Amara Mining plc (formerly Cluff Gold plc) ("Amara" or "the
Company") (AIM:AMA)(TSX:AMZ), the dual AIM and TSX-listed West
African focused gold mining company, is pleased to announce its
results for the quarter ended 30 September 2012.
HIGHLIGHTS FOR Q3 2012
Operational
-- Results of the Preliminary Economic Assessment for Sega gold project
confirm potential viability of the project, with robust metrics
including 48% IRR(i)
-- Gold production from Kalsaka of 14,369 ounces despite unusually heavy
rains in Burkina Faso
-- 8% decrease in cash cost per ounce produced to US$883/oz compared to Q2
2012 (US$961/oz)
-- 2012 production is expected to be 53,000-57,000 ounces at a cash cost of
under US$1,000/oz - higher grade ore is now anticipated to be recovered
in H1 2013
-- Work continues on the resource update for the Baomahun gold project in
Sierra Leone
-- Exploration at Yaoure gold project in Cote d'Ivoire continues to yield
encouraging results - resource update on track for Q1 2013 with all
holes drilled to date intersecting the targeted mineralised zone
Financial
-- 22% increase in Group EBITDA to US$7.6 million compared to Q2 2012
(US$6.2 million) driven by lower cash costs
-- Cash and liquid assets of US$28.4 million at 30 September 2012
-- Balance sheet further boosted by US$20 million cash drawn down under the
Samsung facility in Q4
Corporate
-- Strategic partnership formed with Samsung C&T Corporation to provide
potential framework for the long-term funding of Amara's growth
projects, plus other development opportunities
-- Change of name to symbolise the start of a new era for the Company's
leadership under John McGloin
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Q3 2012 Q2 2012 Q1 2012
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Kalsaka
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Total Gold Production (oz) 14,369 15,191 12,504
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Cash Costs excl. Royalties (US$/oz produced) 883 961 1,016
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Average Realised Gold Price (US$/oz sold) 1,660 1,612 1,701
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Group
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Revenue (US$'000) 24,145 23,924 23,605
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EBITDA (US$'000) 7,569 6,192 5,310
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Basic EPS (cents) 1.79 1.19 (0.89)
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Peter Spivey, Chief Executive Officer of Amara, commented:
"During Q3 2012 Amara has been transformed: financially,
operationally and corporately. Financially, with the commencement
of the partnership with Samsung, we have made significant progress
towards funding the development of Baomahun. Operationally, we have
demonstrated that Kalsaka's mine life will be extended through
integration with Sega through the Preliminary Economic Assessment
which offers robust metrics. Corporately, our rebranding to Amara
comes at a time when we are focused on demonstrating our ability to
move to a larger production platform, through the long term
development of our growth portfolio at both Baomahun and Yaoure.
With a strengthened team and diversified portfolio of assets, we
are well positioned for the future."
The Company will host an analyst conference call at 10:00am UK
with a simultaneous webcast. Dial in details are as follows:
Telephone number: +44(0)20 3427 1919
Passcode: 7590274
To log into the webcast, which will be aired simultaneously,
please go to the homepage of the Company's website:
www.amaramining.com. The webcast will subsequently be available for
playback on this link.
A second conference call will be hosted at 9:30am EDT/2:30pm UK
time for North American analysts. Dial-in details are as
follows:
Canada +1-866-270-8076
USA +1-866-793-4279
Other parts of the world +44 20 8609 0205
Participant PIN Code: 754198#
Operational Review
Overview
Q3 2012 has been a transformational period for Amara at all
levels, as the Company has taken significant steps towards
achieving its goal of becoming a mid-tier producer. Amara is more
than just the sum of its assets. It is the Company's strong
management team, non-executive directors and operational staff who
will ensure that maximum value is delivered to shareholders from
the Company's portfolio of assets.
During Q3 Amara has successfully moved to a more solid financial
footing. The innovative funding deal with Samsung C&T
Corporation ("Samsung"), which does not require recourse to
expensive hedging or royalty financing, will allow the Company to
deliver its growth plans while maximising returns to equity
investors. It also ensures Amara's shareholders are exposed to the
upside of an appreciating gold price. This partnership provides a
framework for the long term funding of the Baomahun gold project
("Baomahun") in Sierra Leone and other development opportunities.
Amara's management remains committed to expansion while minimising
dilution to investors and the delivery of this new form of
financing is testament to its ability to think innovatively to
benefit shareholders.
Of equal importance, the results of the Preliminary Economic
Assessment ("PEA") for the Sega gold project ("Sega") in Burkina
Faso have confirmed the potential viability of mining oxide and
transitional material at Sega. This will extend the mine life of
the Kalsaka gold mine ("Kalsaka") and ensure that Amara maintains
its status as a producer. The PEA demonstrates that Sega's metrics
are robust, with a post-tax net present value ("NPV") of US$49.5
million. Including the initial acquisition costs, this delivers a
strong internal rate of return ("IRR") of 48%. As the material will
be processed at Kalsaka, Sega requires limited upfront capital
expenditure (US$9.5 million) and mining is expected to commence in
H1 2013, before Kalsaka's remaining reserves are exhausted. The
results of the PEA were announced alongside an update on the
promising exploration results received from Sega. Amara firmly
believes that through the on-going exploration programme the mine
life of the Kalsaka-Sega complex will be further extended, ensuring
that it continues to deliver cashflow to underpin the development
of the Company's growth projects.
In Sierra Leone, Amara has completed a structural analysis of
the Baomahun deposit and the remodelling of the orebody is close to
its conclusion. Whilst this work has taken longer than originally
anticipated, the improved understanding of the mineralisation at
Baomahun is absolutely necessary for both the near term development
and the longer term exploration of the area. Amara expects to
complete the resource update imminently and the full feasibility
study in H1 2013. The Company's objective remains to see first gold
poured at Baomahun in 2015. Importantly, the structural analysis
has identified a number of additional exploration targets. These
lie within the anticipated open pit shell and are the subject of
Amara's current Baomahun drilling programme.
