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Ariana Resources PLC SIGNIFICANT RESOURCE UPDATE: KEPEZ NORTH

21/07/2021 7:00am

UK Regulatory (RNS & others)


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TIDMAAU

RNS Number : 8943F

Ariana Resources PLC

21 July 2021

http://www.rns-pdf.londonstockexchange.com/rns/8943F_1-2021-7-20.pdf

21 July 2021

AIM: AAU

SIGNIFICANT RESOURCE UPDATE: KEPEZ NORTH

c. 100% increase over previous resource estimate

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral exploration and development company with joint-venture gold mining operations in Europe, is pleased to announce a drilling and resource update for the Kepez North ("Kepez" or "the Project") area of the Kiziltepe Sector. Kepez North is part of the Zenit Madencilik San. ve Tic. A.S. ("Zenit") Joint Venture ("JV") with Proccea Construction Co. and Ozaltin Holding A.S. and is 23.5% owned by Ariana.

Highlights:

   --    Resource contains c. 36,400 ounces of gold and 329,400 ounces of silver. 

-- 97% increase in contained gold ounces over previous resource estimate (2020) and a 310% increase over the Feasibility Study Resource (2013).

   --    Significant positive increase in average grade to 7.14g/t Au + 64.65g/t Ag. 

-- Substantially improved classification of the Resource to approximately 86% Measured and 14% Indicated.

-- New pit optimisation study now complete and area is being advanced through further permitting.

Dr. Kerim Sener, Managing Director, commented:

"This is a great outcome from the recent drilling undertaken in the Kepez area. We remain highly encouraged by this area as a potential source of very high-grade mineralisation, which can complement the mill-feed of the Kiziltepe processing plant, which is located only 14km away by road. Based on the significant increase in the resource at Kepez and the potential for identifying further extensions of this high-grade mineralisation down plunge, the JV has taken the decision to bring the drill rig back to this area to complete further drilling. This work, in addition to further mining studies and associated permitting is being expedited in order to bring this area forward in the mining schedule. Importantly, the geometry of the mineralisation lends itself well to near complete resource extraction."

* All Mineral Resource figures in the announcement are quoted gross with respect to the Red Rabbit Joint Venture. Ariana owns 23.5% of the JV.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Introduction

The Kepez North resource has been updated with the addition of five new diamond drill holes, as announced 30 June 2021. This infill drilling reduced the drill spacing to an average of 25m within the primary resource area, to as little as 10m, increasing confidence of the resource and its classification. Revised optimisation work has also been completed, providing for a designed pit which captures 81% of the total resource by volume and over 87% of the resource by gold ounces. The Zenit mining team are in the process of expediting mining activities at Kepez North. Additional drilling is commencing to expand the vein and scree resources to the south and southwest.

Kepez North

The Kepez North prospect is situated 14km haulage distance from the Kiziltepe processing plant. The prospect contains 2.5km of dominantly north-trending and bifurcating low-sulphidation style vein outcrop over a series of ridges near the village of Kepez. The Kepez North vein is approximately 600m long and up to 20m wide (Figure 1). It is positioned at the contact between dacitic pyroclastic and ophiolitic rocks and dips at 50(o) to the west. The majority of the gold mineralisation in this vein occurs in a matrix supported hydrothermal quartz breccia which occurs in a limited zone of approximately 150m along strike. The mineralisation is silver rich with some veins showing an Ag:Au ratio of between 4:1 and 8:1. The pyrite content is typically 1 to 5%. Mineralised scree from old workings along the Kepez Main hanging wall (containing average grades of approximately 7g/t Au + 65g/t Ag) has been defined from previous sampling.

http://www.rns-pdf.londonstockexchange.com/rns/8943F_1-2021-7-20.pdf

Figure 1: Overview of the Kepez deposit, updated geological model and 2021 optimisation pit outline.

Resource Estimation

The 2021 Kepez Mineral Resource Estimate (MRE) consists of: 1) the addition of 306 drill core samples (incl. 46 QA/QC samples) from the latest drilling of five holes; 2) an increase in confidence in surface scree sampling, allowing a better resource domain to be created; 3) the inclusion of surface rock-saw channel sampling; and 4) a revised optimisation study.

Estimation Methodology

Ariana completed the geological modelling of the mineralised zones in Leapfrog Geo 6.0 (see JORC Table 1, Appendix 1) for the Kepez area as a whole. Several mineralised zones were modelled from sectional interpretations and associated interpolation, representing the most current geological and geochemical data and understanding.

Interpolation and wireframe modelling of the mineralised zones in Leapfrog EDGE was completed using a 0.2g/t Au modelling cut-off grade (CoG). However, most of the vein domain within the immediate resource area was defined using 1g/t Au intercept composites. Where continuity was not established between sections, the strike extrapolation was limited both manually (wireframes) and statistically (interpolations). The continuity of the various structures is reflected in the Mineral Resource classification.

Two domains were modelled; one for the main vein material and one for the mineralised scree material up to 5m from the surface. An average specific gravity value of 2.6g/cm(3) was used for both vein and scree material.

Compositing was completed in Leapfrog EDGE using a 1m best fit routine. Hard domain boundaries were applied to both deposit models, which forced all samples to be included in one of the composites by adjusting the composite length, while keeping it as close as possible to the selected intervals of 1m.

A top-cut was not applied to the assay results or composites. The maximum gold value is 20.31g/t Au, which is below the 30g/t Au top-cut determined from statistical analysis of the Kiziltepe-Kepez area as a whole. Despite silver showing significantly higher values than in other areas of the Kiziltepe Gold Corridor, the values are considered to be relevant values and did not warrant a top-cut.

Variography was assessed, however the sample population is too small to obtain reasonable results for use in an Ordinary Kriging estimation. The variable orientation (dynamic anisotropy) function was used for estimation of grade into the vein domain whilst the orientation of the scree at surface was used for estimation into the scree domain. The grades were interpolated into the 2.5m x 2.5m x 2.5m blocks by Inverse Distance Weighting Squared (ID2), adopting a multi-pass methodology. The block model is a non-rotated conventional block model with no sub-blocking used (Figure 2).

http://www.rns-pdf.londonstockexchange.com/rns/8943F_1-2021-7-20.pdf

Figure 2: Block model of the Kepez deposit in plan and section.

Resource Classification

The Mineral Resource is classified in line with the guidelines of the 2012 JORC Code (JORC Table 1) as Measured, Indicated and Inferred (Table 1 and 2). The classification is determined based on search pass spacing, with increasing confidence with proximity to drill holes. The Measured and Indicated components occur mainly within the limits of the designed open-pit.

Table 1: Summary 2021 Kepez North MRE (dated 13 July 2021), in accordance with JORC 2012, based on 25 diamond drill holes and 22 rock-saw channels across the Kepez North deposit. The 20 RAB holes drilled in 2009 were not included in the modelling and estimate as they did not achieve their objective depth (target 30m, achieved 5m). Reporting is based on a 1g/t Au economic cut-off grade. Figures in the table may not sum precisely due to rounding. Figures include assessment of mineralised scree material. See Table 2 for in-pit Mineral Resources.

