Red Rabbit Gold-Silver Project Update

RNS Number : 1531T

Ariana Resources PLC

24 March 2016

 

24 March 2016

AIM: AAU

Ariana Resources plc

RED RABBIT GOLD-SILVER PROJECT UPDATE

Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company operating in Turkey, is pleased to provide an update on the Kiziltepe Mine within the Red Rabbit Gold-Silver Project in Western Turkey ("Red Rabbit").  Kiziltepe is being advanced towards production through a Joint Venture ("JV") with Proccea Construction Co. ("Proccea").  The project is currently under construction and is targeting production in H2 2016.

Highlights:

·     Proccea continuing to earn-in on Red Rabbit, having spent a further US$2.4 million in equity-funding during 2015-2016.

·     Proccea now owns approximately 42% of the JV and is continuing equity-funding through the construction stage, formally committing the final US$2.1 million to earn-in to 50% of the JV.

·     US$33 million construction finance facility is also in process of being drawn down to fund the development of the Kiziltepe Mine.

Dr. Kerim Sener, Managing Director, commented: 

"Following our joint venture meeting in Ankara recently, we have now arrived on site with our partners to review developments at our Kiziltepe Mine.  Our joint venture company has been demonstrating excellent progress on the construction of the Kiziltepe Mine since site works commenced in September 2015.  We are looking forward to providing further updates in due course and over the coming months."

Joint Venture Update

Following the Annual General Meeting held in Ankara, Turkey, on 21 March 2016 for the Joint Venture ("JV") company, Zenit Madencilik San. ve Tic. A.S. ("Zenit"), Ariana is able to provide an update on the current status of the Joint Venture ("JV") project.

Approximately US$2.4 million of project expenditures were incurred by Proccea on the JV properties in the 2015 to 2016 period. To date, Proccea has spent approximately US$5.9 million on the JV since its inception in August 2010. Accordingly, Proccea now holds approximately 42% of the JV company and continues to earn-in on 50% of the project, having formally committed the final US$2.1 million.  Proccea are committed to spend a total of US$8 million on the project to earn-in to 50% of the JV.

In addition to the equity contributions by Proccea, draw downs on a US$33 million credit agreement with Turkiye Finans Katilim Bankasi A.S. are being undertaken by Zenit to provide funding for the construction phase.  The credit facility is non-recourse and comprises no hedging or currency swap requirements.  Loan repayments will occur over five years, with a two-year repayment holiday following first drawn down.

Contacts:

Ariana Resources plc	Tel: [phone]
Michael de Villiers, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited	Tel: [phone]
Roland Cornish / Felicity Geidt
Beaufort Securities Limited	Tel: [phone]
Jon Belliss
Loeb Aron & Company Ltd.	Tel: [phone]
John Beresford-Peirse
IFC Advisory Limited	Tel: [phone]
Tim Metcalfe Graham Herring Heather Armstrong

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 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.

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