Amara Mining (OTCPK:CLUGF) has updated the market with a fresh batch of drill results from its Yaouré project in Ivory Coast. As I explained in my previous article and updates, I didn't care too much about Kalsaka/Sega and the Baomahun gold projects as my attention was focused on the Yaouré exploration project. One of my central points in my investment thesis was that I was 100% sure the resources at Yaoure would continue to grow because infill drilling at previously untested zones could increase the total resources fast.
The company has started an 80,000 meter (!) drill campaign and has drilled in excess of 53,000 meters of the planned 50 miles. The drill bit intercepted very significant results such as 31 meters at 4.2g/t gold and 10 meters of 6.1g/t gold. This strengthens my belief that an updated resource estimate - which is expected in the fourth quarter- will both increase and upgrade the currently known 6.3Moz resource estimate. I was aiming for 7.5-8Moz in my original article, and I'll stick with those numbers for now.
Now the Kalsaka/Sega mine has been shut down and Baomahun's economics don't look too great at the current gold price, Amara Mining is firing on all cylinders at Yaouré and an updated resource estimate in Q4 2014 should be a stepping stone for a pre-feasibility study in Q1 2015. It is my firm belief that if Yaouré can complete a pre-feasibility study based on 8 million ounces with the same (or improved) economics as the Preliminary Economic Assessment, it will be on the radar screen of several Africa-focused senior producers.
Disclosure: The author is long CLUGF.
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