 
                                       Average Value     Material Content 
-----------------------------------  ----------------  ------------------- 
 Classification    Volume    Mass       Au       Ag       Au         Ag 
                    m(3)       t        g/t      g/t     t. oz      t. oz 
----------------  -------  --------  -------  -------  --------  --------- 
    Measured       52,300   136,000     7.18    67.37    31,300    294,500 
----------------  -------  --------  -------  -------  --------  --------- 
    Indicated       8,500    22,200     7.02    48.76     5,000     34,800 
----------------  -------  --------  -------  -------  --------  --------- 
   Meas + Ind      60,800   158,200     7.15    64.76    36,400    329,400 
----------------  -------  --------  -------  -------  --------  --------- 
    Inferred          100       300     1.08     2.19        10         20 
                  -------  --------  -------  -------  --------  --------- 
 

Optimisation Study

The updated classified resource model was assessed internally by the Zenit Team and an optimised pit shell was created for the Measured and Indicated Resource, using an input price of US$1,735 per ounce gold (see JORC Table 1 for further details). The optimisation found that the resource is not sensitive to changes to the overall pit wall angle between 40-45(o) . At a pit wall angle of 40(o) , the pit encompasses 128,300t @ 7.69g/t Au + 69.98g/t Ag, totalling 31,700 oz Au.

The updated optimisation indicates a stripping ratio of 2.7. The next stage of development will involve the establishment of a trial pit to confirm the choice of pit wall angles and determine the best method of grade control sampling to be used when mining begins.

Table 2: Summary table of in-pit Mineral Resources. Figures in the table are rounded.

 
                                              Average Value     Material Content 
------------------------------------------  ----------------  ------------------- 
    Classification       Volume     Mass       Au       Ag       Au         Ag 
                          (m(3))     (t)      (g/t)    (g/t)     (oz)      (oz) 
----------------------  --------  --------  -------  -------  --------  --------- 
 Measured + Indicated     49,300   128,300     7.69    69.98    31,700    288,500 
----------------------  --------  --------  -------  -------  --------  --------- 
 

Sampling and Assaying Procedures

All diamond drill core is currently being processed at the Kiziltepe mine site and analysed at the Kiziltepe Mine Laboratory. Results are being assessed systematically and are being grouped according to individual vein systems at the Kiziltepe Sector.

HQ size drill-core samples from the drilling programme at the Kepez deposit were cut in half by a diamond saw and sent for analysis in batches in line with the Company's quality control procedures. For all the Kepez North drilling, a total of 306 samples (including 46 QA/QC samples) were submitted to the Kiziltepe Mine Laboratory. Core recovery for all drilling conducted at Kepez North during this campaign was 85%, for a total of 178 measurements.

All samples were assayed for gold using a 30g fire assay. Reviews of the assay results have determined that all Quality Control and Quality Assurance samples (blanks, standards and duplicates) passed the quality control checks established by the company, with duplicate samples showing excellent correlation. Laboratory sample preparation, assaying procedures and chain of custody are appropriately controlled. The Company maintains an archive of half core samples and a photographic record of all cores for future reference.

Contacts:

 
 Ariana Resources plc                 Tel: +44 (0) 20 7407 3616 
 Michael de Villiers, Chairman 
 Kerim Sener, Managing Director 
 Beaumont Cornish Limited             Tel: +44 (0) 20 7628 3396 
 Roland Cornish / Felicity Geidt 
 Panmure Gordon (UK) Limited          Tel: +44 (0) 20 7886 2500 
 John Prior / Hugh Rich / Atholl 
  Tweedie 
 Yellow Jersey PR Limited             Tel: +44 (0) 7951 402 336 
 Dom Barretto / Joe Burgess / Henry   arianaresources@yellowjerseypr.com 
  Wilkinson 
 

Editors' Note:

The Mineral Resource estimate was prepared by Ruth Bektas BSc (Hons) CGeol EurGeol, Projects Analyst, Ariana Resources plc. Miss Bektas is a Competent Person as defined by the JORC Code, 2012 Edition. The estimate was reviewed internally by Zack van Coller, BSc (Hons), Special Projects Geologist, a Competent Person as defined by the JORC Code. The results are reported in accordance with the JORC Code, under the direction of Dr. Kerim Sener BSc (Hons), MSc, PhD, Managing Director of Ariana Resources plc, and a Competent Person as defined by the JORC Code. Mr. van Coller and Dr. Sener have reviewed the technical and scientific information in this press release relating to the Mineral Resource estimates and approve the use of the information contained herein.

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 AIM-listed mineral exploration and development company with an exceptional track-record of creating value for its shareholders through its interests in active mining projects and investments in exploration companies. Its current interests include gold production in Turkey and copper-gold exploration and development projects in Cyprus and Kosovo.

The Company holds 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a joint venture with Ozaltin Holding A.S. and Proccea Construction Co. in Turkey which contains a depleted total of c. 2.1 million ounces of gold and other metals (as at July 2020). The joint venture comprises the Kiziltepe Mine and the Tavsan and Salinbas projects.

The Kiziltepe Gold-Silver Mine is located in western Turkey and contains a depleted JORC Measured, Indicated and Inferred Resource of 227,000 ounces gold and 0.7 million ounces silver (as at April 2020). The mine has been in profitable production since 2017 and is expected to produce at a rate of c.20,000 ounces of gold per annum to at least the mid-2020s. A Net Smelter Return ("NSR") royalty of 2.5% on production is being paid to Franco-Nevada Corporation.

The Tavsan Gold Project is located in western Turkey and contains a JORC Measured, Indicated and Inferred Resource of 253,000 ounces gold and 3.7 million ounces silver (as at June 2020). The project is being progressed through permitting and an Environmental Impact Assessment, with the intention of developing the site to become the second joint venture gold mining operation. A NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

The Salinbas Gold Project is located in north-eastern Turkey and contains a JORC Measured, Indicated and Inferred Resource of 1.5 million ounces of gold (as at July 2020). It is located within the multi-million ounce Artvin Goldfield, which contains the "Hot Gold Corridor" comprising several significant gold-copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas. A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

Ariana is currently earning-in to 75% of Western Tethyan Resources Ltd ("WTR"), which operates across Eastern Europe and is based in Pristina, Republic of Kosovo. The company is targeting its exploration on major copper-gold deposits across the porphyry-epithermal transition.

Ariana is also earning-in to 50% of UK-registered Venus Minerals Ltd ("Venus") and has to date earned into an entitlement to 37.5%. Venus is focused on the exploration and development of copper-gold assets in Cyprus which contain a combined JORC Inferred Resource of 9.5Mt @ 0.65% copper (excluding additional gold, silver and zinc).

