30 March 2015
AIM: AAU
RED RABBIT GOLD-SILVER PROJECT UPDATE
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, is pleased to provide an update on the Red Rabbit Gold-Silver Project in Western Turkey ("Red Rabbit"). The Kiziltepe Sector will be the initial mine site at Red Rabbit, which is being advanced towards production with its Joint Venture ("JV") partner Proccea Construction Co. ("Proccea").
Highlights:
- Proccea continuing to earn-in on Red Rabbit, having spent approximately US$0.74 million during 2014-2015.
- Proccea has also separately purchased additional freehold land during 2014 for a total of US$0.23 million.
- Proccea now owns 30.4% of the JV and is continuing sole-funding through the final permitting and construction stages.
- Trial mining at the Kiziltepe Sector is due to produce up to 3,000 tonnes of ore in Q2 2015; Trial mining at the Tavsan Sector produced 2,500 tonnes during 2014, which has been stockpiled and sampled.
- Provincial agricultural exclusion permit and 3000kVA electrical power access permission obtained.
- US$33 million construction finance facility remains on standby for the development of the Kiziltepe Mine.
Dr. Kerim Sener, Managing Director, commented:
"During the year, we have continued several project development activities at Red Rabbit. Our partners, Proccea Construction, are continuing to fund the development of the Kiziltepe Mine through the permitting and construction stages, having spent approximately US$1 million in 2014 alone. We continue to liaise with relevant authorities regarding our land access permit application and we look forward to updating the market once approval has been received, which will enable the construction stage of the project to commence."
Joint Venture Update
Following the Annual General Meeting held in Ankara, Turkey, on 26 March 2015 for the Joint Venture ("JV") company, Zenit Madencilik San. ve Tic. A.S. ("Zenit"), Ariana is able to provide an update on the current status of the Joint Venture ("JV") project.
Approximately US$0.74 million of project expenditures were incurred by Proccea on the JV properties in the 2014 to 2015 period. To date, Proccea has spent approximately US$3.5 million on the JV since its inception in August 2010. Accordingly, Proccea now holds 30.4% of the JV company and continues to earn-in on 50% of the project. Proccea will have earned 50% of the JV once they have spent a total of US$8 million on the project.
In addition to the expenditures incurred on the JV during 2014, Proccea also completed the acquisition of a further 150,000 m2 of freehold land purchases in the vicinity of the mine. This brings the total land holding by the JV and its partners to 406,000 m2, which represents approximately two thirds of the total land parcels that require acquisition within the planned infrastructure areas of the mine. Additional land parcels are in the process of being acquired.
During the year a US$33 million credit agreement, inclusive of capital repayments and borrowing costs, was completed with Turkiye Finans Katilim Bankasi A.S. in order to fund mine construction. The credit facility is non-recourse and comprises no hedging or currency swap requirements. Loan repayments will occur over five years, with a two-year principal repayment holiday following first drawn down.
During 2014, Zenit completed further trial mining at the Kiziltepe Sector in accordance with Turkish mining legislation. Approximately 2,500-3,000 tonnes of ore will be mined from the Kiziltepe Sector in Q2 2015. This will be added to the existing stockpile of 4,800 tonnes (containing approximately 450 oz of gold), which remains on site ready for processing. At the Tavsan Sector, which contains a 215,000 oz gold resource, Zenit completed trial mining for 2,500 tonnes during 2014. This material has been stockpiled on site and sampled.
Zenit is currently awaiting the approval of its land access permits for the Kiziltepe gold-silver mine. The permit application, which was submitted in April 2014, has remained at the Prime Ministry for approval since June 2014. Feedback from the Prime Ministry remains positive and the Company and Proccea are working to ensure that this permit is issued soon.
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 |
| Saif Janjua | |
| Loeb Aron & Company Ltd. | Tel: +44 (0) 20 7628 1128 |
| John Beresford-Peirse / Dr. Frank Lucas | |
| St Brides Partners Ltd | Tel: +44 (0) 20 7236 1177 |
| Susie Geliher / Lottie Brocklehurst | |
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 selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with Eldorado Gold Corporation in north-eastern Turkey. Eldorado owns 51% of this joint venture and are fully funding all exploration work on the JV properties, while Ariana owns 49%. The total resource inventory within this JV is 1.09 million ounces of gold.
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, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co. The total resource inventory at the Red Rabbit Project stands at 475,000 ounces of gold equivalent.
Beaufort Securities Limited and Loeb Aron & Company Ltd. 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.
Ends