October 1, 2014 / 4:54 PM / 3 years ago

Amara Mining's Ivory Coast gold mine to start production in 2017

3 Min Read

* Company to invest $400 mln over next two years

* Resources evaluated at 6.3 mln oz

* Average annual production forecast at 325,000 oz

By Loucoumane Coulibaly

ANGOVIA, Ivory Coast, Oct 1 (Reuters) - Amara Mining will invest $400 million over the next two years to build one of Africa's largest gold mines at its Yaoure property in Ivory Coast with production due to start in 2017, the London-listed company's CEO said on Wednesday.

Resources have been evaluated at 6.3 million ounces, John McGloin said during a visit to the site in the centre of the West African nation.

"We expect to produce an average of 325,000 ounces per year. With this level of output we'll be in the top 10 of the largest mines in Africa and the largest in Ivory Coast," he said.

Construction, which will be financed by the company, private investors, banks and through market fundraising, will begin in 2016 and last 18 months.

The mine has a projected lifespan of 12 years. McGloin said the company, which has already spent around $24 million on exploration at the site, hopes that further drilling will lead to discoveries that could prolong the mine's life to around 20 years.

"It's a mine that will have a low cost of production. Even if the price per ounce falls to around $1,000, the project will still be profitable for us," he said, highlighting the proximity to the Kossou hydroelectric dam, some 5 km (3 miles) away.

Spot gold is trading around $1,217 an ounce.

Amara placed its Baomahun project in Sierra Leone on hold earlier this year due to the Ebola outbreak in the country.

"We're working with the government of Sierra Leone, giving them vehicles to transport the sick," McGloin said.

The company also owns three early-stage exploration licences in Liberia.

Ivory Coast, long a world leader in agricultural commodities, is seeking to grow its long-neglected mining sector as part of efforts to diversify the economy following a decade of political turmoil that ended in a brief 2011 civil war.

After producing 15.5 tonnes of gold last year, the government expects output to increase to 17 tonnes this year and 22 tonnes in 2016.

Canada's Endeavour Mining opened its Agbaou gold mine earlier this year, with annual production expected to reach three tonnes. London-listed Randgold and Australia's Newcrest are the other large operators in Ivory Coast's gold-dominated mining sector. (Editing by Joe Bavier and David Evans)

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