Panmure Gordon (UK) Limited is broker to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser and Broker.

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;

"JORC 2012" is the current edition of the JORC Code, which was published in 2012. After a transition period, the 2012 Edition came into mandatory operation in Australasia from 1 December 2013;

"m" Metres;

"Mt" million tonnes;

"oz" Troy ounces. One Troy Ounce is equal to 31.1035 grams;

"cut-off grade" The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification;

"Inverse Distance Weighted Squared" a conventional mathematical method used to calculate the attributes of mineral resources. Near sample points provide a greater weighting than samples further away for any given resource block;

"Measured resource" a part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are spaced closely enough to confirm geological and grade continuity;

"Indicated resource" a part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;

"Inferred resource" a part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has assumed, but not verified, geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability.

Ends.

Appendix 1 - JORC Table 1

JORC Code, 2012 Edition - Table 1

Kepez North, Western Turkey

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

 
 Criteria       JORC Code explanation                                         Commentary 
 Sampling 
 techniques      *    Nature and quality of sampling (e.g. cut channels,         *    Full core was split using a diamond rock-saw, and 
                      random chips, or specific specialised industry                  half-core samples were taken at variable intervals. 
                      standard measurement tools appropriate to the                   Core recovery was recorded into the database. 
                      minerals under investigation, such as down hole gamma 
                      sondes, or handheld XRF instruments, etc). These 
                      examples should not be taken as limiting the broad         *    Portable XRF (pXRF) was used to obtain more data in 
                      meaning of sampling.                                            support of the sampling. pXRF certified reference 
                                                                                      standards were used on a regular basis in line with 
                                                                                      company procedures. 
                 *    Include reference to measures taken to ensure sample 
                      representivity and the appropriate calibration of any 
                      measurement tools or systems used. 
 
 
                 *    Aspects of the determination of mineralisation that 
                      are Material to the Public Report. 
 
 
                 *    In cases where 'industry standard' work has been done 
                      this would be relatively simple (e.g. 'reverse 
                      circulation drilling was used to obtain 1 m samples 
                      from which 3 kg was pulverised to produce a 30 g 
                      charge for fire assay'). In other cases more 
                      explanation may be required, such as where there is 
                      coarse gold that has inherent sampling problems. 
                      Unusual commodities or mineralisation types (e.g. 
                      submarine nodules) may warrant disclosure of detailed 
                      information. 
 Drilling 
 techniques      *    Drill type (e.g. core, reverse circulation, open-hole           *    The majority of the drilling is inclined (only 7 
                      hammer, rotary air blast, auger, Bangka, sonic, etc)                 vertical holes). 
                      and details (e.g. core diameter, triple or standard 
                      tube, depth of diamond tails, face-sampling bit or 
                      other type, whether core is oriented and if so, by              *    Core is not oriented. 
                      what method, etc). 
 
                                                                                      *    Historic drilling (1992) was undertaken by HQ diamond 
                                                                                           drilling (440.3 m). 
 
 
                                                                                      *    2006 drilling was undertaken by HQ diamond drilling 
                                                                                           (857.2 m). 
 
 
                                                                                      *    2009 drilling was undertaken by blast hole RAB 
                                                                                           drilling (100.0 m). 
 
 
                                                                                      *    2021 drilling was undertaken by HQ diamond drilling 
                                                                                           (300.2 m). 
 
 
                                                                                      *    Rock-saw channel sampling was completed in 2020 
                                                                                           (157.5 m). 
 Drill sample 
 recovery        *    Method of recording and assessing core and chip            *    Recovery data for the 1992 drilling is not available. 
                      sample recoveries and results assessed. 
 
                                                                                 *    From 2006 onwards recoveries were monitored and 
                 *    Measures taken to maximise sample recovery and ensure           recorded into the sampling database. Drill recoveries 
                      representative nature of the samples.                           for all mineralised intercepts exceeded 90% recovery. 
 
 
                 *    Whether a relationship exists between sample recovery      *    There is no bias between sample recovery and grade. 
                      and grade and whether sample bias may have occurred 
                      due to preferential loss/gain of fine/coarse 
                      material. 
 Logging 
                  *    Whether core and chip samples have been geologically      *    All diamond core holes were logged lithologically 
                       and geotechnically logged to a level of detail to              using a coded logging system for rock type, grain 
                       support appropriate Mineral Resource estimation,               size, colour, alteration and any other relevant 
                       mining studies and metallurgical studies.                      observations. 
 
 
                  *    Whether logging is qualitative or quantitative in         *    Mineralised zones were identified from observation of 
                       nature. Core (or costean, channel, etc) photography.           mineralogy and lithological characteristics. pXRF 
                                                                                      analysis of recent drill core was conducted post 
                                                                                      drilling, to provide supporting geochemical data for 
                  *    The total length and percentage of the relevant                non-sampled regions. Areas identified as 
                       intersections logged.                                          geochemically anomalous by pXRF were further sampled. 
                                                                                      The pXRF was checked by use of certified referenced 
                                                                                      standards to ensure good quality data was produced. 
 
 
                                                                                 *    All drilled metres [25 diamond drill holes (1,597.7 
                                                                                      m), 20 RAB drill holes (100 m) and 22 rock-saw 
                                                                                      channels (157.5 m)] were logged regardless of 
                                                                                      presence of mineralisation. 
 Sub-sampling 
 techniques       *    If core, whether cut or sawn and whether quarter,              *    Samples from diamond drill core were collected from 
 and sample            half or all core taken.                                             sawn halves of identified zones of interest. Half 
 preparation                                                                               core remains in the core tray for reference. 
 
                  *    If non-core, whether riffled, tube sampled, rotary 
                       split, etc and whether sampled wet or dry.                     *    Sample preparation technique is appropriate to the 
                                                                                           mineralisation style. 
 
                  *    For all sample types, the nature, quality and 
                       appropriateness of the sample preparation technique.           *    Splitting and sample preparation conducted on samples 
                                                                                           at the ALS laboratory: 
 
                  *    Quality control procedures adopted for all 
                       sub-sampling stages to maximise representivity of 
                       samples. 
 
 
                  *    Measures taken to ensure that the sampling is 
                       representative of the in situ material collected, 
                       including for instance results for field 
                       duplicate/second-half sampling. 
 
