Ariana Resources targeting a 1Moz gold JORC Resource at Salinbas (AAU)

It’s been a good year for shareholders in Arian Resources (LSE:AAU). The recent rally in the gold price has helped bolster the company’s share price, which is now up 50% this year at 2.25p per share. Gold production at the low cost Kiziltepe mine in western Turkey continues to increase and the firm has embarked on exploration campaigns at its other assets. Of these perhaps the project that holds the most potential is at Salinbas and on Thursday the firm announced positive preliminary drill results here.

Ariana originally acquired Salinbas from Eldorado Gold Corporation (NYSE:EGO), which retains a 2% net smelter royalty over future revenue. The project is located in north-eastern Turkey and already hosts a 650,000oz (Indicated and Inferred) JORC Resource. Ariana’s exploration target here is 1.4M to 2.7M ounces of gold and the company ultimately aims to be able to prove up a final JORC of 1Moz.

Ariana’s licenses in north-eastern Turkey

In mid-May, Ariana secured an upgrade to part of the Salinbas licence, which was re-designated as a 10-year operational licence by the Turkish General Directorate of Mining and Petroleum Affairs. Specifically this upgrade covered the area of Salinbas, which hosts the Indicated ounces of gold in the Salinbas JORC Resource. In the company’s words, this made Salinbas “one of its most important licences”.

Following on from this and Ariana has sought to increase the value of Salinbas by drilling at the company’s Ardala licence, immediately to the north. Here Ariana began a 2,000m Reverse Circulation (RC) drilling campaign just over six ago and one of the primary objectives of this was to establish whether Salinbas and Ardala are physically connected. Since Ariana owns 100% of Salinbas and with the recent license upgrade, if the company can prove this hypothesis then the upside is clear.

So far, the initial results are encouraging.

The diagram below shows four distinct intrusive phases, where the Salinbas and Ardala mineralisation systems intersect. According to Ariana, at least two of the intrusive phases are “significantly mineralised” and provide the company with a high degree of confidence to continue pursuing this lead in future exploration activity.

 

 

 

Diagram of the Salinbas and Ardala mineralised systems, with positions of recent drilling

Quoted at the end of Thursday’s RNS and Ariana’s Managing Director, Kerim Sener, succinctly summed up the position.

"We are very pleased to report our preliminary drilling results from the Salinbas Gold Project, since it became 100% held by Ariana.  These results, while only partial at this stage, demonstrate the development of a major magmatic-hydrothermal system in the vicinity of the Ardala Cu-Au-Mo porphyry.  The latest data confirms that the mineralised part of the Ardala porphyry, which is enriched in precious and base-metals, does connect intimately with the Salinbas gold-silver zone and that the two systems should in fact be treated as one.  This was a prediction from our earlier geological modelling and is a finding that bodes exceptionally well for the discovery of further mineralisation in the vicinity, particularly in the immediate surrounds of the Ardala porphyry.  This is an area, which to date, has been poorly explored.  Consequently we continue to remain excited by the exploration upside of the project and look forward to commencing our follow-up work programmes."

So far the market response to this news has been somewhat muted. The RNS was on the heavy side, with a lot of technical detail. Ariana was also very careful to caveat the announcement, warning that the results are only preliminary at this stage.

However, what is heartening is that so far the company has received a degree of confirmation to its original theory about the potential for extending Salinbas to the north. If Ariana can build on these initial results and further demonstrate the geological connection between the two sites, this could well set the firm on a course to realising its ambition for identifying a +1Moz gold JORC Resource here.

 

Author: Ben Turney

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

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

Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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 recovers bonanza-grade gold and silver mineralisation at Kizilcukur project (AAU)

Ariana Resources’ (LSE:AAU) strong week continued on Thursday with the ‘highly encouraging’ news that it had encountered bonanza-grade gold and silver mineralisation at Kizilcukur project in Turkey. The business completed a total of 745.8m of diamond drilling across 13 holes within the project’s previous-optimised Zeki open pit in the first quarter of the year. In Thursday’s update, Ariana said this work has confirmed the presence of high-grade mineralisation in the Zeki vein to a depth of approximately 40m below surface.

Indeed, one hole yielded 0.9m at 30.27g/t gold and 184g/t silver in a footwall vein not previously drill-tested – a level classified at ‘bonanza-grade’ mineralisation. Elsewhere, near-surface in-fill resource drilling results from the vein include 6m at 4.21g/t gold and 205.9g/t silver, 5.3m at 4.04g/t gold and 171.9g/t silver and 6.4m at 3.44g/t gold and 89.3g/t silver. Ariana added that the majority of its high-grade results occur over around 130m of strike to a depth of at least 40m.

