Ariana Resources Share Discussion Threads

[temujiin] 01/7/2020 09:58

tigerchris1,

Salinbas is certainly too big for us to take to production, but AAU as is, makes enough profit to have a drilling program at Salinbas, say $3m a year, and give a divi, say $3m a year and still have money to start on Cyprus. Tasvan can be developed via the loan route as was Kizil.

I'm not keen on the Salinbas aspect but am also less concerned about that as it's a drain of cash atm, rather than a profitable part of the company.

[jbilt2004] 01/7/2020 09:55

Reality check here - when the MOU was announced in November-9 the share price was c2p and AAU market cap was c£20m. The MOU valued the Zenit JV at $100m and Ariana's 50% at $50m - more than the entire AAU market cap at the time. Increase in value of AAU happened on the market in the intervening time - so no way to renegotiate with other party who knows full well that it was their offer that kicked off the re-rate. That's what negotiating in 'good faith' is all about. This deal is a blinder for AAU - seems to me that some want to have their cake and eat it. Just my thoughts-no advice intended.

[risa5] 01/7/2020 09:54

Ariana Resources says Özaltin formally commits to proceeding with acquisition of stakes in the Salinbas Project and Zenit Madencilik joint venture

"This transaction will crystallise significant value for the Company and substantially de-risks the deliverability of the Salinbas Project, at an important time in its development"

Ariana Resources PLC (LON:AAU) said that Özaltin Holding A.S., through its subsidiary, Özaltin Insaat, Ticaret and Sanayi A.S., has formally committed to proceeding with its acquisition of 53% of both the Salinbas Project and the Zenit Madencilik San. ve Tic. A.S. joint venture which is currently owned by Ariana in a 50:50 partnership with Proccea Construction Co.

The AIM-listed exploration and development company operating in Europe announced on November 25, 2019, that it intends to partially dispose various interests held in Turkey to Özaltin, including jointly with Proccea, 53% of Zenit for US$50mln - to be split equally by Ariana and Proccea -, as well as an initial 17% of the Salinbas Project for US$mln. In addition, Özaltin committed to injecting a further US$8mln of equity into the Salinbas Project in order to acquire 53% of the project.

It is envisaged Özaltin will ultimately hold 53% of Zenit, with Ariana and Proccea each holding 23.5% and that the Salinbas Project ultimately will be acquired by Zenit, such that the respective shareholdings do not change.

In a statement, Dr Kerim Sener, Ariana’s managing director, commented: "We are very pleased that our incoming partners, Özaltin Holding A.S., have formally committed to completing the definitive agreements necessary for our proposed transaction to proceed. This follows the completion of extensive due diligence conducted by SRK Consulting UK on the Salinbas Project and on the Zenit production and development assets.”

He added: "Ariana, Özaltin and Proccea are now working through the necessary steps, including seeking Ministerial approval, in order to complete the transaction. This will lay the foundations for the completion of our transaction, substantially as proposed in the MoU, but including various minor modifications to ensure robust legal documentation, structural changes in the type of company and practical outcomes in the context of Turkish Law.

“In addition, at the earliest possible opportunity, Ariana will make the necessary arrangements to seek shareholder approval for the transaction via a General Meeting.”

Sener concluded: "This transaction will crystallise significant value for the Company and substantially de-risks the deliverability of the Salinbas Project, at an important time in its development. Accordingly, we fully expect shareholders to support the transaction, definitive agreements for which are expected to be concluded by the end of August 2020."

Özaltın Holding A.Ş., is a conglomerate active in Turkey and several other countries, in the construction, transportation, energy, tourism and agriculture sectors, which was initially established as Özaltın Construction in 1965 by Nuri Özaltın, who originated from Artvin Province in Turkey.
PI

[temujiin] 01/7/2020 09:52

Soulsauce,

I'm looking at the most likely scenario with the information to hand, AAU's cash income at Kizil is well known and established, Tasvan is highly likely (but not certain as nothing is) to be developed in approx timeframe given and will produce approx stated amount of gold. Of course there could be problems going forward with Tasvan, just as whatever venture KS gets involved in with £25m might turn out to be problematic.

Gold mining isn't risk free, but AAU's current set up looks much better than £25m for over half of our RR assets.

[tigerchris1] 01/7/2020 09:49

Tem... another way of putting it is that it is a very good deal for the new JV partners. I think we would all agree with that. AAU could have kept everything to itself, ploughed all the profits into developing Salinbas in which case we might have seen only modest returns for the next few years and then a possible significant boost 5 or 10 years down the line. In this case AAU could have been taking out loans and been under pressure for some years - Salanbas is a big project for a company of our size. I think that there is enough in Salinbas for us all to do very well. Deals are good when they work for everyone, I think that this one does, albeit we might have wanted even more.

