MAIDEN DIVIDENDS FROM SUBSIDIARY

RNS Number : 6278H

Ariana Resources PLC

26 March 2020

 

26 March 2020

AIM: AAU

MAIDEN DIVIDENDS FROM SUBSIDIARY

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed exploration and development company operating in Europe, is pleased to announce a financial update for the Company.

Following the receipt of funds from Zenit Madencilik San. ve Tic. A.S. (owner of the Kiziltepe gold-silver mine), the Company advises that it has recently received its maiden dividends from its wholly-owned Turkish operating subsidiary Galata Madencilik San. ve Tic. Ltd. ("Galata"), following a declaration of profit by Galata. A total of £1,600,000 has been transferred to Ariana.

Dr. Kerim Sener, Managing Director, commented:

"The maiden dividends from Galata represent the culmination of many years of effort by the Company and mark the moment that its subsidiary became the cash-generative engine of growth for the Group.

"Since early 2018, Galata has received a total of US$7.3 million from Zenit to repay intercompany loans and as partial dividend payments, as a result of its profitable gold mining operations at Kiziltepe. Ahead of the March 2020 AGM of Zenit, all outstanding dividend payments declared by Zenit were paid to Galata. This has enabled Galata to repatriate profits to its parent company in the form of dividends."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Summary of Project

The Kiziltepe operation is currently 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 current resources. The operating company, Zenit Madencilik San. ve Tic. A.S. (50:50 JV between Ariana and Proccea) will continue to make repayments against its loan from Turkiye Finans Katilim Bankasi A.S. based on a contractual schedule. Construction capital loan repayments will have been completed by April 2020 and, during this time, 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. After the repayment of all loans, profits from the operation will be shared on a 51:49 basis between Ariana and Proccea 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 targeting a minimum ten-year mine life, which will require the addition of a further 40,000 oz gold equivalent in reserves outside of the four main pits (Arzu South, Arzu North, Banu and Derya) that are currently scheduled to be mined. Management is confident that this can be achieved assuming the conversion of existing resources to reserves.

Contacts:

Ariana Resources plc	Tel: [phone]
Michael de Villiers, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited	Tel: [phone]
Roland Cornish / Felicity Geidt
Panmure Gordon (UK) Limited	Tel: [phone]
James Stearns / Atholl Tweedie
Yellow Jersey PR Limited	Tel: [phone]
Dom Barretto / Joe Burgess / Henry Wilkinson	[e-mail]

Editors' Note:

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 total of 1.6 million ounces of gold and other metals (as at end-2017). 

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 resource inventory at the Project and its wider area is c. 605,000 ounces of gold equivalent (as at end-2017).  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 .

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