Most excitingly, the Company has had continued exploration
success at the Yaoure gold project ("Yaoure") in Cote d'Ivoire,
with all holes drilled to date having intersected the targeted
mineralised zones. The final holes of the current phase were
drilled in early November and the Company is currently compiling
and analysing the data with the intention of announcing a
significant increase in the resource base early in 2013. Amara has
now drilled out an area covering a strike length of 1km across the
historic open pits, targeting a shallow dipping (25 to 35 degrees )
package of mineralised material varying in thickness from 10m to
25m on drill fence lines with an average spacing of 100m by
100m.
Kalsaka has continued to perform well in Q3, generating US$16.3
million in net cash inflows from operating activities and ensuring
that that the Company's business model remains sustainable. While
gold production fell by 5% during the period, cash costs decreased
by 12% and the gold price strengthened, improving margins and
lifting EBITDA by 20%. These improvements were seen despite Q3
being a challenging quarter, with unusually heavy rains in Burkina
Faso forcing Kalsaka's mining team to alter its plans and move to
areas of lower grade and higher waste stripping. Due to the working
capital cycle of a heap leach operation, the full effect of these
challenges will not be seen until Q4.
Looking ahead to Q4, Amara expects to return to higher grade
zones in the K-zone 1 pit. However, due to the leach cycle the
Company expects to fall marginally short of the lower end of
previous guidance, producing 53,000-57,000 ounces as opposed to the
60,000 ounces originally anticipated. The ultimate impact will be
that some of the higher grade ore will now be recovered in H1 2013,
giving Amara further comfort on the smooth transition between
Kalsaka and Sega ore sources in 2013.
The Company finished the quarter with US$28.4 million in cash
and liquid assets. With the additional US$20 million from the
Samsung facility, Amara is in a very healthy position to deliver on
its near term growth and exploration plans. The management believes
that there is better clarity than ever before on the future growth
potential of the Company. A strong balance sheet, ongoing
production and the long term partnership with Samsung ensure that
Amara is well placed to deliver on its aspiration of becoming a
mid-tier producer. As the Company move towards the feasibility
study at Baomahun, an updated mineral resource estimate at Yaoure,
and further extensions of the Kalsaka-Sega mine life, Amara is
confident that it can continue to demonstrate the latent value in
the Company for the benefit of all shareholders.
Kalsaka Gold Mine, Burkina Faso
Production statistics
Q3 2012 Q2 2012 Q3 2011 9M 2012 9M 2011
Ore mined (kt) 270 434 550 1,223 1,401
Waste mined (kt) 2,015 1,646 3,209 6,548 9,735
Total tonnage mined (kt) 2,285 2,079 3,759 7,771 11,136
Strip ratio (w:o) 7.45 3.80 5.84 5.35 6.95
Ore processed (kt) 359 408 451 1,174 1,230
Average ore head grade (g/t) 1.29 1.42 1.63 1.27 1.50
Gold production (oz) 14,369 15,191 23,611 42,064 55,129
Cash costs excl.
royalties (US$/oz prod) 883 961 756 951 842
Cash costs excl.
royalties (US$/oz sold) 886 1,008 848 952 890
Average realised gold
price (US$/oz sold) 1,660 1,612 1,746 1,656 1,568
Pre-tax cash margin (US$/oz sold) 774 603 898 705 677
EBITDA (US$m) 10.9 9.1 23.6 27.9 39.4
Kalsaka delivered robust EBITDA in Q3 despite challenging
conditions, with production decreasing by 5% on the previous
quarter. However, due to the lower cash costs achieved in Q3 and
the strengthening gold price, Kalsaka's EBITDA increased by
20%.
Burkina Faso suffered unusually heavy rains this year, which had
a negative impact on both head grade and strip ratio. The original
Kalsaka mine plan for H2 2012 focused on the K-zone 1 pit, which
contains higher than average resource grade material. However, the
heavy rainfall caused pit-wall failures, restricting access to
higher grade ore and increasing waste stripping. Consequently,
Kalsaka's operational team focused on opening lower grade pits,
originally scheduled for mining in H1 2013, in order for production
to continue. The gold produced from this material will not come out
of the heap until Q4 as the leach cycle time is approximately 4
months. Now that the wet season is complete, Kalsaka's mining team
is re-accessing K-zone 1's higher grade material, which is expected
to have a positive impact on head grade and production in H1
2013.
Cash costs per ounce produced in Q3 were lower than in H1 as
expected, due to the working capital cycle of a heap leach
operation. The high grade, low strip ore stacked in Q2, which was
leached in Q3, had a beneficial effect on this quarter's cash
costs, allowing a pre-tax margin of US$774/oz to be generated.
However, cash costs in Q4 will be higher than previously
anticipated as the lower grade ore processed in Q3 is recovered.
Despite this, cash costs per ounce produced for the full year are
expected to remain below US$1,000 per ounce, delivering a healthy
pre-tax cash margin.
As production was budgeted to be weighted towards H2 and the
operational results achieved in Q3 were weaker than anticipated,
full year production is now expected to be 53,000-57,000 ounces.
Despite the weaker production, Kalsaka continues to deliver strong
EBITDA, which differentiates Amara from its exploration-only peers
and self-funds it exploration programme. Amara's production is
expected to increase in 2013 as the higher grade Sega material
begins to be processed together with the delayed K-zone 1 material
at Kalsaka. This, combined with the Company's larger ownership of
Sega (90% compared to 78% at Kalsaka), is expected to ensure that
Amara continues to generate robust cashflow.
