Ampella Mining* (ASX:AMX) – High grade oxide results should raise production and value
• Ampella Mining have released details of drilling at the Konkera mine project in Burkina Faso
• The results show very substantial, intersections of relatively high grade gold.
- 60m at 4.3 g/t gold from 8m (Konkera North)
- 50m at 4.7 g/t gold from 11m (Konkera North)
- 44m at 4.1 g/t gold from 35m (Konkera North)
- 57m at 2.2 g/t gold from 116m including 10m at 6.0 g/t gold (Konkera East)
- 18m at 4.7 g/t gold from 254m (Konkera Main)
• These are some of the best intersections that we have ever seen in a gold mine and should not be underestimated
• The drilling is ‘focussed on shallow oxide and transition zone gold mineralisation above 200m vertical depth’
• .The project currently bears a JORC classified gold resource of 3.1moz, with 1.5moz of indicated ore grading 1.6g/t and 1.6moz inferred grading 1.5g/t.
• Today’s results suggest that higher grade areas within the orebody may give the mine an uplift in early production through the input of higher grade ores through selective mining if this is possible within the areas highlighted in today’s drill results.
Conclusion: This means that the ore should be cheap to mine, cheap to process and show good recovery rates. In all the mine should be larger and lower cost than has been previously considered. That’s value adding in my book at the very least. We expect today’s news should help the shares recover and feel that Ampella stock has been oversold on the back of its ‘refractory’ ore issue (see previous comment).
* Fairfax has previously acted for Ampella Mining in the issue of new shares
Let's see if some results come tonight
documents/4/1/120401-5 Exploration Update.pdf
I'm not seeing this type of drill program for many of the juniors
AMPELLA’S RESPONSE TO CORPORATE INTEREST AND EXECUTIVE MANAGEMENT CHANGE
In the December 2011 Quarterly Report, Ampella announced that it had appointed Macquarie Capital and Gresham Advisory Partners to provide advice on all options to enhance returns to shareholders and respond to proposals that may be received from time to time. This followed approaches from a number of leading gold companies seeking access to due diligence in order to develop proposals for the Ampella Board to consider.
To date, no party has been provided with access to non-public information.
With the recently completed capital raising, Ampella now has approximately $55 million in cash and is fully funded to pursue its programme of exploration and development work planned for the next 12 - 18 months. This includes the regional exploration programme the subject of an announcement earlier today.
Response to Corporate Interest
In recent weeks, Ampella has received further expressions of interest and requests for access to due diligence from other gold companies. Rather than continue to deal with these requests on an ad hoc basis, the Ampella Board has resolved to instruct its financial and legal advisers to undertake a targeted process to test whether any party with an interest in Ampella is willing to put forward a proposal which is attractive enough to win the unanimous support of the Ampella Board.
The Chairman of Ampella, Peter Mansell said:
“With our strong balance sheet, Ampella is now very well placed to continue down its current path and in the absence of a compelling alternative that is what we intend to do. Having said that, we have had approaches from serious global players in the gold sector and we concluded that we had a duty to all shareholders to properly test whether any one of those parties is prepared to make an offer to acquire Ampella on terms that would be attractive to our shareholders.”
“Ampella is in a rapid growth phase and we did not want our board and management team distracted by a number of separate approaches. We therefore instructed our advisers to run a targeted process as quickly as possible to test the level of corporate interest. If we receive a proposal that is sufficiently attractive to recommend to shareholders we will move forward with it. If we do not, we will shut down further discussions and move forward aggressively with our exploration and development programme.”
Ampella does not intend to provide further information about the status of discussions with third parties until such time as a final position is known. This is likely to take 2-3 months.
Suite 22, Level 1 513 Hay Street Subiaco WA 6008 PO Box 352 Subiaco WA 6904 ABN. 59 121 152 001 phone. +61 8 6142 0980 fax. +61 8 9200 1879 email. info[at]ampella[dot]com[dot]auExecutive Management Change
Ampella also announces that Evan Cranston, Executive Director – Corporate, has advised that he will be resigning to pursue other personal business interests.
Mr Cranston said:
“I have thoroughly enjoyed the past 3 years taking Ampella from a micro-cap junior to where it is today. However I have now decided that it is time to spend more time on my other business interests. Having managed the recent capital raising, I know I am leaving the Board and management team in a very strong position to grow the Company for the benefit of all shareholders. Ampella is now funded to enter into an exciting stage of the Company’s development and I am supportive of the Board and the future direction of the Company.”
The Board of Ampella wishes to formally record its appreciation on behalf of all shareholders for the contribution that Evan has made to the success of Ampella. Evan over the last 3 years in his role as Corporate Director for Ampella has been instrumental in the growth of Ampella and we wish him every success in his future endeavours.