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Amara Mining Upbeat After 'Transformational' Quarter

Higher gold prices and lower costs helped Amara Mining (LON:AMA) lift earnings by more than a fifth in what the Africa-focused gold miner described as a transformational quarter.

Cash costs in the three months to September fell by 8% to US$883 per ounce, compared to US$961 in the previous quarter.

Underlying earnings (EBITDA) rose to US$US$7.6 mln, from US$6.2 mln as its realised gold price ticked up to US$1,660 per ounce from US$1,612.

Revenues totalled US$24.1 mln in the quarter to September, up from US$23.9 mln three months earlier, though production was slightly lower at 14,639 ounces due to heavy rain in Burkina Faso where Amara's Kalsaka mine situated.

The former Cluff Gold said it now expects to produce 53,000-57,000 ounces this year at a cash cost of under US$1,000/oz and will move on to higher grade ore in the first half of 2013.

Peter Spivey, chief executive, said: "During Q3 2012 Amara has been transformed: financially, operationally and corporately.

"Financially, with the commencement of the partnership with Samsung, we have made significant progress towards funding the development of Baomahun.

"Operationally, we have demonstrated that Kalsaka's mine life will be extended through integrationwith Sega through the Preliminary Economic Assessment which offers robust metrics.

"Corporately, our rebranding to Amara comes at a time when we are focused on demonstrating our ability to move to a larger production platform, through the long term development of our growth portfolio at both Baomahun and Yaoure."

The Sega deposit is located 20 Km away from Kalsaka and Amara intends to mine gold ore from the Sega deposit and transport to the Kalsaka plant for processing.

The preliminary economic assessment calculated an internal rate of return of 48% and gave the project a net present value of US$49.5 million.

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