Sega
Maintaining cashflow in Burkina Faso until production is
scheduled to commence at Baomahun in 2015 is a key priority for
Amara. The Company is committed to upholding its producer status,
which lends flexibility to its development plans as it continues to
grow its portfolio of assets. The results of the PEA for Sega,
which were announced on 16 October 2012, confirm the potential
viability of mining oxide and transitional material at Sega,
located 20km north of Kalsaka, and transporting it to Amara's
existing heap leach operation at Kalsaka for processing.
The PEA demonstrates that Sega has solid metrics, with a
post-tax NPV of US$49.5 million, using a gold price of US$1,500 per
ounce and a discount rate of 10%. Including the initial acquisition
costs, this delivers a strong internal rate of return ("IRR") of
48%. The upfront capital expenditure required for the project is
limited at US$9.5 million, as the material from Sega will be
trucked to Kalsaka and processed in the existing plant. Combined
with the good existing infrastructure in place, this reduces the
permitting hurdle and diminishes the timeline to production.
Based on the mineral resources delineated at Sega to date, the
mine plan delivers contained gold of 162,825 ounces over the 21
month initial mine life and a cash cost per ounce produced,
excluding royalties, of US$821/oz. Amara's management is optimistic
that production will continue from Kalsaka's reserves until the
trucking of material begins from Sega, ensuring that production
continues uninterrupted. The NI 43-101 technical report is on track
to be filed on SEDAR before the deadline of 30 November 2012 and
the environmental permit is expected to be received from the
Burkina Faso government in Q1 2013. The mining licence is
anticipated to be received shortly thereafter, with mining at Sega
expected to commence in H1 2013.
Kalsaka/Sega exploration
Exploration at the Kalsaka-Sega complex is a primary focus for
Amara. Drilling results received to date give confidence that there
is further upside potential to Sega's current resources, with
particularly encouraging intercepts logged at the Touli prospect.
This upside potential adds further confidence that production will
continue uninterrupted at the Kalsaka-Sega complex as the Company
continues to develop its portfolio of growth assets.
As previously announced, 35,464 metres of RC and RAB drilling
have been completed by the Company on the 313km2 Sega licence area.
This followed up on the 10,000 metre drilling programme conducted
by Orezone in Q1 2012 prior to the transfer to Amara. The recent
drilling has focused on the Touli, Sampella, KNW and Bangassilla
targets. Significant intercepts include(ii):
-- 26m at 3.05g/t from 8m at Touli
-- 18m at 3.49g/t from 18m at Touli
-- 11m at 2.89 g/t from 25m at KNW
-- 5m at 3.48g/t from 96m at Sampella
-- 4m at 2.07g/t from 99m at Bangassilla
A significant intercept has a minimum width of 2m, a minimum
grade of 0.4 g/t and a maximum internal dilution of 2m.
Further RC drilling commenced at KNW in late Q3 and will be
completed, together with further drilling at Touli and initial
drilling at a further target, Tiba3Sud, in Q4 after the harvest.
Exploration work is also ongoing on the Kalsaka permit, focusing on
areas east of the existing K-zone pits along the K-zone shear
structure, where additional resources are expected to be
defined.
Baomahun, Sierra Leone
In Sierra Leone, Amara has completed a fundamental re-analysis
of the structural controls of the Baomahun resources. This work
ensures that the Company not only has a robust geological model at
the core of the Baomahun feasibility study, but it has also proved
to be a valuable exploration tool, defining a number of new
exploration targets that lie within the existing open pit shell
that are currently classified as waste. Work on the Baomahun
resource update is nearing its conclusion and it is anticipated
that the final resource figures will be announced within the next
few weeks.
The feasibility study for Baomahun remains at an advanced stage,
based on a 2Mtpa CIL plant. The two outstanding technical aspects
are the resource update, as detailed above, and geotechnical work
for the final optimised open pit. Amara expects to announce the
timing of the delivery of the feasibility study as part of the
resource update, but it is currently anticipated that this should
be completed in H1 2013. Importantly, with the financing options
inherent in the recently announced strategic partnership with
Samsung, and the work already completed on initial infrastructure
at the Baomahun site, Amara anticipates that it can still meet its
expectation of first gold in 2015 at Baomahun.
Exploration
Due to the onset of the wet season in Sierra Leone, exploration
at Baomahun was minimal during Q3. Whilst drilling at Pujehun South
halted in mid-July, work at the Makong South prospect continued
with sampling and trenching in artisanal areas. Following the
cessation of the rains, drilling has recommenced in November,
focusing on the new targets within the resource area as well as the
Pujehun South prospect.
Drilling at Pujehun South, located 700m north of the Baomahun
deposit, has discovered multiple zones of mineralisation within the
hinge zones of isoclinal folds. The 2013 drilling campaign is
expected to progress Pujehun South to the resource estimation
stage.
Significant results have been received from sampling of the
Makong South artisanal workings in quartz veined mylonites. An
aggressive trenching programme is now underway to take the Makong
South targets to the early drilling stage, with a drilling
programme planned to commence in the current dry season.
Yaoure, Cote d'Ivoire
Exploration is the lifeblood of a mining company and through an
extensive exploration programme, Yaoure forms Amara's medium term
growth. The promising results received in Q2 warranted an
aggressive approach and accordingly up to four diamond rigs were on
site at Yaoure in Q3.
The drilling campaign continues to deliver encouraging results,
underlining the potential for a large scale, moderate-grade, open
pittable deposit. Drilling has covered a strike length of 1km
across the historic open pits targeting a shallow dipping (25 to 35
degrees ) package of mineralised material varying in thickness from
10m to 25m where continuity is being established. However, it is
expected that thinner, higher grade sub-vertical cross-cutting
veins with frequent visible gold contained within the shallow
dipping zones will enhance the overall grade of the ore body.
