Ariana Resources PLC KIZILCUKUR DEVELOPMENT UPDATE (5673N)

TIDMAAU

RNS Number : 5673N

Ariana Resources PLC

21 January 2019

21 January 2019

AIM: AAU

KIZILCUKUR DEVELOPMENT UPDATE

Positive results of bulk sampling and drilling update

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company with gold mining operations in Turkey, is pleased to announce a development update for the Kizilcukur Project ("Kizilcukur" or "the Project"). Kizilcukur is located outside of the Red Rabbit Joint Venture ("JV") with Proccea Construction Co. and is 100% owned by Ariana. The project lies 22km to the northeast of the Kiziltepe Mine ("Kiziltepe").

Highlights:

-- Bulk sample obtained from the Kizilcukur vein returned c. 20 tonnes at 4.22 g/t gold + 284 g/t silver.

-- Approximately 2,800 tonnes of mineralised material currently stockpiled on site, with potential to double with limited additional trial mining in 2019.

-- Planning underway to truck 300 tonnes of this material grading 4.30 g/t gold + 239 g/t Ag to the Kiziltepe plant site for bulk processing during summer 2019.

-- Company will expand its operations at Kizilcukur and truck remaining 2,500 tonnes of ore to Kiziltepe if processing of the first batch of 300 tonnes is successful.

   --     Drilling at Kizilcukur has been continuing despite adverse winter weather conditions. 

Dr. Kerim Sener, Managing Director, commented:

"These bulk sampling results demonstrate that the Kizilcukur deposit has the capacity to act as a source of high-grade satellite feed to the Kiziltepe processing plant. We are encouraged by the results of this recent work and the current drilling programme will add confidence to the resource estimate for the Zeki Pit as part of our feasibility work programme. We are planning to truck a 300 tonne batch of ore to Kiziltepe for test processing during the summer, in order to assess the merits of potentially expanding our operations at Kizilcukur."

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

Bulk Sampling Results

In December 2018, the Ariana team completed a series trenches along the strike of the Kizilcukur vein system, where it was previously exposed in trial mining within the Zeki Pit. This work was planned in conjunction with drill pad preparation and road building for the current drilling programme. The aim of the trenching was to obtain a high-grade bulk sample for test processing at the Kiziltepe processing plant during the summer of 2019. A total of five trenches measuring 5m long, 1.3m wide and 1.2m deep were excavated directly along the vein. Care was taken to ensure that each trench was positioned over the exposed vein so as to only extract mineralised material, resulting in five quartz-vein dominant stockpiles being formed. Two systematically collected and unbiased composite samples of approximately 10kgs each were taken from each quartz-vein stockpile, and sent to ALS in Izmir for fire assay and ME-ICP analysis. Average results for each stockpile include:

   --     Stockpile 1: 3.70 g/t Au + 345 g/t Ag 
   --     Stockpile 2: 5.85 g/t Au + 357 g/t Ag 
   --     Stockpile 3: 5.57 g/t Au + 286 g/t Ag 
   --     Stockpile 4: 1.36 g/t Au + 114 g/t Ag 
   --     Stockpile 5: 4.61 g/t Au + 319 g/t Ag 

Collectively, the five stockpiles represent a bulk sample of 20 tonnes collected over a total strike length of 25m at an average grade of 4.22g/t Au + 284 g/t Ag.

Drilling Programme

Since early December 2018, the Ariana exploration team have focused on drilling activities at Kizilcukur. The team have been working through the winter season, although drilling has been intermittently hindered by heavy snow and freezing of equipment at the altitude of the project (1,170m). However, access to the site has not been prohibited and the team are planning to continue to work through a window of more favourable weather in the coming weeks. Drilling will continue for as long as possible but will be suspended temporarily should weather conditions prevent the team from operating safely. The team have made good progress to date and the drilling programme is currently about a quarter completed.

