AAU Ariana Resources Plc

 
TIDMAAU 
 
   31 July 2017 
 
   AIM: AAU 
 
   KIZILTEPE QUARTERLY OPERATIONAL UPDATE 
 
   Ariana Resources plc ("Ariana" or "the Company"), the exploration and 
development company operating in Turkey, is pleased to announce its 
results for the ramp-up period ended 30 June 2017 and to provide the 
following operational update for July 2017 from the Kiziltepe Mine 
("Kiziltepe" or "the Project").  Kiziltepe is part of the Red Rabbit 
Joint Venture with Proccea Construction Co. and is 50% owned by Ariana. 
 
   Operational Highlights: 
 
 
   -- Production of c.1,370 oz gold and c.6,780 oz silver during July 2017 has 
      exceeded forecast, with total production since start-up of c.3,300 oz 
      gold and c.21,300 oz silver. 
 
   -- Operation has successfully transitioned in to commercial production 
      during July, as expected (see announcement dated 30 June 2017). 
 
   -- Gold and silver production during ramp-up period (ending 30 June 2017) 
      totalled 1,929 oz and 14,519 oz respectively. 
 
   -- Processing plant operating to design specifications, with mill 
      availability increasing to c.97% and utilisation increasing to c.96% by 
      June. 
 
   -- Process recoveries of gold and silver remain significantly higher than 
      expected; average recoveries were 94% for gold and 79% for silver, while 
      feasibility expectations were 86% and 64% respectively. 
 
   -- 38,886 tonnes ore milled during the period ending 30 June 2017, with May 
      and June tonnage exceeding feasibility expectations. 
 
 
   Current Developments: 
 
 
   -- Grade of ore mined in July is c.4g/t Au and c.40 g/t Ag which is higher 
      than forecast; grades expected to be maintained at this level over the 
      next 6 months. 
 
   -- Production of ore from the open-pit is being increased to 17,000 tonnes 
      per month, with a further increase to 22,000 tonnes per month planned by 
      late summer. 
 
   -- Doré pour of c.450 oz gold and c.2,000 oz silver expected today 
      (included in July figure quoted above and Table 1 below); gold and silver 
      in circuit after this pour is estimated to be 300 oz and 3,000 oz 
      respectively. 
 
   -- Loan repayments to Turkiye Katilim Finans Bankasi A.S. have been made on 
      their scheduled basis and have amounted to over US$4.2 million as at the 
      end of July 2017. 
 
   -- Calendar year 2017 production guidance lies within a range 10,100 to 
      11,900 oz gold and 103,500 to 106,500 oz silver. 
 
 
   Dr. Kerim Sener, Managing Director, commented: 
 
   "We are very pleased to provide our first quarterly operational update 
for the Kiziltepe Mine, encompassing the period of ramp-up from 
mid-March through to the end of June 2017.  We remain very encouraged by 
the performance of all aspects of the operation, especially during July 
when doré output considerably exceeded forecast.  Following 
sustained high-rate mill throughput, we have now achieved a production 
rate above our feasibility plan and the transition in to commercial 
production is complete. 
 
   Our confidence in the ability for the operation to increase output, 
particularly during the dry summer months is significantly improved. 
Ore movement from the pit will be increased to 22,000 tonnes per month, 
which will represent an increase of over 75% above the feasibility plan. 
We are also continuing to consider strategies to increase mill 
throughput which may enable production to be eventually increased to 
c.200,000 tonnes of ore per annum, representing an increase of one third 
over the feasibility plan.  Notably these strategies will not involve 
any significant additional capital expenditure and relate to alternative 
crusher scheduling, screening and milling approaches." 
 
   Table 1: Production statistics for the period reported, mid-March to 
end-June 2017 and production to date up to the end of July 2017. 
End-July production includes a doré pour, occurring on the 31 July 
2017, which will yield c.450 oz gold and c.2,000 oz silver. 
 
 
 
 
                                                       2017 Production to Date 
           Measure                 Unit      Q2 2017      March to End-July 
Gold produced                  Troy Ounces    1,929            c.3,300 
Gold sold                      Troy Ounces      1,929                    2,861 
Silver produced                Troy Ounces     14,519                 c.21,300 
Silver sold                    Troy Ounces     14,519                   19,372 
Cash cost of production        US$/oz          n/a(*)                   n/a(*) 
Average realised gold price    US$/oz        1,258.20                 1,247.75 
Average realised silver price  US$/oz           17.40                    17.04 
 
 
 
   (*)  Cash costs are not provided for the purposes of this report due to 
the operation having been in ramp-up.  Costs incurred during the period 
are not reflective of estimated operating costs over the longer term. 
 