Significant intercepts reported on 14 August 2012(iii)
included:
-- 17.8m at 4.44 g/t from 111.9m in hole YDD0060
-- 9.4m at 4.88 g/t from 126.6m and 10.3m at 5.58 g/t from 542.8m in hole
YDD0056
-- 6.2m at 9.06 g/t from 421. 7m in hole YDD0054
All of the 53 holes reported this year have encountered
mineralisation, and the mineralisation remains open in all
directions. The current drilling campaign concluded in early
November and the Company expects to announce further drilling
results in late November 2012, with a resource update targeted for
Q1 2013.
The delineation of a sizeable resource at Yaoure would allow
Amara to achieve greater flexibility in its portfolio of assets.
Yaoure's location presents a number of advantages that will enhance
the prospects for a CIL plant to be developed at site. These
include excellent existing infrastructure including close proximity
to the Kossou Barrage which offers the potential for lower
operating and capital costs through the utilisation of
hydro-electric power. In addition Yaoure benefits from an existing
mining licence and environmental permits.
Corporate
Following John McGloin's appointment as Executive Chairman on 28
May 2012, a number of changes have taken place within Amara.
Working alongside Peter Spivey and Pete Gardner, John has refocused
Amara on a portfolio approach, ensuring that all of the Company's
assets in West Africa are optimised and moved along the growth
curve in a timely manner. However, the Company's assets are just
one part of Amara's investment case - people are Amara's most
valuable resource and it is the management team, non-executive
directors and operational staff who will ensure that maximum value
is delivered to shareholders.
John's background in geology has also driven the new approach
towards the Baomahun resource. The focus on gaining a thorough
understanding of the structural controls that underpin the resource
estimate is expected to produce a more reliable geological model
and consequently a better long term mine plan. Management's
philosophy is that it is always best to make decisions with the
maximum information available.
Amara is moving closer to its goal of becoming a mid-tier
producer and to mark the beginning of this transitional period, the
Company changed its name from Cluff Gold plc to Amara Mining plc on
1 October 2012. The rebranding coincided with the change of Amara's
registered office to 29-30 Cornhill, London, EC3V 3NF.
As part of the Board's review of its structure following John's
appointment, Bobby Danchin, Nicholas Berry and Ronald Winston
resigned as directors on 30 September 2012. The Board now comprises
three executive directors and three non-executive directors, which
is appropriate for a company of Amara's size. Amara now has the
right team to drive the Company's growth and achieve the next stage
of its development into a sustainable mid-tier producer.
Financial Report
Group Financial Highlights
US$000 Q3 2012 Q2 2012 Q3 2011 9M 2012 9M 2011
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Revenue 24,145 23,924 38,817 71,674 86,592
Gross profit 9,923 9,994 19,355 26,052 29,761
EBITDA 7,569 6,192 21,987 19,071 33,133
Profit before taxation 5,434 4,110 11,670 10,941 13,876
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Basic EPS (cents per share) 1.79 1.19 4.82 2.41 4.38
Cash generated from operating
activities 16,256 1,569 17,944 23,904 26,984
Net change in cash and cash
equivalents 3,387 (32,708) 8,469 (4,790) 4,694
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Total cash and cash
equivalents 23,850 20,298 25,559 23,850 25,559
Total capital expenditure 10,919 41,379 6,552 63,294 19,076
Amara continued to deliver a robust financial performance in Q3
with Group EBITDA increasing by 22% to US$7.6 million, driven by
the strong financial performance at Kalsaka. At Yaoure, the
quarterly EBITDA represents a US$1.6 million loss as the remaining
gold in process from the old Angovia heap leach was recovered.
Amara's management is targeting reduced administrative costs at
Yaoure in Q4 to reflect the project's status as an exploration
property.
Sustaining capital expenditure fell in the quarter as the main
annual cost, the addition of leach pads at Kalsaka, was incurred
during H1. Other capital expenditure includes some of the initial
costs of mechanical equipment for Sega; however, the majority of
expenditure for Sega will be incurred during Q4 2012 and Q1
2013.
Group exploration expenditure was maintained in line with
budget, with US$9.3 million incurred during the quarter compared to
US$10.6 million in the previous period. At Yaoure, four diamond
drills worked throughout the quarter with the aim of delivering a
resource update in Q1 2013. Expenditure at Baomahun represents the
ongoing costs of the feasibility study, together with maintenance
of the camp and minor exploration work. Kalsaka expenditure relates
entirely to work commencing on the new Sega licences, targeting the
upside potential around the existing resource. Other segment
expenditure relates to the completion of the initial drill
programme in Mali.
Amara ended the quarter with cash and liquid assets totalling
US$28.4 million, comprising US$23.9 million in cash and US$4.5
million in bullion sold after the quarter end. This healthy
financial position has been strengthened further in October by the
drawdown of the US$20 million facility provided by Samsung. This
form of financing is revolutionary for both Amara and the wider
mining sector as, unlike many traditional forms of debt, it does
not require any hedging. The price paid by Samsung for gold is not
fixed in any way, so Amara's shareholders will still see the
majority of the upside of a rising gold price. It also avoids the
disadvantages of other financing options, such as royalties, as it
has a limited life and the obligations to deliver gold to Samsung
cease after the debt is repaid. The longer term relationship with
Samsung set out in the agreement delivers a solution with the
potential to fund a significant proportion of Baomahun's financing
requirements, alleviating a significant amount of risk from the
Company's long term financing plans.
