Ariana Resources PLC (AIM:AAU) said the Kiziltepe mine in Turkey produced 20,737 ounces (oz) of gold in 2021, which was 9% above expectations.
The mineral exploration company owns 23.5% of Kiziltepe through its 23.5% interest in Zenit Madencilik San. ve Tic. A.S., a joint venture with Ozaltin Holding A.S. and Proccea Construction Co.
By the end of 2021, the mine had produced a total of 104,937 oz of gold and 1,154,805 oz of silver, recording US$177mln in revenue since operations began in early 2017.
"2021 marked the fifth full-year of operations at Kiziltepe, which has performed flawlessly and consistently above guidance since day one, and an increase in production from 2020,” said Ariana managing director Dr Kerim Sener.
"As at the end of 2021, within a period of less than five years, total production from Kiziltepe comprised more gold than the original eight-year life of mine production estimated from the feasibility study, highlighting the significant upside generated from Kiziltepe and surrounding prospects such as Kepez.
“This has occurred against a backdrop of improved economic conditions, operational excellence and precise planning. Looking to the future, we now expect to double life of mine production as compared to the feasibility study, once all future permitting requirements are satisfied."
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Ariana said Zenit achieved gross full-year revenue of US$42.9mln last year at an average realised gold price of US$1,763/oz against an average revenue per gold ounce of US$2,067 (due to silver credit).
"While the past year has seen unprecedented reinvestment into the operational company in terms of exploration and development (to help extend mine life) and the significant plant expansion (to double throughput capacity), this has been balanced by the second-best revenue flow we have ever seen into the business," Sener said.
"This, coupled with our focus on maintaining the lowest possible cash costs (typically in the US$500-US$600 range), continues to yield significant operational margin, especially considering our hard currency denominated revenue stream within a declining value local currency environment."
Ariana said mining operations are continuing at Arzu North and Derya, with additional high-grade (7 to 8 grams per tonne of gold) material being trucked from Kepez. Expansion of these operations is expected during the current year.
A processing plant expansion was completed in the latter half of 2021, with plant capacity now 300% above the feasibility design.
Sener said Ariana continues to reinvest income from its Turkish operating company into its business with a view to expanding its interests across Eastern Europe and further afield.
“In particular, we are pleased to see the progress being made by Venus Minerals towards its proposed IPO in London and we look forward to continuing our involvement in their exploration and development plans,” he said.
"In addition, current discovery-stage investments made during the year as part of our Project Catalyst Strategy across the Eastern Hemisphere are enhancing our operational reach and exposure to exploration upside in new jurisdictions.
"With value upside evident across all arms of the company, 2022 is set to be a fantastic year for Ariana," he concluded.
Ariana shares were 6.17% higher at 4.30p in early trade.