1 May 2020
100% REPAYMENT OF CAPITAL LOAN
Ariana Resources plc (“Ariana” or “the Company”), the AIM-listed exploration and development company operating in Europe, is pleased to announce the completion of the repayment of the construction capital loan of US$33 million to Turkiye Finans Katilim Bankasi A.S. by Zenit Madencilik San. ve Tic. A.S., the 50:50 Joint Venture company between Ariana and Proccea Construction Co. (“Proccea”), owner of the Kiziltepe Mine.
Dr. Kerim Sener, Managing Director, commented:
“This is a fantastic result for the Joint Venture and the Company. Repayments against the construction capital loan commenced in December 2014 and have been completed as planned, according to mandated repayment dates, up to the end of April 2020. This serves to demonstrate the strong operating credentials of the JV and the profitability of the Kiziltepe Mine. While the life of mine average revenue per gold ounce is US$1,478, we also expect that this buoyant price environment will likely remain under current macroeconomic circumstances.
“Meanwhile our new exploration drilling programme which commenced late last week at Kiziltepe is proceeding as planned. This programme was designed to follow-up on the successful deep drilling which we completed at Arzu South last year. We are pleased to report that vein mineralisation has been encountered in the first of the new drill holes, which terminated at about 200m depth, demonstrating the vertical continuity of the vein system as predicted. This bodes well for the future development of the Kiziltepe Mine, as we consider its transition to underground operations in the future.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Summary of Project
The Kiziltepe operation is 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 its Feasibility Study. The operating company, Zenit Madencilik San. ve Tic. A.S. (50:50 JV between Ariana and Proccea) completed repayments of its construction capital loan from Turkiye Finans Katilim Bankasi A.S. in April 2020. After the repayment of all loans, profits from the operation will be shared on a 51:49 basis between Ariana and Proccea respectively. Excess cash-flow from the operation is being 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 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 expecting a minimum ten-year mine life, following the addition of a further 40,000 oz gold equivalent in reserves located outside of the four main pits (Arzu South, Arzu North, Banu and Derya). Management is confident that existing resources will be converted to reserves in part.
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
James Stearns / Atholl Tweedie
Yellow Jersey PR Limited
Tel: +44 (0) 20 3004 9512
Dom Barretto / Joe Burgess / Henry Wilkinson
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 1.5 million ounces of gold and other metals (as at April 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 million ounces of gold equivalent. The project comprises three notable licence areas: Salinbas, Ardala and Hizarliyayla, all of which are located within a multi-million ounce Artvin Goldfield. The “Hot Gold Corridor” contains several significant gold-copper projects including the 4Moz 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”). Venus is focused on the exploration and development of copper-gold assets in Cyprus.
Panmure Gordon (UK) Limited are broker 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.