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Ariana Resources plc: THE INVESTMENT CASE

Ariana on track for first gold pour this year

Ariana Resources remains on track to produce its first gold from the Kiziltepe mine later this year
Ariana on track for first gold pour this year
Chief executive Kerim Sener in Turkey

There’s been some serious snowfall in Turkey this winter, but nothing that’s put Ariana Resources (LON:AAU) off its stride as it continues with development work at the Kiziltepe gold mine in the west of the country.

The current plan is that first gold will be poured at Kiziltepe later this year, probably in the early autumn, with the precise schedule somewhat dependent on the timely delivery of the ball mill, which is being sourced from Istanbul.

The latest reports from site are positive, and Ariana’s long-standing chief executive Kerim Sener is in a confident frame of mind.

“It’s all good,” he says. “We’ve had some snowfall down at Kiziltepe, but we’ve also had blue skies and there’s not been much rain. A lot of activity’s gone on over the winter.”

To that end, the company reports that most of the on-site accommodation, laboratory and administration buildings have been completed and that personnel will now be accommodated on site within the next few days.

“That keeps costs down, keeping everyone on site,” says Sener simply.

It also means that the pace of work can more easily be maintained, as there is to be no let up as winter turns to spring.

Within the next few days the structural steel will start to arrive, and at that point work can begin in earnest on the processing plant and on the housing for the crushers and the ball mills.

The company has already completed its first blast with a view to the development of the open pit mine, and earth moving on the open pit access ramp is now underway.

“By early summer the process plant will be largely complete,” says Sener. He talks of his aspiration to complete the first gold pour by late summer, and of his aspiration for a quick ramp up to the Kiziltepe nameplate capacity of 150,000 tonnes per year.

That equates to production of around 20,000 ounces of gold per year, although there is some scalability in the plant and Sener says the precise numbers may be varied depending on the grade and the gold price.

That last, of course, is the great imponderable. Ariana is more than comfortable with the current gold price of around US$1,200 per ounce. Indeed, it wouldn’t experience too much discomfort if the price were to fall again down towards US$1,000.

But the momentum appears to be swinging to the upside in the face of ongoing global economic uncertainty and the tightrope that Janet Yellen appears to be walking in the USA.

In that context, Ariana’s plans to be producing by late summer or early autumn could turn out to be serendipitous. After a long wait, it would surely be just reward for Ariana’s shareholders if the first gold sales from Kiziltepe went through into a strong and rising gold market.




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