Ariana Resources plc (LON:AAU), the exploration and development company operating in Turkey, is has today provided the following operational update from the Kiziltepe Mine (“Kiziltepe” or “the Project”).Kiziltepe is part of the Red Rabbit Joint Venture with Proccea Construction Co. and is 50% owned by Ariana.
Highlights:
Processing plant operating to design specifications, with mill availability having increased to over 95% during May 2017.
Operational enhancements now being considered to increase mill throughput, currently targeting in excess of 180,000 tpa (up from design plan of 150,000 tpa).
Process recoveries of gold and silver are currently trending considerably higher than feasibility-study expectations and leach times are faster than predicted.
Ore grade input in to the mill has been increased during ramp-up and averaged c. 2.5 g/t gold and 24 g/t silver in May 2017, with further increases expected during H2 2017.
Grade-control sampling has identified additional ore zones at the NW end of Arzu South that sit outside of the resource block model and will now be scheduled for production.
Doré pours now occurring approximately weekly with c. 1,000 oz gold and 7,000 oz silver having been sold by the refinery to date; gold and silver sales during the period to end May 2017 realised at prices ranging from US$1275-1225/oz and US$18.2-16.2/oz respectively.
Construction of the second stage of the tailings dam commencing shortly and supported by implementation of a night shift to increase production from the open pit to 20,000m3 (ore and waste) per week.
Operational ramp-up largely complete as at end May 2017.
Dr. Kerim Sener, Ariana Resources PLC Managing Director, commented: “We are very pleased to provide this interim report on the solid progress of operational ramp-up at the Kiziltepe Mine. While being acutely cognisant of the risks associated with the commencement of operations, we have been very encouraged by the reports of the team on site.
Whilst this has been a relatively smooth transition in to production for the Joint Venture, our team has continued to identify a number of areas in which we could introduce operational enhancements to increase productivity and overall performance. Such work remains ongoing.
The considerably better than expected performance of the processing plant has ensured that production is currently occurring at a rate which will meet our operational expectations during ramp-up.Once the June quarter and ramp-up officially concludes, we will be providing further operational updates on a quarterly basis and as appropriate.”
Summary of Project
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 expected to be concluded 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.
