Ariana Resources plc (LON:AAU) is eyeing a second mine at its Red Rabbit project in Turkey after a scoping study at Tavsan came back very favourably.
Gold production from Red Rabbit is expected to get underway this year from the new Kiziltepe mine.
Tavsan would add a further 30,000 ounces a year to the 20,000 expected from Kiziltepe.
The scoping study showed production at that level would cost between US$559-630/oz over the expected four-year mine life and generate a net present value of US$41.9mln at a gold price of US$1,250.
That is a return of 80% on the expected US$20mln build cost plus operating expenses.
Kiziletepe is just 75km away and the plan will be for Tavsan to use a lot of its infrastructure for processing.
Kerim Sener, Ariana’s managing director, said that following the numbers in the scoping study it will look at fast-tracking further exploration and development work at Tavsan.
Completion of a more detailed ore-feasibility study (PFS) in 2017 will be an aim.
"This is an excellent result which reinforces our view that the Tavsan Sector will become a valuable additional source of revenue.”