H1 2015 Results

12 August 2015 AIM: AMA

Amara Mining plc

(with its subsidiaries, "Amara" or "the Group")

H1 RESULTS 2015

Amara, the AIM-listed West African-focused gold exploration/development group, is pleased to announce an update for the half year ended 30 June 2015 ("H1 2015").

HIGHLIGHTS

· Maiden Mineral Reserve reported of 2.7Moz (70.4Mt at 1.18g/t) for Yaoure Gold Project ("Yaoure") as part of Pre-Feasibility Study ("PFS"), underlining the economic viability of this large scale deposit

· Optimisation work is underway to further improve Yaoure's economics. Initial results demonstrate opportunities to:

o Increase the head grade of the Mineral Reserve through the selective mining of the higher grade CMA zone

o Decrease Yaoure's upfront capital cost through reducing the size of the mining fleet and the size of the plant and removing the need for pre-stripping

· 12,000 metre drilling programme underway in the Yaoure Central zone to upgrade a portion of the remaining Inferred resources to the higher confidence Indicated category and to improve continuity within higher grade areas - Mineral Resource update expected Q4 2015

· Application for mining exploitation licence for Yaoure lodged with the government of Côte d'Ivoire, including the submission of the Environment and Social Impact Assessment ("ESIA")

· New 206km2 exploration licence called Yaoure East obtained to the east of the current Yaoure exploration licence area

· Second strong growth opportunity in Baomahun Gold Project ("Baomahun") - potential to be a compelling second project for Amara, assisting the Group in its goal of becoming a mid-tier producer

· Cash as at 30 June 2015 of US$13.6 million following successful placing to raise US$21 million (net of costs) in January 2015

· Amara remains well funded to advance the Bankable Feasibility Study ("BFS")

John McGloin, Chairman and Chief Executive Officer of Amara, commented:

"H1 2015 has been an important period for Amara as we have reported a maiden Mineral Reserve for Yaoure as part of the PFS and increased the project's resources to 6.8 million ounces. Although recent weeks have been challenging for the gold sector, we continue to advance Yaoure along its development path and remain fully-funded to do this. Our focus in H2 2015 is to progress our understanding of the optimisation opportunities identified by the PFS, which include increasing the head grade of the CMA zone through selective mining and reducing the upfront capital cost. Drilling is also underway to further improve our understanding of the Yaoure Central zone, which is expected to strengthen the overall economics of the project. I look forward to updating the market on Yaoure's progress over the coming months."

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About Amara Mining plc

Amara is a gold explorer/developer with assets in West Africa. The Group is focused on unlocking the value in its development projects. At Yaoure in Côte d'Ivoire, this will be done by increasing the confidence in the existing Mineral Resource and economics at the project as Amara progresses it through to Bankable Feasibility Study. At Baomahun, this will be achieved by gaining an improved understanding of the exploration upside potential and underground opportunity. Amara aims to further increase its production profile with highly prospective opportunities across both assets.

OPERATIONAL REVIEW

YAOURE GOLD PROJECT, CÔTE D'IVOIRE

Yaoure has the potential to be one of the largest gold mines in Africa. With 6.8 million ounces of Mineral Resources (4.4 million ounces Indicated and 2.6 million ounces Inferred), Yaoure is the largest undeveloped gold project in West Africa.

Notes to Mineral Reserve table

1. Canadian Institute of Mining and Metallurgy and Petroleum ("CIM") definitions were used for Mineral Reserves

2. The Mineral Reserve was estimated by the contents of a resource block model within a pit design. This design was based on an optimisation, in which only indicated Resources were enabled. The optimised shell selected corresponded to a gold price of US$975/oz.

3. The Mineral Reserve is reported at a cut-off grade of 0.33 g/t Au. This cut-off has been derived from the breakeven level corresponding to a gold price of US$1,250/oz.

4. A mining loss factor of 10% has been applied. Dilution has already been applied in the generation of bulk mining blocks in the resource model, measuring 12.5m x 12.5m x 10m.

