Zenit Mining Operations Update

Ariana Resources PLC

29 May 2024

 

29 May 2024

AIM: AAU

ZENIT MINING OPERATIONS UPDATE

US$20 MILLION FINANCING AGREEMENT

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral exploration and development company with gold project interests in Africa and Europe, is pleased to announce a finance agreement to support ongoing developments of the Zenit Mining Operations in Türkiye. Zenit Mining Operations comprise the Kiziltepe gold-silver mine and the Tavsan mine construction programme in western Türkiye. Zenit Mining Operations are a partnership between Ariana (23.5%), Proccea Construction Co. ("Proccea") (23.5%) and Özaltin Holding A.S. ("Özaltin") (53%). The finance agreement has been secured via the partnership entity, Zenit Madencilik San. ve Tic. A.S. ("Zenit").

Highlights:

·    US$20 million credit agreement was completed with Türkiye Cumhuriyeti Ziraat Bankasi A.S. ("Ziraat Bankasi"), the largest bank in Türkiye.

·    Loan repayments at an effective interest rate of 8.5% will occur over three years, with a one-year principal repayment holiday following drawn-down.

·    Facility is non-recourse and comprises no hedging or currency swap requirements.

Dr. Kerim Sener, Managing Director, commented:

"With our partners, Özaltin Holding and Proccea Construction, we are exceptionally pleased to have completed a credit agreement with Türkiye Cumhuriyeti Ziraat Bankasi A.S. to support our Zenit Mining Operations, in particular for the financing and timely delivery of our second mine in Türkiye. As a State-owned bank, Ziraat Bankasi is the largest bank in terms of total assets (US$129 billion) and number of branches in the country. It is primarily testament to the strength of our partner, Özaltin Holding, for us to have achieved this significant funding milestone.

"This funding facility will enable the partnership to accelerate the construction of the Tavsan mine with the expectation that the mine build will be completed in the latter part of 2024. We would like to take this opportunity to thank both Özaltin and Proccea for their impressive efforts in progressing the Tavsan mine development programme and extend our appreciation to Ziraat Bankasi for the completion of this funding arrangement. Such strong banking relationships bode well for the development of our future project pipeline, both in Türkiye and potentially also in Zimbabwe."

Finance Facility

A US$20 million finance facility has been agreed upon following negotiations with Türkiye Cumhuriyeti Ziraat Bankasi A.S. The facility has been provided in the name of Zenit Madencilik San. ve Tic. A.S. ("Zenit") to support operations in western Türkiye, and particularly, the completion of construction of the Tavsan Gold-Silver Mine. Following receipt of these funds, the Zenit partnership has approximately US$29 million in capital available for the development programmes across the projects in which it is involved.

The facility will have a term of three years from the time of drawdown, with the repayment of the loan occurring via 12 quarterly instalments commencing on 20 August 2024 and completing on 20 May 2027. There is an effective one-year principal repayment holiday after drawdown.  The total repayments are capped at c.US$23.6 million, which covers all capital repayments and funding costs. 

Özaltin Holding A.S., Proccea Construction Co. and Ariana's subsidiary, Galata Madencilik San. ve Tic. A.S., have provided joint and several securities to the bank until such time that the loan has been repaid. There are no hedging, currency swaps or other overhead requirements that are normally associated with traditional Western-style project finance arrangements.

Ariana has no further financial commitment to Zenit for development-level funding, although it continues to provide technical support on specific exploration and development programmes across the broader Zenit operational region (including at the Salinbas Project) to further enhance the overall potential of the projects, for which it recovers its costs from Zenit.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Contacts:

Ariana Resources plc	Tel: [phone]
Michael de Villiers, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited (Nominated Adviser)	Tel: [phone]
Roland Cornish / Felicity Geidt
Panmure Gordon (UK) Limited (Joint Broker)	Tel: [phone]
Hugh Rich / Atholl Tweedie / Rauf Munir
WHIreland Limited (Joint Broker) Harry Ansell / Katy Mitchell / George Krokos Yellow Jersey PR Limited (Financial PR)	Tel: [phone] Tel: [phone]
Dom Barretto / Shivantha Thambirajah / Bessie Elliot	[e-mail]

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

Editors' Note:

About Ariana Resources:

Ariana is an AIM-listed mineral exploration and development company with an exceptional track-record of creating value for its shareholders through its interests in active mining projects and investments in exploration companies. Its current interests include gold production in Türkiye and copper-gold exploration and development projects in Cyprus and Kosovo.

The Company holds 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a joint venture with Özaltin Holding A.S. and Proccea Construction Co. in Türkiye which contains a depleted total of c. 2.2 million ounces gold equivalent (as at March 2024, using a price ratio of 90 Ag to 1 Au). The joint venture comprises the Kiziltepe Mine and Tavsan mines and the Salinbas projects.

The Kiziltepe Gold-Silver Mine is located in western Türkiye and contains a depleted JORC Measured, Indicated and Inferred Resource of 171,700 ounces gold and 3.3 million ounces silver (as at March 2024). The mine has been in profitable production since 2017 and has been producing at an average rate of c.22,000 ounces of gold per annum. A Net Smelter Return ("NSR") royalty of 2.5% on production is being paid to Franco-Nevada Corporation.

The Tavsan Gold Mine is located in western Türkiye and contains a JORC Measured, Indicated and Inferred Resource of 311,000 ounces gold and 1.1 million ounces silver (as at March 2024). Following the approval of its Environmental Impact Assessment and associated permitting, Tavsan is being developed as the second gold mining operation in Türkiye and is currently in construction. A NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

The Salinbas Gold Project is located in north-eastern Türkiye and contains a JORC Measured, Indicated and Inferred Resource of 1.5 million ounces of gold (as at July 2020). It is located within the multi-million ounce Artvin Goldfield, which contains the "Hot Gold Corridor" comprising several significant gold- copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas. A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

Ariana owns 100% of Australia-registered Asgard Metals Fund ("Asgard"), as part of the Company's proprietary Project Catalyst Strategy. The Fund is focused on investments in high-value potential, discovery-stage mineral exploration companies located across the Eastern Hemisphere and within easy reach of Ariana's operational hubs in Australia, Türkiye, UK and Zimbabwe.

Ariana owns 75% of UK-registered Western Tethyan Resources Ltd ("WTR"), which operates across south-eastern Europe and is based in Pristina, Republic of Kosovo. The company is targeting its exploration on major copper-gold deposits across the porphyry-epithermal transition. WTR is being funded through a five-year Alliance Agreement with Newmont Mining Corporation (www.newmont.com) and is separately earning-in to up to 85% of the Slivova Gold Project.

Ariana owns 61% of UK-registered Venus Minerals PLC ("Venus") which is focused on the exploration and development of copper-gold assets in Cyprus which contain a combined JORC Indicated and Inferred Resource of 16.6Mt @ 0.45% to 0.80% copper (excluding additional gold, silver and zinc.

Panmure Gordon (UK) Limited and WH Ireland Limited are 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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