Meanwhile, a new access road has been constructed to the trial mining area at Kizilcukur. This can be used for future haulage to the nearby Kiziltepe processing plant. The project is based 22km to the northeast of Kiziltepe, which is held within Ariana’s Red Rabbit joint venture with Proccea Construction.

Kizilcukur, which is not part of Red Rabbit, covers an area containing a series of sub-parallel quartz veins hosted by ophiolitic units that trend northwest and extend for about two kilometres A mineral resource estimate prepared in 2016 identified the potential for the development of three open pits within the asset, of which Zeki is the largest and highest grade. The asset’s total mineral resource in the indicated and inferred categories is c.308,000ts at 2.11g/t gold and 73.4g/t silver with upside potential. Ariana’s target for future exploration at Kizilcukur is currently 500,000 tonnes at more than 2 g/t gold and more than 70g/t silver.

Ariana’s managing director Kerim Sener said Thursday’s results were ‘highly encouraging’ and confirmed the potential for Kizilcukur to be established as a satellite source of high-grade ore for Kiziltepe.

‘The mineralisation encountered within the top 40m of the Zeki vein system shows sufficiently high grades and widths to support an open pit operation,’ he added. ‘During Q3 2019 we are expecting to conclude our assessments on the feasibility of hauling ore from Kizilcukur to the Kiziltepe processing plant as part of a bulk processing trial. 

‘In anticipation of this, we have already completed the construction of a low-gradient haulage road connecting the trial mining area to the existing road network, enabling excellent access to the site. In addition, we will prepare a revised Mineral Resource estimate upon which we can make appropriate decisions about the future of the project. We expect that Kizilcukur will be an attractive addition to the JV operations, due to the high grades and gold recoveries that have been demonstrated in recent work.’

Thursday’s update follows a strong start to the week for Ariana. On Wednesday, the company enjoyed an 8.6pc boost to 2.1p after releasing a robust set of 2018 results.  It revealed that gold output from Kiziltepe reached more than 27,100oz over the period, 36pc ahead of guidance. What’s more, the mine achieved an average cash cost of $415/oz, placing it within the lowest cash-cost quartile for mines globally. This helped to push its profit before tax up to £2.2m from £400,000 in 2017.

Elsewhere, Ariana said that the Red Rabbit JV’s financial strength had allowed it to progress its Tavsan project to the next stage of development. The JV is on track to complete a formal environmental impact assessment submission to the authorities for the asset in late 2019. This will precede the conclusion of a feasibility study in line with the requirements of project financing and final permitting. According to Ariana, getting Tavsan to this stage will enable Red Rabbit to increase its annual gold production rate from 25,000oz – where it currently stands – to 50,000oz. The company believes this will, in turn, influence a positive re-rating of its market valuation.

Author: Daniel Flynn

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

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

Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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 bounces after revealing strong gold production and profits in 2018 (AAU)

Ariana Resources (LSE:AAU) enjoyed an 8.6pc boost to 2.1p on Wednesday following the release of a robust set of 2018 results that saw it reveal enhanced gold production and profits. The £22.2m business revealed that gold output from its flagship Kiziltepe gold mine in Turkey reached more than 27,100oz over the period, 36pc ahead of guidance. What’s more, the mine achieved an average cash cost of $415/oz, placing it within the lowest cash-cost quartile for mines globally.

Alongside a project called Tavsan, Kiziltepe is part of Ariana’s 50:50 Red Rabbit JV with Proccea Construction. Both sites contain a series of prospects within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional Province of western Turkey. This province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits. The total resource inventory of the Red Rabbit Project and wider project area stands at c.605,000oz of gold equivalent.

In Wednesday’s results, Ariana said that Kiziltepe’s improved production had helped to push profit before tax up to £2.2m from £400,000 in 2017. Meanwhile, the company said that its income statement remained broadly consistent with the prior year, with administration expenses largely unchanged. It added that while a depreciation in the value of the Turkish lira led to some foreign exchange translation losses, the decline could, in fact, be beneficial as it would lead to a reduced cost base.

Elsewhere, Ariana said that the Red Rabbit JV’s financial strength had allowed it to progress Tavsan to the next stage of development. The JV is on track to complete a formal environmental impact assessment submission to the authorities for the asset in late 2019. This will precede the conclusion of a feasibility study in line with the requirements of project financing and final permitting. According to Ariana, getting Tavsan to this stage will enable Red Rabbit to increase its annual gold production rate from 25,000oz – where it currently stands – to 50,000oz. The company believes this will, in turn, influence a positive re-rating of its market valuation.