5. The Mineral Reserves were estimated based on the NI 43-101 Mineral Resources, both effective as of 5 January 2015.

6. A 90.1% metallurgical gold recovery was used.

Notes to Mineral Resource table

1. The effective date of the Yaoure Mineral Resource estimate is 5 January 2015, prepared by Mario E Rossi, GeoSystems International, Inc. Pit optimisation work for this was completed by A. Wheeler.

2. The gold price used in the Mineral Resource estimate is US$1,500 per ounce, assuming an open pit mining scenario, processing via tank leaching. Pit slopes are 44º in oxide, 53º in sulphide. Recoveries have been assumed at 90%.

3. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

4. There are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may materially affect the resource estimates.

5. Totals and average grades are subject to rounding to the appropriate precision and some columns or rows may not compute exactly as shown.

6. The stated resources include dilution in the block model that relates to the level of low selectivity envisioned in an open pit operation, assuming 10m bench heights.

Pre-Feasibility Study Delivered

Amara completed a PFS for Yaoure in Q2 2015, which delivered large scale production at low operating costs[i]. It is one of the few development projects in West Africa that has the potential to deliver production of over 200,000 ounces over a 10 year life of mine. The Group also demonstrated further upside at Yaoure in a scenario based on PFS parameters, but including Inferred Mineral Resources, named the Measured, Indicated and Inferred scenario ("MII scenario"). Importantly, the key metrics of the MII Scenario are largely in line with the compelling Preliminary Economic Assessment ("PEA") that was delivered in March 2014.

Key Parameters of PFS and MII Scenario

Yaoure's location is highly advantageous for developing a large-scale gold mine due to its access to low-cost grid power and abundant water. It is situated 40km from a dual carriageway linking the political capital of Yamoussoukro with the commercial capital of Abidjan. As a brownfield site, Yaoure is low risk as there is no requirement to relocate any dwellings, which is a significant advantage compared to many of the project's peers.

Optimisation Opportunities

Following the PFS, a number of optimisation opportunities have been identified and are being assessed with the objective of increasing the overall head grade and reducing the upfront capital cost, which are as follows:

· Utilising a selective mining approach for the CMA zone - together with bulk mining for the Yaoure Central zone, this would increase the overall grade going to the plant as the impact of dilution would be reduced

· Utilising a smaller processing plant - the higher grade and therefore smaller volumes of ore from the CMA zone would reduce the overall throughput of the processing plant and lower the upfront capital cost, potentially delivering a stronger internal rate of return

· Employing staged development - this would deliver a reduced upfront capital requirement, which may be more palatable for a company of Amara's size given the current challenging market conditions

· Removing the need for pre-stripping and the associated capital cost by commencing mining in the Yaoure Central zone - pit floor mapping, historic rip line data and reverse circulation ("RC") drilling indicate that it may be possible to commence mining in a higher grade pod of ore at surface in the Yaoure Central zone rather than commencing mining in the CMA zone. Part of the current drilling campaign is aimed at better defining this higher grade ore at surface in the Yaoure Central zone

· Reducing the mining fleet - through reviewing the mining schedule and reducing the pre-strip, together with the selective mining approach, it may be possible to decrease the upfront capital requirements for the mining fleet

Next Steps

Exploration at Yaoure

In conjunction with progressing the optimisation opportunities, a 12,000 metre drilling campaign commenced in April 2015 in the Yaoure Central zone. The programme has two key objectives:

· To upgrade a portion of the remaining Inferred ounces to the higher confidence Indicated category, which is expected to allow Amara to deliver a BFS in-line with the original PEA

· To increase continuity within the higher grade areas to strengthen the economics of the Mineral Reserve within the Yaoure Central zone and confirm the potential to commence mining in this area, supported by the historic RC drilling and rip line data

Following this drilling programme, Amara will report a Mineral Resource update in Q4 2015.

In terms of the wider exploration licence area, Amara has embarked on a regional target generation programme, initially utilising geophysics and soil geochemistry. The Yaoure resource area is contained in only a small portion of Amara's total exploration licences and soil geochemistry and structural mapping have identified other areas similar to the resource area. Through further geological mapping, trenching and soil sampling, Amara intends to identify drilling targets with the potential to deliver satellite deposits for Yaoure.