AMARA MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the three and nine months ended 30 September 2012 and 2011
3 months 3 months 9 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2012 2011 2012 2011
Notes US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Continuing operations
Revenue 24,145 38,817 71,674 86,592
Cost of sales (14,222) (19,462) (45,622) (56,831)
------------ ----------- ----------- -----------
Gross profit
9,923 19,355 26,052 29,761
General and
administrative
expenses (2,005) (3,288) (6,830) (6,374)
Other operating costs (2,712) (3,777) (8,173) (9,543)
------------ ----------- ----------- -----------
Operating profit 5,206 12,290 11,049 13,844
Investment income 228 29 157 97
Finance costs - (649) (265) (65)
------------ ----------- ----------- -----------
Profit before taxation 5,434 11,670 10,941 13,876
Income tax (1,184) (3,188) (4,559) (5,016)
------------ ----------- ----------- -----------
Profit for the period 4,250 8,482 6,382 8,860
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Attributable to:
Equity holders of the
parent company 3,001 6,351 3,727 5,769
Non-controlling
interests 1,249 2,131 2,655 3,091
------------ ----------- ----------- -----------
Profit for the period 4,250 8,482 6,382 8,860
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Total comprehensive
income for the period 4,250 8,482 6,382 8,860
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
Earnings per share
Basic (cents per
share) 3 1.79 4.82 2.41 4.38
Diluted (cents per
share) 3 1.78 4.74 2.39 4.30
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
AMARA MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2012
As at As at As at
30 September 30 September 31 December
2012 2011 2011
Notes US$'000 US$'000 US$'000
Unaudited Unaudited Audited
ASSETS
NON-CURRENT ASSETS
Intangible assets 4 120,812 62,441 68,027
Property, plant and
equipment 5 21,540 19,939 17,453
Other receivables - 2,192 1,452
Deferred tax asset - 943 -
-------------- ------------- -------------
Total non-current assets 142,352 85,515 86,932
-------------- ------------- -------------
CURRENT ASSETS
Inventories 6 15,635 16,707 18,275
Other receivables 6,611 4,834 6,586
Cash and cash equivalents 23,850 25,559 28,905
-------------- ------------- -------------
Total current assets 46,096 47,100 53,766
-------------- ------------- -------------
TOTAL ASSETS 188,448 132,615 140,698
-------------- ------------- -------------
-------------- ------------- -------------
CAPITAL AND RESERVES
Share capital 7 2,950 2,374 2,375
Share premium 163,185 117,774 117,823
Merger reserve 15,107 15,107 15,107
Share option reserve 3,748 3,118 3,316
Currency translation reserve 987 987 987
Accumulated losses (27,016) (37,507) (30,886)
-------------- ------------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
THE PARENT 158,961 101,853 108,722
Non-controlling interests 2,026 4,723 3,441
-------------- ------------- -------------
TOTAL EQUITY 160,987 106,576 112,163
-------------- ------------- -------------
NON-CURRENT LIABILITIES
Provisions 9,445 7,397 8,578
Deferred tax liability 168 - 305
-------------- ------------- -------------
Total non-current
liabilities 9,613 7,397 8,883
-------------- ------------- -------------
CURRENT LIABILITIES
Trade and other payables 15,575 14,177 14,705
Corporation tax 2,273 4,465 4,947
-------------- ------------- -------------
Total current liabilities 17,848 18,642 19,652
-------------- ------------- -------------
TOTAL LIABILITIES 27,461 26,039 28,535
-------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 188,448 132,615 140,698
-------------- ------------- -------------
-------------- ------------- -------------
AMARA MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the three and nine months ended 30 September 2012 and 2011
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
---------------------------------------------
Share Currency
Share Share Merger option translation
capital premium reserve reserve reserve
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2011 2,365 117,410 15,107 2,556 987
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Profit for the period - - - - -
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Total comprehensive income for
the period - - - - -
----------------------------------------------------------------------------
Issue of ordinary share capital 9 364 - - -
Share option charge - - - 717 -
Reserve transfer - - - (155) -
Dividend - - - - -
----------------------------------------------------------------------------
As at 30 September 2011 2,374 117,774 15,107 3,118 987
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Profit for the period - - - - -
----------------------------------------------------------------------------
Total comprehensive income for
the period - - - - -
----------------------------------------------------------------------------
Issue of ordinary share capital 1 49 - - -
Share option charge - - - 199 -
Reserve transfer - - - (1) -
Dividend - - - - -
----------------------------------------------------------------------------
As at 31 December 2011 2,375 117,823 15,107 3,316 987
----------------------------------------------------------------------------
Profit for the period - - - - -
----------------------------------------------------------------------------
Total comprehensive income for
the period - - - - -
----------------------------------------------------------------------------
Issue of ordinary share capital 575 47,712 - - -
Share issue costs - (2,350) - - -
Share option charge - - - 575 -
Reserve transfer - - - (143) -
Dividend - - - - -
----------------------------------------------------------------------------
As at 30 September 2012 2,950 163,185 15,107 3,748 987
----------------------------------------------------------------------------
ATTRIBUTABLE TO
EQUITY HOLDERS OF THE
PARENT
----------------------
Non-
Accumulated Sub- controlling Total
losses total interests equity
US$'000 US$'000 US$'000 US$'000
As at 1 January 2011 (43,431) 94,994 2,012 97,006
----------------------------------------------------------------------------
Profit for the period 5,769 5,769 3,091 8,860
----------------------------------------------------------------------------
Total comprehensive income for
the period 5,769 5,769 3,091 8,860
----------------------------------------------------------------------------
Issue of ordinary share capital - 373 - 373
Share option charge - 717 - 717
Reserve transfer 155 - - -
Dividend - - (380) (380)
----------------------------------------------------------------------------
As at 30 September 2011 (37,507) 101,853 4,723 106,576
----------------------------------------------------------------------------
