Ariana Resources PLC Ariana Resources Plc : 100% Acquisition Of Salinbas Gold Project
December 21 2016 - 2:01AM
UK Regulatory
TIDMAAU
21 December 2016
AIM: AAU
100% ACQUISITION OF 1Moz SALINBAS GOLD PROJECT FROM ELDORADO
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration
and development company operating in Turkey, is pleased to announce the
100% acquisition of the Salinbas Gold Project* ("Salinbas" or "the
Project") from Eldorado Gold (Netherlands) BV, a subsidiary of Eldorado
Gold Corporation ("Eldorado Sub"). Salinbas had been part of a 49:51
Joint Venture ("JV") with Eldorado Sub since 2012 and previously with
European Goldfields Limited from 2008 prior to their acquisition by
Eldorado.
Highlights:
-- Salinbas Project is located within a multi-million ounce goldfield
containing several significant gold-copper projects, notably the adjacent
Hot Maden project.
-- Ariana 100% owner of Salinbas following a Net Smelter Return ("NSR")
royalty of up to 2% on future production being granted to Eldorado Sub.
-- Company considering a focused work programme on Salinbas during 2017 to
identify potential resource extensions and consider routes to
commercialise the project.
-- Project area includes the Salinbas Au-Ag deposit, the Ardala Cu-Au-Mo
porphyry and the Hizarliyayla Au-Ag system.
-- Salinbas contains an approximately 10Mt Indicated and Inferred JORC
resource, with an average grade of 2.0 g/t Au and 10.2 g/t Ag (for
650,000 oz gold and 3.2Moz of silver).
-- Scoping-study completed on Salinbas demonstrated potential for production
of approximately 50,000 ounces of gold and 100,000 ounces of silver per
annum over 10 years, providing an NPV(8%) in excess of US$100 million.
-- Ardala contains an approximately 16Mt Inferred JORC gold resource with a
grade of 0.6 g/t Au (for 323,000 oz gold), also containing copper (up to
0.2%) and molybdenum (up to 0.01%) domains.
Dr. Kerim Sener, Managing Director, commented:
"Completing this transaction with Eldorado on the Salinbas Project comes
at a significant time in the evolution of the Company. With the
Kiziltepe Sector of the Red Rabbit Project due to enter production
shortly, we are keen to enhance our project pipeline and to demonstrate
a pathway to increased downstream production capacity. The Salinbas
Project represents a major opportunity for the future growth of Ariana,
coming with approximately 1Moz in JORC Indicated and Inferred resources
in its own right and in a region with significant exploration upside, as
underscored by the recent discovery of the approximately 4Moz Hot Maden
project just 16 kilometres to the south.
We look forward to providing further updates on the project and towards
enhancing its value in what is proving to be a multi-million ounce
goldfield and one of the most prospective areas for new gold exploration
in Turkey."
Figure 1 which can be accessed from the link at the bottom of this
announcement: Map of the Salinbas project area showing the location of
major prospects, related alteration and mapped intrusions. Most of the
gold prospects, including Salinbas, lie within the Hot Gold Corridor.
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014.
Salinbas Project
The Salinbas Project is located in the Pontide Metallogenic Province in
northeastern Turkey and lies approximately 80km southeast of the coastal
city of Hopa and 20km east of Artvin. The project comprises three
notable prospects: Salinbas, Ardala and Hizarliyayla. The project
comprises three licences which are owned 100% by the operating
subsidiary, Pontid Madencilik San. ve Tic. Ltd. Two of the licences are
in process at the General Directorate of Mining Affairs for conversion
to operational status.
Salinbas is the most notable of the prospect areas, having been
identified in 2009 following rock-chip sampling and trenching, which
included 33m at 9.6 g/t Au and 46m at 8.3 g/t Au. Follow-up drilling
identified a gently dipping mineralised body emplaced along a thrust
zone to the east of a series of breccia pipes and the main body of the
Ardala Cu-Au-Mo porphyry. The best intercepts in initial shallow
drilling included 9.5m @ 6.48 g/t Au + 39.4 g/t Ag, 11.3m @ 4.98 g/t Au
+ 42.8 g/t Ag and 25m @ 3.34 g/t Au + 7.9 g/t Ag. Best intercepts from
further drilling included 31.10m @ 1.38g/t Au, 17.90m @ 2.09 g/t Au and
9.20m @ 2.25 g/t Au, with most mineralised intercepts obtained from less
than 70m below surface. A total of 11,709m drilling for 86 drill holes
has been completed on Salinbas to date and has defined a tabular
resource (Table 1) which dips towards the east at 25 degrees.
Substantial vertical relief exists between the top of the mineralisation
at Salinbas Peak (1,320m above sea level) to the lower limits of the
current resource (780m above sea level) in the vicinity of the Ardala
porphyry.
Table 1: Classified JORC Mineral Resource estimate for Salinbas (dated
1 April 2015). The resource was modelled on the basis of geology and a
lower cut-off of 0.5 g/t Au. Numbers may not sum due to rounding.
JORC Grade Au Grade Ag
Classification Tonnage (Mt) (g/t) (g/t) Ounces Au Ounces Ag
Indicated 2.29 2.11 11.9 155,500 877,700
Inferred 7.67 2.00 9.7 493,300 2,396,400
TOTAL 9.96 2.03 10.2 648,900 3,274,200
Limited exploration drilling between Salinbas and the Ardala porphyry to
the east has also been conducted. Highly encouraging results from these
holes confirmed the need for further exploration in this area and
suggest the continuity of mineralisation from the Ardala porphyry in the
valley floor to the Salinbas system on the ridge, representing a
vertical distance of 675m and a horizontal distance of close to 2km.