Elsewhere, Ariana said that exploration is continuing ‘apace’ across all of its project areas, with 2019 expected to come in as its business year of exploration to date. At just $15/oz, the company places within the lowest international cost quartile for prospecting. The firm added that it is also being boosted by ‘encouraging support’ from both the local community and government authorities in this area.

‘This support is essential for Ariana to continue to build upon current exploration opportunities in addition to making the necessary investments to grow our portfolio and increase the life of mine of the producing operation and in the development of new mines,’ said chairman Michael de Villiers. ‘We are encouraged to see fellow gold producers operating in Turkey announcing new mine development plans and major investments. We look forward to continuing working closely with both the local and national government offices to ensure we can contribute to this growth potential for the Turkish gold mining industry.’

Finally, Ariana said it was boosted by favourable macro conditions throughout 2018, with gold production from Kiziltepe being sold at a substantial $1,269/oz, and silver at $15/oz. The organisation said it would continue to monitor new opportunities in the energy storage and electrification of transport sectors moving forward:

‘It is encouraging to see such a seismic shift away from carbon-based polluting fuels to renewable- energy based electrification of vehicles. I personally have been a long-time adopter and advocate of this technology,’ de Villiers added. ‘This trend has opened new opportunities for exploration companies as demand increases for all the minerals required to sustain the growth expected in this new sector.

‘Industry demand for copper in this sector is obvious, but so too is the requirement for more esoteric metals including those across the full spectrum of rare earth elements and others too numerous to mention. Ariana has an extensive exploration database covering the whole of Turkey and extending into various surrounding countries within the Tethyan Metallogenic Belt. Ariana has had prior success in this sector through the discovery of various lithium prospects in Western Australia and the Northern Territory, which were successfully vended in to two separate ASX-listed companies for significant profit.

Wednesday’s results follow the news last month that low operating cash costs at Ariana’s Kiziltepe mine have continued into 2019. In a quarterly update for the Turkey-based asset, Ariana said operating cash costs for the period came in at just c.$399/oz of gold, a slight increase on the $349/oz achieved in Q4 2018.

Managing director Kerim Sener said this figure remains low in spite of the high strip ratios incurred during the pushback of the southern pit wall at an area of Kiziltepe called Arzu South. ‘This was helped by the planned draw down on stockpiles, maintenance of significant by-product silver credit and high grades through the plant during the period,’ he added.

Elsewhere, Ariana revealed that its gross income from the asset came in at $10.86m for the quarter based on an average realised gold price of $1,311/oz. This represents a slight increase of the $10.62m turnover generated by the mine in the previous quarter. Finally, gold production came in a 7,296oz over the period while silver output reached 84,109oz.

Looking forward, Ariana said that ore production from Kiziltepe’s open pit will remain restricted during Q2 and Q3 due to the continuation of work on the pushback of the southern wall of the Arzu South pit. However, the firm said this is not expected to impact output significantly.

Author: Daniel Flynn

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

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

Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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 reveals ‘solid start’ to 2019 as costs remain low at Kiziltepe (AAU)

Ariana Resources (LSE:AAU) sat at 1.97p on Monday morning after revealing that low operating cash costs at its Kiziltepe mine have continued into 2019. In a quarterly update for the Turkey-based asset, Ariana said operating cash costs for the period came in at just c.$399/oz of gold, a slight increase on the $349/oz achieved in Q4 2018.

Managing director Kerim Sener said this figure remains low in spite of the high strip ratios incurred during the pushback of the southern pit wall at an area of Kiziltepe called Arzu South. ‘This was helped by the planned draw down on stockpiles, maintenance of significant by-product silver credit and high grades through the plant during the period,’ he added.

Elsewhere, Ariana revealed that its gross income from the asset came in at $10.86m for the quarter based on an average realised gold price of $1,311/oz. This represents a slight increase of the $10.62m turnover generated by the mine in the previous quarter. Finally, gold production came in a 7,296oz over the period while silver output reached 84,109oz.

Looking forward, Ariana said that ore production from Kiziltepe’s open pit will remain restricted during Q2 and Q3 due to the continuation of work on the pushback of the southern wall of the Arzu South pit. However, the firm said this is not expected to impact output significantly. 

Alongside a project called Tavsan, Kiziltepe is part of Ariana’s 50:50 Red Rabbit JV with Proccea Construction. Both sites contain a series of prospects within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional Province of western Turkey.  This province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  The total resource inventory of the Red Rabbit Project and wider project area stands at c.605,000oz of gold equivalent.

