12 March 2019
2019 PRODUCTION GUIDANCE
Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company with gold mining operations in Turkey, is pleased to announce its production guidance for 2019 for the Kiziltepe Mine ("Kiziltepe" or "the Project").
· Gold production guidance for 2019 from Kiziltepe is c. 25,000 oz Au*, c. 21% above feasibility plan for the third year of operations.
· The mine plan forecasts average monthly production of ore of approximately 13,000 tonnes, peaking during Q4 2019.
· Ore throughput to the mill during 2019 is expected at c. 195,000 tonnes, which represents a 30% increase over the feasibility plan.
· Average grade of gold expected to be mined during the year is expected at c. 5 g/t Au and gold recovery is expected to exceed 90%.
· Open-pit mining will continue to focus on the Arzu South pit during 2019, with preparations being made to commence mining on satellite pits from early 2020.
Dr. Kerim Sener, Managing Director, commented:
"Following the quarterly operational update, as announced on 22 February 2019, in which we confirmed the full year 2018 Kiziltepe production figures, we are very pleased to report our production guidance for 2019. Advancing on the Company's positive finish to 2018, the Kiziltepe mine continued to perform exceptionally well, despite a very wet winter period during Q4 2018 and into Q1 2019, and we look forward to building on this strong operational track-record. Notably, our gold production guidance for the JV is up 25% from last year's guidance, and is estimated at circa 25,000 oz for the year, reflecting a further increase in expected grades as we mine deeper into the Arzu South pit and the maintenance of high monthly mill throughputs. Although ore output from Arzu South will be variable through the year due to the pushbacks required to accommodate the final stage of mining, current stockpiles are expected to provide for any shortfalls in output such that mill throughput can be maintained at the highest levels through the year.
"As a low-cost open pit operator, ranked in the lowest quartile of cash costs globally, the JV continues to target increases in production and life of mine. We are pleased to note that our plans for advancing production from some of our satellite pits are at an advanced stage and we look forward to commencing work in these areas towards the end of this year. Meanwhile repayments of the JV loan to Turkiye Finans Katilim Bankasi A.S. are over half completed, with the balance largely being paid down by the end 2019."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
* Silver production guidance is not provided, as silver is treated as a by-product credit.
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.
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
Panmure Gordon (UK) Limited
Tel: +44 (0) 20 7886 2500
James Stearns / Atholl Tweedie
Yellow Jersey PR Limited
Tel: +44 (0) 20 3004 9512
Tim Thompson / Felicity Winkles / Harriet Jackson
/ Henry Wilkinson
About Ariana Resources:
Ariana is an exploration and development company with mining operations focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey, the largest gold producing country in Europe. The Company is developing a portfolio of prospective licences originally selected on the basis of its in-house geological and remote-sensing database, which now contain a total of 1.6 million ounces of gold and other metals (as at end-2017). Ariana's objective is to cost-effectively add value to its projects through focused exploration and to develop its operations, primarily through well-financed joint ventures.
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 (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.
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.
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.