Ariana Resources Share Discussion Threads

[thanksamillion] 28/5/2019 09:17

Yep, in my haste to scribble my message forgot to mention them....

[charles clore] 28/5/2019 09:09

Thanksamillion - not to mention director bonuses and pay awards.

[thanksamillion] 28/5/2019 08:59

I thought most of the cost of processing and mining was borne by the joint venture and loan, monies raised by AAU were for exploration etc in other areas, meaning little to choose between j.v. and toll.

Someone please put me right on this niggle.

[jaynesdad] 28/5/2019 08:56

Pedro, 8rad

Harsh critisisms. MDV is very experienced in Mining finance, is not a geologist, so to dismiss the BOD in that way seems unjust.
A toll arrangement may be suitable for the distances involved and resource size for Kizilcukur, but you seem to be suggesting a similar arrangement for the whole of current Red Rabbit resources. A toll arrangement would rely on there being a plant(s) with spare capacity within reasonable trucking distance of all the W. Turkey prospects. That seems unlikely and anyway would have probably been more expensive long term than building a plant because of the scale of the operation

[bigglesbingham] 28/5/2019 08:40

Have you ever asked the company?

[8rad] 28/5/2019 08:28

Pedro ..a very hardhitting but unfortunately accurate assessment of previous calamities. Geologists yes financiers no.

[pedr01] 27/5/2019 21:12

14230 - ETI ??? They used ETI for trial processing in 2009.


What I have never managed to understand is, if toll processing is economically feasible now, then it must have been economically feasible in the period 2009 to now. Why did we not toll process to raise monies instead of issuing shares in the period 2009 to now during which time they have issued circa 900mn shares in order to raise roughly £10m over the years diluting shareholders by over 85% in the period (from circa 143m to 1050m shares).

[bigglesbingham] 27/5/2019 18:42

I'm positive they will bring it in to JV. They want expo cost remuneration and they don't want to wait 8 years .

[jaynesdad] 27/5/2019 18:30

Yes, I've used the argument about Kiziltepe working flat out already before, does seem unlikely Proccea would be happy to delay JV ore being processed. Still the possibility of Toll arrangment with a third party plant (cant remember the name that Kerim gave, think it started with an 'E'), or wait until all current JV resources are exhausted, buy the redundant plant from the JV and process Ivrindi and Kizilcukur then. All possible, see what they decide.

[bigglesbingham] 27/5/2019 15:38

The plant at kiziltepe is running at full capacity and the JV enjoy equal profits. Why would procea agree to substitute a share of capacity to process kizilchuk on which they get a dramatically reduced cut?? Answer is they aren't. So I think they will add to JV and pay AAU a fee for exploration. This will effectively add to mine life by a year which will benefit procea but only in eight years or so. (Minelife if kizilchuk wasn't processed now assumed to be 8 years).

[jaynesdad] 27/5/2019 09:18

The options for Kizilcukur include toll treatment of the ore either at Kiziltepe itself or at an existing plant owned by a third party in the vicinity of Kizilcukur (there is one apparently, Kerim mentioned it in the recent London presentation). It is important, 15,000 oz relinquished from a 30,000 oz resource has a net value probably well in excess of £7m compared to our market cap of £20m. Anyway, not long to wait, I hope all will become clear soon. Have a great bank holiday to all posters.

[bigglesbingham] 27/5/2019 09:09

My point too

[paul280i] 27/5/2019 09:06

JD, you must also add in the value of 50% of the resource that Ariana will still own through the JV. I don't have a problem with the existing arrangement.

[bigglesbingham] 27/5/2019 08:47

If they didn't have kiziltepe to process then there would be no money because the gold in the ground is worthless until mines and processed. If the JV made 9million profit AAU would earn 4.5m plus there would be an additional element for exploration which would be based on actual expense. I wouldn't think this is unfair. Noone is going to buy a 30000 stand alone resource. So to a certain extent I think their options are limited. In the grand scheme of things let's hope it's and insignificant debate compared to salinbas. Also I'm not sure excellent results at kizulcker will boost share price. We recently received a payment from JV of over three million which was excellent surprise but share price hardly moved.

