22 February 2017
AIM: AAU

SIGNIFICANT RESOURCE DEVELOPMENT UPSIDE AT TAVSAN

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, is pleased to announce the completion of resource-focused target generation for the Tavsan Project* ("Tavsan" or "the Project").  Tavsan is part of the Red Rabbit Joint Venture with Proccea Construction Co.

and is 50% owned by Ariana.

Highlights:

  • Sixteen target areas identify the potential for significant resource growth at the Tavsan Project.
     
  • Important drill intercepts warranting follow-up include 11m @ 5.11 g/t Au + 6.83g/t Ag, 6m @ 3.37g/t Au + 3.67g/t Ag and 9m @ 1.30g/t Au + 4.32g/t Ag within c.20m from surface.
     
  • Several mineralised zones identified in trenching require follow-up, including 170m @ 1.04g/t Au + 4.1g/t Ag, 140m @ 1.11g/t Au + 5.2g/t Ag and 60m @ 1.30g/t Au + 4.34g/t Ag.
     
  • Trial mining at the site has produced a stockpile of c.28,000 tonnes to date at an average grade of 1.41 g/t gold. 
     
  • Company planning to conduct a high-resolution portable X-ray Fluorescent (pXRF) soil sampling programme to refine target areas ahead of future resource drilling.

Dr. Kerim Sener, Managing Director, commented: 

"The Tavsan Project comprises significant scope for further resource growth and the development of an extremely attractive low-cost and high-margin mining opportunity.  Based on the existing scoping study, the project has already demonstrated considerable potential, though further resource upside could enhance this substantially.  Our management resource target at Tavsan is 300,000 oz gold of which at least 200,000 oz gold is targeted to be accessible via open pit mining methods.  This would result in an increase in potential mine life by a further c.3 years to a total life of c.7 years, producing at a rate of approximately 30,000 oz gold per annum.

At this stage we envisage Tavsan as a semi-autonomous satellite operation to the Kiziltepe Mine within the context of the broader Red Rabbit Joint Venture with Proccea Construction Co.  Tavsan would share much of the management and operational infrastructure as Kiziltepe yet be developed as a heap-leach operation with possibly only the carbon elution and regeneration, electro-winning and gold room being shared between the two operations.  This would require limited additional capital expenditure at Kiziltepe, though substantially less than developing such facilities independently at Tavsan.

More work is required at Tavsan before we can refine our models and operational plans, but it is certainly a project deserving of our efforts due to the significant potential uplift in company value that it represents to our shareholders."   

* All figures relating to Mineral Resources, including the financial model, are quoted gross with respect to the Joint Venture; Ariana holds 50% of the project through its JV company.

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

Figure 1 http://hugin.info/138153/R/2080629/783522.pdf : Map of the Tavsan project area showing the location of outcropping mineralised jasperoid (in red) and currently designed open-pits (dark blue outlines).  Most of the exploration targets lie along NW- and NE-trending axes associated with a thrust-fault and its subsidiary structures.  Target numbers correspond to those shown in Table 1. The location of the trial mining pit is also shown within the Main Zone resource area. 

Target Generation

Following the completion of the Tavsan Scoping Study (released 10 November 2016), the Ariana Exploration Team have finalised a comprehensive review of all surface geochemical, drilling and geological databases across the project area.  A total of sixteen significant targets have been generated for immediate follow-up (Table 1).  Seven of the targets demonstrate significant potential to expand the current Tavsan resource following limited infill drilling and other resource test work.

Table 1:  Targets generated for follow-up during 2017, in numerical order.  Several targets have been ranked as very high priority and warrant further drill testing. 

Target Target typeGradesPriority
1 Drill Intercept (ODX99A) 11m @ 5.11 g/t Au + 6.83g/t Ag (0m-11m) Very High
2 Drill Intercept (ODX53) 6m @ 3.37g/t Au + 3.67g/t Ag (16m-22m) Very High
3 Drill Intercept (OR3) 9m @ 1.30g/t Au + 4.32g/t Ag (0m-9m) Very High
4 Trench 4 170m @ 1.04g/t Au + 4.1g/t Ag High
5 Trench 5 140m @ 1.11g/t Au + 5.2g/t Ag High
6 Trench 6 75m @ 1.19g/t Au + 6.5g/t Ag High
7 Trench 1 60m @ 1.30g/t Au + 4.3g/t Ag High
8 Trench 3 75m @ 0.6g/t Au + 1.5g/t Ag Moderate
9 Trench 2 65m @ 0.88g/t + 3.1g/t Ag Moderate
10 Trench 7 60m @ 0.65g/t Au + 2.6g/t Ag Moderate
11 Rock-chip 1.13g/t Au + 21.1g/t Ag, 1.18g/t Au + 21.4g/t Ag Moderate
12 Rock-chip 1.58g/t Au + 7.6g/t Ag, 0.71g/t Au + 33.4g/t Ag, 0.38g/t Au + 11.3g/t Ag Moderate
13 Rock-chip 0.64g/t Au + 4.5g/t Ag, 0.58g/t Au + 11.5g/t Ag, 0.42g/t Au + 4.1g/t Ag Moderate
14 Rock-chip 3.03g/t Au + 11.4g/t Ag Moderate
15 Rock-chip 1.06g/t Au + 4.2g/t Ag Moderate
16 Untested Historic Workings 14 mapped workings Moderate

Mineralisation at Tavsan largely occurs on two dominant structural trends, with the majority of mineralisation located along the gently dipping and undulating plane of a NE-SE trending thrust-fault. The second, subsidiary trend for mineralisation is controlled dominantly by a unit of neritic limestone and a series of NW-SE linkage faults, trending at about 90 degrees to the primary fault plane. The Tavsan resource currently stands at approximately 215,000oz gold equivalent (Table 2) across four main areas.  Trial mining at the Main Zone has produced a stockpile of c.28,000 tonnes to date (Figure 2) at an average grade of 1.41 g/t gold, which is consistent with the estimated grade of the resource (Table 2). 