 
                  *    Whether sample sizes are appropriate to the grain 
                       size of the material being sampled. 
 Quality of 
 assay data      *    The nature, quality and appropriateness of the             *    QC procedures employed in all drill programmes prior 
 and                  assaying and laboratory procedures used and whether             to 2019 included the insertion of certified reference 
 laboratory           the technique is considered partial or total.                   standards (1:22), blank samples (1:22), pulp and 
 tests                                                                                crush duplicates (2:22) to monitor the accuracy and 
                                                                                      precision of laboratory data when samples were 
                 *    For geophysical tools, spectrometers, handheld XRF              submitted to ALS Global, Izmir. Insertion rate of 
                      instruments, etc, the parameters used in determining            18%. 
                      the analysis including instrument make and model, 
                      reading times, calibrations factors applied and their 
                      derivation, etc.                                           *    In drill programmes since 2019, samples have been 
                                                                                      submitted in batches of 35 to ALS Global, Izmir, to 
                                                                                      include 1 blank, 1 CRM, 1 field duplicate and 1 pulp 
                 *    Nature of quality control procedures adopted (e.g.              duplicate. Insertion rate of 11%. 
                      standards, blanks, duplicates, external laboratory 
                      checks) and whether acceptable levels of accuracy 
                      (i.e. lack of bias) and precision have been 
                      established.                                               *    Samples submitted to Zenit Laboratory are in batches 
                                                                                      of 20 to include 1 blank, 1 CRM, 1 field duplicate 
                                                                                      and 1 internal Zenit Lab sample. Insertion rate of 
                                                                                      16%. 
 
 
                                                                                 *    The overall quality of QA/QC procedures is considered 
                                                                                      adequate to ensure the validity of the data used for 
                                                                                      resource estimation purposes. 
 
 
                                                                                 *    The pXRF is an Olympus Vanta. A series of 10 blank 
                                                                                      and certified reference material samples are used to 
                                                                                      check the quality of the pXRF data. These are scanned 
                                                                                      at a rate of 1 blank and 1 CRM for every 100 samples. 
                                                                                      The device does not require further calibration. 
 Verification 
 of sampling     *    The verification of significant intersections by           *    All samples between 2006 and 2019 were submitted to 
 and assaying         either independent or alternative company personnel.            the internationally accredited laboratory of ALS 
                                                                                      Global in Izmir, Turkey (ISO 9001:2008 accredited). 
 
                 *    The use of twinned holes. 
                                                                                 *    Samples taken in 2019, 2020 and 2021 have been 
                                                                                      submitted to Zenit Laboratory at the Kiziltepe Mine, 
                 *    Documentation of primary data, data entry procedures,           with 10% also selected for check assays at ALS Global 
                      data verification, data storage (physical and                   in Izmir throughout the sampling programme. Samples 
                      electronic) protocols.                                          are chosen from areas suspected to be mineralised. 
 
 
                 *    Discuss any adjustment to assay data.                      *    Primary data, data entry procedures, data 
                                                                                      verification and data storage protocols are in line 
                                                                                      with industry best-practice. 
 
 
                                                                                 *    Assay data has not been adjusted. 
 Location of 
 data points     *    Accuracy and quality of surveys used to locate drill        *    All collar positions were located initially by 
                      holes (collar and down-hole surveys), trenches, mine             hand-held GPS (Garmin Etrex 10 and 30) and later 
                      workings and other locations used in Mineral Resource            surveyed by a professional surveyor using dGPS 
                      estimation.                                                      equipment. 
 
 
                 *    Specification of the grid system used.                      *    2021 drill holes were surveyed using a standard 
                                                                                       Electronic Multi-shot Magnetic survey deviation tool 
                                                                                       (Devico PeeWee). All holes were surveyed in the 2021 
                 *    Quality and adequacy of topographic control.                     drilling programme. 
 
 
                                                                                  *    All coordinates are collected by dGPS, converted to 
                                                                                       the local grid and recorded in UTM ED50 35N. 
 
 
                                                                                  *    Topographic data is collected by dGPS. 
 Data spacing 
 and             *    Data spacing for reporting of Exploration Results.         *    Drill section spacing close to the vein outcrop is 
 distribution                                                                         typically 10 to 12.5 m, with average spacing of 25m 
                                                                                      across the Kepez North prospect as a whole. 
                 *    Whether the data spacing and distribution is 
                      sufficient to establish the degree of geological and 
                      grade continuity appropriate for the Mineral Resource      *    25 diamond drill holes (1,597.7m) and 22 rock-saw 
                      and Ore Reserve estimation procedure(s) and                     channels (157.5 m) were used to model the vein 
                      classifications applied.                                        systems and scree material. The 20 RAB drill holes 
                                                                                      (100 m) were excluded from the modelling and 
                                                                                      estimation as they did not achieve their drilling 
                 *    Whether sample compositing has been applied.                    objective (30m planned depth, 5m depth achieved). 
 
 
                                                                                 *    Sample compositing has not been applied at the 
                                                                                      sampling stage. 
 
 
                                                                                 *    Sample spacing and distribution is sufficient to 
                                                                                      establish the geological and grade continuity 
                                                                                      required for modelling and resource estimation. 
 Orientation 
 of data in      *    Whether the orientation of sampling achieves unbiased      *    The dip of the mineralisation for most of the deposit 
 relation to          sampling of possible structures and the extent to               is 50deg to the west. 
 geological           which this is known, considering the deposit type. 
 structure 
                                                                                 *    Local grade continuity follows the dip of the 
                 *    If the relationship between the drilling orientation            mineralisation for the entire deposit. 
                      and the orientation of key mineralised structures is 
                      considered to have introduced a sampling bias, this 
                      should be assessed and reported if material.               *    Most drilling is angled (7 holes are vertical), thus 
                                                                                      intersecting the mineralisation appropriately. 
 
 
                                                                                 *    No biases are expected from the drilling direction. 
 Sample 
 security         *    The measures taken to ensure sample security.             *    Samples are stored at a secure company facility 
                                                                                      (Sindirgi Depot) in a clean area free of any 
                                                                                      contamination. 
 
 
                                                                                 *    During drilling programmes pre-2019 samples were 
                                                                                      delivered to ALS Global, Izmir once a week by Aras 
                                                                                      Cargo, Sindirgi. The measures taken to ensure sample 
                                                                                      security for samples used for analysis and QA/QC 
                                                                                      include the following: 
 
 
                                                                                1. Chain of Custody is demonstrated by both the Company 
                                                                                and ALS Global in the delivery and receipt of sample 
                                                                                materials. 
                                                                                2. Upon receipt of samples, ALS Global delivers by 
                                                                                email to the Company's designated Quality Control 
                                                                                Manager, confirmation that each batch of samples has 
                                                                                arrived, with its tamper-proof seal intact, at the 
                                                                                allocated sample preparation facility. 
                                                                                3. Any damage to or loss of samples within each batch 
                                                                                (e.g., total loss, spillage or obvious contamination), 
                                                                                must also be reported to the Company in the form of 
                                                                                a list of samples affected and detailing the nature 
                                                                                of the problem(s). 
                                                                                 *    In all drilling programmes since 2020, the majority 
                                                                                      of samples have been analysed by the laboratory at 
                                                                                      the Kiziltepe Mine, 14 km by road from Kepez North. 
                                                                                      Samples are delivered securely by the exploration 
                                                                                      team and are securely held at the laboratory in the 
                                                                                      fenced off and guarded mine site, with no 
                                                                                      unauthorised access. 
 Audits or 
 reviews          *    The results of any audits or reviews of sampling           *    Ariana has implemented QA/QC programmes covering all 
                       techniques and data.                                            aspects of sample location and collection that meets 
                                                                                       or exceeds the currently accepted industry standards. 
 
