17 May 2017
AIM: AAU

KIZILTEPE WEST DISCOVERIES

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, is pleased to announce the results of recent exploration at Kiziltepe West.  Kiziltepe West is located within 4km by asphalt road from the Kiziltepe Mine ("Kiziltepe" or "the Project"), which has been in production since March 2017.

  Kiziltepe is part of the Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana.

Highlights:

  • New portable X-Ray Fluorescence ("pXRF") data reinforces the potential for near surface mineralisation across Kiziltepe West.
     
  • Ipek Vein mapped following pXRF sampling, with a re-evaluation of historic exploration drilling and rock-chip sampling determining down-dip potential.
     
  • Rock-chip sampling from Ipek yielded 2.36g/t Au + 27.2g/t Ag, 1.94g/t Au + 13.3g/t Ag and 1.07g/t Au + 20.6g/t Ag.
     
  • Potential exists for a low-grade and high-tonnage style of stockwork mineralisation in alteration zones between the Ceylan and Derya veins and trending towards Ipek.

Dr. Kerim Sener, Managing Director, commented: 

"These results confirm our understanding that the Kiziltepe vein system extends across a further 4km from the areas currently being developed as part of the Kiziltepe mine operations. The Company recently announced a revision of its mineral resource estimate for Kiziltepe which encompassed all veins drill tested to date and established an additional and immediate JORC Exploration Target.  There are clearly opportunities for the discovery of additional resources beyond the veins previously drill tested and further work by the Joint Venture will be required in these areas. 

In summary, the recent work at Kiziltepe West further reinforces the long-term potential of the Red Rabbit JV area.  The Company recognises that additional exploration of the JV area will likely further increase the resource-base and guide our future mine planning strategy."

Details of Programme

The Ariana exploration team recently initiated a portable X-Ray Fluorescence ("pXRF") soil sampling program covering the western-most limits of the Kiziltepe Mine area. The programme was designed to increase data resolution within anomalous zones initially identified during a conventional soil survey completed during 2014.  A further 410 samples were collected, analysed and merged with historic data for evaluation.  

The merged dataset demonstrates that there is significant potential within the western-most limits of Kiziltepe to host additional economic mineralisation. The geochemical signatures of mineralised zones in the Kiziltepe West area appear very similar to those defined over the Arzu South, Arzu North, Banu and Derya veins. These signatures include significant depletion in manganese within clay alteration zones, an increase in background arsenic highlighting narrow 10m to 50m wide linear features and sporadic peaks in antimony along such zones.

Several outcropping zones of stockwork and quartz vein exposures within the Kiziltepe West study area were mapped and sampled. The longest partly exposed vein identified within Kiziltepe West, called Ipek, has a strike length of approximately 0.5km with vein widths of up-to four meters. Rock-chips from outcrops of this vein returned grades of 2.36g/t Au + 27.2g/t Ag, 1.94g/t Au + 13.3g/t Ag and 1.07g/t Au + 20.6g/t Ag.  Ipek displays very similar geochemical signatures and vein textures as the Arzu North and Derya veins, indicating that this area represents the uppermost parts of the Kiziltepe vein system.  Ipek also shares the same strike trend as all other major mineralised veins within the Kiziltepe mine area.  However, Ipek locally dips moderately to the north (approximately 50 degrees), which is different to the veins elsewhere at Kiziltepe which tend to dip very steeply to the north. Shallow initial drill testing completed in 2009 in two holes on the northwest end of Ipek returned results of up to 1m @ 1.44g/t Au + 7.6g/t Ag at 14m down hole (KTP-D01-09). Further drilling is required to appropriately test this structure, particularly further to the south-east where mapped vein and stockwork zones reach up to 11 meters wide. 

On the far western end of Kiziltepe West, narrow vein and stockwork trends were geochemically mapped on a high-resolution 10m x 10m pXRF infill grid.  The narrow nature of the vein structures in this area and their associated stockwork zones has confirmed the absolute end of the Kiziltepe vein system, some 4km from the centre of the Kiziltepe mine operations.  Between these two points exist significant potential for near-surface mineralisation, including the potential for a low-grade high-tonnage style of mineralisation in the vicinity of the Ceylan and Derya veins, where significant mineralised stockwork vein zones and alteration have been identified.

To the north of the Ipek vein system there is a notable increase in antimony anomalism as determined by soil pXRF analysis, rock-chip and conventional soil samples. 64 rock chips were collected in this area of which 29 yielded results in the range of 250ppm to 2,452ppm Sb following pXRF analysis.  Antimony is regarded as a pathfinder element associated with the upper parts of an epithermal vein system, typically occurring above the gold and silver dominant zones. Therefore, the abundant presence of anomalous antimony north of Ipek suggest that the whole Kiziltepe vein system plunges gently to the south-east. This interpretation is supported by the presence of high grade mineralised shoots plunging approximately 30 degrees to the south-east at Arzu South and the trend towards more stockwork-style mineralisation and alteration in the direction of Arzu North. Further work will be required to determine the depth continuity of the veins and antimony rich zones identified at Kiziltepe West.  

Figure 1: Link below shows soil geochemical (pXRF) map of the Kiziltepe Mine area shows the location of anomalous areas related to known vein systems.  The main Kiziltepe Mine area is distinctly anomalous in pathfinder elements (such as arsenic and antimony) but outside of this area and to the west of Kiziltepe lies the Ipek vein system that remains only partially defined. The antimony anomalism in the area north of Ipek is defined by an approximately >50ppm Sb contour, which also corresponds to a zone of stockwork vein mineralisation. 

Summary of Kiziltepe Project

Following completion of construction of the tailings dam in February (see announcement of 14th February 2017) and the receipt of an Operations Permit, a first pour of doré (gold-silver) of 5.25kg was achieved at Kiziltepe. The Kiziltepe operation is currently expected to deliver approximately 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 be making repayments against its loan from Turkiye Finans Katilim Bankasi A.S. based on a pre-determined schedule.  Major loan repayments will have been completed by April 2020 and, during this time, excess cash-flow from the operation will be used to make 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.

Ramp up to full production capacity at Kiziltepe is likely to be completed during June 2017, following which quarterly production reporting will commence.  In the meantime, the Company has 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 veins (Arzu South, Arzu North, Banu and Derya) that are currently scheduled to be mined.

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

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' Notes

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 production.  The total resource inventory at the Red Rabbit Project and wider project area stands at c. 605,000 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:

"doré" semi-pure alloy of gold and silver

"kg" Kilograms

"oz" Ounces

Ends




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Source: Ariana Resources plc via Globenewswire