Ariana Resources smashes 2018 gold production forecasts by more than a third (AAU)

Ariana Resources (LSE:AAU) rose 2.2pc this morning after announcing that production from its flagship project in Turkey beat expectations by more than a third in 2018. Production from the Kiziltepe mine came in at 27,110ozs of gold over the 12 months. This output surpasses initial full-year production guidance of 20,000oz by around 36pc.

Gold production for the final three months of 2018 came in at 7,517oz, slightly below the 7,556oz it produced in the last quarter of 2017. Meanwhile, total ore processed for the quarter was 49,717ts at an average head grade to the plant of 5.23g/t gold, and average metallurgical plant recovery of gold remained high at 91.6pc.

Kiziltepe is part of Ariana’s 50pc-held Red Rabbit joint venture with Proccea Construction in Turkey. It is fully permitted and, as it stands, the company’s chief producing asset. A net smelter return royalty of up to 2.5pc on production is payable to the Franco-Nevada Corporation.

Last month, Ariana announced plans to carry out an imminent 1,00m diamond drilling programme at a licence called Kizilcukur, 22km northeast of Kiziltepe. The programme is expected to upgrade Kizilcukur’s existing indicated and inferred resource of c.308,000 tonnes at 2.11g/t gold and 73.4g/t silver. Ariana plans to truck ore from the licence and process it at Kiziltepe in the future, further boosting the latter’s upside.

The Red Rabbit project also contains the Tavsan gold project, where a royalty of up to 2pc on future production is payable to Sandstorm gold.

Kiziltepe and Tavsan host a series of prospects and span two prolific mineralised districts in the Western Anatolian Volcanic and Extensional province of western Turkey. This area hosts the most significant operating gold mines in Turkey. According to Ariana, it remains highly prospective for new porphyry and epithermal deposits. All-in-all, the total resource inventory at Red Rabbit and its wider project area stands at c.605,000ozs of gold equivalent.

Ariana’s managing director Kerim Sener said that beating production expectations was a ‘significant milestone’ for the business. He added that it coincides with the repayment of 50pc of a $33m redevelopment loan. It will repay the majority of the remaining balance throughout 2019, he said.

‘The past year has seen the Joint Venture achieve several successes, quarter on quarter, including an annualised increase in mill throughput to 200,000 tonnes per annum. We look forward to the continuation of these very positive developments. We take this opportunity to thank both our dedicated JV team and our partners, Proccea Construction Co., for their diligence and focus during the year,’ said Sener. ‘We begin 2019 on firm-footing, and we are very excited about the year ahead.  We are expecting to publish 2019 production guidance in due course.’

Alongside its stake in Red Rabbit, Ariana owns 100pc of the Salinbas Gold Project in north-eastern Turkey. This contains numerous prospects, the most notable of which are the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry. The project’s total resource inventory comes in at c.1MMoz of gold equivalent. A royalty of 2pc on future production is also payable to Eldorado Gold Corporation.

Author: Daniel Flynn

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

Ariana announces planned drill at Kizilcukur project in Turkey (AAU)

Ariana Resources (LSE:AAU) jumped 6.7pc to 1.6p today after announcing ‘imminent’ drilling at its Kizilcukur project in Turkey. A 1,000m diamond drilling programme aims to upgrade existing JORC resources to the measured and indicated categories.

Ariana Resources bounces as exploration suggests further Salinbas gold potential (AAU)

Shares in Ariana Resources (LSE:AAU) enjoyed a 5.4pc lift to 1.5p last week after the Turkey-focused miner revealed that exploration drilling has identified further mineralisation at its Salinbas gold project.

In an update, the business said a conventional soil sampling programme recorded a substantial increase of gold along the interpreted extents of the project’s Salinbas North target. Salinbas North is one of three potential areas of mineralisation identified by Ariana this year at Salinbas, which itself comprises the Salinbas gold-silver deposit and the Ardala porphyry, among other prospects.

One soil sample returned with 5.02g/t of gold and 4405g/t of silver as well as 0.49pc copper, 1.45pc lead, and 0.26pc zinc. Ariana said this almost certainly represents mineralisation that surfaces at the eastern flank of Salinbas North and lies exactly where it expected Salinbas-type mineralisation to be.

Alongside the soil sampling programme, Ariana took 54 composite channel-samples for a total of 155m along a new access road network to the Ardala Porphyry. The firm said these revealed extensive new zones of mineralisation on the periphery of the Ardala Porphyry in the region of Ardala North. These contained considerable grades of gold and silver as well as smaller amounts of lead and zinc.

Following this work, Ariana plans to carry out 2,000m of reverse circulation drilling across the broader Salinbas project in the second quarter of 2019. It is working to exploit the project’s considerable total resource inventory, which currently sits at c.1MMoz of gold equivalent.

The 100pc-owned asset sits in Turkey’s ‘Hot Gold Corridor’ and has been compared by Ariana to the country’s highly-prospective Hot Maden gold project. Ariana’s managing director Kerim Sener said today’s results reinforce the firm’s understanding of the distribution of gold mineralisation near the Ardala Porphyry, Ardala North and Salinbas North areas at Salinbas.

He added: ‘We are confident that the testing of some of these targets with drilling will lead to the identification and definition of further resources within the project area. We have scheduled the drilling programme for Q2 2019 and we envisage undertaking approximately 2,000m of RC drilling on targets that are accessible from existing permit areas and freehold land.’

Sener provided further details on the progress being made at Salinbas in a recent podcast with MiningMaven, the transcript of which can be read here.

Today’s news comes just weeks after Ariana said it was on track to exceed production guidance at its flagship, 50pc-owned Kiziltepe project, also based in Turkey. In its operating results for the third quarter of 2018, the business said the mine achieved gross income of $10.12m during the period with sales of 7,588ozs of gold.

On this, Sener said: ‘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.’

Author: Daniel Flynn 

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

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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