 
                                                                                  *    Ariana implemented a QA/QC programme based on 
                                                                                       international best practice during the initial 
                                                                                       exploration work and subsequent drilling programmes. 
                                                                                       The company has continued to review and refine the 
                                                                                       QA/QC programme as these exploration campaigns have 
                                                                                       progressed. 
=============  ============================================================  =================================================================== 
 

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

 
 Criteria         JORC Code explanation                                            Commentary 
 Mineral 
 tenement and       *    Type, reference name/number, location and ownership          *    The Kepez Project is within one of four operating 
 land tenure             including agreements or material issues with third                licenses owned in the Sindirgi District of Balikesir 
 status                  parties such as joint ventures, partnerships,                     Province in western Turkey by Zenit Madencilik San. 
                         overriding royalties, native title interests,                     ve Tic. A.S. ("Zenit") Joint Venture ("JV") with 
                         historical sites, wilderness or national park and                 Proccea Construction Co. and Ozaltin Holding A.S. 
                         environmental settings.                                           (23.5% owned by Ariana). Licence number: 44830. 
 
 
                    *    The security of the tenure held at the time of               *    Royalties include the State Right payable to the 
                         reporting along with any known impediments to                     Turkish Government and a Net Smelter Return ("NSR") 
                         obtaining a licence to operate in the area.                       royalty of up to 2.5% on production is payable to 
                                                                                           Franco-Nevada Corporation. 
 
 
                                                                                      *    There are no known impediments to current operations. 
 Exploration 
 done by other      *    Acknowledgment and appraisal of exploration by other         *    In 1990, Eurogold Madencilik A.S. conducted regional 
 parties                 parties.                                                          BLEG stream-sediment sampling around the Kiziltepe 
                                                                                           area. This led to the initial discovery of anomalous 
                                                                                           gold in the district. Follow-up work led to the 
                                                                                           identification of several gold-bearing low 
                                                                                           sulphidation epithermal veins. 
 
 
                                                                                      *    The Kepez area (Kepez Main, North, South, West, Far 
                                                                                           West) was then explored from 1991 by Tuprag 
                                                                                           Madencilik Ltd. and Newmont Overseas Exploration Ltd. 
                                                                                           joint venture. In 1992 the licence area was acquired 
                                                                                           via state auction by Tuprag following the 
                                                                                           identification of areas of potential hydrothermal 
                                                                                           alteration, as defined in Landsat colour-composite 
                                                                                           imagery. The Kepez North vein was drill-tested for 
                                                                                           the first time with nine drill holes totalling 440m, 
                                                                                           each intercepting some mineralisation. 
 
 
                                                                                      *    In 1994, Normandy La Source acquired the project from 
                                                                                           the joint venture. No further exploration was carried 
                                                                                           out and the licence areas were relinquished. 
 
 
                                                                                      *    Newmont acquired the key licences via state auction 
                                                                                           in 2000. In 2002, Newmont undertook an exploration 
                                                                                           targeting exercise using Landsat structural 
                                                                                           interpretations and new BLEG stream-sediment 
                                                                                           geochemistry across the Sindirgi district, which led 
                                                                                           to the rediscovery of the epithermal veins. They 
                                                                                           completed an extensive programme of regional and 
                                                                                           detailed rock-chip sampling. 
 
 
                                                                                      *    Galata Madencilik San. ve Tic . Ltd., the wholly 
                                                                                           owned subsidiary of Ariana, acquired the licences in 
                                                                                           early 2005. 
 
 
                                                                                      *    Since 2006 Ariana Resources have completed new 
                                                                                           mapping and sampling, including diamond drilling (HQ), 
                                                                                           blast hole RAB drilling (RAB), rock-saw channel 
                                                                                           sampling of vein outcrop and composite rock-chip 
                                                                                           sampling of scree material. 
 Geology 
                    *    Deposit type, geological setting and style of                *    The Kiziltepe area is dominated by Miocene volcanic 
                         mineralisation.                                                   rocks, comprising a series of dacitic volcanoclastic 
                                                                                           units, which host the low sulphidation epithermal 
                                                                                           gold-silver style mineralisation envelope. An upper 
                                                                                           dacitic ignimbrite unit, covers parts of the vein 
                                                                                           field. 
 
 
                                                                                      *    The Kepez North prospect is situated 14km haulage 
                                                                                           distance from the Kiziltepe processing plant. The 
                                                                                           prospect contains 2.5km of dominantly north-trending 
                                                                                           and bifurcating low-sulphidation style vein outcrop 
                                                                                           over a series of ridges near the village of Kepez. 
                                                                                           The Kepez North main outcrop vein is approximately 
                                                                                           600m long and up to 20m wide. It is positioned at the 
                                                                                           contact between dacitic pyroclastic and ophiolitic 
                                                                                           rocks and dips at 50(o) to the west. The majority of 
                                                                                           the gold mineralisation in this vein occurs in a 
                                                                                           matrix supported hydrothermal quartz breccia which 
                                                                                           occurs in a limited zone of approximately 100m along 
                                                                                           strike. The mineralisation is silver rich with some 
                                                                                           veins showing an Ag:Au ratio of between 4:1 and 8:1. 
                                                                                           In places, a pyrite content of up to 40% is observed, 
                                                                                           but this is typically 1 to 5%. Mineralised scree from 
                                                                                           old workings along the Kepez Main hanging wall 
                                                                                           (containing average grades of approximately 7g/t Au + 
                                                                                           65g/t Ag) has been defined from previous sampling. 
 Drill hole 
 Information           *    A summary of all information material to the                    *    All drilling prior to 2021 has been reported. The 
                            understanding of the exploration results including a                 table below summarises the 2021 HQ diamond drilling 
                            tabulation of the following information for all                      programme. 
                            Material drill holes: 
 
