Friday saw Ariana Resources (LSE:AAU) reveal positive progress in joint venture (“JV”) discussions for its Salinbas project in Turkey.

The firm said that its proposed, as-yet-un-named partner for the asset has completed 600 metres of reverse circulation drilling at the asset to twin four holes previously drilled by Ariana. Following the receipt of assay results from the work, “good correlations” have been found between the two sets of holes. As such, the parties involved in the potential JV have completed an extension agreement that will enable due diligence work to be completed up to the end of next month.

Wholly-owned by Ariana, Salinbas is located in north-east Turkey where it spans three highly-prospective licence areas called Salinbas, Ardala, and Hizarliyayla.

The Salinbas deposit (which lies within both the Salinbas and Ardala licences) contains an Indicated and Inferred JORC resource of c.10Mt at an average grade of 2g/t gold and 10.2g/t silver for approximately 650,000oz and 3.2Moz of the metals respectively.

Ardala, meanwhile, hosts a porphyry system with an Inferred JORC resource of 16Mt. This grades 0.6g/t gold for 323,000oz of the precious metal while also containing domains with up to 0.2pc copper and 0.01pc molybdenum.

Finally, Hizarliyayla, the least advanced of the three licence areas, is an epithermal prospect with a c.3km2 alteration zone prospective for both gold and base-metal mineralisation.

Joint venture discussions for the project began last November when Ariana enter a non-binding memorandum of understanding for the project with a ‘major Turkish construction and engineering company’. The agreement – which prompted a 30% increase in Ariana’s share price – proposes the sale of a 17% stake in Salinbas to the unnamed partner for $5 million.  The third-party will then inject a further $8 million of equity into the asset via an earn-in arrangement and organise the bank finance to enable it to be brought into production. This would take its total position to 53%.

Alongside the Salinbas deal, the MoU also lays out some transactions for the Kiziltepe and Tavsan projects – currently held in a 50:50 JV called Red Rabbit between Ariana and Proccea Construction. Specifically, the partner would take on 53% of the JV in exchange for a $50 million payment that would be split between the Red Rabbit firms.

Ariana’s managing director Kerim Sener provided further details on these discussions in Friday’s release:

"We are pleased to confirm that the due diligence confirmatory drilling programme at Salinbas has been concluded and can now be factored into the independent review. The efforts of the independent due diligence team are currently focusing on the Kiziltepe mining operations and, in order to provide sufficient time for the completion of this work, the proposed JV parties have extended the exclusivity period to the end of March.

Meanwhile, the necessary definitive legal documentation is being prepared for review by the proposed JV parties from the second half of February. We look forward to working closely with the proposed JV parties in order to conclude the proposed agreement and advancing our project development plans for Salinbas in particular."

To download and read our recent, in-depth report on the Salinbas project – please click here

Author: Daniel Flynn

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