ceo kitto gives new confidence to investors

The lastest from John Meyer.

Ampella Mining* (ASX:AMX) meeting with ceo gives new
confidence to investors

• Ampella Mining, ceo, Paul Kitto, has been meeting with investors in London and Australia to restore confidence in the stock.

• The team are focussed on the addition of some 300,000oz of gold in oxide at Konkera (Batie West).

• A 200,000ozpa comprehensive PFS (preliminary feasibility study) is being prepared and this should upgrade to a BFS (bankable feasibility study) once the gold oxide JORC resource is prepared.

• Cash costs should at least rank alongside other local gold producers at around $850/oz (worse case scenario) .

• The BFS could equally be finalised on better news from test work on treatment of the fine grained portion of the sulphide ore. The additional capital cost of the sulphide circuit is thought to be some $30m, hardly a deal breaker, while recovery rates fall to around 85%, again not so bad for this type of ore.

• The market has been hard on Ampella stock in recent months despite good support from some big name institutions.

• Some downside from the coup in Mali was accompanied by concerns over the cost of treating fine grained gold ore in the sulphide portion of the orebody.

• Closure of the data room to potential acquirers invariably removed any market-related takeover premium while a pullback in gold prices and worsening market sentiment did the rest.

• Konkera currently hosts a 3.1moz JORC resource with good opportunity to expand the oxide resource in the area.
• Management are seen as of good quality and are confident on the quality of the project and are exceptional when it comes to the discovery of low-cost gold resources. Having great ground / licences also helps! Burkina does not suffer the troubles of its regional neighbours and the relatively quick development of other goldmines in the region is testament to the ease of business in country. Konkera’s location close to the main road from Ghana and to the Ghanaian boarder should make this a relatively easy mine to build.

Conclusion: We expect news to come on the BFS development this year and for significant advance on the oxide gold resource and process recovery rates. We see Ampella as offering exceptional value for investors at this price level.