 
                      o easting and northing of the drill 
                      hole collar 
                      o elevation or RL (Reduced Level - 
                      elevation above sea level in metres) 
                      of the drill hole collar 
                      o dip and azimuth of the hole 
                      o down hole length and interception 
                      depth 
                      o hole length. 
                       *    If the exclusion of this information is justified on 
                            the basis that the information is not Material and 
                            this exclusion does not detract from the 
                            understanding of the report, the Competent Person 
                            should clearly explain why this is the case. 
 Data 
 aggregation          *    In reporting Exploration Results, weighting averaging                *    Metal equivalents have not been used. 
 methods                   techniques, maximum and/or minimum grade truncations 
                           (e.g. cutting of high grades) and cut-off grades are 
                           usually Material and should be stated.                               *    Significant down-hole intercepts calculated for the 
                                                                                                     Kepez North 2021 drilling programme, using a 1g/t Au 
                                                                                                     minimum cut-off and allowing for up to 2m internal 
                      *    Where aggregate intercepts incorporate short lengths                      dilution: 
                           of high grade results and longer lengths of low grade 
                           results, the procedure used for such aggregation                       Hole ID     From (m)   To (m)   Interval (m)   Gold g/t   Silver g/t 
                           should be stated and some typical examples of such                   KPZ-D01-21       0        1.5         1.5          5.02        51.0 
                           aggregations should be shown in detail.                                           ---------  -------  -------------  ---------  ----------- 
                                                                                                                4.5       5.5         1.0          1.12        22.0 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                      *    The assumptions used for any reporting of metal                      KPZ-D02-21       0        4.0         4.0          8.26       107.3 
                           equivalent values should be clearly stated.                                       ---------  -------  -------------  ---------  ----------- 
                                                                                                                18.0      19.0        1.0          1.39        10.0 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                                                                                                                23.0      25.7        2.7         15.26        90.7 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                                                                                                                28.5      31.1        2.6          5.75        9.2 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                                                                                                KPZ-D03-21       0        4.5         4.5         10.21       133.8 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                                                                                                                28.9      34.9        6.1          2.34        22.5 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
                                                                                                KPZ-D04-21      40.6      41.6        1.0          2.16        1.0 
                                                                                                             ---------  -------  -------------  ---------  ----------- 
 Relationship 
 between            *    These relationships are particularly important in the       *    Down hole length, true width not known. 
 mineralisation          reporting of Exploration Results. 
 widths and 
 intercept 
 lengths            *    If the geometry of the mineralisation with respect to 
                         the drill hole angle is known, its nature should be 
                         reported. 
 
 
                    *    If it is not known and only the down hole lengths are 
                         reported, there should be a clear statement to this 
                         effect (e.g. 'down hole length, true width not 
                         known'). 
 Diagrams 
                    *    Appropriate maps and sections (with scales) and 
                         tabulations of intercepts should be included for any 
                         significant discovery being reported These should 
                         include, but not be limited to a plan view of drill 
                         hole collar locations and appropriate sectional 
                         views. 
 Balanced 
 reporting          *    Where comprehensive reporting of all Exploration             *    Intercept depths are stated in the drill hole 
                         Results is not practicable, representative reporting              information but not stated in the data aggregation 
                         of both low and high grades and/or widths should be               methods section, which include lower grade 
                         practiced to avoid misleading reporting of                        intersections. Widths of intercepts are stated. 
                         Exploration Results. 
 Other 
 substantive        *    Other exploration data, if meaningful and material,          *    In October 2014, Ariana commenced a ground magnetic 
 exploration             should be reported including (but not limited to):                survey over the Kiziltepe Sector JV licences 
 data                    geological observations; geophysical survey results;              (totalling 50 km(2) ), including Kepez. The 
                         geochemical survey results; bulk samples - size and               geophysical survey was undertaken by the Ariana field 
                         method of treatment; metallurgical test results; bulk             team utilising two backpack magnetometers with 
                         density, groundwater, geotechnical and rock                       continuous readings undertaken along N-S oriented 
                         characteristics; potential deleterious or                         lines spaced 200m apart. 
                         contaminating substances. 
 
                                                                                      *    Prior to the initiation of the geophysical survey the 
                                                                                           Company collected approximately 15,000 soil samples 
                                                                                           across the JV licence area (totalling 100 km(2) ) 
                                                                                           including Kepez, and analysed these using a pXRF 
                                                                                           device. The soil samples were collected every 50m 
                                                                                           along N-S oriented lines spaced 100m apart. The 
                                                                                           resulting pXRF geochemical maps have provided an 
                                                                                           unprecedented amount of data coverage for key trace 
                                                                                           elements (e.g. antimony, arsenic, copper, lead, 
                                                                                           manganese, molybdenum and zinc) which can be used as 
                                                                                           vectors to gold and silver mineralisation. 
 Further work 
                    *    The nature and scale of planned further work (e.g.           *    Substantial at surface and near surface exploration 
                         tests for lateral extensions or depth extensions or               targets exist within the immediate and surrounding 
                         large-scale step-out drilling).                                   areas of Kepez North, including Kepez Main, Kepez 
                                                                                           South, Kepez West and Kepez Far West. These generally 
                                                                                           exist as strike extensions of known gold bearing 
                    *    Diagrams clearly highlighting the areas of possible               quartz veins that have not been drill tested 
                         extensions, including the main geological                         adequately due to Company exploration priorities and 
                         interpretations and future drilling areas, provided               budget. 
                         this information is not commercially sensitive. 
 
                                                                                      *    Additional drilling work is scheduled for the near 
                                                                                           future. 
===============  ===============================================================  ==================================================================================== 
 

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

 
 Criteria         JORC Code explanation                                         Commentary 
 Database 
 integrity          *    Measures taken to ensure that data has not been           *    The Kepez resource data is stored in Datashed. Data 
                         corrupted by, for example, transcription or keying             is now being transferred to MX Deposit, the database 
                         errors, between its initial collection and its use             management system to be used by the company, starting 
                         for Mineral Resource estimation purposes.                      in Q3 2021. 
 
 
                    *    Data validation procedures used.                          *    Data was logged onto field sheets which were then 
                                                                                        entered into the data system by data capture 
                                                                                        technicians. 
 
 
                                                                                   *    Data was validated on entry into the database, or on 
                                                                                        upload from the earlier MS Access databases, by a 
                                                                                        variety of means including the enforcement of coding 
                                                                                        standards, constraints and triggers. These are 
                                                                                        features built into the data model that ensure data 
                                                                                        meets essential standards of validity and 
                                                                                        consistency. 
 
 
                                                                                   *    Laboratory data has been received in digital format 
                                                                                        and uploaded directly to the database. 
 
 
                                                                                   *    Original data sheets and files have been retained and 
                                                                                        are used to validate the contents of the database 
                                                                                        against the original logging. 
 
 
                                                                                   *    Zenit Madencilik and Independent consultants Odessa 
                                                                                        Resources Pty Ltd performed a visual validation by 
                                                                                        reviewing drill holes on section and by subjecting 
                                                                                        drill hole data to data auditing processes in 
                                                                                        specialised mining software (e.g. checks for sample 
                                                                                        overlaps etc.). 
 
 
                                                                                   *    Independent consultants Tetra Tech performed a visual 
                                                                                        validation by reviewing drill holes on section in 
                                                                                        Datamine Studio RM mining software. 
 
 
                                                                                   *    Ariana Resources performed validation checks in 
                                                                                        Leapfrog GEO and EDGE. 
 Site visits 
                    *    Comment on any site visits undertaken by the              *    Ariana staff have visited the site on numerous 
                         Competent Person and the outcome of those visits.              occasions, and supervised all drilling, sampling and 
                                                                                        other operations at all times in order to introduce 
                                                                                        appropriate logging, sampling and drilling protocols. 
                    *    If no site visits have been undertaken indicate why 
                         this is the case. 
                                                                                   *    Zack van Coller (BSc Hons.) of Ariana Resources has 
                                                                                        been involved in all work on the project since 2010. 
 
