Ariana Resources plc (UK) – Red Rabbit JV Update

Red Rabbit JV Update
18th February 2010

AIM / PLUS Markets: AAU

RED RABBIT JV UPDATE

Ariana Resources plc (“Ariana” or “the Company”), the gold exploration and development company focused on Turkey is pleased to announce significant progress towards production on its proposed joint venture (“JV”) with Proccea Construction Co. (“Proccea”) on the Red Rabbit Project in western Turkey.

Highlights

  • A positive project scoping study and an environmental scoping assessment have been completed for the Kiziltepe sector
  • Proccea has completed preliminary designs for the processing plant
  • Reverse Circulation (“RC”) resource drilling programme to commence on two satellite veins: Banu and Derya
  • Feasibility study and Environmental Impact Assessment (EIA) to commence

Dr. Kerim Sener, Managing Director, commented:

“The Company is continuing to advance Red Rabbit according to plan. The project and environmental scoping have been completed and we are now positioned to initiate a feasibility study and environmental impact assessment. We are expecting to conclude these studies during the last quarter of 2010 and to begin mine and plant construction in quarter one 2011.”

Mr. Deniz Aybars, Managing Director, Proccea, commented:

“We are pleased with the progress of work on Red Rabbit and are committed to completing the feasibility study and environmental impact assessment of the project. We are in the process of finalising our JV agreement with Galata Madencilik and we look forward to cementing our future partnership.”

Current Progress

The Company and its future JV partner, Proccea, have continued to develop several core aspects of the Red Rabbit project. While the shareholders agreement is under review, the partners are actively advancing studies on the Kiziltepe sector of the project, and are planning to proceed with an RC drilling programme on certain veins to enable the inclusion of current Inferred resources in the Indicated category.

The Company has completed a positive scoping study of the project based on an envisaged production rate of 150,000 tonnes of ore per annum over a mine life targeted to be greater than 5 years. The scoping study estimates a project cash cost of between US$350 and $400 per ounce. The expected process route is Carbon-in-Leach (CIL) but the Merrill-Crowe gold separation technique is also under consideration. Based on current resource estimates, one central pit is envisaged on Arzu South, with satellite pits at Banu, Derya, Arzu North and Kepez (Figure 1). The overall ratio of waste to ore at the Kiziltepe sector is targeted between 8:1 and 12:1. A preliminary site plan, including the position of the pits, processing plant, waste rock dump and tailings storage facility has been prepared.

A revised geological model for the mineralisation at Kiziltepe (including ‘vein’ and ‘halo’ types) has been completed, which will be used as part of a revised formal resource estimate following the completion of additional RC drilling now planned at the Banu and Derya veins. Additional drilling is required on these veins to upgrade them to the Indicated category. Including currently Inferred resources, the Company is targeting in its revised geological resource model a total resource of vein and halo mineralisation at a 1 g/t cut-off as being between 1.4 Mt and 1.7 Mt at gold grades between 2.5 and 3.5 g/t and silver grades between 50 and 70 g/t. The average in-pit resource grade is expected to be 3.5 to 4.5 g/t Au and 50 to 70 g/t Ag.

Proccea and its division, CH Consultants, have completed preliminary design drawings for the Adsorption-Desorption-Recovery (ADR) facility for gold recovery. The current design is based on a 40,000 oz per annum production rate and will be used for capital cost estimation purposes during the feasibility study. The ADR component of the plant has been designed as a mobile unit so that it may be moved to the Tavsan sector following the conclusion of mining at the Kiziltepe sector. Proccea has also purchased an Atomic Absorption Spectrometer (AAS) which will form the core of an in-house laboratory for advanced testwork.

SRK Consulting in Turkey has completed its environmental scoping study and reported positively to both Ariana and Proccea. Proposals have been requested from several international consulting firms to complete the Feasibility Study (“FS”) and the Environmental Impact Assessment (“EIA”). By the 1st March 2010, Ariana and Proccea will have jointly selected the consulting group(s) responsible for the FS and EIA. It is expected that both the FS and EIA will then commence immediately and will be completed in parallel during Q4 2010. Funding of the FS and EIA will be undertaken by Proccea as part of its earn-in on the Red Rabbit Project.

Derya

Arzu North

Arzu South

Banu

N

About Proccea

Proccea Construction Co. (www.proccea.com) is an integrated construction firm specialising in turn-key solutions for a variety of business sectors ranging from the development of gold processing plants to designing and building major hotels. The mining service is provided by a business division of Proccea named CH Engineering & Consultancy (“CH”). CH provides a range of services to the mining industry, including the design of mining equipment and processing plants, manufacturing installation, commissioning, start-up and staff training for gold and silver extraction in the mining industry (www.chconsultants.com).

CH provides the installation and technical services for such gold mining processes as heap leach, CIL and CIP design and operations. CH has wide experience of designing and commissioning gold and silver processing plants. In Turkey this has included the Kişladag gold mine (Eldorado Gold), Copler gold mine (Anatolia Minerals), Mastra gold mine (Koza Gold) and the Gümüşköy silver mine (Eti Gümüş). Internationally, CH processing plant commissions have included the Zarcan gold mine in Iran, the Knelson gold mine in Kazakhstan, the Amesmessa gold mine in Algeria, the Kitila gold mine in Finland, the Minera Triton gold mine in Argentina and the Maaden gold mine in Saudi Arabia. CH has the technical support of the internationally renowned Summit Valley Equipment and Engineering firm based in Utah, U.S.A.

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 exploring 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 European Goldfields Limited in north-eastern Turkey.

The Company’s flagship assets are its Sindirgi and Tavsan gold projects. Both projects 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. The total resource inventory of the Company stands at 401,000 ounces of gold equivalent.

Loeb Aron & Company Ltd. and Alexander David Securities Limited 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.

HUGIN /Source: Ariana Resources plc /LSE: AAU /ISIN: GB00B085SD50

You may also like...