Amara Mining PLC: RESULTS OF FIRST PHASE OF BAOMAHUN OPTIMISATION

LONDON, UNITED KINGDOM--(Marketwired - Jan 30, 2014) - Amara Mining PLC (AIM: AMA) (TSX: AMZ)

LSE: AMA; TSX: AMZ



30 January 2014                                              AIM:AMA

                           Amara Mining plc
                      ("Amara" or "the Company")

         RESULTS OF FIRST PHASE OF BAOMAHUN OPTIMISATION WORK

Amara Mining plc, the AIM-listed West African focused gold mining
company, is pleased to announce the results of the first phase of
optimisation work[i] for the July 2013 Feasibility Study ("FS") of the
Baomahun Gold Project ("Baomahun") in Sierra Leone.

HIGHLIGHTS

* First phase of optimisation work focused on 'right-sizing' the
  plant to the deposit to reflect current market conditions and gold
  price outlook. The optimisation studies demonstrated that a 1 million
  tonne per annum ("Mtpa") plant would allow for:

     o the selective mining of the deposit's higher grade core in a
       smaller open pit

     o the longer term mine feed from underground sources to unlock the
       full potential of Baomahun's Mineral Resources

* Based upon this smaller scenario, there is a 40% reduction in the
  upfront capital cost to US$90 million and a 43% reduction in the total
  pre-production capital costs to US$143 million compared to the FS

* Average production in years 1-6 remains robust at 88,000 ounces
  per annum with total cash costs (including royalties) reduced by 11%
  to US$711 per ounce over the life of mine ("LOM")

* At a gold price of US$1,350 which was used for the FS, the open
  pit only scenario delivers a post-tax Internal Rate of Return ("IRR")
  consistent with the FS at 22% and a post-tax Net Present Value ("NPV")
  of US$80 million at a discount rate of 8%

* At a gold price of US$1,250, the post-tax IRR is 17% and the
  post-tax NPV is US$50 million at a discount rate of 8% for an open pit
  only scenario

* Baomahun's metrics are in line with other similar West African
  gold projects on an open pit only basis, however the underground
  opportunity transforms its economics

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