Ariana Resources (LSE:AAU) had a positive end to the year continuing a strong run of production from its Turkish gold mine. Gross income for the final quarter was $10.62m from production and sale of 7,417 ounces of gold.  These figures were in line with what Ariana’s Managing Director, Dt. Kerim Sener described as ‘excellent performance’ during the previous two quarters.

In a quarterly update released on Friday, Ariana said final year gross income totalled $37.8m from the production of 27,110 ounces of gold. This saw the company substantially exceed its yearly production forecast with year-on-year increase of gold production of around 166pc.

Operating costs have also come down since 2017, averaging $349 per ounce in 2018, compared with $585 per ounce in the previous year. With the gold price appearing to have put in a base since its lows of $1161 last August, Ariana appears poised to capitalise on a much-improved margin as we continue into 2019. 

Earlier this month, Ariana said it will receive up to £3.79m worth of capital from its subsidiary Galata Madencilik. Galata, Ariana’s wholly-owned Turkish operating company, has transferred around £1m to date as a result of the repayment of loans by its JV company, Zenit Madencilik.

The company is currently undertaking a drilling campaign in Western Turkey at Kizilcukur, which lies around 22km to the northeast of the Kiziltepe Mine. Drilling to date has indicated that Kizilcukur has the capacity to act as a high-grade satellite source for Kiziltepe 

Dr. Kerim Sener, Managing Director, commented: 

"These final results for Q4 2018 are fully in line with the excellent performance of the Kiziltepe Mine achieved during the prior two quarters. Operating cash cost per ounce remains low, mainly due to the maintenance of significant by-product silver credit and increased grades through the plant during the period. 

"As at the end of the quarter, 50% of the JV construction capital loan of US$33 million has been repaid, with the remaining balance to be repaid largely during 2019. Monthly intercompany loan repayments from the JV to our wholly owned subsidiary, Galata Madencilik San. ve Tic. Ltd., reached approximately US$2.1 million by the end of 2018." 

Author: Stuart Langelaan

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