 
                                                                                   *    Ruth Bektas (BSc Hons., CGeol, EurGeol) of Ariana 
                                                                                        Resources is acting as the CP for this study, and has 
                                                                                        been on site during active drilling programmes and 
                                                                                        other exploration activities. 
 
 
                                                                                   *    Ariana Resources, Galata Madencilik and Zenit 
                                                                                        Madencilik field staff are permanently on site. 
 Geological 
 interpretation    *    Confidence in (or conversely, the uncertainty of )         *    Kepez North is part of a 2.5km of dominantly 
                        the geological interpretation of the mineral deposit.           North-trending and bifurcating low-sulphidation (LS) 
                                                                                        style vein system outcropping along ridges. 
 
                   *    Nature of the data used and of any assumptions made. 
                                                                                   *    Interpretations of geological surfaces are derived 
                                                                                        from 3D modelling of drill hole lithological data in 
                   *    The effect, if any, of alternative interpretations on           Leapfrog GEO and EDGE v. 6.0. 
                        Mineral Resource estimation. 
 
                                                                                   *    Interpolation and wireframe modelling of the 
                   *    The use of geology in guiding and controlling Mineral           mineralised zones in Leapfrog EDGE was completed 
                        Resource estimation.                                            using a 0.2g/t Au modelling cut-off grade (CoG). 
                                                                                        Where continuity was not established between sections, 
                                                                                        the strike extrapolation was limited both manually 
                   *    The factors affecting continuity both of grade and              (wireframes) and statistically (interpolations). The 
                        geology.                                                        continuity of the various structures is reflected in 
                                                                                        the Mineral Resource classification. 
 Dimensions 
                   *    The extent and variability of the Mineral Resource         *    Kepez North resource dimensions are 230m wide x 525m 
                        expressed as length (along strike or otherwise), plan           along strike x 230m down dip (X x Y x Z). 
                        width, and depth below surface to the upper and lower 
                        limits of the Mineral Resource. 
 Estimation and 
 modelling         *    The nature and appropriateness of the estimation           *    Two domains were modelled - one for the main vein 
 techniques             technique(s) applied and key assumptions, including             material and one for the mineralised scree material 
                        treatment of extreme grade values, domaining,                   up to 5m from the surface. 
                        interpolation parameters and maximum distance of 
                        extrapolation from data points. If a computer 
                        assisted estimation method was chosen include a            *    Compositing was completed in Leapfrog EDGE using a 1m 
                        description of computer software and parameters used.           best fit routine. Hard domain boundaries were applied 
                                                                                        to both deposit models, which forced all samples to 
                                                                                        be included in one of the composites by adjusting the 
                   *    The availability of check estimates, previous                   composite length, while keeping it as close as 
                        estimates and/or mine production records and whether            possible to the selected intervals of 1m. 
                        the Mineral Resource estimate takes appropriate 
                        account of such data. 
                                                                                   *    A top-cut was not applied to the assay results or 
                                                                                        composites. The maximum gold value is 20.31g/t, which 
                   *    The assumptions made regarding recovery of                      is below the 30g/t Au top-cut determined from 
                        by-products.                                                    statistical analysis of the Kiziltepe-Kepez area as a 
                                                                                        whole. Despite silver showing significantly higher 
                                                                                        values than in other areas of the Kiziltepe Gold 
                   *    Estimation of deleterious elements or other non-grade           Corridor (incl. Kepez), the values did not warrant a 
                        variables of economic significance (e.g. sulphur for            top-cut. 
                        acid mine drainage characterisation). 
 
                                                                                   *    Isotropic search ellipses and ranges were used. 
                   *    In the case of block model interpolation, the block             Variable orientation was used in Leapfrog EDGE to 
                        size in relation to the average sample spacing and              better represent the grade distribution. 
                        the search employed. 
 
                                                                                   *    The block models were constructed using a 2.5 mE by 
                   *    Any assumptions behind modelling of selective mining            2.5 mN by 2.5 mRL parent block size, in relation to 
                        units.                                                          an average of 10-12.5m drill spacing near the vein. 
 
 
                   *    Any assumptions about correlation between variables.       *    Variography was assessed, however the sample 
                                                                                        population is too small to obtain reasonable results 
                                                                                        for use in an Ordinary Kriging estimation. The 
                   *    Description of how the geological interpretation was            variable orientation (dynamic anisotropy) function 
                        used to control the resource estimates.                         was used for estimation of grade into the vein domain 
                                                                                        whilst the orientation of the scree at surface was 
                                                                                        used for estimation into the scree domain. 
                   *    Discussion of basis for using or not using grade 
                        cutting or capping. 
                                                                                   *    The grades were interpolated into the 2.5m x 2.5m x 
                                                                                        2.5m blocks by Inverse Distance Weighting Squared 
                   *    The process of validation, the checking process used,           (ID2) at the parent block scale using a three-pass 
                        the comparison of model data to drill hole data, and            estimation, adopting a multi-pass methodology. 
                        use of reconciliation data if available. 
 
                                                                                   *    The block model is a non-rotated conventional block 
                                                                                        model with no sub-blocking used. 
 
 
                                                                                   *    Check estimates were carried out and the final 
                                                                                        estimate was compared to previous estimates. 
 
 
                                                                                   *    Gold and silver have been estimated as mining 
                                                                                        products. No by-products or deleterious elements have 
                                                                                        been modelled. 
 
 
                                                                                   *    In general, gold and silver show a positive 
                                                                                        correlation with each other. 
 
 
                                                                                   *    A visual validation between drillhole data, composite 
                                                                                        data and block model data was carried out. 
 Moisture                                                                       *    Tonnes have been estimated on a dry basis. 
                    *    Whether the tonnages are estimated on a dry basis or 
                         with natural moisture, and the method of 
                         determination of the moisture content. 
 Cut-off 
 parameters         *    The basis of the adopted cut-off grade(s) or quality      *    Mineralisation has been modelled above a 0.2 g/t Au 
                         parameters applied.                                            cut-off grade and reported above a 1.0 g/t Au cut-off 
                                                                                        grade. Cut-off grade is calculated from assumptions 
                                                                                        on mining and processing cost, metallurgical recovery 
                                                                                        and metals prices. 
 Mining factors 
 or assumptions    *    Assumptions made regarding possible mining methods,                       *    No mining factors (i.e., dilution, ore loss, 
                        minimum mining dimensions and internal (or, if                                 recoverable resources at selective mining block size) 
                        applicable, external) mining dilution. It is always                            have been applied to the original resource. 
                        necessary as part of the process of determining 
                        reasonable prospects for eventual economic extraction 
                        to consider potential mining methods, but the                             *    It is assumed that the deposit will be an open pit 
                        assumptions made regarding mining methods and                                  operation with ore material trucked to the Kiziltepe 
                        parameters when estimating Mineral Resources may not                           Mine carbon in leach (CIL) plant for gold and silver 
                        always be rigorous. Where this is the case, this                               extraction, 14km by road. 
                        should be reported with an explanation of the basis 
                        of the mining assumptions made. 
                                                                                                  *    The following assumptions and mining factors were 
                                                                                                       applied during the pit optimisation stage: 
 
