Final Results

 

 

 

 

28 May 2013
AIM : AAU

FINAL   AUDITED RESULTS FOR THE YEAR 31 DECEMBER 2012

Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, announces its final audited results for the year ended 31 December 2012.

Chairman's statement

I am pleased to have this opportunity to update our shareholders on the continuing progress of your Company at this key phase of our development, as we advance ever closer to production at our first gold mine, targeted for 2014. The Ariana team successfully delivered on numerous key objectives during 2012, laying the foundation for a truly transformational year in 2013.

Ariana is preparing to generate a solid stream of news flow this year, as we progressively de-risk our flagship Red Rabbit Gold Project ('Red Rabbit') - through the publication of our Definitive Feasibility Study ('DFS'); the receipt of Environmental Impact Assessment ('EIA') certification; and the start of mine construction. While all of this development activity is based around the Kiziltepe Sector of Red Rabbit, the Ariana team remains fully committed to its exploration strategy. The team has conducted and delivered several strategic appraisal programmes which, the Board believes, have the potential to generate significant future value for the Company, building Ariana into a gold and precious metals exploration, development and production company focused on geologically highly prospective regions of Turkey.

The Board of Ariana remains only too aware of the impact of the current adverse market sentiment towards exploration companies and of the recent correction in precious metals prices. These influences have combined to create a very difficult environment for many of our peers. But, despite these setbacks, it remains our strategy to continue to de-risk our more advanced projects as we progress them up the value curve, in tandem with feeding in new gold prospects, to build the Company's project pipeline and to add gold ounces to our global JORC inventory. We are convinced that this strategy, supported by our projections of low production costs of under US$700 per ounce of gold at Red Rabbit and the low associated political and operational risk factors for our main projects in Turkey, should take us further down the route of allaying any current investor concerns.

Despite the market turmoil that practically all junior resource companies are facing at present, I remain wholly positive about the longer term fundamentals for mining companies such as ours. True, in the short term, the market remains vulnerable to further instability after the sharp corrections in gold and silver prices in early 2013. However, gold's fundamentals remain sound. In its role as a hedge against inflation/currency depreciation, gold remains the ultimate store of value, while US and European budget negotiations remain unresolved. With robust physical demand from China and India and continuing strong investment demand, I believe that these corrections have created the path for a more gradual rise to a sustainable and stable long term gold price. So, despite much recent speculation that these events mark the end of the decade-long gold bull market, I would point investors to similar corrections in both mid 2006 and again in late 2008 when the gold price retreated sharply, down more than 25% and 33% respectively, before resuming its longer term upward trend.

With this in mind, the Ariana team remains focused on realising the longer term value generated across its portfolio of assets, with the prime objective of bringing Red Rabbit into production. Over recent months, we have made considerable progress in this direction. Calendar year 2012 saw the all-important sanctioning by the Turkish government authorities of the forestry permits for the drilling of the designated tailings storage area of the Kiziltepe Sector. Unsuccessful efforts to secure such approvals have been the source of protracted delays in recent years for a number of developing mining companies operating in Turkey. Achieving this milestone provided us with the access we crucially required in order to complete our geotechnical and hydrogeological drilling - a key stage ahead of the finalisation of our DFS.

The DFS represents a major landmark in the development of Red Rabbit, as we anticipate confirmation of the project's robust and attractive economic fundamentals. In parallel with the completion and publication of our DFS, we are advancing other key components of the development process. In February 2013 we submitted our Project Summary Document to the Ministry of Environment and Urban Planning, initiating the formal environmental permitting process at Kiziltepe. In line with this, the route to production has now been set out clearly before us, with the EIA permitting process expected to be concluded during H2 2013, swiftly followed by the commencement of mine construction by the end of 2013.

