TIDMAAU
RNS Number : 0899G
Ariana Resources PLC
23 November 2020
23 November 2020
AIM: AAU
KIZILTEPE QUARTERLY OPERATIONAL UPDATE
Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed
exploration and development company operating in Europe, is pleased
to announce its operating results for the quarter ended 30
September 2020 for the Kiziltepe Mine ("Kiziltepe" or "the
Project") in Turkey. Kiziltepe is part of the Red Rabbit Joint
Venture ("JV") with Proccea Construction Co., and is 50% owned by
Ariana through its shareholding in Zenit Madencilik San. ve Tic.
A.S. ("Zenit").
Highlights:
-- Gross quarterly revenue of US$11.4 million at an average
realised gold price of US$1, 915 per ounce,
against an average revenue per gold ounce of US$2, 219 (due to silver credit)*.
-- Production and sale of 5,125 ounces of gold during the quarter ended 30 September 2020.
-- Operating cash costs for the quarter are estimated at US$352
per ounce(#) ; lower costs for the period resulting in part due to
a decline in exchange rate and sale of silver stock.
-- Operational mill availability running at 100% and utilisation at 99% during the period.
-- 57,302 tonnes of ore milled during the period ended 30
September 2020 at an average head grade of 2.63 g/t Au.
-- Process recovery of gold remains high at 94.2%.
* All figures are given gross with respect to the JV.
Dr. Kerim Sener, Managing Director, commented:
"Third quarter 2020 gold production not only exceeded the prior
quarter by nearly 10% and enabled full year production guidance to
be maintained into the current quarter, it also showed a 15%
increase in revenue for the period. While the quarter marked the
end of production from the high-grade Arzu South open-pit,
operations have continued exceedingly well at the Arzu North and
Derya areas. In particular, open-pit material movements have
remained very high and the JV has built up a very large ore
stockpile which provides for over ten months of mill feed.
"The period also concluded with the completion of the final
stage installation of the tailings dam liners. Consequently,
development of the mine site is now fully complete in terms of the
infrastructure according to the feasibility design. However, it is
the intention of the JV to continue operational enhancements at the
site and work is now underway on an increase in operating capacity
up to about 500,000 tonnes of ore per annum.
"This will be particularly important as we look to lower grade
sources of ore for the plant. The potential at Kiziltepe for larger
tonnage, lower grade orebodies is evident already based on our
experience of exploring and now mining of the Arzu North and Derya
areas. The mine is currently producing over 200% more gold in these
areas than was projected in the mine plan. We are confident that
further ore will be defined in this area with future drilling
programmes.
"These efforts are part of our drive to ensure that Kiziltepe
remains an efficient operation, capable of producing gold at the
lowest possible cash costs. The emphasis on operating margin
represents one of the guiding principles on which the JV intends to
continue developing. The current precious metal pricing environment
only adds to the fundamental profitability of the Kiziltepe
operation."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Current Developments:
-- Production of ore from the open-pits achieved an average rate
of 28,987 tonnes per month over the period, with a peak rate of
over 40,773 tonnes achieved in July.
-- Operations in the Arzu North and Derya areas are continuing
as planned and production during the quarter showed a >200%
increase in mined gold over the Reserve block-model but at slightly
lower than modelled grades; this trend is currently continuing in
to the current quarter.
-- The JV maintains a working capital loan balance with Turkiye
Finans Katilim Bankasi A.S. of approximately US$5.4 million which
is expected to be repaid in full by October 2021.
* All production figures are quoted gross with respect to the JV
in this announcement.
(#) Operating cash costs are inclusive of on-site costs,
off-site charges and royalties specific to the project. It also
includes adjustments for stockpile balances at the end of each
quarter, in addition to an adjustment for by-product silver. They
exclude finance costs, taxes and development capital. The
definition used to derive the cash costs is essentially the same as
that used within the feasibility study. This cash cost was
calculated based on unaudited figures obtained from Zenit.
Table 1: Production statistics for the Kiziltepe Mine in Q3
2020.
