Amara Mining Regulatory News (AMA)

20 April 2015 AIM:AMA

Amara Mining plc

("Amara" or "the Company")

PROPOSED STRATEGIC INVESTMENT BY INTERNATIONAL FINANCE CORPORATION (IFC)

Amara Mining plc, the AIM-listed West African focused gold mining company, is pleased to announce a proposed strategic investment by International Finance Corporation ("IFC"), a member of the World Bank Group, in Amara.

HIGHLIGHTS:

· IFC proposes to invest US$10 million in Amara at a price of 16 pence per share, in line with the price of the placing announced on 21 January 2015

· The investment will further strengthen Amara's financial position as it advances the 6.8 million ounce Yaoure Gold Project in Côte d'Ivoire ("Yaoure")

· An investment by IFC is a strong endorsement of the technical strengths, socio-environmental standards and economic potential of Yaoure and is based upon a site visit and due diligence investigation

· Following the proposed investment, Amara will be fully-funded to the end of 2016, allowing time for discussions with banks and other financial institutions for the financing of Yaoure to the production stage

· The potential investment is consistent with IFC's strategy to support the further development of Côte d'Ivoire, where it has already invested in numerous sectors including power, banking, oil & gas and agribusiness

John McGloin, Chairman and Chief Executive Officer of Amara, commented:

"The Board has carefully considered the merits of a strategic investment by IFC and we have concluded that it is in the best interest of Amara's shareholders. IFC is renowned for conducting stringent due diligence before making an investment and gaining this approval acts as a strong endorsement for Yaoure's technical and socio-environmental standards. I was particularly pleased to hear that IFC considers Yaoure as a very low risk project and Côte d'Ivoire as a compelling investment destination.

"Following this proposed investment, Amara's financial position will be further strengthened and we will be fully funded to the end of 2016. This will ensure that Amara is not made vulnerable by a low cash position at a time when it is important to keep advancing the project as rapidly as possible. The investment also demonstrates Amara's ongoing ability to attract new strategic investors for the long term financing of Yaoure. Amara remains on track to deliver the Pre-Feasibility Study for Yaoure in early Q2 2015 and I look forward to working alongside IFC as we benefit from the input of their highly experienced team."

Terms of Proposed Investment

IFC has proposed to make an investment of US$10 million in cash for 41,500,000 new ordinary shares at a price of 16 pence per share. This share price is in line with the price of the placing to raise US$22 million, announced on 21 January 2015.

Following this proposed investment, IFC will be interested in approximately 9% of the issued share capital. Amara will not pay any brokers fees on this investment. The investment is subject to the successful completion of IFC's mandatory 30 day disclosure period, the execution of final documentation, approval by the IFC Board of Directors and the Board of Amara.

As at 31 March 2015, Amara had US$17.2 million in cash and liquid assets and was fully funded to deliver a Pre-Feasibility Study for Yaoure in early Q2 2015 and a Bankable Feasibility Study in December 2015. This proposed investment will further strengthen Amara's financial position as the Company continues to advance the project. Furthermore, following this proposed investment, Amara will be fully-funded to the end of 2016, by which time it expects to have commenced construction at Yaoure.

Background on Yaoure Gold Project

Amara delivered a Preliminary Economic Assessment for Yaoure in Q1 2014, which demonstrated that the project has the potential to be one of the top gold mines in Africa by production. With average production of 279,000 ounces per annum over a 10 year mine life and all-in sustaining costs of US$624 per ounce, the 6.5 million tonnes per annum scenario delivers an IRR of 33% and an NPV of US$613 million at a gold price of US$1,250 per ounce. Yaoure is one of the few development projects in West Africa that remains resilient at low gold prices, with an IRR of 19% at US$1,000 per ounce and breaking even below US$800 per ounce. 

The project is flexible and delivers similarly strong returns over a range of alternative throughput scenarios. The compelling economics are driven by the excellent existing infrastructure in Côte d'Ivoire, with low cost hydro-electric power from the Kossou dam (5km from site) and a dual carriageway to within 40km of site. With 85,574 metres of drilling completed in 2014, there is expected to be strong exploration upside potential on the current NI 43-101 compliant 6.8 million ounce resource base[i].

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About Amara Mining plc

Amara is a gold explorer/developer with assets in West Africa. The Company is focused on unlocking the value in its development projects. At Yaoure in Côte d'Ivoire, this will be done by increasing the confidence in the existing Mineral Resource and economics at the project as the Company progresses it through to Pre-Feasibility Study and Bankable Feasibility Study. At Baomahun, this will be achieved by gaining an improved understanding of the exploration upside potential and underground opportunity. With its experience of bringing new mines into production, Amara aims to further increase its production profile with highly prospective opportunities across both assets.

About International Finance Corporation

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, IFC uses its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, IFC provided more than US$22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visitwww.ifc.org