Environmental licence and exploitation licence

Amara's Ivorian subsidiary, Amara Mining Côte d'Ivoire SARL ("AMCDI") submitted its application for an exploitation (mining) licence to the government of Côte d'Ivoire in early August 2015, which included an ESIA for Yaoure. The Group expects to receive both its environmental licence and its mining licence by the end of H1 2016.

New licence area obtained

The Department of Mines and Geology within the government of Côte d'Ivoire has granted Amara a new 206km2 exploration licence area to the east of the current Yaoure licence area. Amara believes that Côte d'Ivoire is one of the most prospective countries in West Africa and significant exploration upside potential exists as Côte d'Ivoire is largely under-explored.

BAOMAHUN GOLD PROJECT, SIERRA LEONE

Baomahun is a feasibility stage, Archean-age gold project in central Sierra Leone, with a high grade core and grades that strengthen at depth. With 1.21 million ounces of Probable Reserves (23.27Mt at 1.62g/t) and Mineral Resources of 2.24 million Indicated ounces (38.4Mt at 1.81g/t) and 0.54 million Inferred ounces (6.6Mt at 2.2g/t), it forms a second strong growth opportunity for Amara.

Baomahun Mineral Reserves and Mineral Resources, both as of 19 November 2012

Notes to Mineral Resources and Reserves

1. CIM definitions were used for Mineral Resources and Mineral Reserves

2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability

3. A cut-off grade of 0.5g/t was applied within a US$1,500/oz open pit shell and a 2.0g/t cut-off for Mineral Resources suitable for underground mining. The resources suitable for underground mining are not included in the FS. The Mineral Reserve is reported at a cut-off grade of 0.5 g/t Au at a gold price of US$1,100/oz

4. The Mineral Resource is inclusive of the Mineral Reserve. The Mineral Reserve was estimated by construction of a block model within constraining wireframes and based on Indicated Resources

5. Mining dilution of 5% was added to the Mineral Reserve

6. The Mineral Reserves were estimated based on the NI 43-101 Mineral Resources, both effective as of 19 November 2012

7. A 93.4% metallurgical gold recovery was used for the Mineral Reserve

8. Due to rounding, some columns or rows may not add up exactly to the computed totals

The Feasibility Study ("FS"), which was completed in Q2 2013, demonstrated that the project is robust and economically viable at a gold price of US$1,350 per ounce[ii]. Amara is now focused on gaining a better understanding of the project with the aim of delivering similar strong returns in the current lower gold price environment.

Once Sierra Leone is declared Ebola free by the World Health Organisation and the Sierra Leone government, the focus of Amara's efforts at Baomahun will be to gain a greater understanding of the high grade core of the deposit and to evaluate the potential to grow the 2.8Moz Mineral Resource. The first step towards achieving these objectives will be to re-log the core, ensuring a thorough geological understanding has been gained from the extensive drilling completed to date.

In addition, Amara will gain a more thorough understanding of Baomahun's underground opportunity by evaluating the optimal place in the ore body to transition between open pit and underground mining and the most optimal underground mining strategy.

FINANCIAL REPORT

In January 2015 Amara successfully raised US$22 million (US$21 million net of costs) via a placing to fund the next phase of Yaoure's development. At 30 June 2015 the Group had cash resources of US$13.6 million having invested US$5.2 million in the ongoing exploration and Feasibility Study work at Yaoure.

Amara continues to focus on cash conservation to ensure funds are utilised for the advancement of the Yaoure Gold Project. In H1 2015 administrative expenses in London decreased by 42% to US$2.1 million (net of US$0.4 million of foreign exchange gains) from US$3.6 million in the comparative period in 2014, reflecting the simplification of the Group, including a reduction in staff numbers. Other operating costs on the face of the income statement have increased as costs associated with the operations in Sierra Leone are not being capitalised whilst work in country remains on hold due to the Ebola outbreak. Other operating costs include US$0.5 million of one-off costs incurred in the period, including the write down of obsolete inventories in Côte d'Ivoire and payment of historic taxes in Sierra Leone.

