Ariana Resources plc : Targets at Salinbas Gold Project

18 January 2017
AIM: AAU

SIGNIFICANT TARGETS AT SALINBAS GOLD PROJECT

Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company operating in Turkey, is pleased to announce an update on the Salinbas Gold Project ("Salinbas" or "the Project"). 

Highlights:

• Thirty-seven target areas are defined within the Salinbas Project following a thorough analysis of all previous data, with several areas prioritised for additional work.
   
• Highly significant drill intercepts that warrant follow-up include 125m @ 2.44 g/t Au + 0.3% Cu and 34.5m @ 1.75 g/t Au + 6.13 g/t Ag and 164m @ 0.16 g/t Au + 0.3% Cu + 120 ppm Mo in the Ardala area.
   
• Numerous significant rock-chip and soil geochemical anomalies (principally Au, Ag, Cu, Mo) which have not been drill-tested, also require follow-up.
   
• Project area includes targets developed around the Salinbas Au-Ag deposit, the Ardala Cu-Au-Mo porphyry and the Hizarliyayla Au-Ag system among several other prospects. 
   
• Company planning to conduct exploration along the Hot Gold Corridor during 2017 to establish the continuity of mineralisation from Salinbas-Ardala through to Hizarliyayla (Figure 1). 

Dr. Kerim Sener, Managing Director, commented: 

"The Salinbas Project, although already containing a JORC resource of c.1Moz gold equivalent, remains only partially explored.  There are several drilling results, rock-chip, soil and geophysical and geological targets that have not yet been tested to any significant degree.  These targets are mainly defined within and around the Salinbas and Ardala resource areas but several additional targets lie elsewhere within the 16km long Hot Gold Corridor.

Beyond the main Salinbas deposit, several well defined target areas at Ardala South East and South West, Hizarliyayla and Incesu South, among others, will become the focus of generative soil and rock-chip sampling work during 2017.  In particular, we are excited by the possibility that the mineralised part of the Ardala Porphyry extends for a further 1km to the south and represents a style of mineralisation that is enriched in molybdenum.  We are also particularly encouraged by several significant rock-chip and soil anomalies encountered in the Hizarliyayla area, which lies about 8km to the north of Hot Maden and along the same geological trend.

We will be providing further updates on the Project during the months ahead and our teams are looking forward to continuing the exploration within an area that, along with Hot Maden, is proving to be an exceptionally prospective goldfield with multi-million ounce potential."

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

Figure 1: Map of the Salinbas project area showing the location of major prospects, related alteration and mapped intrusions.  Most of the gold prospects, including Salinbas, lie within the Hot Gold Corridor.

Link:  http://hugin.info/138153/R/2071877/778619.pdf

Target Generation

A comprehensive review of geochemical (Figure 2), geophysical (Figure 3) and geological data pertaining to the Project has been completed by the Company and its consultants since the acquisition from Eldorado Gold.  This review has identified 37 target areas in total with several warranting comprehensive follow-up work (Table 1).  A select number of these targets will be assessed further in advance of the exploration field season and, where possible, new drilling permissions will be sought in order that some of these targets may be drilled during 2017.  The Company is planning a programme of work to conduct during 2017 that will refine these target areas further and better determine the future exploration potential of the Project.

Table 1: A selection of targets generated for follow-up during 2017, in alphabetical order.  Several targets have not been drill-tested and require comprehensive follow-up through soil geochemical methods before they can be refined ahead of drilling.

Figure 2: Map of the Salinbas Project area, showing the extent of current geochemical anomalies for gold and silver in addition to the area not yet tested by geochemistry that shows potential for the continuation of mineralisation along the Hot Gold Corridor.

Link:  http://hugin.info/138153/R/2071877/778620.pdf 

Figure 3: Map of the Salinbas Project area, showing the extent of current geophysical data coverage (magnetics) along the Hot Gold Corridor.  A significant area has not yet been tested with any form of geophysics and this will be a priority for future work.

Link:  http://hugin.info/138153/R/2071877/778621.pdf  

Salinbas Project

The Salinbas Project is located in the Pontide Metallogenic Province in northeastern Turkey and lies approximately 80km southeast of the coastal city of Hopa and 20km east of Artvin. The project comprises three notable prospects: Salinbas, Ardala and Hizarliyayla (Figure 1).  The project comprises three licences which are owned 100% by the operating subsidiary, Pontid Madencilik San. ve Tic. Ltd.  Two of the licences are in process at the General Directorate of Mining Affairs for conversion to operational status during 2017.

Salinbas is the most notable of the prospect areas, having been identified in 2009 following rock-chip sampling and trenching, which included 33m at 9.6 g/t Au and 46m at 8.3 g/t Au.  Follow-up drilling identified a gently dipping mineralised body emplaced along a thrust zone to the east of a series of breccia pipes and the main body of the Ardala Cu-Au-Mo porphyry.  The best intercepts in initial shallow drilling included 9.5m @ 6.48 g/t Au + 39.4 g/t Ag, 11.3m @ 4.98 g/t Au + 42.8 g/t Ag and 25m @ 3.34 g/t Au + 7.9 g/t Ag.  Best intercepts from further drilling included 31.10m @ 1.38g/t Au, 17.90m @ 2.09 g/t Au and 9.20m @ 2.25 g/t Au, with most mineralised intercepts obtained from less than 70m below surface.  A total of 11,709m drilling for 86 drill holes has been completed on Salinbas to date and has defined a tabular resource (Table 1) which dips towards the east at 25 degrees.  Substantial vertical relief exists between the top of the mineralisation at Salinbas Peak (1,320m above sea level) to the lower limits of the current resource (780m above sea level) in the vicinity of the Ardala porphyry.

