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Ariana Resources completes Tavsan scoping study, pre-tax IRR 80%

Ariana Resources Plc (AAU:AIM)

The completion of a scoping study for the Tavsan Project in Turkey reveals excellent results. Tavsan is part of the Red Rabbit JV with Proccea Construction Co. and will be 50% owned by Ariana once mine construction at the Kiziltepe Sector is completed in Q4 2016. The Tavsan project is planned to be a satellite operation to the established Kiziltepe project which will absorb the majority of the company’s corporate overheads.

Dr. Kerim Sener, Managing Director, commented: “This is an excellent result which reinforces our view that the Tavsan Sector will become a valuable additional source of revenue within the context of the Red Rabbit Joint Venture with Proccea Construction Co. The addition of Tavsan to our mining schedule will enable the Company the opportunity to increase production from approximately 20,000 oz pa to 50,000 oz pa between two operations”.

Tavsan scoping study highlights:

  • NPV(8%) US$41.9M.
  • Payback 1.1 years.
  • Pre-tax IRR 80% at a gold price of US$1,250/oz.
  • Life of mine gold-equivalent cash-cost of US$559-630/oz
  • Life of mine production, approximately 30k oz of gold per annum over 4 years; with potential to increase the resource with drilling.
  • Capital expenditure US$20 million (±30% estimated accuracy) using a low strip ratio, open-pit mine and heap-leach.
  • Planned as a semi-stand-alone operation to Kiziltepe, potentially sharing much of the same infrastructure including the gold stripping and carbon regeneration facility, and gold room.
  • Pre-feasibility scheduled for 2017.

On going work program for Tavsan will consist of drilling and further metallurgical test-work.

Processing to include silver along with the gold recovered which exceeds economic cut-off. The silver contained with the mineralisation adds credits as an output but is not economic on its own. Of approximately 136k oz of gold input to the heap leach, approximately 109k oz Au is recovered at an 80% recovery rate using an approximated cut-off grade of 0.96 g/t Au, for the base case gold price of US$1060/oz.

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