On the operational side, Ariana said the JV has continued to make gross capital repayments on a $33m construction capital loan on their scheduled basis.  As at the end of March, these payments totalled $19.6m, with $3.2m repaid over the first three months of the year.

‘These first quarter results for the Kiziltepe Mine reflects a solid start to 2019 and continues to demonstrate the efficiency of our JV operations,’ added Sener on Monday. ‘As at the end of the quarter, 60pc of the JV construction capital loan of $33 million had been repaid, and by the end of the June quarter we are expecting to be almost 70pc repaid. Monthly intercompany loan repayments and dividends from the JV to our wholly owned subsidiary, Galata Madencilik San. ve Tic. Ltd., reached approximately $2.7m by the end of Q1 2019.’

Monday’s update comes just days after Ariana said infill resource drilling had demonstrated the potential for a large-tonnage, lower-grade system at the Arzu North area of Kiziltepe. Drilling completed at the site in December to provide Red Rabbit with additional infill resource data encountered encouraging intersections.  Highlights included 44m at 1.5g/t gold and 17.5g/t silver and 27.7m at 1.37g/t gold and 13.1g/t silver.

The drilling was planned to test the theory that the Arzu North vein system – which had not been tested thoroughly – broadens out into a more extensive array of vein mineralisation spanning a series of structures. According to Ariana, the results confirm the presence of at least three broad mineralised structures within the Arzu North pit.

New geological modelling and pit optimisation studies are now underway to revise the resources for Arzu North alongside another area called Derya.  Ariana said it is also looking at the potential of merging Arzu North and Derya into a single pit following re-interpretation of the Aybor vein, located in a 30m-wide zone between the two areas. Regardless, mining is scheduled to begin at both areas simultaneously in the final quarter of this year now that the Red Rabbit partners have received all necessary forestry permissions.

Elsewhere, last week saw Ariana announce that it had received approval for a 10-year renewal of its Salinbas license from the Turkish General Directorate of Mining and Petroleum Affairs.  The organisation is about to commence a 2,000m Reverse Circulation drilling programme, for which a drill rig has now been mobilised.

The gold, silver, and base-metal project contains three notable licence areas called Salinbas, Ardala and Hizarliyayla. The licenses are located within the multi-million-ounce Artvin Goldfield in Turkey’s “Hot Gold Corridor”.  The corridor contains several significant gold-copper projects including the 4Moz Hot Maden project which lies 16km to the south of Salinbas. Also to the south lies the Hizarliyayla prospect which is partially hosted within the same stratigraphic sequence as the Hot Maden discovery.

Author: Daniel Flynn

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

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

Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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.

Drilling imminent as Ariana secures all permits for Ardala License at Salinbas Gold Project (AAU)

On Tuesday, Ariana Resources (LSE:AAU) updated the market on developments at its Salinbas Gold Project in Turkey. The firm has received approval for a 10-year renewal of the Salinbas license from the Turkish General Directorate of Mining and Petroleum Affairs. Ariana is about to commence a 2,000-metre Reverse Circulation (RC) drilling programme, reporting the drill rig has now been mobilised.

Having received the required Ardala licence forestry permits, site preparation is underway. This includes some road-building and existing roads have been readied for further drilling in the trial mining area. To date, over 10,000 tonnes of mineralised material has been extracted from the trial mining area and stockpiled on site.

Map of the Salinbas Gold Project

 The gold, silver, and base-metal project contains three notable licence areas called Salinbas, Ardala and Hizarliyayla. The licenses are located within the multi-million ounce Artvin Goldfield in Turkey’s “Hot Gold Corridor”. The corridor contains a number of significant gold-copper projects including the 4 Million Ounce (Moz) Hot Maden project which lies 16km to the south of Salinbas. Also to the south lies the Hizarliyayla prospect which is partially hosted within the same stratigraphic sequence as the Hot Maden discovery.

Dr. Kerim Sener, Managing Director, commented:

"This is an excellent set of outcomes for the future development of the Salinbas Project, which have converged simultaneously.  Now that we have secured all of the permits required for the drilling of the Ardala licence we have much greater flexibility to drill-test some of the key targets defined in earlier exploration.  An initial 2,000m of RC drilling is due to commence on the Ardala licence imminently and is expected to conclude by early June.  In addition, achieving the upgrade of the Salinbas licence to operational status is a particularly important development, as it will secure our rights to that property for 10 years."

Author: Stuart Langelaan

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

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

Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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.