Ariana Resources plc : Investment incentives gr...

25 June 2014
AIM : AAU

INVESTMENT INCENTIVES GRANTED FROM TURKISH GOVERNMENT FOR DEVELOPMENT OF KIZILTEPE GOLD-SILVER MINE

Ariana Resources plc ("Ariana" or "the Company"), the Anglo-Turkish gold exploration and development company is pleased to confirm receipt of several key investment incentives from the Turkish Government for its Kiziltepe Gold-Silver Mine ("Kiziltepe"), part of its Red Rabbit Joint Venture in western Turkey with Proccea Construction Co. ("Proccea"). 

Highlights:

• Attractive investment incentives approved for Kiziltepe demonstrating continued support for the mine's development by the Turkish Government.

• Significant reduction in corporation tax and exemptions from customs duties and VAT.

• Mine finance has been conditional on securing these incentives - discussions with relevant institutions can now be advanced.

Michael de Villiers, Chairman, commented:

"These are some of the most attractive investment incentives granted to a development company that I have seen during my mining career. I believe that this level of support from the Turkish Government clearly demonstrates the country's commitment to facilitating mining and development investment in Turkey."

Investment Incentives

Following an application made by Zenit Madencilik San. ve Tic A.S. ("Zenit") to the General Directorate of Incentives and Foreign Investment at the Turkish Ministry of the Economy at the end of 2013, the Company has now been granted approval for several investment incentives made available by the Turkish Government.

The incentives secured include:

1. Exemption from customs duty domestic and foreign machinery and equipment (100% exemption). 
2. 80% reduction in corporation tax up to a tax limit of 40% of the capital investment.
3. Social insurance contributions for all mine employees will be paid by the Turkish Government for 7 years.
4. Interest repayment support on any Turkish Lira or foreign currency loan secured by the company.
5. VAT exemption domestic and foreign machinery and equipment (100% exemption).

The Company has commissioned an independent analysis of the above incentives, specifically focusing on the corporation tax reductions and social insurance support in order to estimate the magnitude of the incentives provided.  Over the life of the operation, an estimated saving of approximately US$1.2 million in corporation tax and US$1 million in social insurance support has been secured.  Further savings will be made from the customs duty and VAT exemptions and further work to quantify these is underway. 

Zenit has also recently applied for the inclusion of the project as a Strategic Investment.  If the application is successful there will be a further 10% reduction (i.e. 90% total reduction) in corporation tax up to a tax limit of 50% of the capital investment. 

Contacts:

Ariana Resources plc	Tel: [phone]
Michael de Villiers, Chairman
Dr. Kerim Sener, Managing Director
Beaumont Cornish Limited	Tel: [phone]
Roland Cornish / Felicity Geidt
Beaufort Securities Limited	Tel: [phone]
Saif Janjua
Loeb Aron & Company Ltd.	Tel: [phone]
John Beresford-Peirse / Dr. Frank Lucas
St Brides Media & Finance Ltd	Tel: [phone]
Susie Geliher / Lottie Brocklehurst

About Ariana Resources:

Ariana is an Anglo-Turkish exploration and mine development company focused on advancing epithermal gold-silver and porphyry copper-gold deposits in Turkey.  The Company is developing a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with Eldorado Gold Corporation in north-eastern Turkey.  Eldorado owns 51% of this joint venture and are fully funding all exploration work on the JV properties, while Ariana owns 49%.  The total resource inventory within this JV is 1.09 million ounces of gold.

The Company's flagship assets are its Kiziltepe and Tavsan gold projects that 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, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co.  The total resource inventory at the Red Rabbit Project stands at 475,000 ounces of gold equivalent. 

Beaufort Securities Limited and Loeb Aron & Company Ltd. 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

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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

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