources shown as combined oxide, transitional and sulphide. A technical report titled "Technical Review of the Kalsaka Gold Mine, Burkina Faso" and dated 16 October 2008, has been prepared by SRK Consulting (UK) Ltd. Resource estimation has been subsequently updated for production changes. Resources at 0.5g/t Au cut off and reserves at 0.5g/t Au cut off and US$950/oz gold price.

2. A technical report titled "Technical Report on the Mineral Resource of the Sega Gold Project" and dated 18 January 2010, was previously prepared by Orezone Gold Corporation and filed on SEDAR.

3. A technical report titled "Techical Review, Mineral Resource Estimate for the Baomahun Gold Project, Sierra Leone" and dated 03 January 2013, has been prepared by SRK Consulting (UK) Ltd. The cut-off grade used for the open pittable resources is 0.5g/t (pit shell optimised using a US$1,600/oz gold price). A cut-off of 2g/t was used to represent blocks with potential to satisfy an underground mining scenario.

4. As at 25 March 2013 using a 0.8g/t cut-off. A technical report is expected to be filed on SEDAR within 45 days of the resource update announcement.

AMARA MININGplc

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

AMARA MINING plc

CONDENSED consolidated statement of financial position

As at 31 December 2012

AMARA MINING plc

CONDENSED consolidated statement of changes in equity

For the year ended 31 December 2012

ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

AMARA MINING plc

CONDENSED consolidated statement of cash flows

For the year ended 31 December 2012

AMARA MINING plc

notes to the condensed consolidated FINANCIAL STATEMENTS

For the year ended 31 December 2012

1. FINANCIAL STATEMENTS

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2012 or 2011. The financial information for 2011 is derived from the statutory accounts for 2011 which have been delivered to the registrar of companies. The auditor has reported on the 2011 accounts; their report was (i) unmodified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The statutory accounts for 2012 on which the auditor has not yet expressed an opinion are expected to be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course.

Full financial statements for the year ended 31 December 2012 will shortly be published on the Groups website at www.amaramining.com and posted to shareholders and, after adoption at the Annual General Meeting on 05 June 2013, they will be delivered to the registrar.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

Whilst the financial information included in this preliminary announcement has been presented in accordance with International Financial Reporting Standards as adopted by the EU (IFRS), this announcement in itself does not constitute full compliance with IFRS. Details of the accounting policies are those set out in the annual report for the year ended 31 December 2011. These accounting policies have remained unchanged for the financial year ended 31 December 2012 except for those new standards issued and adopted in the year.

3. DIVIDENDS

The directors do not recommend the payment of a dividend (2011: nil).

4. SEGMENTAL REPORTING

Operating segments have been identified on the basis of internal reports about components of the Group that are regularly reviewed by the Group's chief operating decision maker. The Group's chief operating decision maker is considered by management to be the Board of Directors. The operating segments included in internal reports are determined on the basis of their significance to the Group. In particular, operating mines are reported as separate segments together with exploration projects that have significant capitalised expenditure. An analysis of the Group's business segments is set out below.

In 2012 the Group had two customers (2011: one).

The segmental result reported represents earnings before interest, tax, depreciation and amortisation (EBITDA) and excludes share option charges, which is the measure of segmental profit regularly reported to the Board of Directors. The accounting policies of the reporting segments are different from the Group's accounting policies as follows:

·; Pre-commissioning income and expenditure at operating mines is not capitalised in the segmental results.

·; Income is accrued for gold bullion on hand at the period end in segmental results and, accordingly, no stock is recognised for this item.

·; The depreciation charge against segmental assets is based on a different total asset cost compared to the statutory accounts due to the fact that income and expenditure is not capitalised during the commissioning period. In addition, the total asset cost is depreciated from the commencement of mining operations.

A reconciliation of segmental revenue to the statutory financial statements is as follows:

A reconciliation of EBITDA to profit before taxation is as follows:

A reconciliation of segmental assets to the statutory financial statements is as follows:

 Geographic information

1Due to the loss incurred in 2012 the effect of the share options in issue (totalling 10,000,980) is anti-dilutive and consequently not included in the calculation of diluted loss per share.

Included above is an amount of US$72.5 million in relation to the Baomahun Gold Project. A further US$5.7m is included within Property Plant and Equipment in Note 7 relating to the Baomahun Gold Project. These amounts are recoverable through the exploitation or sale of the project. In order to recover this amount through exploitation significant additional funds would be required to construct an operating mine.

The addition to Exploration and Mining Rights in the year relates to the acquisition of the Sega Gold Project in Burkina Faso, comprising two exploration permits hosting a defined gold resource. This amount is recoverable through the exploitation of the project, subject to the granting of a mining permit which is expected in mid-2013.

7. PROPERTY, PLANT AND EQUIPMENT