Ariana kicks off diamond drilling at Cyprus project Megallan

Diamond drilling kicked off for the first time at the Magellan project, Ariana Resources (LON: AAU) announced Thursday, ushering in a new and exciting stage in development.

The project is owned by Venus Minerals, which focuses on exploring and developing volcanogenic massive sulphide (“VMS”) copper-gold deposits in Cyprus. Megellan itself has been found to have a combined JORC inferred resource of 9.5 million tonnes at 0.65% copper, excluding additional gold, silver, and zinc.

Mineral exploration and development firm Ariana is earning up to a 50% interest in Venus through key milestones and is well on its way, having already earned a 16% entitlement.

Venus will conduct 1,260 metres of drilling at Magellan’s Kokkinoyia sector, eight holes in total. This will further test known mineralisation and provide needed material for metallurgical testwork.

Back in the 1970s, the Kokkinoyia deposit produced around 465,500 tonnes of ore at an average grade of 3.7%.

The drilling will also improve confidence in the Megallan resources estimate and enhance understanding of gold and silver distribution within the mineralised system. It will take place in phases throughout 2021, testing all sectors at Magellan.

Ariana managing director Kerim Sener explained that, once Kokkinoyia has been drilled, the plan is to move the rig to Magellan’s Klirou and New Sha sectors.

Sener said the drilling will not only “provide further understanding on the current resource estimate” but also provide enough mineralised material to conduct metallurgical test work. Results from this will then “be integrated in to the Magellan scoping study”.

The managing director highlighted that the drilling “represents the culmination of approximately three years of work by the team at Venus”, building on previous percussion drilling testing “certain geological concepts concerning the distribution of volcanogenic massive sulphide deposits in the region.”

VMS deposits are among the world’s “richest sources of metals” like copper, zinc, and lead. They can also produce gold and silver in economic amounts.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Ariana Resources issues highly positive production guidance as JV plans progress (AAU)

Monday saw Ariana Resources (LON: AAU) reveal impressive 2021 gold mine production guidance figures for its Kiziltepe project in western Turkey.

At around 19,000 ounces (“oz”), the miner’s forecasted gold output for the year is nearly double Kiziltepe’s feasibility plan for this approximate mine life stage. Indeed, production is expected to reach 20,000 oz of gold per year over mine life, and is almost there already.

Elsewhere, average monthly production is forecast at around 27,000 tonnes of ore, peaking in the second 2021 quarter. It’s also worth remembering that, at more than 240,000 tonnes, Ariana’s current gold stockpile at Kiziltepe represents “well over a year of current production capacity”.

Ariana has 23.5% ownership of Kiziltepe though its shareholding in Zenit Madencilik, a joint venture between Ariana, Proccea and Ozaltin.

Other key figures for Kiziltepe include an expected throughput to the mill of around 325,000 tonnes, once operating capacity rises as planned – a sizeable 115% increase on feasibility plans.

Kiziltepe is located in the Red Rabbit project area of Turkey and is made up of the Kiziltepe and Tavsan sectors – both of which are joint ventures. Ariana holds a number of 100%-owned exploration licences in Red Rabbit, including the Kizilcukur project.

The average grade set to be mined in 2021 is approximately 2.1 grams of gold per ton of ore, while gold recovery is forecast at more than 90%.

Kiziltepe expansion

Ariana said plant expansion at Kiziltepe, boosting operating capacity to 500,000 tonnes of ore per year, is “well underway”. This is set to complete early in the third quarter despite Covid-related supply issues and a new mill has already been installed.

Kerim Sener, managing director at Ariana, said: “With the enhanced JV now formally underway, we are pleased to report on JV plans to increase the operational capacity at Kiziltepe. This will see a marked positive impact on production output and will continue to ensure the lowest possible unit costs.”

The exploration plan is being funded through a $6.6 million capital loan to Zenit from Turkiye Garanti Bankasi, with 25% of the loan already repaid and just nine quarterly payments left to go.

This comes after a previous $33 million capital development loan was repaid to Turkiye Finans Katilim Bankasi in early 2020, while its remaining working capital loan with the same bank is about 70% complete, with $3.1 million still requiring payment.

Open pit mining in 2021 is set to continue mostly in the Arzu North pit, though some mining will take place at the Derya pit at the same time.

Sener said work on Arzu North has already identified “significant additional gold mineralisation” outside the original mine reserve. The managing director added that this could positively impact Ariana and its partners’ mining schedule, “which is nominally targeting circa 19,000 oz gold in 2021”.

