LONDON (ShareCast) - (Sharecast News) - Europe-focusses exploration and development company Ariana Resources announced operating results for the quarter ended 30 September for the Kiziltepe Mine in Turkey on Monday.


The AIM-traded firm said Kiziltepe is part of the Red Rabbit joint venture with Proccea Construction, and is 50% owned by Ariana through its shareholding in Zenit.

It reported gross quarterly revenue of $11.4m at an average realised gold price of $1,915 per ounce, against an average revenue per gold ounce of $2,219, due to silver credit.

Production and sales totalled 5,125 ounces of gold during the quarter, with operating cash costs expected to come in at $352 per ounce.

Ariana said lower costs for the period were partially due to a decline in the exchange rate, and the sale of silver stock.

Operational mill availability was running at 100%, and utilisation at 99% during the period.

A total of 57,302 tonnes of ore was milled during the period, at an average head grade of 2.63 grams of gold per tonne.

The company said the process recovery of gold remained "high" at 94.2%.

"Third quarter 2020 gold production not only exceeded the prior quarter by nearly 10% and enabled full year production guidance to be maintained into the current quarter, it also showed a 15% increase in revenue for the period," said managing director Dr Kerim Sener.

"While the quarter marked the end of production from the high-grade Arzu South open-pit, operations have continued exceedingly well at the Arzu North and Derya areas.

"In particular, open-pit material movements have remained very high and the joint venture has built up a very large ore stockpile which provides for over ten months of mill feed."

Dr Sener said the period also concluded with the completion of the final stage installation of the tailings dam liners.

As a result, development of the mine site was now fully complete in terms of the infrastructure according to the feasibility design.

"However, it is the intention of the JV to continue operational enhancements at the site and work is now underway on an increase in operating capacity up to about 500,000 tonnes of ore per annum.

"This will be particularly important as we look to lower grade sources of ore for the plant.

"The potential at Kiziltepe for larger tonnage, lower grade orebodies is evident already based on our experience of exploring and now mining of the Arzu North and Derya areas."

The mine was currently producing over 200% more gold in those areas than was projected in the mine plan, Dr Sener noted.

"We are confident that further ore will be defined in this area with future drilling programmes.

"These efforts are part of our drive to ensure that Kiziltepe remains an efficient operation, capable of producing gold at the lowest possible cash costs."

Dr Sener said the emphasis on operating margin represented one of the guiding principles on which the joint venture intended to continue developing.

"The current precious metal pricing environment only adds to the fundamental profitability of the Kiziltepe operation."

At 1239 GMT, shares in Ariana Resources were up 7.2% at 5.36p.

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