Measure Unit Q3 2020 Q2 2020
Plant feed grade g/t Au 2.63 3.02
------------- --------- ---------
Gold produced Troy Ounces 5,125 4,679
------------- --------- ---------
Silver produced Troy Ounces 63,339 61,986
------------- --------- ---------
Gross income US$'000 11,373 9,901
------------- --------- ---------
Operating cash cost
of production US$/oz 352 492
------------- --------- ---------
Average revenue per
gold ounce(1) US$/oz 2,219.07 2,116.12
------------- --------- ---------
Average realised
gold price US$/oz 1,915.73 1,717.16
------------- --------- ---------
(1) Average revenue per gold ounce accounts for both the gold
and silver sold during the period and is calculated by dividing the
gross income by only the gold ounces sold in the period.
Summary of Project
The Kiziltepe operation is currently expected to deliver
approximately an average of 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) is making remaining repayments against a
working capital loan from Turkiye Finans Katilim Bankasi A.S. based
on a contractual schedule to October 2021. Construction capital
loan repayments totalling US$33 million were completed in April
2020, with excess cash-flow from the operation used to make
proportional repayments of loans provided by Ariana and Proccea
jointly to the JV for exploration and development respectively.
Commercial production was initiated at Kiziltepe during July
2017 and formal quarterly production reporting commenced. 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 pits (Arzu South, Arzu North,
Banu and Derya) that are currently scheduled to be mined.
Management is confident that this can be achieved assuming the
conversion of existing resources to reserves.
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
Panmure Gordon (UK) Limited Tel: +44 (0) 20 7886
2500
John Prior / Hugh Rich / Atholl Tweedie
Yellow Jersey PR Limited Tel: +44 (0) 20 3004
9512
Dom Barretto / Joe Burgess / Henry arianaresources@yellowjerseypr.com
Wilkinson
Editors' Note
About Ariana Resources:
Ariana is an AIM-listed mineral exploration and development
company operating in Europe. It has interests in gold production in
Turkey and copper-gold assets in Cyprus. The Company is developing
a portfolio of prospective licences in Turkey, which contain a
depleted total of c. 2.1 million ounces of gold and other metals
(as at July 2020).
The Red Rabbit Project is comprised of the Company's flagship
assets, the Kiziltepe and Tavsan gold projects, and is part of a
50:50 Joint Venture with Proccea Construction Co. Both assets are
located in western Turkey, which hosts some of the largest
operating gold mines in the country and remains highly prospective
for new porphyry and epithermal deposits. The Kiziltepe Sector of
the Red Rabbit Project is fully permitted and is currently in
production. The total depleted resource inventory at the Project
and its wider area is c. 500,000 ounces of gold equivalent (as at
April 2020). 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.
The 100% owned Salinbas Gold Project is located in north-eastern
Turkey and has a total resource inventory of c. 1.5 million ounces
of gold. The project comprises three notable licence areas:
Salinbas, Ardala and Hizarliyayla, all of which are located within
the multi-million ounce Artvin Goldfield. The "Hot Gold Corridor"
contains several significant gold-copper projects including the 4
million ounce Hot Maden project, which lies 16km to the south of
Salinbas and 7km south of Hizarliyayla. A NSR royalty of up to 2%
on future production is payable to Eldorado Gold Corporation on the
Salinbas Gold Project.
Ariana is also earning-in to 50% of UK-registered Venus Minerals
Ltd ("Venus") and has to date earned into an entitlement to c. 12%.
Venus is focused on the exploration and development of copper-gold
assets in Cyprus, which includes the Magellan Project on which a
resource of 8.5Mt @ 0.63% Cu (+ Au, Ag, Zn) has been defined.
Panmure Gordon (UK) Limited is broker to the Company and
Beaumont Cornish Limited is the Company's Nominated Adviser and
Broker.
For further information on Ariana you are invited to visit the
Company's website at www.arianaresources.com .
--Ends--
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDPPGAWGUPUGAP
(END) Dow Jones Newswires
November 23, 2020 02:00 ET (07:00 GMT)
Ariana (AQSE:AAU.GB)
Historical Stock Chart
From Jan 2025 to Feb 2025
Ariana (AQSE:AAU.GB)
Historical Stock Chart
From Feb 2024 to Feb 2025