The best recent intercepts from drilling in the area connecting the
Salinbas system to the Ardala system include 81.5m @ 1.28 g/t Au + 10.5
g/t Ag, 34.5m @ 2.21 g/t Au + 10.7 g/t Ag and 18.2m @ 2.20 g/t Au + 25.6
g/t Ag. Further establishing the links between these two areas will be
an important objective for future drilling programmes.
A scoping study focused on Salinbas and completed in 2015 (see
announcement on 1 April 2015), demonstrated potential for the project to
yield strong financial returns, with NPV (8%) at US$108M, pre-tax IRR of
28%, and payback secured within approximately 3.3 years over the Life of
Mine ("LoM") at a gold price of US$1,250/oz. This demonstrates that a
potentially viable resource development opportunity already exists at
Salinbas and that future exploration work will probably reinforce this
view.
The nearby Ardala area hosts a porphyry copper-gold (plus molybdenum)
mineralised system associated with a series of nested quartz-diorite
intrusions of Eocene age within an Upper Cretaceous volcano-sedimentary
sequence. Geological mapping, soil, rock-chip and drill sample data, and
a ground magnetic survey outlined the mineralised porphyry and in 2013 a
JORC Mineral Resource was established (Table 2). Exposed parts of the
porphyry have dimensions of 600 x 700m and interpretation of magnetic
data suggests further lateral continuity beneath limestone units over an
area of 1,000m x 1,000m in extent. Previous exploration also focused
specifically on the mineralised intrusions, while surrounding
gold-bearing skarns (peak grade 5.16 g/t Au and 0.2% Cu in rock-chips)
and related disseminated mineralisation in the host-rocks remain largely
untested. The best intercepts from recent drilling in the Ardala area
include 119.5m @ 0.71g/t Au + 0.21% Cu + 0.01% Mo, 236.3m @ 0.34 g/t Au
+ 0.06% Cu and 122.9m @ 0.58 g/t Au + 0.05% Cu, which tested an area of
mineralised porphyry and immediately adjacent limestone. Deeper (>150m)
high-grade intercepts outside of the porphyry at Ardala include 4.2m @
6.74 g/t Au, 2.8m @ 3.34 g/t Au + 38.96 g/t Ag + 2.56% Zn, 2.0m @ 5.29
g/t Au + 13.5 g/t Ag, indicating the potential for other styles of
higher grade mineralisation sitting adjacent to the porphyry.
Table 2: Classified JORC Mineral Resource estimate for Ardala (dated 13
April 2013). Separate resource domains were established for the Au, Cu
and Mo components of the Ardala porphyry. There is a 95% coincidence of
the Au and Cu domains, and a 40-50% coincidence of the Au and Mo
domains.
Tonnage
JORC Classification (Mt) Grade (ppm) Tonnes Metal Ounces Metal Element
Inferred 4.66 2,175 10,000 Cu
18.00 136 2,400 Mo
16.27 0.60 323,000 Au
Summary of Agreement
Ariana has acquired the 51% of Greater Pontides Exploration BV ("GPE")
previously held by Eldorado Sub in exchange for a nominal cash
consideration and a NSR royalty of up to 2% being granted to Eldorado
Sub and resulting in Ariana holding 100% interest through its subsidiary
Ariana Exploration and Development Limited. Eldorado Sub has provided
certain limited commercial warranties as part of the transaction.
The licences are held by Pontid Madencilik San. ve Tic. Ltd. ("Pontid"),
a 100% owned subsidiary of GPE. Ariana is acquiring Pontid with its
management team intact and with US$40,000 in cash at bank, which will
increase to US$60,000 on the related sale of certain fixtures and
equipment to Eldorado.
Separate to the arrangement with Eldorado Sub, advance royalty payments
of US$7,000 per annum will be made to the original owner of the Ardala
licence for as long as Ariana holds the licence, in addition to which a
1.5% NSR will be payable in the event that the project enters
production. The Eldorado royalty on this licence will be 0.5% NSR, to
ensure the maximum royalty paid on any licence in the project will be no
more than 2% NSR.
Greater Pontides Exploration BV ("GPE")
GPE was created in the Netherlands. This company, along with its wholly
owned subsidiary - Pontid Madencilik San. ve Tic. Ltd., a private
company incorporated in Turkey - was established originally with
European Goldfields Limited as part of the agreement on the Artvin
Project. European Goldfields Limited was acquired by Eldorado Gold
Corporation in 2012. Prior to the acquisition as detailed above, Ariana
Exploration and Development Limited, a fully owned subsidiary of the
Ariana Group held 49% of the ordinary shares and Eldorado Gold
Corporation, the other party to the agreement, held the remaining 51% of
the ordinary shares. GPE was therefore treated in the Ariana Audited
Accounts for the year ended 31 December 2015 as an Associate investment
with a carrying value (together with GPE's subsidiaries) at that date of
GBPnil.
The reported loss of GPE in its unaudited company financial statements
for the year ended 31 December 2015, amounted to US$17,965 and as at
that date it had total assets of US$8,727,148.
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 construction. The total resource inventory at the Red
Rabbit Project and wider project area stands at c. 525,000 ounces of
gold equivalent.
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.
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.
Ends
FIGURE 1: http://hugin.info/138153/R/2066880/776020.pdf
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
(END) Dow Jones Newswires
December 21, 2016 02:01 ET (07:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.