 
   Summary of Project 
 
   The Kiziltepe operation is currently expected to deliver approximately 
20,000 oz gold equivalent per annum over eight years of initial mine 
life, for a total of up to 160,000 oz gold equivalent based on current 
resources.  The operating company, Zenit Madencilik San. ve Tic. A.S. 
(50:50 JV between Ariana and Proccea) will continue to make repayments 
against its loan from Turkiye Finans Katilim Bankasi A.S. based on a 
pre-determined schedule.  Major loan repayments will have been completed 
by April 2020 and, during this time, excess cash-flow from the operation 
will be used to make repayments of loans provided by Ariana and Proccea 
jointly to the JV for exploration and development respectively.  After 
the repayment of all loans, profits from the operation will be shared on 
a 51:49 basis between Ariana and Proccea respectively. 
 
   Ramp-up to full production capacity at Kiziltepe has been concluded and 
formal quarterly production reporting is commencing.  The Company has 
also completed a new resource estimate for the project based on recent 
drilling and geological interpretation.  Detailed technical and economic 
assessments will be completed on several satellite vein systems which 
are not currently in the mining plan, in anticipation of these being 
developed in future years.  The Company is currently targeting a minimum 
ten-year mine life, which will require the addition of a further 40,000 
oz gold equivalent in reserves outside of the four main veins (Arzu 
South, Arzu North, Banu and Derya) that are currently scheduled to be 
mined. 
 
   This announcement contains inside information for the purposes of 
Article 7 of EU Regulation 596/2014. 
 
   Contacts: 
 
 
 
 
Ariana Resources plc             Tel: +44 (0) 20 7407 3616 
Michael de Villiers, Chairman 
Kerim Sener, Managing Director 
 
Beaumont Cornish Limited         Tel: +44 (0) 20 7628 3396 
Roland Cornish / Felicity Geidt 
 
Beaufort Securities Limited      Tel: +44 (0) 20 7382 8300 
Jon Belliss 
 
Panmure Gordon (UK) Limited      Tel: +44 (0) 20 7886 2500 
Adam James / Tom Salvesen 
 
 
 
   Editors' Note 
 
   About Ariana Resources: 
 
   Ariana is an exploration and development company focused on epithermal 
gold-silver and porphyry copper-gold deposits in Turkey.  The Company is 
developing a portfolio of prospective licences originally selected on 
the basis of its in-house geological and remote-sensing database. 
 
   The Company's flagship assets are its Kiziltepe and Tavsan gold projects 
which form the Red Rabbit Gold Project.  Both contain a series of 
prospects, within two prolific mineralised districts in the Western 
Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. 
This Province hosts the largest operating gold mines in Turkey and 
remains highly prospective for new porphyry and epithermal deposits. 
These core projects, which are separated by a distance of 75km, form 
part of a 50:50 Joint Venture with Proccea Construction Co.  The 
Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is 
currently in production.  The total resource inventory at the Red Rabbit 
Project and wider project area stands at c. 605,000 ounces of gold 
equivalent.  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 
2.5% on production is payable to Franco-Nevada Corporation.  At Tavsan 
an NSR royalty of up to 2% on future production is payable to Sandstorm 
Gold. 
 
   In north-eastern Turkey, Ariana owns 100% of the Salinbas Gold Project, 
comprising the Salinbas gold-silver deposit and the Ardala 
copper-gold-molybdenum porphyry among other prospects.  The total 
resource inventory of the Salinbas project area is c. 1 million ounces 
of gold equivalent.  A NSR royalty of up to 2% on future production is 
payable to Eldorado Gold Corporation. 
 
   Beaufort Securities Limited and Panmure Gordon (UK) Limited are joint 
brokers to the Company and Beaumont Cornish Limited is the Company's 
Nominated Adviser. 
 
   For further information on Ariana you are invited to visit the Company's 
website at www.arianaresources.com. 
 
   Glossary of Technical Terms: 
 
   "doré" semi-pure alloy of gold and silver; 
 
   "g/t" grams per tonne; 
 
   "kg" Kilograms; 
 
   "oz" Ounces; 
 
   "tpa" tonnes per annum; 
 
   "tpm" tonnes per month. 
 
   Ends 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Ariana Resources plc via Globenewswire 
 
 
  http://www.arianaresources.com/s/Home.asp 
 

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July 31, 2017 02:00 ET (06:00 GMT)

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