 
                                                                                                 o Price: $55.8/g Au, $0.803/g Ag 
                                                                                                 o Mining recovery: 100% 
                                                                                                 o Mining dilution: 10% 
                                                                                                 o Mining cost: $1.1/t 
                                                                                                 o Process Cost + G&A: $52/t 
                                                                                                 o 40(o) general pit slope angle. The in-pit resource is not 
                                                                                                 sensitive to minor changes to 
                                                                                                 this angle. 
 Metallurgical 
 factors or        *    The basis for assumptions or predictions regarding         *    No metallurgical assumptions have been built into the 
 assumptions            metallurgical amenability. It is always necessary as            resources, though prior studies undertaken at 
                        part of the process of determining reasonable                   EtiGumus showed very high gold and silver recover. 
                        prospects for eventual economic extraction to                   Further metallurgical test work will be carried out. 
                        consider potential metallurgical methods, but the 
                        assumptions regarding metallurgical treatment 
                        processes and parameters made when reporting Mineral       *    The operating Kiziltepe plant (where the Kepez North 
                        Resources may not always be rigorous. Where this is             ore will eventually be processed) has life of mine 
                        the case, this should be reported with an explanation           (LOM) average recoveries of 92.9% and 71.3% for gold 
                        of the basis of the metallurgical assumptions made.             and silver respectively. A Process Recovery of 90% 
                                                                                        and 70% has been applied to the pit optimisation for 
                                                                                        gold and silver, respectively. 
 Environmental 
 factors or        *    Assumptions made regarding possible waste and process      *    The CP is not aware of any known environmental or 
 assumptions            residue disposal options. It is always necessary as             permitting issues on the projects. 
                        part of the process of determining reasonable 
                        prospects for eventual economic extraction to 
                        consider the potential environmental impacts of the        *    Statutory forestry permits have been approved by the 
                        mining and processing operation. While at this stage            Prime Ministry and issued by the Department of 
                        the determination of potential environmental impacts,           Forestry for the Kiziltepe and Kepez areas of the 
                        particularly for a greenfields project, may not                 Kiziltepe Sector. 
                        always be well advanced, the status of early 
                        consideration of these potential environmental 
                        impacts should be reported. Where these aspects have 
                        not been considered this should be reported with an 
                        explanation of the environmental assumptions made. 
 Bulk density 
                   *    Whether assumed or determined. If assumed, the basis       *    An average specific gravity value of 2.6g/cm(3) was 
                        for the assumptions. If determined, the method used,            used for both vein and scree material based on 
                        whether wet or dry, the frequency of the measurements           specific gravity measurements on core samples and 
                  ,                                                                     operational data from the Kiziltepe Mine. 
                        the nature, size and representativeness of the 
                        samples. 
 
 
                   *    The bulk density for bulk material must have been 
                        measured by methods that adequately account for void 
                        spaces (vugs, porosity, etc), moisture and 
                        differences between rock and alteration zones within 
                        the deposit. 
 
 
                   *    Discuss assumptions for bulk density estimates used 
                        in the evaluation process of the different materials. 
 Classification 
                   *    The basis for the classification of the Mineral            *    The Mineral Resource is classified in line with the 
                        Resources into varying confidence categories.                   guidelines of the 2012 JORC code as Measured, 
                                                                                        Indicated and Inferred. The classification is 
                                                                                        determined based on search pass spacing, with 
                   *    Whether appropriate account has been taken of all               increasing confidence with proximity to drill holes. 
                        relevant factors (i.e. relative confidence in 
                        tonnage/grade estimations, reliability of input data, 
                        confidence in continuity of geology and metal values,      *    Measured Mineral Resources have been defined by Pass 
                        quality, quantity and distribution of the data).                1 (up to 40m x 20m x 10m) depending on the vein 
                                                                                        characteristics and drill hole spacing. 
 
                   *    Whether the result appropriately reflects the 
                        Competent Person's view of the deposit.                    *    Indicated Mineral Resources have been defined by Pass 
                                                                                        2 (up to 80m x 40m x 20m) depending on the vein 
                                                                                        characteristics and drill hole spacing. 
 
 
                                                                                   *    Inferred Mineral Resources have been defined in areas 
                                                                                        beyond the indicated search radius to the limits of 
                                                                                        the resource wireframes (up to 200m x 100m x 50m). 
 
 
                                                                                   *    The Measured and Indicated components are further 
                                                                                        constrained to the limits of the pit optimisation 
                                                                                        study. 
 Audits or 
 reviews            *    The results of any audits or reviews of Mineral           *    The ID(2) model was validated against the input drill 
                         Resource estimates.                                            hole composites for the vein and scree models by 
                                                                                        visual comparisons carried out against the composited 
                                                                                        drill hole samples against the modelled block grade. 
 
 
                                                                                   *    A comparison was made between the analytical volumes 
                                                                                        of the resource wireframes and the volumes reported 
                                                                                        through volumetric functions. The difference was less 
                                                                                        than 0.3%. Thus, a high-level confidence is 
                                                                                        appropriate for the model reports. The estimated 
                                                                                        grades were validated against average Au and Ag grade 
                                                                                        statistics for each lode. 
 Discussion of 
 relative          *    Where appropriate a statement of the relative              *    The Mineral Resource estimate at the global level for 
 accuracy/              accuracy and confidence level in the Mineral Resource           the Measured and Indicated Resources based on the 
 confidence             estimate using an approach or procedure deemed                  estimation technique and data quality and 
                        appropriate by the Competent Person. For example, the           distribution is considered to be adequate for the 
                        application of statistical or geostatistical                    classification. 
                        procedures to quantify the relative accuracy of the 
                        resource within stated confidence limits, or, if such 
                        an approach is not deemed appropriate, a qualitative       *    Inferred Resources have a lower level of confidence 
                        discussion of the factors that could affect the                 outside of this range. 
                        relative accuracy and confidence of the estimate. 
 
 
                   *    The statement should specify whether it relates to 
                        global or local estimates, and, if local, state the 
                        relevant tonnages, which should be relevant to 
                        technical and economic evaluation. Documentation 
                        should include assumptions made and the procedures 
                        used. 
 
 
                   *    These statements of relative accuracy and confidence 
                        of the estimate should be compared with production 
                        data, where available. 
===============  ============================================================  ============================================================================= 
 

NOTE: Sections 4 and 5 are not relevant to this work as no reserves are being estimated and there is no estimation or reporting of diamonds or other gemstones in this project.

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