How do you keep share prices buoyant during the long lag between financing a junior mine and completing its construction? - old hands always say it’s important for juniors in these circumstances to keep the newsflow coming thick and fast.
And somewhat counterintuitively it can even be better if the newsflow doesn’t relate to the build, but rather to exploration and blue-sky upside.
After all, there isn’t much value in announcing the arrivals of ball mills or crushing plants on site – investors are expecting that to happen anyway.
What they might not be expecting, though, is an announcement like the one which came out from Ariana Resources plc (LON:AAU) on 16th June.
This stated that Arian had discovered a new vein system at the northern end of its Kiziltepe gold project, and that rock chip sampling had returned grades as high as 5.27 grams per tonne gold plus 21.5 grams silver, and 4.87 grams gold plus 8 grams of silver.
Rock chip sampling is an early stage in the overall exploration process and there’s not too much that can be gleaned from these early results, other than the broad key conclusion: there is definitely something interesting on this section of ground.
And it’s that type of news, allied with Ariana’s concurrent statement that it’s lining up drilling rigs to go to work in July and August, that keeps investors interested.
But what does the new discovery really mean?
Firstly, says Ariana’s long-standing chief executive Kerim Sener, it’s not likely to have any impact on the design of Kiziltepe itself.
The building work continues apace and the company is on track to meet guidance that the plant will be commissioned in the third quarter of this year, with first production following on in the fourth.
Nevertheless, he is planning to follow up on this new find.
“We’re going back in and collecting more samples,” he says. Once they’re in, a decision will be taken about where best to deploy the drill rigs.
Because the new zone to the north of Kiziltepe isn’t the only prospective area that Ariana has its sights on.
It’s also just gained permission to drill on the Karakavak area around 10 kilometres to the north-east of Kiziltepe.
This, says Sener, is “an extensive low-sulphidation gold-bearing vein system.” As such it’s also work a look, and results from drilling work there might well serve to keep the fires burning beneath investors’ feet in the final run up to commissioning at Kiziltepe.
Either way the company plans to drill at least 2,500 metres into its Turkish ground this summer, and possibly as much as 4,000 metres, depending on what sort of core comes up out of the ground.
In the background, the work at Kiziltepe continues, under the auspices of what Sener calls an “excellent construction crew.” These, he explains, are being “guided” by the team from Ariana’s joint venture partner, local heavyweight conglomerate Proccea.
So all told, the newsflow for the second half of the year from Ariana is likely to be strong indeed and as long as the gold price holds up the company looks set to close out 2016 in very good shape.