Operational Plans

During the summer of 2019 the Company is planning to truck approximately 300 tonnes of high-grade (4.30 g/t gold and 239 g/t Ag) material currently held in stockpile to Kiziltepe for test processing through the CIL processing plant. Approximately 2,800 tonnes of mineralised material is currently stockpiled on site following the trial mining conducted in 2017 and 2018. It is expected that further trial mining during 2019 could potentially double this tonnage. If test processing of the first batch of 300 tonnes concludes successfully, the Company will give consideration to expanding its operations at Kizilcukur with a view to trucking 2,500 tonnes of ore to Kiziltepe. The Company intends to ensure that any material sent to the Kiziltepe plant averages >4 g/t Au and >150 g/t Ag.

Project Summary

The Kizilcukur Project consists of one operational licence located in the Balikesir Province in Western Turkey (coordinates: 626150 mE; 4360440 mN). The property lies 22km to the northeast (straight line) and 50km by road from the Kiziltepe Sector of the Company's Red Rabbit Project. A royalty will be payable to Dogu Akdeniz Mineralleri San. ve Tic. Ltd. of 2% Net Smelter Return on commercial production from the Project. Ariana has the option to sell the project to Zenit Madencilik San. ve Tic. A.S. (the operating company for the Kiziltepe Mine) at three times the exploration cost.

The Project covers an area containing a series of sub-parallel quartz veins hosted by ophiolitic units that trend northwest and extend for about two kilometres. The Main Vein exhibits classic low-sulphidation epithermal features and attains a maximum true width of 8m. The western quartz vein extends over a strike length of 820m. Composite rock-chip sampling of 80m strike along this quartz vein returned encouraging assay results of 6m at 3.3 g/t gold, 2m at 9.6g/t gold and 1m at 7.2 g/t gold prior to drill-testing. The peak rock-chip assay result in this area was 152 g/t gold and 1,320 g/t silver.

A JORC 2012 compliant Mineral Resource estimate was prepared for the Kizilcukur Project and Whittle optimisation conducted in 2016 identified the potential for the development of three open pits. The Mineral Resource in Indicated and Inferred JORC categories stands at c.308,000 tonnes at 2.11g/t gold + 73.4g/t silver (for 33,000 oz gold equivalent) and demonstrates potential for further growth with additional drilling. The management resource target for future exploration at Kizilcukur is currently 500,000 tonnes at >2 g/t gold + >70g/t silver.

Trial mining commenced within the central part of the Zeki Pit during 2017. This pit is the largest and highest grade of the three pits defined following Whittle optimisation of the Kizilcukur resource. The General Directorate of Mining Affairs approved blasting operations on the licence as part of the Mining Permit (as announced on 18 November 2015). Further trial mining is being planned for 2019.

Contacts:

 
 Ariana Resources plc                       Tel: [phone] 
                                             3616 
 Michael de Villiers, Chairman 
 Kerim Sener, Managing Director 
 
 Beaumont Cornish Limited                   Tel: [phone] 
                                             3396 
 Roland Cornish / Felicity Geidt 
 
 Panmure Gordon (UK) Limited                Tel: [phone] 
                                             2500 
 Atholl Tweedie / James Stearns 
 
 Yellow Jersey PR Limited                   Tel: [phone] 
                                             882 
 Felicity Winkles/ Tim Thompson / Harriet   [e-mail] 
  Jackson 
  / Henry Wilkinson 
 

Editors' Note:

The information in this announcement that relates to exploration results is based on information compiled by Dr. Kerim Sener BSc (Hons), MSc, PhD, Managing Director of Ariana Resources plc. Dr. Sener is a Fellow of The Geological Society of London and a Member of The Institute of Materials, Minerals and Mining and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity that has been undertaken to qualify as a Competent Person as defined by the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and under the AIM Rules - Note for Mining and Oil & Gas Companies. Dr. Sener consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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.

Glossary of Technical Terms:

"Ag" chemical symbol for silver;

"Au" chemical symbol for gold;

"g/t" grams per tonne;

"JORC" the Joint Ore Reserves Committee;

"m" Metres;

"oz" Troy ounces;

Ends.

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January 21, 2019 02:00 ET (07:00 GMT)