Ariana Resources Share Discussion Threads

[brasso3] 02/9/2019 13:29

its probably going to require positive news flow to break out above 2.5p. Maybe another jump in the gold price would also be enough for that to happen.

[paul280i] 02/9/2019 13:11

Biggles will sell when the takeover offer comes in at £1 per share! (Like me)

[shortarm] 02/9/2019 12:44

I thinks that's quite a long way in the future :-D

[charles clore] 02/9/2019 12:25

I'd hate to be around on the day biggles sells!

[shortarm] 02/9/2019 12:08

With that much money tied up in Ariana I'm guessing he's already a millionaire :-)

[charles clore] 02/9/2019 12:05

biggles - I bet you are almost a paper millionaire by now!

[bigglesbingham] 02/9/2019 11:54

A positive rns on any outstanding matter will take this up to 2.65 ish over a very short period (assuming TW followers don't top slice too much). One point though , less than 3 m shares were bought since the NS write up so sells due to top slicing shouldn't be too drastic.

[the deacon] 02/9/2019 11:42

Buys going through at 2.305 on NEX exchange

[thanksamillion] 02/9/2019 11:32

Nice up-tick but no trade shown could be a biggy - delayed reporting.

[paul280i] 01/9/2019 17:00

JD, I think the pronoun you are searching for is "it".

[jaynesdad] 01/9/2019 13:26

Ta sfs. I'll make sure he/she has gone first......

[swallowsflysouth] 31/8/2019 17:02

JD glad you are back
sfs

[jaynesdad] 31/8/2019 14:26

backmarker.....depends how expensive your tastes are!

[backmarker] 31/8/2019 11:08

CC, more like 5k

[swallowsflysouth] 30/8/2019 19:28

Mcmather, hadn't thought of that angle, you could be right, maybe we have both picked up on something in some newbie posts, i observe with interest !

[charles clore] 30/8/2019 15:33

backmarker - I think turkey could be quite expensive by Christmas time so yes, a topslice might be advisable. 50k @ 2.9p would be enough for a very nice meal.

Look at that share price strength - she's coming back into the close!

[backmarker] 30/8/2019 15:30

that spread is still a bit wide. and I am wondering if those 2.22p trades were actually sells.

[backmarker] 30/8/2019 15:29

TW must have been reading my posts - and plagiarising them.

however, this may be the occasion he has got it right.

except if we do hit 3p before Xmas I will be taking a cheeky topslice at 2.9p sold.

[mcmather] 30/8/2019 15:28

Courtesy of SFS #16403
"Sadily you would appear to be right about the 'deramper' bit. I don't think he is paid however, he is not smart enough. Probably part of a group of PI's who all have different identities and focus on individual shares with a view to generally short them.
sfs"

Or try to get lower for a better entry point.....

[the deacon] 30/8/2019 14:32

It's another Nigel Somerville write up:Gold may once again be shooting the lights out but poor old AIM-listed Turkish gold play Ariana (AAU) seems to be struggling to keep up. Yesterday's news as detailed in the Alliance News headline of Ariana Reports Dip In Kiziltepe Mine Income and Production didn't help – and certainly didn't tell the whole story. But perhaps of bigger interest to me was last week's news regarding the Salinbas project.To the numbers first: the gross income from gold and silver sales was indeed down, from $10.86 million to $9.67 million. But we already knew that there had been less production and much of that was due to the pushback at the southern wall of the Arzu South pit and having been told that this will be completed late summer we are now told it is nearing completion and ore production is steadily increasing during the current quarter. So that dip really does look like a one-off. More to the point, even at the reduced level of production it was still ahead of the annual guidance.The big surprise was the large increase in operating costs, which ran at $589 per ounce of gold produced – well up from the $399 per ounce of Q1. Ouch! But we are told that this increase was largely due to the annual payment of the State Right royalty to the Turkish Government within the period.  Excluding this, the operating cash cost remains fully in line with prior quarters. OK, so this was an annual payment and otherwise the costs would have been around $400 per ounce. In future perhaps we should add around $47.50 per ounce to the reported costs each quarter to get a truer figure!With 6,438 oz of gold (and associated silver as a by-product), that means whilst the gross income was $9.67 million, costs came in at $3.79 million even with the full year's state royalty, meaning cashflow in to the joint venture (where Ariana owns half) of around $5.88 million before finance costs, taxes and development capital. If we level out the state royalty over a year the cashflow would have come in at around $6.79 million and that is, I suggest, a low point: not only was production lower, the gold and silver prices have moved sharply northwards. Q3s numbers will be very interesting indeed.To underline the point, the average gold price received was $1307 per ounce but gold is now trading at around $1540. We are not given the silver prices received but we can work them out as we are alos given the average revenue per gold ounce (which includes silver) of $1496 which means that silver production brought in an extra $189 per ounce of gold produced. With 6438 ounces of gold produced and 82,988 ounces of silver, it means that 12.9 ounces of silver were produced for each ounce of gold. Doing the maths, the silver brought in around $14.66 per ounce. The silver price is now sitting at around $18.60. So even if there is no increase in production this quarter the income will move forward by some $1.79 million to $11.46 million. If we get costs of around $400 per ounce then the cashflow (before bank costs etc) will reach around $8.89 million – well up on Q2's number of $5.88 million.I expect production to have improved this quarter and in view of the effect of the rising gold and silver prices I am not at all concerned, however Alliance News wants to headline it. Thinking a year from now, with the bank fully paid off, the above maths would suggest that £10 million a year to Ariana is within reach – yet the company is only capitalised at £22.3 million. That is why I think this is a buy at around current levels.As far as the bank is concerned, we are told that $3.2 million was repaid during Q2 to bring total repayments to $22.8 million, leaving $10.2 million to go over the next three quarters and one month. Easy peasy – indeed, it looks as though there is plenty of cash left over for the JV partners to enjoy some dividends.So all is well on track at Kiziltepe. The next major development I want to hear of is the plan to get production raised to 50,000 oz per year – and what the costs and timings will be. I hope we won't have to wait too long for that.But we also had news from the other side of Turkey in relation to the Salinbas project. The drilling results are coming in and whilst they don't look spectacular yet, they are finding gold. We will have to wait and see what they turn up going forward, so for now I'm still seeing it as a speculation for now.But bigger news seems to be afoot, as we are told that:Discussions being advanced with a number of other companies interested in developing the Salinbas Gold Project in partnership with Ariana.And Kerim Sener, the big cheese, told us that:  ....we are confident that there is an opportunity to develop a major new gold mine producing at a rate of 50,000 oz per annum over a mine life of about 10 years.This is with the announcement of two 10-year operational licences now granted and a third operational licence awaiting its extension, the Project is reaching a decision point concerning a major new work programme involving further drilling and technical studies, including the preparation of a full statutory Environmental Impact Assessment.  These studies will be undertaken in parallel with the commencement of a Pre-Feasibility Study in due course.Well, they already have a million ounces proved up so this looks like very positive news.In short, it seems that Ariana will be running 100,000 oz a year of gold production, and they are looking for a partner for Salinbas. If the deal is structured like Kiziltepe then it will represent a four-fold increase – and the shares should respond very favourably to that.Much to look forward to, then. In the meantime, with the shares still hanging around the 2p mark, if you can pick some up at 2p I would imagine a rise to 2.5p is easily achievable in the short term for a top-sloicing moment. If company quadruples its production then the shares will surely be worth a lot more than that.

