Ariana Resources announces interim results

Financial highlights

• Ariana's share of profits from the Kiziltepe Mine, part of the joint venture (Zenit or JV), in the 6 months to June 2020 amount to £3 million, compared to £7.9 million in the year ended December 2019.
• Profit before tax of £2.2 million recorded for the period, with operating costs in line with expectations and the prior year.
• Profit for the period of £1.9 million reflects a withholding tax charge on maiden dividend distributions of £1.6 million which were paid in March 2020 from Ariana's operating subsidiary in Turkey to its intermediate (BVI) holding company.

Operational highlights

• Gold production guidance for 2020 for the Kiziltepe Mine is approximately 18 000 oz gold (Au) (gross to the JV) is expected to be met at the end of 4Q20.
• Gold production for 1H20 achieved 9808 oz Au (1H19: 13 734 oz Au); reduced output due to the planned progression of mining to lower grade areas.
• During the period, 100% of Zenit's US$33 million construction capital loan for Kiziltepe was repaid to Turkiye Finans Katilim Bankasi A.S.
• Ariana completed its initial earn-in on Cyprus-focused Venus Minerals Ltd to 9.24% and, following further expenditure, has earned an entitlement to 12%, post-period end.
• New independent JORC resource estimates completed for Kiziltepe, Kizilcukur and Tavsan, increasing the total depleted resource inventory across the wider Red Rabbit Project Area to just over 500 000 oz of Au.
• An exploration drilling campaign, which commenced during the period at the Arzu South vein, identified a new high-grade vein which will become the focus of further work.

Michael de Villiers, Chairman, commented: "1H20 was marked by extraordinary global developments, which will undoubtedly leave their mark on society for many years into the future. Despite this, our business has continued to progress positively under the conditions imposed by the Coronavirus pandemic and we are now drawing on this experience to further strengthen and build the company's strategy.

"During the period, both our operating mine and our ongoing exploration and development activities have continued to yield positive results. While we remain on track to produce approximately 18 000 oz (gross to the JV) of gold for the year, at an average operating cost in the region of US$580/oz, exploration at Kiziltepe has continued to demonstrate the opportunities to expand the resource and to identify new mining areas.

"Significantly, the period saw the end of repayments against Zenit's US$33 million construction capital loan in April 2020. Full repayment of this loan has in turn underpinned the financial strength of our business, through cash flow arising from the repayment of debtor balances and dividends, enabling us to support various exploration and development programmes across our Turkish portfolio and the diversification of the portfolio outside of Turkey.

"In particular we are pursuing an expanded joint venture with our current partners, Proccea Construction Co., along with a potential new partner, Ozaltin Holding A.S. The Salinbas Gold Project, which we believe has the potential to become a significant new gold mine producing at a rate of 50 000 oz/yr over a 10-year life of mine, is the focus of this enhanced JV.

"Meanwhile, commodity market conditions have not been this favourable for many years, with the gold price having risen to a high of US$1782/oz at the end of the period. Under the current conditions of global uncertainty and with yet more unprecedented central bank financial action, we expect that the gold market will remain strong for some time to come.

"As always, I take this opportunity to thank the Ariana and joint venture teams for their unwavering efforts during a period of heightened uncertainty. These efforts have been reflected in a share price which climbed 56% during the period; a momentum which was maintained into the current period."

Read the article online at: https://www.globalminingreview.com/finance-business/30092020/ariana-resources-announces-interim-results/