www.arianaresources.com
Ariana is an AIM-listed and PLUS-traded gold exploration and development company which aims to develop new gold mines in Turkey. Ariana is lead by an experienced board and is spearheaded by a focused Turkish management team. Current resources stand at approximately 400,000 ounces of gold in western Turkey, with two key projects under development: the high-grade Kiziltepe prospect and the heap-leachable Tavsan prospect. An exploration joint venture with European Goldfields (20% shareholders in Ariana) in northeastern Turkey is focused on the Ardala copper-gold porphyry and surrounding areas. Ariana holds a large and prospective licence portfolio from which a pipeline of new exploration targets is being generated for drill-testing utilizing an ‘in-house’ drilling team. Exploration and development success is being delivered via a strategy which integrates geoscientific knowledge and new technologies to identify and advance prospects for drill-testing. Ariana aims to develop a portfolio of licences in western Turkey which contain an aggregate of one million ounces of gold; a target which it is already on the way to achieving.
Ariana Resources looks good value, says Fairfax
Ariana Resources (LON:AAU) looks good value given its modest price tag and based on the potential of its assets in western Turkey, according to John Meyer, analyst at City broker Fairfax.
There, it is developing the Kiziltepe mine, part of the Red Rabbit project.
"The company’s relatively small (£11 million) capitalisation looks like good value considering its potential,” Meyer said.
“Management appear relatively modest in their statements with a deliberately conservative view on the potential to expand on both future gold production and new resources."
Yesterday, the firm revealed positive results from a geophysical study of the area, further underlining Fairfax's confidence in the company.
Production from the mine is planned at around 20,000 ounces per year gold equivalent over seven years from a total resource at Red Rabbit of 447,591 ounces.
Red Rabbit consists of the Kiziltepe, Kepez West, and Karakavak prospects.
Yesterday, the firm revealed “numerous high priority drill targets” from these two satellite prospects.
"Large, high resistivity and chargeability anomalies” have been identified at Kepez West, while two main gold-bearing quartz veins on the Karakavak prospect are connected by a sub-surface structure, providing 1.7 kilometres of untested strike length.
The company says it will now focus in on a handful of targets as it plans its latest drilling programme.
The Red Rabbit gold project brings together the Kiziltepe prospect with the Tavsan gold area of the Turkish construction company Proccea.
Together they have a resource of 450,000 ounces of gold and gold equivalent, though the target is to take that figure to at least 500,000 ounces. From that they hope to produce around 30,000 ounces per annum over a five year period.
Proccea has committed to spending US$8 million to earn a 50 per cent stake in the joint venture company.
Phase one of the project will be overseen by Ariana, which will include the feasibility study and environmental permitting process.
Once this is completed the project will then be handed over to Proccea, which will supervise the construction of the gold plant.
Fairfax said that Kiziltepe (232,000 ounces) and Tavsan (215,000 ounces) remained open to the addition of further resources and indicated the start of a campaign which could produce significantly greater gold or silver resources within these regions.
Interestingly, the broker notes that a permit to mine is relatively simple but the permits to construct a plant to use cyanide and to produce gold in dore form is more complex.
"This is the key to the venture and delays here can prove critical for smaller gold producers," it added.
Fairfax’s Meyer said: "Ariana Resources is moving quickly to develop its first gold mine and to increase gold and silver resources on the JV and wholly owned license areas.”