[lurchlides] 30/8/2019 14:32

In February we banked big profits on Ariana Resources (LSE:AAU) with the shares at around 2p, noting longer-term risk/reward still looked favourable including the macro backdrop seeing us bullish on the gold price but that it had met our short-term purposes. The gold price was then just over $1,300 per ounce and is currently comfortably above $1,500 per ounce yet the shares are available to buy at still 2.3p – and so…

© Image copyright digitalcurrency
© Image copyright digitalcurrency
Operations:

Ariana continues to have gold production, development and exploration in Turkey. In the west of the country, it has a 50:50 joint venture with Proccea Construction Co producing from the Red Rabbit project. The current key here is Kiziltepe, where commercial production was initiated a couple of years ago and is planned to deliver an average of approximately 20,000 gold equivalent ounces per annum over eight years. However, with potential including several satellite vein systems, a minimum ten-year mine life is currently targeted.

Meanwhile, in the north-east of the country, the company has the Salinbas gold project, with a total resource inventory of the project area c. 1 million ounces of gold equivalent. Here there’s “discussions being advanced with a number of other companies interested in developing the Salinbas gold project in partnership with Ariana”.

Current Activity:

With a rising gold price, shares in Ariana rose to around 2.5p earlier this summer. Their more recent dropping back was compounded a couple of days ago by a Kiziltepe Quarterly Operational Update…

This included that for the quarter ended 30th June 2019 gross income was $9.69 million, with gold production 6,438 ounces and operating cash costs estimated at $589 per ounce… they respectively comparing to $10.86 million, 7,296 ounces and $399 per ounce in the prior quarter! However, this latest update also included;



“Pushback of the southern wall of the Arzu South pit is nearing completion and ore production is steadily increasing during the current quarter.”


“Operating cash costs per ounce for the period are higher than in prior quarters, largely due to the annual payment of the State Right royalty to the Turkish Government within the period. Excluding this, the operating cash cost remains fully in line with prior quarters.”


“During the July and August period the gold price is up c.10% and this increase will be reflected in our Q3 results.”


Conclusion:

There thus looks good reason to be optimistic looking ahead which, combined with the current valuation (a sub £25 million market cap), suggests good upside potential. House broker Panmure Gordon is looking for a full-year adjusted profit of more than £4 million, notes project loan repayment progress (the company stating “on track to fully repay loan by April 2020”) and that its “valuation, generated by using a blended average of NAV per share, earnings per share and cash flow per share implies a target price of 3.18p”.

Of course, elevated caution should be applied to house broker assessments – but we consider that one looks reasonable and, looking for improved quarterly performance and the current valuation to see upside,…

The Trade: at 2.3p, and up to 2.4p, targeting around 3p to sell, Buy.

[bigglesbingham] 30/8/2019 14:29

Oh Christ ha ha

[charles clore] 30/8/2019 14:25

lurch - thanks for the tip off. The tip is of course well deserved imho - but be warned, TW is also notorious for taking profits which can create quite a bumpy ride. I would be interested to see what he says about the company.