[jaynesdad] 26/5/2019 19:10

Be good if it could be renegotiated! I'd be all for it ending up in the current JV but at a reasonable price. I think exploration expenditure is around the million mark at the moment (£s, $s ??) so sale of 3 x exploration expenditure into the JV means AAU effectively get a net 1.5 million when sold (because they are half the JV, plus the have already spent the million so 'net net' +0.5 million). I have in mind a recent management target of 30000 oz at Kizilcukur (hold my hands up, that's just from memory) which may of course be updated/ hopefully upgraded by the winter drilling efforts. So they would be exchanging 15,000 oz (say, net profit $600 oz at least) for 1.5 million (£s or $s). That's why I think the BOD may get criticism, and may be why they are looking at alternatives. Sorry for the rushed typing!

[bigglesbingham] 26/5/2019 18:17

Can always be renegotiated

[plasybryn] 26/5/2019 18:04

It's currently not that significant in the scheme of things. Far better to stand by any agreed arrangement and respect each other. Proccea are the brains behind the mine and will be no doubt be in the future with Tavsan etc. We each benefit from each others skills and expertise. No point creating waves unnecessarily imo.

[jaynesdad] 26/5/2019 17:02

True enough Paul, but this is a business. AAU need to keep the current JV partner sweet but there must be a limit to that generosity.
I am obviously not privy to the BOD about this, but the fact that that the option (which is at AAUs 100% discretion not Procceas)has not been exercised speaks volumes to me - as does the fact that Kerim has said at meetings that alternatives are being considered. Consider also the 2 years of flak the BOD have received on this and other boards because of the hasty financing that took place to get the mine into production - would they not get similar grief from giving away wholly AAU owned assets at a knock down price?

[paul280i] 26/5/2019 16:37

In my view without Proccea we would not have got the mine into production and I do not think we should worry about whether we are getting full value for the discoveries, the income will come from the mining. Gold only has value when it has been mined and processed, not laying in the ground.

[jaynesdad] 26/5/2019 12:48

Biggles
It seems most logical to me as well. However the 3 x exploration costs basis is, from my understanding, set in stone and cannot be renegotiated. Depends how palatable that is given the resource that has been (and hopefully is about to be) exposed - it seems a total bargain from Procceas point of view
JD

[bigglesbingham] 26/5/2019 12:39

Kizilcuker Will be brought into the JV imho but in the deal AAU will take account of exploration costs. This would be logical .

[plasybryn] 26/5/2019 12:32

Oil price has gone down as well.

[jaynesdad] 26/5/2019 12:25

Duke
There is indeed some material from trial mining at Kizilicuker due, but not a sustained supply. From my understanding of the situation this material is being put through the existing JV plant to investigate how it is best processed, it is very finite and no agreement has yet been concluded about bringing Kizicukur into the JV. There is even talk of the ore being processed at a plant other than Kiziltepe. I assume that this ore will raise costs per oz due to the trucking required.

[theduke420] 26/5/2019 12:05

Isn't higher grade Kizilcukur ore to be processed over the summer? Should help keep the numbers up.

[jaynesdad] 26/5/2019 11:21

No need for apologies. You can call me whatever you like!
I was only making the point about the Ball Mill because logically (and I state here that I am an office worker) if your input grade is lower then you have to increase throughout of ore to achieve the same financial result (all other things like POG and costs remaining constant, which is unlikely as the latter is liable to increase as you rightly say). I appreciate that ,if you like, distributable net revenue is bound to increase due to the end of loan repayments. However I'm sure that the BOD will not want to see a persistent drop in gross revenue as I would have thought that would be regarded as a negative by the market. All in my opinion, just want to find out what any other seasoned AAU posters feel about the transition from Arzu South.