Ariana Resources reports 'superb' year at Kiziltepe

The AIM-traded firm said that exceeded its full-year production guidance of 25,000 ounces of gold by 2,985 ounces, and represented an increase of around 12%.

It 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 record gross quarterly income of $12.78m at an average realised gold price of $1,484 per ounce for the fourth quarter, against an average revenue per gold ounce of $1,736 due to silver credit.

Ariana reported the production and sale of 7,318 ounces of gold during the quarter ended 31 December, and said its operating cash costs for the three months were estimated to be $500 per ounce.

It said the operational mill was running at 99% availability, and utilisation at 97% during December.

A total of 54,735 tonnes of ore was milled during the period ending 31 December, at an average head grade of 4.42 grams of gold per tonne, while its process recovery of gold remained “high” at 92%.

“The performance of the Kiziltepe Mine remains fully in line with expectations and these record-breaking results for the fourth quarter represent a fitting end to an operationally superb year,” said managing director Kerim Sener.

“The sustained increase in gold price during the period contributed significantly to revenue, while operating cash cost per ounce remained low; mainly due to increased by-product silver credit.

“It is important to note that these strong results are despite the expected reduction in grade during the period as operations on the high-grade Arzu South pit were decreased and gradually replaced by production from the lower-grade Arzu North pit.”

Dr Sener said the Kiziltepe Mine had been producing for around three years, and was expected to deliver about 20,000 ounces of gold equivalent per annum, on average, over eight years.

“We are excited by the resource growth opportunities we have identified recently at Kiziltepe and the progress being made at Tavsan, which represents the opportunity to deliver an additional 30,000 ounces of gold per annum to the Red Rabbit joint venture, targeting an overall production of 50,000 ounces of gold per annum.

“As at the end of the quarter, 87% of the joint venture construction capital loan of $33m has been repaid, with the remaining balance to be completed in April 2020.

“Intercompany loan repayments from the joint venture to our wholly-owned subsidiary, Galata Madencilik, have totalled $2m during the year ended 31 December.”

At 1011 GMT, shares in Ariana Resources were up 6.06% at 3.5p.