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Ariana Resources plc RNS Release

Kiziltepe Operational Update


RNS Number : 7149J
Ariana Resources PLC
30 June 2017
 

 

 

 

 

 

 

30 June 2017

AIM: AAU

 

KIZILTEPE OPERATIONAL UPDATE

 

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, is pleased to provide the following operational update from the Kiziltepe Mine ("Kiziltepe" or "the Project").  Kiziltepe is part of the Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana.

 

Highlights:

 

·     Processing plant operating to design specifications, with mill availability having increased to over 97% during June 2017.

 

·     Process recoveries of gold and silver are continuing to trend considerably higher than feasibility-study expectations and leach times remain faster than predicted.

 

·     Grade of ore produced from the open-pit is continuing to increase with target grades of >3 g/t gold and >40 g/t silver expected to be met from July 2017 onwards. 

 

·     Approximately 1,930 oz gold and 14,520 oz silver has been sold by the refinery to date; gold and silver sales during the period to end June 2017 realised at prices ranging from US$1,295-1,225/oz and US$18.2-16.2/oz respectively.

 

·     Further doré pour of up to 354 oz gold and 3,215 oz silver expected today, completing production during June 2017; gold and silver in circuit after this pour will be 621 oz and 9,064 oz respectively.

 

·     Waste movement from the open-pit is occurring at the expected rate to support the construction of the second stage of the tailings dam; further interim capacity of the tailings dam will be ready for use by mid-July.

 

·     Operation in process of transitioning to commercial production, with formal quarterly operational reporting expected accordingly.

 

·     Loan repayments to Turkiye Katilim Finans Bankasi A.S. have been made on their scheduled basis and have amounted to over US$4 million as at the end of June 2017.

 

Dr. Kerim Sener, Managing Director, commented: 

 

"We are very pleased to provide this further interim report on the operational ramp-up of the Kiziltepe Mine. The operation continues to deliver at or beyond our expectations and we are encouraged by the continuation of several positive factors which remain substantially above feasibility design parameters.  In particular, the higher than expected recoveries and lower leach times, will contribute towards enhanced operational efficiencies.  In time, this may enable other aspects of the operation, such as mill throughput, to be further improved.

 

We are expecting to make the transition in to commercial production shortly, particularly once we have achieved consistent high-rate mill throughput and our monthly gold and silver output achieves its target.  The ramp-up period has proceeded smoothly and to a significant degree has met our internal production estimates.  We have encountered some issues with the clay content of the ore at times, particularly during periods of heavy rainfall, as such material has a tendency of decreasing the feed rate to the mill.  However, we are investigating ways to mitigate this and in any case we are not expecting this to remain a concern over the very dry summer months ahead of us."

 

Summary of Project

 

The Kiziltepe operation is currently expected to deliver approximately 20,000 oz gold equivalent per annum over eight years of initial mine life, for a total of up to 160,000 oz gold equivalent based on current resources.  The operating company, Zenit Madencilik San. ve Tic. A.S. (50:50 JV between Ariana and Proccea) will be making repayments against its loan from Turkiye Finans Katilim Bankasi A.S. based on a pre-determined schedule.  Major loan repayments will have been completed by April 2020 and, during this time, excess cash-flow from the operation will be used to make repayments of loans provided by Ariana and Proccea jointly to the JV for exploration and development respectively.  After the repayment of all loans, profits from the operation will be shared on a 51:49 basis between Ariana and Proccea respectively.

 

Ramp-up to full production capacity at Kiziltepe will be concluded imminently, following which quarterly production reporting will commence.  The Company has also completed a new resource estimate for the project based on recent drilling and geological interpretation.  Detailed technical and economic assessments will be completed on several satellite vein systems which are not currently in the mining plan, in anticipation of these being developed in future years.  The Company is currently targeting a minimum ten-year mine life, which will require the addition of a further 40,000 oz gold equivalent in reserves outside of the four main veins (Arzu South, Arzu North, Banu and Derya) that are currently scheduled to be mined.

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

 

Contacts:

 

Ariana Resources plc

Tel: +44 (0) 20 7407 3616

Michael de Villiers, Chairman


Kerim Sener, Managing Director




Beaumont Cornish Limited

Tel: +44 (0) 20 7628 3396

Roland Cornish / Felicity Geidt




Beaufort Securities Limited

Tel: +44 (0) 20 7382 8300

Jon Belliss




Panmure Gordon (UK) Limited

Tel: +44 (0) 20 7886 2500

Adam James / Tom Salvesen




 

Editors' Note

 

About Ariana Resources:

 

Ariana is an exploration and development company focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey.  The Company is developing a portfolio of prospective licences originally selected on the basis of its in-house geological and remote-sensing database.

 

The Company's flagship assets are its Kiziltepe and Tavsan gold projects which form the Red Rabbit Gold Project.  Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey.  This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  These core projects, which are separated by a distance of 75km, form part of a 50:50 Joint Venture with Proccea Construction Co.  The Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is currently in production.  The total resource inventory at the Red Rabbit Project and wider project area stands at c. 605,000 ounces of gold equivalent.  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on future production is payable to Franco-Nevada Corporation.  At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

 

In north-eastern Turkey, Ariana owns 100% of the Salinbas Gold Project, comprising the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects.  The total resource inventory of the Salinbas project area is c. 1 million ounces of gold equivalent.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

 

Beaufort Securities Limited and Panmure Gordon (UK) Limited are joint brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.

 

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com .

 

 

Glossary of Technical Terms:

 

"doré" semi-pure alloy of gold and silver;

 

"g/t" grams per tonne;

 

"kg" Kilograms;

 

"oz" Ounces;

 

"tpa" tonnes per annum.

 

 

Ends

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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