--adds share price and broker comment--
Amara Mining (LON:AMA, TSE: AMZ) has updated the indicated gold resource at the Baomahun project to 2.24 million ounces.
The Baomahun project, in Sierra Leone, is being advanced through a feasibility study which is due in the first half of next year. This puts the project on track for first gold production in 2015.
The new update has increased indicated resources by adding material from a low grade halo that’s found around a high grade core - the resource now stands at 38.4 million tonnes at 2.6 grams per tonne (g/t).
Baomahun’s high grade core deposit remains at 23 million tonnes at 2.6 g/t for 1.92 million ounces of indicated gold resources.
Amara says the new resource model is significantly more robust.
“The completion of the resource update for Baomahun, following the additional structural work, is a key step on our path to delivering long term value at the project,” said chief executive Peter Spivey.
“Not only does this represent a robust geological model for the development of our feasibility study, it also significantly increases our understanding of the genesis of the Baomahun deposit, highlighting a number of additional near term exploration targets and assisting with the long term exploration of our tenements.
“With the new geological model we move forward with increasing confidence as we complete the work required to develop Baomahun.”
Broker Westhouse said the structural work has identified more targets that lie within the current pit shell, with the potential to replace material currently classified as waste.
“This could result in a reduced strip ratio and therefore increased project economics,” added analyst Rob Broke.
He keeps his ‘buy’ rating and 124p target price on the stock, more than twice the current value of the shares which stand at 60.6p, up 1.6p or 2.7% today.
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