Table 2:  Classified JORC 2012 Mineral Resource estimate for Salinbas (dated 1 April 2015). The resource was modelled on the basis of geology and a lower cut-off of 0.5 g/t Au.  Numbers may not sum due to rounding.

Limited exploration drilling between Salinbas and the Ardala porphyry to the east has also been conducted.  Highly encouraging results from these holes confirmed the need for further exploration in this area and suggest the continuity of mineralisation from the Ardala porphyry in the valley floor to the Salinbas system on the ridge, representing a vertical distance of 675m and a horizontal distance of close to 2km.  The best recent intercepts from drilling in the area connecting the Salinbas system to the Ardala system include 81.5m @ 1.28 g/t Au + 10.5 g/t Ag, 34.5m @ 2.21 g/t Au + 10.7 g/t Ag and 18.2m @ 2.20 g/t Au + 25.6 g/t Ag.  Further establishing the links between these two areas will be an important objective for future drilling programmes.   

A scoping study focused on Salinbas and completed in 2015 (see announcement on 1 April 2015), demonstrated potential for the project to yield strong financial returns, with NPV (8%) at US$108M, pre-tax IRR of 28%, and payback secured within approximately 3.3 years over the Life of Mine ("LoM") at a gold price of US$1,250/oz.  This demonstrates that a potentially viable resource development opportunity already exists at Salinbas and that future exploration work will probably reinforce this view.

The nearby Ardala area hosts a porphyry copper-gold (plus molybdenum) mineralised system associated with a series of nested quartz-diorite intrusions of Eocene age within an Upper Cretaceous volcano-sedimentary sequence. Geological mapping, soil, rock-chip and drill sample data, and a ground magnetic survey outlined the mineralised porphyry and in 2013 a JORC Mineral Resource was established (Table 2).  Exposed parts of the porphyry have dimensions of 600 x 700m and interpretation of magnetic data suggests further lateral continuity beneath limestone units over an area of 1,000m x 1,000m in extent.  Previous exploration also focused specifically on the mineralised intrusions, while surrounding gold-bearing skarns (peak grade 5.16 g/t Au and 0.2% Cu in rock-chips) and related disseminated mineralisation in the host-rocks remain largely untested.  The best intercepts from recent drilling in the Ardala area include 119.5m @ 0.71g/t Au + 0.21% Cu + 0.01% Mo, 236.3m @ 0.34 g/t Au + 0.06% Cu and 122.9m @ 0.58 g/t Au + 0.05% Cu, which tested an area of mineralised porphyry and immediately adjacent limestone.  Deeper (>150m) high-grade intercepts outside of the porphyry at Ardala include 4.2m @ 6.74 g/t Au, 2.8m @ 3.34 g/t Au + 38.96 g/t Ag + 2.56% Zn, 2.0m @ 5.29 g/t Au + 13.5 g/t Ag, indicating the potential for other styles of higher grade mineralisation sitting adjacent to the porphyry. 

Table 3: Classified JORC 2004 Mineral Resource estimate for Ardala (dated 13 April 2013).  Separate resource domains were established for the Au, Cu and Mo components of the Ardala porphyry.  There is a 95% coincidence of the Au and Cu domains, and a 40-50% coincidence of the Au and Mo domains.

Contacts:

Editors' Note:

Dr Kerim Sener, BSc (Hons), MSc, PhD, is the Managing Director of Ariana Resources plc.  A graduate of the University of Southampton in Geology, he also holds a Master's degree from the Royal School of Mines (Imperial College, London) in Mineral Exploration and a doctorate from the University of Western Australia.  He is a Fellow of The Geological Society of London and has worked in geological research and mineral consultancy in Africa, Australia and Europe.  He has read and approved the technical disclosure in this regulatory announcement. 

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 construction.  The total resource inventory at the Red Rabbit Project and wider project area stands at c. 525,000 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:

"Ag" the chemical symbol for silver;

"Au" the chemical symbol for gold;

"Cu" the chemical symbol for copper;

"g/t" grams per tonne;

"Indicated resource" a part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;

"Inferred resource" a part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has assumed, but not verified, geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability;

"IRR" Internal Rate of Return;

"JORC" the Joint Ore Reserves Committee;

"m" Metres;

"M" million;

"Mo" the chemical symbol for molybdenum;

"Mt" million tonnes;

"NPV" Net Present Value;

"oz" Ounces;

"Pb" the chemical symbol for lead;

"ppb" parts per billion;

"ppm" parts per million;

"Re" the chemical symbol for rhenium;

"Sb" the chemical symbol for antimony;

"Te" the chemical symbol for tellurium;

"Zn" the chemical symbol for zinc.

Ends