Progress towards mine construction at Kiziltepe

4 August 2015
AIM: AAU

PROGRESS TOWARDS MINE CONSTRUCTION AT KIZILTEPE

Ariana Resources plc ("Ariana" or "the Company"), the Anglo-Turkish gold exploration and development company focused on Turkey, is pleased to provide a progress update on the Kiziltepe Sector of the Red Rabbit Gold Project in western Turkey ("Red Rabbit") which is being developed in partnership with Proccea Construction Co. ("Proccea").

Highlights:

• Forestry permit payments have been made totalling US$0.96 million to the Department of Forestry.

• Turkiye Finans Katilim Bankasi A.S. has released the first tranche of funds to cover initial costs of project development.

• Land acquisitions continuing with majority of critical land now acquired.

• Final negotiations on major Turkish supplied plant components has commenced and long lead orders are being placed. 

• Final mining contractor quotes received and contractor to be finalised shortly.

• Kiziltepe mine construction expected to commence shortly, on track to deliver first gold pour in H2 2016.

Dr. Kerim Sener, Managing Director, commented:

"Progress on the construction stage of the project has been continuing at pace and we are now close to the mobilisation of construction crews to site.  Project funding through Turkiye Finans Katilim Bankasi A.S. has now been initiated and significant early expenditure, notably for the forestry permits, has now been completed.  Critical freehold land for the project has largely been acquired and there are no access impediments to the mine development area for construction to commence. 

"We look forward to providing further guidance on construction start-up and the project development timeline in due course as we progress towards our first gold pour in H2 2016." 

Project Update

Statutory payments have been made by Zenit Madencilik San. ve Tic. A.S. ("Zenit") to the Department of Forestry totalling TL2.66 million (US$0.96 million) have been made in order to secure the rights of the JV company, Zenit, to operate in the designated forestry permit areas.  All legal procedures associated with the felling of trees across the project area have now been completed.  The Department of Forestry is in the process of marking up trees to be felled, including on areas of land now held 100% by the JV company.  Due to the size of the area involved the process of marking up and felling is expected to take up to one and a half months. 

Turkiye Finans Katilim Bankasi A.S. has released the first tranche of funds to satisfy project cash-flow requirements up to the end of July 2015.  These funds are being utilised for engineering and project management, equipment orders and acquisitions and for initial site works.  The funding plan will be completed within ten months from project start-up, coming to an end in May 2016, for a total of US$31.9 million. 

The JV company has continued to acquire freehold land within the footprint area of the mine.  Almost all critical land has now been acquired with a small number of additional parcels currently in the process of being acquired.  Further advancement of the project is no longer contingent on the acquisition of the remaining surface rights and the project is now clear to proceed in to construction. 

Final negotiations on major Turkish supplied plant components has commenced and other long lead orders are being placed with foreign suppliers.  Final mining contractor quotes have been received and a contractor is to be decided upon shortly.  Based on the current development schedule and expected equipment delivery times, it is anticipated that completion of construction will be achieved in early H2 2016.

Contacts:

Editors' note:

About Ariana Resources:

Ariana is an exploration and development company focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey.  The Company is developing a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with Eldorado Gold Corporation in north-eastern Turkey.  Eldorado owns 51% of this joint venture and are fully funding all exploration work on the JV properties, while Ariana owns 49%.  The total resource inventory within this JV is 1.09 million ounces of gold.

The Company's flagship assets are its Kiziltepe and Tavsan gold projects which form the Red Rabbit Gold Project.  Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey.  This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  These core projects, which are separated by a distance of 75km, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co.  The total resource inventory at the Red Rabbit Project stands at 475,000 ounces of gold equivalent. 

Beaufort Securities Limited and Loeb Aron & Company Ltd. are joint brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.

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