The operations in Burkina Faso are nearing closure. The liquidation of Amara's local subsidiary, Seguénéga Mining SA ("SMSA"), the sale of the Kalsaka processing plant, together with other marketable assets, and the primary environmental closure obligations are expected to be completed during 2015. One-off legal and other costs totalling US$0.3 million were incurred by the Group in the period, with all other costs being met from cash generated in country. The assets have been written down to the expected recoverable amount at the period end. At present, it is not expected that any surplus cash will be generated for repayment to Amara Mining plc and, as such, a provision of US$2.3 million is included within the liabilities of the disposal group held for sale. BCM, the former mining contractor at Sega, continues to pursue Amara Mining plc in Burkina Faso to be held jointly and severally liable for the debts of SMSA, although no hearings have taken place in respect of this litigation and nothing is expected until Q4 2015. The Directors of Amara remain confident that the claims by BCM against Amara are highly unlikely to succeed or have any recourse to Amara.

Longer term, the IFC has proposed a strategic investment in Amara of US$10 million, as announced on 20 April 2015, although given the current share price weakness this has not yet completed. Subject to its completion, Amara will be fully funded to the end of 2016, including the delivery of a BFS. These funds would also allow the Group time to further its discussions with banks and other financial institutions for the financing of Yaoure to the production stage.

AMARA MINING plc

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2015 and 2014

There were no other comprehensive income gains or losses during the periods presented.AMARA MINING plc

CONDENSED consolidated statement of financial position

As at 30 June 2015 and 31 December 2014

AMARA MINING plc

CONDENSED consolidated statement of changes in equity

For the six months ended 30 June 2015 and 2014 and 31 December 2014

Amara Mining plc

CONDENSED consolidated statement of cash flows

For the six months ended 30 June 2015 and 2014

Included in cash and cash equivalents is US$2,770,000 (2014: US$3,364,000) in respect of a restricted bank account held for the purposes of the rehabilitation of the Kalsaka mine site in Burkina Faso. This balance forms part of the discontinued operations cash and cash equivalent total disclosed in note 8.

AMARA MINING plc

notes to the interim financial information

For the six months ended 30 June 2015 and 2014

1. Basis of preparation

The condensed interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2014, which this interim consolidated financial information should be read in conjunction with. The financial information has been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting.

The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2015 and 30 June 2014 is unaudited, and has not been reviewed by the auditors.

The financial information for the year ended 31 December 2014 has been derived from the Group's audited financial statements for the period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. The auditor's report on the statutory financial statements for the year ended 31 December 2014 was unqualified and did not contain any statement under sections 498 (2) or (3) of the Companies Act 2006.

Going Concern

The Directors regularly review cashflow forecasts to determine whether the Group has sufficient cash reserves to meet future working capital requirements, progress its exploration projects and take advantage of business opportunities that may arise. The Group manages its treasury function to ensure that cash is primarily held in politically stable countries. This minimises the risk of political events preventing the Group from continuing to make payments required for the Group's operations to continue.

Based on subsequent forecast cash flows the Directors are satisfied that the Group has sufficient cash resources to meet its financial obligations, in particularly the exploration and development costs of its projects, as they fall due for the foreseeable future. Accordingly the Directors have concluded that it is appropriate for the unaudited interim financial information to be prepared on a going concern basis.'

2. Segmental reporting

An analysis of the consolidated income statement by operating segment, presented on the same basis as that set out in the 2014 annual report, is set out below. For the purposes of statutory reporting the Kalsaka/Sega reporting segment has been treated as discontinued - see note 7.

A reconciliation of segmental EBITDA to the loss before tax reported in the interim financial statements is as follows:

3. Loss per share

Loss for the purpose of loss per share (net loss for the period attributable

to equity holders of the parent (US$'000))

None of the share options in issue are dilutive at the current share price.

4. Intangible assets

5. Property, plant and equipment

6. Share capital

Discontinued operations

In 2014 the company announced the cessation of mining operations at Kalsaka/ Sega in Burkina Faso. Accordingly, the results and cash flows relating to those operations have been presented as discontinued for the current and comparative reporting periods.

Statement of comprehensive income - discontinued operations

Statement of cash flows - discontinued operations