How it’s doing

In February, Ariana Resources PLC (LON:AAU) said its Kiziltepe mine in Turkey exceeded its production guidance in 2019.

The mine, which is part of the Red Rabbit joint venture (JV) with Proccea Construction, produced 27,985 ounces of gold in 2019, which was comfortably above guidance of 25,000 ounces (oz) and up by around 12% on 2018.

The Kiziltepe Mine has been producing for about three years and was expected to deliver roughly 20,000 oz gold equivalent per annum, on average, over eight years.

Gross income for the year was US$45.1mln, with the fourth-quarter turning out to be a record one, with income of US$12.78mln at an average realised gold price of US$1,484 an ounce.

Operating cash costs for the final quarter of 2019 were estimated at US$500 per ounce.

Ariana said the process recovery of gold remains high at 92%.

 

What’s next

The company has forecast that 2020 gold production at its Kiziltepe mine will be around 30% above its feasibility plan for this stage of the operational mine life.

The firm said gold production for the year will be around 18,000 ounces of gold with an average grade expected to be at 2.5 grams per tonne.

Throughput to the mill, meanwhile, is expected to be around 205,000 tonnes, a 37% increase over the feasibility plan.

 

What the boss says: Kerim Sener, Managing Director

Ariana’s managing director, Kerim Sener, said that the recent fall in the price of oil will result in a “positive effect” on the company’s mining and processing costs, while gold prices had continued to remain at levels “substantially higher” than forecast.

“These, along with other positive trends including the declining value of the Turkish Lira, reinforce the economics of the Kiziltepe operation”, he added.

Sener also said that the firm was taking “extensive precautions” against coronavirus and was “not anticipating disruption” to production at the site.

 

Inflexion points

  • In mid-February, the company received results of due diligence drilling at the Salinbas gold project showing “good correlations” with its own drilling results at the site

  • Annual production rises to 50koz/year (from 25koz/year) following the hoped-for commencement of mine development at Tavsan during 2020

  • LIcences at Salinbas renewed until 2024 with mining permit area at Ardala extended