Ariana Resources on track to exceed production guidance at Kiziltepe mine

 This morning, Ariana Resources (LSE:AAU) announced operating results for the third quarter of 2018 for the Kiziltepe mine in which it owns a 50% interest. The mine achieved gross income of US$10.12m during the period with sales of 7,588 ounces of gold. Operations at Kiziltepe are forecast to deliver around 20,000 ounces of gold equivalent per annum over eight years of initial mine life. Revenues at the mine include the sale of by-product Silver. This quarter has seen 70,346 ounces of silver produced and sold, a 36% increase compared with the previous quarter. 

Dr. Kerim Sener, Managing Director, commented: 

"These quarterly results have yet again demonstrated record performance for the Kiziltepe Mine and we are now well on track to exceed our production guidance for the year.  Since start-up in 2017 the JV has produced about 30,000 ounces of gold and over 200,000 ounces of silver”

The company hopes that several satellite vein systems which are not currently in the mining plan can by developed to extend mine life to at least 10 years and recently completed a new resource estimate.

 Operating cash costs have also fallen for the quarter and are estimated at US$330 per ounce. This compares with a realized price of US$1,198 for gold sold in the period.

Dr. Sener adds: "Our operating cash cost per ounce has continued to remain low, due in part to a marked fall in value of the Turkish Lira (-28%), a substantial increase in by-product silver credit (+36%) and maintenance of high grades through the plant during the period."  Sener added.

Kiziltepe is part of the Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana through its shareholding in Zenit Madencilik San. ve Tic. A.S. Zenit continues to make debt repayments based on a contractual schedule and construction capital loan repayments should be completed by April 2020. In the meantime, excess cash-flow from operations is being used to make proportional repayments against the loans provided by Ariana and Proccea. 

Dr. Sener commented: As at the end of the quarter, 40% of the JV construction capital loan of US$33 million has been repaid, with the remaining balance to be repaid between now and April 2020.  Monthly intercompany loan repayments from the JV to our wholly owned subsidiary, Galata Madencilik San. ve Tic. Ltd. since early Q1 2018, has now reached approximately US$1.6 million for the year (c. US$200,000 per month)."

Ariana also owns 100% of the Salinbas Gold Project in north-eastern Turkey. We caught up with managing Director, Kerim Sener in an interview about the project last month.

Author: Stuart Langelaan 

Disclosure: The author does not own shares in the company mentioned above






Ariana Resources’ Kerim Sener updates on developments at the Salinbas gold project

Recently Mining Maven caught up with Kerim Sener, Managing Director of Ariana Resources (LON:AAU). The interview was recorded on 22nd October following results from the company’s Salinbas gold project.

Your results last week coincided with your presentation at FINEX, where Salinbas was used as an exploration case study. Can you tell me what FINEX is and how the presentation went?

FINEX is a conference held every two years to allow the geological exploration scene to meet one-to-one with the City. We had a great reception to our presentation, where we talked through the Salinbas project from before we wholly-owned it all the way to last week’s announcement.

What have you been doing with Salinbas since you acquired it outright in 2016?

Firstly, very good work was done by the previous joint venture following the discovery of Salinbas in 2008. For example, it was taken through several drilling programmes and given a first resource. Since 2013/14, the focus has moved away from drilling and onto technical work to keep the licences in good standing.

When we took control of the project, we wanted to pull apart our understanding of the mineralisation’s distribution. This involved re-mapping the entire project area to better understand what is controlling mineralisation right along the Hot Gold Corridor. We also wanted to see how the individual mineralisation styles relate to each other.

We have been very successful here, pulling together an excellent geological understanding. We have also completed a geochemical programme over the whole Hot Gold Corridor. This superior understanding allowed to start making further discoveries that coincided precisely with where we expected to find mineralisation.

Can you talk me through the highlights of last week’s announcement and your expectation for the 2000m of RC drilling you have planned at Salinbas in Q2 2019?

Last week’s announcement relates to sampling we carried out over a particular part of the JORC exploration target identified in June. Our expectation was for a sizable increase in Salinbas’s resource potential because we recognised three potential areas of mineralisation – Salinbas North, Salinbas South and Salinbas Main Extension.