Table 2: JORC 2004 classified resource estimate for Tavsan, completed in 2008 by SRK Consulting (UK) Ltd.

ClassificationZoneTonnage
(Mt)
GradeMetal
Au (g/t)Ag (g/t)Oz AuOz Ag
Indicated Main 1.7 1.6 4.2 87,000 229,000
Inferred Main + Satellites 3.2 1.1 3.7 117,000 380,000

Database evaluations and target generation was initiated in January 2017 following a thorough review of all drilling completed at Tavsan. Isolated anomalous intercepts on the southwest flank of the Main Zone indicates significant potential to expand the current resource. Drill holes ODX53 (6m @ 3.37g/t Au + 3.67g/t Ag) and OR3 (9m @ 1.30g/t Au + 4.32g/t Ag) display potential for a fifth mineralised area to occur between Main Zone and Western Zone, with mineralisation proven from surface (OR3) to a depth of 22 metres (ODX53), where drilling ended in mineralisation (1m @ 0.32g/t Au).

Figure 2 http://hugin.info/138153/R/2080629/783523.pdf : Photograph of the trial mining area at the Tavsan Project, with stockpile area in the foreground.  In aggregate, c.28,000 tonnes of material grading 1.41 g/t Au is stockpiled at Tavsan.

One kilometre north of Main Zone, another significant drill intercept (ODX99A) 11m @ 5.11 g/t Au + 6.83g/t Ag, outlines additional potential for immediate near surface resource growth. As a result, Whittle pits generated for the purposes of the 2016 scoping study, located NE and SW of ODX99A, may have the potential to expand along an 800 metre gap between the planned pits.  Highly anomalous trench results and rock-chip samples have also been defined in this area indicating that such an expansion of the pits, especially near surface, is a distinct possibility.   

Historic trenching, based on composite rock-chip sampling at systematic but non-uniform intervals, has outlined excellent potential for near surface resource expansion.  Trenches (T4) 170m @ 1.04g/t Au + 4.1g/t Ag, (T5) 140m @ 1.11g/t Au + 5.2g/t Ag and (T1) 60m @ 1.30g/t Au + 4.34g/t Ag, suggest that several outcropping jasperoid and associated subcrop areas, demonstrate potential to become additional near surface resources.  Historic trenching, notably T4 and T6, also highlight significant potential for immediate growth of the planned open-pits at the Main Zone.   

In order to cost-effectively follow-up all sixteen target areas, the Ariana team have scheduled a 5,000 sample portable X-ray Fluorescence (pXRF) soil sampling programme to commence in March.  The 25m x 25m gridded programme will generate a high-resolution surface geochemical dataset, covering five square kilometres over the entire project area and will significantly help to define the potential of near-surface resource target areas.  This will assist in refining targets for a second phase of trenching work, which will improve confidence and continuity of the historic work and ultimately assist in targeting for further resource drilling.

Contacts:

Ariana Resources plc Tel: +44 (0) 20 7407 3616
Michael de Villiers, Chairman  
Kerim Sener, Managing Director  
   
Beaumont Cornish Limited Tel: +44 (0) 20 7628 3396
Roland Cornish / Felicity Geidt  
   
Beaufort Securities Limited Tel: +44 (0) 20 7382 8300
Jon Belliss  
   
Panmure Gordon (UK) Limited Tel: +44 (0) 20 7886 2500
Adam James / Tom Salvesen  
   

Editors' Note:

Competent Person

Dr Kerim Sener, BSc (Hons), MSc, PhD, is the Managing Director of Ariana Resources plc.  A graduate of the University of Southampton in Geology, he also holds a Master's degree from the Royal School of Mines (Imperial College, London) in Mineral Exploration and a doctorate from the University of Western Australia.  He is a Fellow of The Geological Society of London and has worked in geological research and mineral consultancy in Africa, Australia and Europe.  He has read and approved the technical disclosure in this regulatory announcement. 

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 originally selected on the basis of its in-house geological and remote-sensing database.

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, form part of a 50:50 Joint Venture with Proccea Construction Co.  The Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is currently in construction.  The total resource inventory at the Red Rabbit Project and wider project area stands at c. 525,000 ounces of gold equivalent.  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on future production is payable to Franco-Nevada Corporation.  At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

In north-eastern Turkey, Ariana owns 100% of the Salinbas Gold Project, comprising the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects.  The total resource inventory of the Salinbas project area is c. 1 million ounces of gold equivalent.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

Beaufort Securities Limited and Panmure Gordon (UK) Limited 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.

Glossary of Technical Terms:

"Ag" the chemical symbol for silver;

"Au" the chemical symbol for gold;

"g/t" grams per tonne;

"Indicated resource" a part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;

"Inferred resource" a part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has assumed, but not verified, geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability;

"JORC" the Joint Ore Reserves Committee;

"m" Metres;

"oz" Ounces;

"t" Tonnes;

"Whittle" computer software that uses the Lerch-Grossman algorithm, which is a 3-D algorithm that can be applied to the optimisation of open-pit mine designs.  The purpose of optimisation is to produce the most cost effective and most profitable open-pit design from a resource block model.

Ends




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Source: Ariana Resources plc via Globenewswire