[temujiin] 01/7/2020 09:46

Hi 8rad,

it probably will get voted through, which imo would be a longer term mistake, but that's democracy and rightly so.

Lottesgold, it did mention this in the original RNS,but its typically vague.
(AAU) 'be free-carried on further costs associated with the development of the Salinbas Project'.

Kaos3,
noted and thanks for the mention yesterday.

[soulsauce] 01/7/2020 09:37

Temujin I love how your assumptions never account for any problems that may occur.

Of course we could be throwing off all this cash, just as easily we could find Tavsan problematic or permitting may take it out a further year, they may hit some unforeseen issues at RR with the plant or Turkey might have another issue with the leadership or more war on it's borders.

The JV allows us less risk to anything from left field in Turkey, significantly increased exploration of Salinbas and move on the Cyprus targets expediently.

[kaos3] 01/7/2020 09:37

i wonder where Ks intimate focus is atm

[bigglesbingham] 01/7/2020 09:33

It could be argued that the world is exactly as they predicted

[8rad] 01/7/2020 09:30

Tem welcome back. "giving away too much for too little" sums up my assessment aswell but we know it will be voted through so must accept it and move on. No talk of any financial refiguring in the deal despite the world being slightly different from last November.

[dixi] 01/7/2020 09:22

Assuming the special dividend is going to go ahead too, current sellers are missing a trick here I feel. But each to their own I guess.

[lottsgold] 01/7/2020 09:16

I understand your point of view. I think there is a free carry on Salinbas to production but I'd have to re check that, if it is correct it is worth a lot more than the figures were first seeing. It also means our cost base will be minuscule and we can focus on the new assets outside the new JV. Kerim is bound to have something planned for the cash. Oh and the nice dividend will help the share price along which hopefully many of us will reinvest.I think things are going to accelerate very quickly here now..

[temujiin] 01/7/2020 09:06

The deal will, as KS says 'crystallise value for the company' and SH's.....but it does it at the cost of giving away over half of AAU's profitable mine. ATM the mine gives AAU a yearly gross profit after AISC deduction of approx £14m and a LOM of approx 8 years. 8 x 14 = £112m gross, pre tax.

The deal also gives away 50% of our ownership of Tasvan which can be ready within 2 years and will also throw off many £millions in profit every years.

AAU/KS wants to sell this for £25m.

Short term this should give the share price and investors /traders a smile as it should take the share price higher. However imo it's a poor deal for the company as it's giving away too much, for too little.

People will say but think what KS could do with a one of £25m. Well I'll say think what KS can do with a steady £10m every year rising to £20m for the next 8 years.

Özaltin are a good fit for the company, but the deal is a near sighted imo, and poor in the longer term than if we carried on as we are.

As for Salinbas, £5m plus a commitment to spend approx £15m for 76.5% doesn't look overly generous either.

All that said, AAU is a good solid profitable company, prospects either way are good, but imo, less so with this deal.

[uknighted] 01/7/2020 09:06

There are still a few formalities to be completed which is probably keeping the reins on the share price

[1candc] 01/7/2020 09:01

That almost sounds obscene

[charles clore] 01/7/2020 08:59

i reckon that gap is itching to be filled.

[1candc] 01/7/2020 08:59

Agree with that Donald, the usual pattern, strong opening followed by a wave of small sellers, then a pause as potential buyers see how low its going to go then committing in the afternoon.
For me the oscillations of the share price don't matter, what matters is the deal is in, it will be transformational to AAU in many ways and the company value will be on a rising trajectory from now on in no matter how many take profits along the way. I expect some new investors to become evident plus some more market makers to appear. This is a great day for the long termers and new strong supporters.

[donald pond] 01/7/2020 08:50

Seen this before with AAU, price strength tends to kick in later on. I remember the day we announced we'd beaten estimates by 20% and were marked down until around midday

[tigerchris1] 01/7/2020 08:49

Sells outnumbering the buys, but the sells are much smaller volume, still plenty of upward momentum through the day

[renniks2016] 01/7/2020 08:47

Yeah! we have regained losses on the week LOL oh no now below recent highs, wont be for long, there will be profit takers and tree shakers galore over the next few weeks, buying on the dips, still under my buy to 4.5 target so happy days because now no risk!

[charles clore] 01/7/2020 08:47

Should be 7p today

[thanksamillion] 01/7/2020 08:46

Gold near $1800, great deal, share price same place it was a month and a half ago ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

[bigglesbingham] 01/7/2020 08:45

Forget the shareprice and look a fundamentals the shareprice will follow remember October 18 this was 1.17p !!!

[charles clore] 01/7/2020 08:41

sells currently outnumbering buys wtf does this have to do to maintain upward momentum?