Profit for the period 6,620 6,620 1,732 8,352
----------------------------------------------------------------------------
Total comprehensive income for
the period 6,620 6,620 1,732 8,352
----------------------------------------------------------------------------
Issue of ordinary share capital - 50 - 50
Share option charge - 199 - 199
Reserve transfer 1 - - -
Dividend - - (3,014) (3,014)
----------------------------------------------------------------------------
As at 31 December 2011 (30,886) 108,722 3,441 112,163
----------------------------------------------------------------------------
Profit for the period 3,727 3,727 2,655 6,382
----------------------------------------------------------------------------
Total comprehensive income for
the period 3,727 3,727 2,655 6,382
----------------------------------------------------------------------------
Issue of ordinary share capital - 48,287 - 48,287
Share issue costs - (2,350) - (2,350)
Share option charge - 575 - 575
Reserve transfer 143 - - -
Dividend - - (4,070) (4,070)
----------------------------------------------------------------------------
As at 30 September 2012 (27,016) 158,961 2,026 160,987
----------------------------------------------------------------------------
AMARA MINING PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the three and nine months ended 30 September 2012 and 2011
3 months 3 months 9 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2012 2011 2012 2011
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Cash flow from operating
activities
Operating profit for the
period 5,206 12,290 11,049 13,844
Depreciation/amortisation 1,600 4,393 7,069 11,610
Increase in trade and
other payables 1,301 2,544 1,615 4,236
Decrease/(increase) in
trade and other
receivables 5,785 (38) 1,169 (2,002)
Decrease/(increase) in
inventories 1,913 (1,433) 1,560 (2,759)
Increase in provisions 253 4 867 1,338
Share option charge 198 184 575 717
------------ ------------ ------------ ------------
Net cash flows from
operating activities 16,256 17,944 23,904 26,984
------------ ------------ ------------ ------------
Income taxes paid (1,521) (815) (7,370) (3,818)
------------ ------------ ------------ ------------
Cash flows used in
investing activities
Interest receivable 63 29 157 97
Interest payable - (5) - (23)
Purchase of property,
plant and equipment (1,415) (1,147) (9,360) (3,392)
Purchase of intangible
assets - deferred
exploration (9,996) (7,165) (27,643) (15,147)
Purchase of intangible
assets - mining rights - (14,959)
------------ ------------ ------------ ------------
Net cash flows used in
investing activities (11,348) (8,288) (51,805) (18,465)
------------ ------------ ------------ ------------
Cash flows (used in)/from
financing activities
Proceeds from the issue
of share capital - 8 34,551 373
Dividends paid - (380) (4,070) (380)
------------ ------------ ------------ ------------
Net cash flows (used
in)/from financing
activities - (372) 30,481 (7)
------------ ------------ ------------ ------------
Net increase/(decrease)
in cash and cash
equivalents 3,387 8,469 (4,790) 4,694
Cash and cash equivalents
at start of period 20,298 17,734 28,905 20,907
Exchange gains/(losses)
on cash 165 (644) (265) (42)
------------ ------------ ------------ ------------
Cash and cash equivalents
at end of period 23,850 25,559 23,850 25,559
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
AMARA MINING PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the three and nine months ended 30 September 2012 and 2011
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 2011, 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 nine months
ended 30 September 2012 and 30 September 2011 is unaudited, and has
not been reviewed by the auditors.
The financial information for the year ended 31 December 2011
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 2011 was unqualified and did not contain any statement
under sections 498 (2) or (3) of the Companies Act 2006.
After review of the Group's operations, financial position and
forecasts, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, the directors continue to
adopt the going concern basis in preparing the unaudited interim
financial information.
2. Segmental reporting
An analysis of the consolidated income statement by operating
segment, presented on the same basis as that set out in the 2011
annual report, is set out below:
All other
Kalsaka Yaoure Baomahun segments Total
US$'000 US$'000 US$'000 US$'000 US$'000
Three months ended 30
September 2012
External revenue 24,297 382 - - 24,679
Direct costs of production (11,603) (1,239) - - (12,842)
Other operating and
administrative costs (1,808) (711) - (1,749) (4,268)
--------------------------------------------------
Segmental result - EBITDA 10,886 (1,568) - (1,749) 7,569
--------------------------------------------------
--------------------------------------------------
Exploration expenditure 1,986 3,908 2,510 927 9,330
Other capital expenditure 736 39 612 202 1,589
Mining rights - - - - -
--------------------------------------------------
--------------------------------------------------
Three months ended 30
September 2011
External revenue 42,746 2,083 - - 44,829
Direct costs of production (17,091) (229) - - (17,320)
Other operating and
administrative costs (2,051) (1,174) - (2,297) (5,522)
--------------------------------------------------
Segmental result - EBITDA 23,604 680 - (2,297) 21,987
--------------------------------------------------
--------------------------------------------------
Exploration expenditure 2,191 - 3,038 95 5,324
Other capital expenditure 464 559 161 44 1,228
Mining rights - - - - -
--------------------------------------------------
--------------------------------------------------
Nine months ended 30
September 2012
External revenue 69,995 2,089 - - 72,084
Direct costs of production (36,506) (2,687) - - (39,193)
Other operating and
administrative costs (5,583) (2,514) - (5,723) (13,820)
--------------------------------------------------
Segmental result - EBITDA 27,906 (3,112) - (5,723) 19,071
--------------------------------------------------
--------------------------------------------------
Exploration expenditure 5,442 9,989 10,266 1,478 27,174
Other capital expenditure 3,759 279 5,521 235 9,794
Mining rights 26,326 - - - 26,326
--------------------------------------------------
--------------------------------------------------
Nine months ended 30
September 2011
External revenue 86,508 8,346 - - 94,854
Direct costs of production (41,486) (7,355) - - (48,841)
Other operating and
administrative costs (5,604) (2,387) - (4,889) (12,880)
--------------------------------------------------