More recently, Ariana was highly encouraged this year by the outcome of its public and ministerial consultation meetings, attended by more than 100 people from the villages surrounding Kiziltepe. The feedback received by the Ariana team at this meeting was extremely positive, giving us the reassurance of local support and confirming that there is no local opposition to the development of Kiziltepe as a producing mine. The value of this support cannot be underestimated - the backing of the local community is an essential prerequisite for getting this project off the ground. We would therefore like to take this opportunity to offer our deep thanks and to emphasise how much we look forward to working with these communities. This support reinforces our view that the development of Red Rabbit will benefit all those involved in this vibrant enterprise.

As previously mentioned, our exploration team has also had an extremely busy year leading up to 2013. Their work has centred on two prime areas: the wider Red Rabbit project area, and the Ardala and Salinbas properties in north-eastern Turkey. Drilling programmes conducted at Kiziltepe have yielded truly exceptional results, with the highest ever grades reported from the deposit. Values included an intercept of 12.1m at 16.5 g/t Au equivalent, including 1m at 79.7 g/t Au equivalent. These outstanding results have underscored the significant further potential within the Kiziltepe Sector and point to the considerable additional upside we believe could be derived from the Kiziltepe mine development.

Looking at the wider area, Ariana has also conducted work at adjacent regional targets, Kepez West and Karakavak. The results have reinforced our view that the Sindirgi Gold Corridor contains demonstrable potential for the discovery of additional resources.

Our exploration efforts at the Salinbas and Ardala properties, which we are developing in joint venture with Eldorado Gold, resulted in the publication of a JORC compliant resource estimate of 180,000 oz Au plus 820,000 oz Ag (Indicated) and 590,000 oz Au plus 3.3 Moz Ag (Inferred) at Salinbas, and the identification of a 323,000 oz Au Inferred resource at Ardala. Establishing this highly encouraging maiden resource represents a crucial step towards realising the wider gold resource potential of the whole system. We firmly believe these deposits have the capacity to host a resource in excess of 1 Moz gold.

Following the success of Ariana's exploration campaign at Ardala and Salinbas, Eldorado Gold has now agreed to assume operational management of the joint venture. This is a powerful endorsement of the potential of this exciting project; we look forward to working closely with the Eldorado Gold team as we move towards proving up the wider prospectivity of this system.

The Ariana team has once again demonstrated its exploration credentials in 2012 through the successful implementation of numerous drilling and appraisal campaigns. The emphasis on exploration will continue throughout 2013. In the June 2012 licence auction process, we successfully acquired four highly attractive new licence areas covering 4,058 hectares. We also concluded an agreement to access the powerful and comprehensive Turkish exploration database assembled by Newmont Mining Corp. during a period of 20 years worth of activities in Turkey.

Both developments provide the Company with further scope to expand its exploration footprint across western Turkey - an area over which the Ariana team has developed an extensive understanding of the geological and operational environment. The Newmont database - valued at approximately US$20M - will be a hugely important tool in the expansion of our exploration activities within prospective and underexplored regions of Turkey, enabling us to build a solid pipeline of quality assets through which to generate long-term value for our shareholders.

Our exploration team is therefore extremely well equipped to undertake the challenge of identifying new +1 Moz gold deposits in Turkey. As we move further towards de-risking our flagship Red Rabbit Gold Project as it heads towards profitable production in 2014, we believe Ariana Resources represents a significant and compelling value proposition.

Our shareholders have loyally and generously continued to support us during a year of extremely difficult funding conditions for junior mining companies. During 2012 we completed an AIM market placing raising a total of £625,000, and we have continued to utilise the SEDA (Standby Equity Drawdown Agreement) facility negotiated with Yorkville Advisors. Via these mechanisms, we have successfully funded our continuing exploration and development activities. We are now on the final straight, and within sight of cash flow generation.

Michael Spriggs
Chairman
24 May 2013

The full accounts are available to download from www.arianaresources.com

Contacts:

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

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 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 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, 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 448,000 ounces of gold equivalent.  

Ariana also has a strategic investment in Tigris Resources Limited (www.tigrisresources.com), a private Jersey-based exploration company, which is focused on the exploration of copper and gold deposits in southeastern Turkey.  Ariana retains 11.5% of Tigris Resources Limited.  

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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Source: Ariana Resources plc via Thomson Reuters ONE

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