fairfax analyst hit the nail on the head

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