Segmental result - EBITDA 39,418 (1,396) - (4,889) 33,133
--------------------------------------------------
--------------------------------------------------
Exploration expenditure 3,444 - 11,905 192 15,541
Other capital expenditure 2,248 793 393 101 3,535
Mining rights - - - - -
--------------------------------------------------
--------------------------------------------------
A reconciliation of segmental revenue to that reported in the
interim financial statements is as follows:
3 months 3 months 9 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2012 2011 2012 2011
US$'000 US$'000 US$'000 US$'000
Revenue for
reportable segments 24,679 44,829 72,084 94,854
Change in accrued
revenue for gold
bullion in stock (534) (6,012) (410) (8,262)
------------- ------------- ------------- -------------
Revenue for interim
financial statements 24,145 38,817 71,674 86,592
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
A reconciliation of segmental EBITDA to the profit before tax
reported in the interim financial statements is as follows:
3 months 9 months 9 months
3 months ended ended ended
ended 30 30 30
30 September September September September
2012 2011 2012 2011
US$'000 US$'000 US$'000 US$'000
EBITDA for
reportable segments 7,569 21,987 19,071 33,133
Depreciation and
amortisation (1,459) (4,387) (6,928) (11,610)
Share based payments (198) (184) (575) (717)
Net interest
received 59 24 153 74
Change in accrued
profit for gold
bullion in stock (679) (4,002) (521) (5,240)
Exploration costs
written-off - - - -
Exchange rate
variance 336 (1,201) (150) (199)
VAT provided in
period (194) (567) (109) (1,565)
-------------- ------------- ------------- -------------
Profit before
taxation 5,434 11,670 10,941 13,876
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
3. Earnings per share
The calculation of basic and diluted earnings per ordinary share
is based on the following data:
3 months 3 months 9 months 9 months
ended ended ended ended
30 September 30 September 30 September 30 September
2012 2011 2012 2011
Shares Shares Shares Shares
Weighted average number
of ordinary shares in
issue for the period
- Number of shares
with voting rights 168,047,937 131,848,222 154,707,791 131,733,492
- Effect of share
options in issue 579,772 2,112,481 1,277,411 2,317,956
------------- ------------ ------------ ------------
- Total used in
calculation of
diluted earnings per
share 168,627,709 133,960,702 155,985,202 134,051,448
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Profit for the period
attributable to owners
of the parent (US$'000) 3,000,749 6,351,458 3,727,120 5,769,623
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Earnings per share
- Basic (cents per
share) 1.79 4.82 2.41 4.38
- Diluted (cents per
share) 1.78 4.74 2.39 4.30
------------- ------------ ------------ ------------
4. Intangible assets
Deferred Exploration
exploration and mining
Costs rights Total
US$'000 US$'000 US$'000
Cost
At 1 January 2011 22,242 30,223 52,465
Additions 15,541 - 15,541
-------------- -------------- --------------
At 30 September 2011 37,783 30,223 68,006
Additions 6,155 - 6,155
-------------- -------------- --------------
At 31 December 2011 43,937 30,223 74,160
Additions 27,175 26,326 53,501
-------------- -------------- --------------
At 30 September 2012 71,112 56,549 127,661
-------------- -------------- --------------
Depreciation
At 1 January 2011 - 4,114 4,114
Charge for the period - 1,451 1,451
-------------- -------------- --------------
At 30 September 2011 - 5,565 5,565
Charge for the period - 568 568
-------------- -------------- --------------
At 31 December 2011 - 6,133 6,133
Charge for the period - 716 716
-------------- -------------- --------------
At 30 September 2012 - 6,849 6,849
-------------- -------------- --------------
Net book value
At 30 September 2012 71,112 49,700 120,812
-------------- -------------- --------------
-------------- -------------- --------------
At 31 December 2011 43,937 24,090 68,027
-------------- -------------- --------------
-------------- -------------- --------------
At 30 September 2011 37,783 24,658 62,441
-------------- -------------- --------------
-------------- -------------- --------------
5. Property, plant and equipment
Motor
Mine development vehicles,
Assets in and associated office
the course property, plant equipment,
of and equipment fixtures and
construction costs computers Total
US$'000 US$'000 US$'000 US$'000
Cost
At 1 January 2011 - 70,604 4,698 75,302
Additions - 2,526 1,009 3,535
Transfer - 161 (161) -
------------ ------------------ ------------- --------
At 30 September 2011 - 73,291 5,546 78,837
Additions - - 372 372
Disposals - (24) - (24)
------------ ------------------ ------------- --------
At 31 December 2011 - 73,267 5,918 79,185
Additions 4,466 3,981 1,347 9,794
Disposals - (27) - (27)
------------ ------------------ ------------- --------
At 30 September 2012 4,466 77,221 7,265 88,952
------------ ------------------ ------------- --------
Depreciation
At 1 January 2011 - 44,439 2,978 47,417
Charge for the period - 10,825 656 11,481
Transfer - 133 (133) -
------------ ------------------ ------------- --------
At 30 September 2011 - 55,397 3,501 58,898
Charge for the period - 2,249 590 2,839
Disposals - (5) - (5)
------------ ------------------ ------------- --------
At 31 December 2011 - 57,641 4,091 61,732
Charge for the period - 4,865 842 5,707
Disposals - (27) - (27)
------------ ------------------ ------------- --------
At 30 September 2012 - 62,479 4,933 67,412
------------ ------------------ ------------- --------
Net book value
At 30 September 2012 4,466 14,742 2,332 21,540
------------ ------------------ ------------- --------
------------ ------------------ ------------- --------
At 31 December 2011 - 15,626 1,827 17,453
------------ ------------------ ------------- --------
------------ ------------------ ------------- --------
At 30 September 2011 - 17,894 2,045 19,939
------------ ------------------ ------------- --------
------------ ------------------ ------------- --------
6. Inventories
As at As at As at
30 September 30 September 31 December
2012 2011 2011
US$'000 US$'000 US$'000
Consumable stores 1,702 1,971 2,358
Ore stockpiles 5,764 1,900 6,544
Gold in process 6,255 8,758 7,347
Gold bullion 1,914 4,078 2,026
--------------- --------------- ---------------
15,635 16,707 18,275
--------------- --------------- ---------------
--------------- --------------- ---------------
7. Share capital
As at As at As at
30 September 30 September 31 December
2012 2011 2011
US$'000 US$'000 US$'000
Authorised:
200,000,000 Ordinary shares
of 1p each 3,080 3,080 3,080
--------------- --------------- ---------------
--------------- --------------- ---------------
No. No. No.
