Ariana Resources shares rise on mineral resource estimate update

Exploration and development company Ariana Resources announced an update of its JORC-compliant mineral resource estimate for the Kiziltepe Mine on Thursday.

The AIM-traded firm said Kiziltepe is part of the Red Rabbit joint venture with Proccea Construction, and is 50% owned by Ariana through its shareholding in Zenit Madencilik.

It reported an increase in the global undepleted mineral resource estimate to around 321,000 ounces of gold, and 5.03 million ounces of silver contained metal on six main veins, including Kepez North and West.

The resource update represented a 25% increase over the previous resource estimate, announced in May 2017, and a 72% improvement over the feasibility study resource, on an undepleted gold-only basis.

In-situ depleted measured and indicated mineral resources stood at 2.01 million tonnes 2.51 grams of gold and 43.49 grams of silver per tonne, for 154,000 ounces of gold and 2.73 million ounces of silver.

It added that in-situ depleted inferred mineral resources added a further 1.01 million tonnes at 2.23 grams of gold and 29.58 grams of silver per tonne, for 73,000 ounces of gold and 0.96 million ounces of silver.

Depletion to date included 70,684 ounces of gold and 738,320 ounces of silver, produced from the Kiziltepe Mine through to the end of the first quarter of 2020, in addition to stockpiled ore of around 130,000 tonnes, awaiting processing.

Ariana said the resource increase continued to support the potential for a “significantly extended” mine life at Kiziltepe, based on current throughput rates, should the resources be converted to reserves.

It added that several subsidiary veins comprised a “substantial” JORC exploration target, which would be drill-tested in the future with the aim of converting to resources.

“Following the drilling in 2019, the company commenced a thorough review of its geological models and undertook revisions to its mineral resource estimate for the Kiziltepe Mine,” said managing director Dr Kerim Sener.

“On completion of the internal review, independent consultants, Coffey, completed an undepleted and depleted mineral resource estimate, so that comparisons can be drawn to previous estimates.”

Dr Sener said the company was “very pleased to note” that the revised estimate supported an increase in expected life-of-mine to at least 2026, using a historical resource-to-reserve conversion ratio of 60%, and at a maintained throughput rate of 200,000 tonnes per annum.

“This also excludes possible conversion of any inferred resources and exploration targets to future measured and indicated resources or reserves.

“We will continue to work on increasing the life of mine through additional open pit and potential underground extensions.”

Dr Sener said the firm was also “pleased” to report that it was beginning a new diamond drilling programme, which was designed to follow up on the results of its recent exploration programme at Arzu South, which had targeted the potential for underground extensions to the current resource.

“As this programme is being conducted in the midst of a pandemic, safety of our personnel and that of our contractors comes first, and early termination of the programme is consequently possible.

“We will keep the market appraised of our progress, as appropriate.”

At 1630 BST, shares in Ariana Resources were up 11.94% at 3.47p.