Positive macro economics

According to Sener “the continued positive economic environment for gold and silver” is what underpins Kiziltepe, with both trading as almost five-year highs as the coronavirus drove investors towards safe haven assets.

The gold price has come under pressure of late, with investors looking to a post-pandemic world. However, there is good cause to believe gold will pick up again when investors wake up to reality. Notably, the US issued more debt in the two weeks following the 2020 pandemic crisis than in the previous five recessions combined.

Sener specifically highlighted concerns around “over unsustainable levels of debt within major economies” as a reason why gold and silver are likely to keep “their time-honoured position in the minds of investors”.

The managing director acknowledged that, while oil prices are “somewhat” higher than they were at the end of 2020, the Turkish Lira’s decline relative to the US dollar has continued. This, he said, has led to “lower dollar-based unit costs”.

Big plans

Now the joint venture is in place, Sener noted, the goal is to advance its collective interest in Turkey, including continued exploration and development on the joint venture’s behalf.

Elsewhere, Ariana is hoping to make progress on its Cyprus-based earn-in and exploration programmes for Venus Minerals, where it has acquired an up to 50% stake though an earn-in agreement. The firm is also “pursuing separate opportunities elsewhere in Eastern Europe”.

Sener concluded that: “2021 is set to be an exciting year for the company and we look forward to updating the market on these activities in due course.”

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Ariana Resources exceeds gold production guidance in strong 2020 results (AAU)

Ariana Resources (LSE: AAU) has again beaten guidance to exceed targeted gold production from its Kiziltepe operations.

In its 2020 full-year production results, the AIM-listed explorer said production of the yellow metal outpaced expectations by 3.5% to hit 18,645 ounces in the year to December 2020. Revenue exceeded $37 million in 2020, it added.

Managing director Dr Kerim Sener said: 

The final quarter of 2020 rounded off another solid year of production for Kiziltepe, which once again exceeded joint venture guidance. We were further buoyed by gold and silver prices during the year, capping off an exceptional period of company development.

Spot gold prices remain elevated in early 2021 with an ounce of the yellow metal north of $1,800/oz.

In the three years since commercial gold-silver production began at the Turkish mine, the group reported that Kiziltepe had produced a total of 84,200 ounces of gold and 915,233 ounces of silver. This output amounts to a total revenue of $134 million. 

Dr Sener added: 

Since operations commenced at Kiziltepe, the joint venture company, Zenit, has successfully repaid US$36.7 million in debt to Turkiye Finans Bankasi A.S. Accordingly its relationships with lenders are very sound, which bodes well for future mine development projects at Tavsan and Salinbas, contemplated as part of our planned new joint venture with Özaltin and Proccea.”

Kiziltepe expansion

The company has long maintained there is significant opportunity for further resource and production expansion at Kiziltepe. To that end, it has now begun a two-rig diamond drilling programme of up to 5,000m to test vein extensions like Arzu South, Arzu North, Derya and Banu.

Mining is continuing at Arzu North and Derya, with plans to expand these open-pit operations, Ariana said. A processing plant expansion is also underway with construction due to complete in H2 2021. The plant’s capacity will be 300% larger than initial designs and able to process 500,000 tonnes of ore per year. 

Ariana currently operates the Kiziltepe mine in a 50% joint venture as part of its Red Rabbit gold project with Ankara-based engineering firm Proccea Construction. That stake is set to reduce to 23.5% as part of its deal with conglomerate Özaltin Holding.

Transformational year 

Ariana’s strategy to expand its portfolio using current cashflow will continue, it said. The company is also exploring and developing the 1 million ounce Salinbas gold project in north-east Turkey.

An April 2020 resource update upgraded the Kiziltepe mine life to 2026 and extended the asset’s total undepleted gold estimate by a further 25%. 

In July the same year, the company secured a landmark deal worth $50 million with Özaltin for a 53% stake in Salinbas and a 50% stake in the Red Rabbit JV.

Investors received notice of a special dividend in September 2020 to mark completion of the Özaltin JV with managing director Dr Kerim Sener noting that Proccea would pay Ariana $5.75 million in cash to acquire its 23.5% stake in Salinbas. 

A scoping study of Salinbas identified a 10-year life of mine with a JORC resource of 9.9Mt @ 2.0 g/t Au.

Ariana’s reduced holding in the JV “will naturally place a different emphasis on our operational activities going forward,” Dr Sener noted. Production would now be reported every six months rather than quarterly. 

Other portfolio developments include the start-up of field activities, fast-tracking a range of copper-gold opportunities in the region and increasing the pace of the company’s involvement with Venus Minerals in Cyprus. 