Issued and Fully Paid:
Ordinary shares of 1p each 168,047,937 131,852,026 131,897,937
--------------- --------------- ---------------
--------------- --------------- ---------------
US$'000 US$'000 US$'000
Issued and Fully Paid:
Ordinary shares of 1p each 2,950 2,374 2,375
--------------- --------------- ---------------
During the period 36,150,000 ordinary shares were issued as
follows:
On 8 March 2012, 150,000 ordinary shares of 1p were issued at
74p in respect of the exercise of share options.
On 22 March 2012, by way of placing, 25,000,000 ordinary shares
of 1p were issued at 92p.
On 24 March 2012, 11,000,000 ordinary shares of 1p were issued
at 62.75p in respect of the acquisition of the Sega Gold project in
Burkina Faso.
8. Contingent liabilities
As stated in note 21 of the Annual report and accounts for the
year ended 31 December 2011, the Company received a proposal for
additional costs sustained by the mining contractor at the Yaoure
Mine totalling US$9.2m in February 2011.
An updated claim was made in June 2011 totalling a further
US$5.4m. Whilst the situation remains unresolved the Company has
received external advice that confirms that the current provision
of US$1.0m is, in the opinion of the Directors, the maximum payable
under the terms of the contract.
The terms of the contract clearly state that the rates set out
therein shall apply regardless of the difficulty in performing the
works under the contract, such that the majority of the additional
costs claimed cannot be recovered under the contract.
9. Post balance sheet events
On 12 September the Company announced the signing of a strategic
alliance with Samsung C&T Corporation which was due to commence
with a US$20m unhedged debt facility. Following the completion of
certain conditions precedent the US$20m was drawdown by the Company
on 24 October 2012.
This report includes certain "forward-looking information"
within the meaning of applicable Canadian securities
legislation.
All statements other than statements of historical fact included
in this report, including, without limitation, the positioning of
the Company for future success, anticipated production at Kalsaka
and cash flow from Kalsaka, expected grade of material processed
from Sega, the finalisation of a fiscal stability agreement with
the Sierra Leone Government, commencement of production at
Baomahun, statements regarding the exploration, drilling results,
mineral resource update and potential future production at Yaoure,
Kalsaka and Baomahun, the timing of the feasibility study for
Baomahun, and future capital plans and objectives of Amara, are
forward-looking information that involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from Amara's expectations include, among others, the
Company's ability to delineate sufficient sulphide resources for
the development of a CIL/CIP operation, risks related to
international operations, the actual results of current exploration
and drilling activities, changes in project parameters as plans
continue to be refined as well as future price of gold. Although
Amara has attempted to identify important factors that could cause
actual results to differ materially, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. Amara does not undertake to update any forward-looking
statements that are included herein, except in accordance with
applicable securities laws.
Non IFRS Measures - EBITDA (Earnings Before Interest, Income
Taxes, Depreciation and Amortization), cash cost per ounce, pre-tax
cash margin and average realised gold price are financial measures
used by many investors to compare mining companies on the basis of
operating results, asset value and the ability to incur and service
debt. EBITDA is used because Amara's net income alone does not give
an accurate picture of its cash generating potential. Management
believes that EBITDA is an important measure in evaluating the
Company's financial performance, ability to fund future capital
expenditures and repay any future project financing, and in
determining whether to invest in Amara. Similarly, cash cost per
ounce, pre-tax cash margin and average realised gold price are
measures that are considered key measures by Amara in evaluating
the Company's operating performance. However, EBITDA, cash cost per
ounce and average realised gold price are not measures of financial
performance, nor do they have a standardized meaning prescribed by
IFRS, and may not be comparable to similar measures presented by
other companies.
Investors are cautioned that EBITDA should not be construed as
an alternative to net income or loss determined in accordance with
IFRS as an indicator of Amara's performance or to cash flows from
operating, investing and financing activities of liquidity and cash
flows. These measures have been described and presented in this
document in order to provide shareholders and potential investors
with additional information regarding the Company's operational
performance, liquidity and its ability generate funds to finance
its operations.
Peter Brown is a "Qualified Person" within the definition of
National Instrument 43-101 and has verified the data disclosed in
this release, including sampling, analytical and test data
underlying the information contained herein, and reviewed and
approved the information contained within this announcement. Mr
Brown (MIMMM) is the Group Exploration Manager.
(i) See the Company's press release, "Results of the Preliminary
Economic Assessment and Exploration Update for the Sega Gold
Project", dated 16 October 2012
(ii) See the Company's press release, "Results of the
Preliminary Economic Assessment and Exploration Update for the Sega
Gold Project", dated 16 October 2012
(iii) See the Company's press release "Further drilling results
from the Yaoure project", dated 14 August 2012
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT
OF THIS PRESS RELEASE
Contacts: Amara Mining plc John McGloin, Chairman Peter Spivey,
Chief Executive Officer Pete Gardner, Finance Director Katharine
Sutton, Head of Investor Relations +44 (0)20 7398 1420 Canaccord
Genuity Limited (Nominated Adviser & Broker, London) Rob
Collins Sebastian Jones Joe Weaving +44 (0)20 7523 8350 Pelham Bell
Pottinger (Financial Public Relations) Charlie Vivian Daniel Thole
Lorna Spears +44 (0)20 7861 3232