Salinbas Main Extension lies immediately on the northern flank of the Salinbas orebody and was an area that had not been sampled adequately. However, we recognised that there was an extension of the mineralised system in that direction. So, to test that area, we completed a sampling programme over the JORC exploration target area and the Salinbas Main Extension, the results of which were released last week.

We are highly satisfied with the results as they demonstrate that we do have continuity to the north there and, potentially, over 500m of strike. That is another tick in the box for our predictions coming good and leads into the drilling programme we have planned for next year.

We will initially do 2,000m of RC drilling, which is essentially a sub-set to the 10,000m we have already planned out for Salinbas. We cannot drill the entire 10,000m yet because we are still pursuing forestry permits. However, we can drill this 2,000m subset without forestry permits, so we are planning to commit to that drilling programme early next year.

You have drawn parallels with the Hot Maden project, which also lies on the Hot Gold Corridor. Following last week’s results, are you now even more confident there is a correlation?

There is definitely some correlation in the sense that the Hot Gold Corridor running through both Hot Maden and our project is part of the same mineralised system. In some of the drilling that took place on the Eastern flank of Salinbas back in 2013, we discovered intercepts of mineralisation akin to those documented at Hot Maden. What we can draw from this is that there may be other porphyries sitting underneath the Salinbas orebody, making our exploration potential even more exciting. This is certainly something we need to follow up on in further drilling and testing work. It is not just a story of finding Salinbas style mineralisation; it is also about finding additional porphyry-style mineralisation.

You have previously indicated that there has been outside interest in Salinbas. Now you are in total control of the asset, has that interest continued?

The interest has certainly continued, and we have kept it satisfied. At this stage, we are not entertaining any particular dialogue on what we are going to do with the project. We need to advance Salinbas in our own right to further de-risk it and really demonstrate what we think is there. We are not just looking a million-ounce system; this is going to be considerably more sizeable. Once we can show that, we will then look at next steps because we will be able to add more value than we can now.

Interview originally published in podcast form:


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Ariana Resources: Kiziltepe Quarterly Operational Update Management Q&A

Ariana Resources (LON:AAU) the exploration and development company operating in Turkey announced its operating results for the quarter ended 30 September 2017 for the Kiziltepe Mine. We took the opportunity to put some investor focused questions to Managing Director Dr Kerim Sener in this investor focused Q&A. Kiziltepe is part of the Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana through its shareholding in Zenit Madencilik San. ve Tic. A.S.   

Ariana Resources (LON:AAU) certainly hit the ground running in 2016!

On the back of their Lithium transaction announced in December Ariana Resources (LON:AAU) released a Letter to Shareholders in January summarising the significant milestones met by the company in 2015 and followed this up on Monday with an impressive set of drilling results from their wholly owned Kizilcukur gold project, which sits just 22k from the Red Rabbit gold mine, currently under construction with JV partners Proccea.

Since we recorded this, we also note the release of news today from Mariana Resources announcing that Sandstorm Gold (TSX: SSL) had a acquired the royalty rights to its 3million oz Hot Maden discovery from Teck Resources as part of a package worth $22m. As Ariana shareholders ourselves the significance of this was not lost on us, considering where Hot Maden sits in the relation to Ariana’s Salinbas JV with Eldorado Gold (TSX:ELD).

This interview is slightly longer than usual as there was much to cover, including the Lithium transaction, Salinbas, Red Rabbit development and much more -  we trust that investors will find it both interesting and informative! 

Ariana Resources announces its Lithium Strategy!

In December Ariana Resources (LON:AAU) announced that, through its 86%-owned Australian subsidiary Asgard Metals Pty. Ltd, it had completed a joint agreement to vend a package of Lithium tenements in the Pilbara region of Western Australia to Dakota Minerals Limited (ASX:DKO). Broader details of the transaction can be seen in this Dakota Minerals presentation . Consideration for the transaction involves an initial cash payment to Asgard of A$147,000 and 22,500,000 fully paid ordinary shares in Dakota (worth around A$1.1m at the current share price of 5c) at which point Ariana will own approximately 8% of Dakota. Asgard will also benefit from up to 29,400,000 performance shares which will be issued on the achievement of certain project milestones. Dakota will also pay a fixed consulting fee of $98,000 to Asgard over the course of 12 months and Ariana’s Exploration Manager Dr. Francis Wedin, will join the Dakota board as Executive Technical Director.