It expects that diamond drilling will be able to start at the Magellan Project by Q2 2021. 1,705m of percussion drilling across 15 holes has already discovered a zone up to 12m thick containing anomalous gold geochemistry at just 50 to 80 metres below the surface.

Permitting activities continued at portfolio projects Tavsan and Salinbas throughout the winter, Ariana said, with resource drilling at Tavsan due to start in spring 2021.

Author: Mark Sheridan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Ariana Resources announces Q3 preliminary production results (AAU)

Ariana Resources (LSE:AAU), the AIM-listed exploration and development company operating in Europe, disclosed better-than-expected preliminary production results for the quarter ended 30 September 2020 for its Kiziltepe project in Turkey. Kiziltepe is part of the Red Rabbit Joint Venture ("JV") with Proccea Construction, in which Ariana owns 50% through its shareholding in Zenit Madencilik San. ve Tic. A.S.

Total gold production in the third-quarter of 2020 reached 5,125 ounces, which is an increase from 4,679 ounces in the previous quarter. The average metallurgical recovery of gold for the quarter remains high at 94.2%. The quarterly production increase reflects increased tons processed that more than offset the impacts of lower average grades.

As with the previous quarter, the Kiziltepe operation continued to demonstrate stable performance despite disruptions caused by the COVID-19 pandemic. “Material movements remain very high, while process plant throughput remains well above average, setting yet another record for the operation; the mill reached an annualised throughput rate of almost 230,000 tonnes per annum which represents an increase of over 53% above the feasibility designed rate.” Dr. Kerim Sener, Managing Director, said in a statement.

Notably, the company had to shift some of its operations in the second quarter owing to pandemic induced restrictions. Because production from the company’s highest-grade pit, Arzu South, came to a close during August, production had to shift entirely to the Arzu North and Derya pits. In the meantime, the Kiziltepe operation was able to maintain a stockpile of over 160,000 tonnes, sufficient to cover about ten months of mill feed at average throughput rates.

As a result of the consistent performance in the past two quarters, the present moment is opportune for a proposed mill expansion. The planned development will provide for an increase in throughput to 400,000 to 500,000 tonnes per annum.

There are additional plans for further development of the Arzu North area in the next quarter. This project is yielding substantially more ore tonnage than modelled previously. In fact, despite the expected reduction in grade, this increased tonnage coupled with continued high mill throughput will ensure output is maintained at the highest possible levels.

Ariana Resources’ Q3 production results were in part driven by the increase in demand for gold. Gold prices have gained 25% so far this year, primarily fueled by the global pandemic. Silver prices have also climbed 34% year to date.

The 100% owned Salinbas Gold Project is located in north-eastern Turkey and has a total resource inventory of c. 1.5 million ounces of gold.  The project comprises three notable licence areas: Salinbas, Ardala and Hizarliyayla, all of which are located within a multi-million ounce Artvin Goldfield.  The "Hot Gold Corridor" contains several significant gold-copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas and 7km south of Hizarliyayla.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation on the Salinbas Gold Project.

Author: Galina Mikova

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Special dividend for Ariana Resources investors on completion of Özaltin JV (AAU)

Shares in Ariana Resources (LSE:AAU) flew 10% higher on Tuesday 29 September as it announced plans for a special dividend.

Investors will be rewarded once the AIM-listed European gold-silver explorer completes its joint venture with Turkish construction firm Özaltin Holding A.S.

Özaltin is due to pay $30 million as part of the JV process, which includes acquiring 53% of Ariana’s Salinbas project, along with 53% of the Zenit Madencilik JV, currently owned by Ariana in a 50% JV with Ankara-based engineering company Proccea Construction.  

Ariana said its investors will likely receive a special dividend made up of 50% of net proceeds after tax and costs. 

Managing director Dr Kerim Sener added that Proccea would pay Ariana $5.75 million in cash to acquire its 23.5% stake in Salinbas, and would remain actively involved in developing the project. 

Salinbas covers three license areas in the multi-million-ounce Artvin goldfield in northeastern Turkey. 

With shares now climbing above 6.2p that gives Ariana a market cap of over £65 million, £30 million higher than three months ago.  

Ariana shares hit an eight-year high back in April when the explorer announced that Q1 2020 gold production had exceeded guidance by nearly 15% to reach 5,419 ounces at its Kiziltepe mine in west Turkey.

Ariana has a 50% stake in Kiziltepe through its shareholding in domestic firm Zenit Madencilik San. ve Tic. A.S and the mine has been in operation since 2009.

Author: Mark Sheridan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance