Drat and double drat. There I was just the other day thinking that shares in AIM-listed gold (and silver) producer in Turkey Ariana Resources (AAU) were incredibly cheap at 4.4p and contemplating a purchase to add to my holding – but then other things got in the way and I didn’t add to my over-sized holding. And we now have another round of drilling results, this time from Arzu Central, and the stock is up 6% to 4.65p to buy. Somebody obviously likes the news…
And the news was good, with highlighted intercepts of 10.8m @ 2.0 g/t gold and 32.8 g/t silver, 8.5m @ 2.2 g/t gold and 57.2 g/t silver and 2.0m @ 8.4 g/t gold and 50.0 g/t silver. More importantly, we learn that: The latest drilling results from Kiziltepe demonstrate unequivocally that the Arzu and Derya vein systems are interlinked without interruption through the Arzu Central area, which is largely obscured beneath cover rocks. We have long suspected that the vein system at Kiziltepe was not limited to the areas being mined and these results confirm that the Arzu structure itself is at least 2.5km long, with only about 50% of that strike length having been mined so far. Likewise, the Derya structure clearly represents a splay off the main NW trend of the Arzu structure, which interestingly appears to carry typically higher grades than Arzu North.
Given that the higher-grade Arzu South has been the main source of ore (now depleted), this suggests to me that the higher-grade resource does indeed continue and if only about half of it has been mined so far then we should see higher grades being delivered to Kiziltepe once again in due course. And given that the mine commenced production back in 2017, the prospect of this suggests the mine has plenty more years to run. And there is more: What is immediately apparent from our latest understanding is that there is an area of not fully quantified resource potential in the area encompassing Arzu North, Derya and the Ceylan veins. We have named this important resource development area 'The Parallelogram' and this will become the focus of further resource development work, including further drilling, in the coming months. We will be working on a revised resource estimate for Kiziltepe accordingly.
This suggests there may be a further discovery to be made: roll on the revised resource estimate! We already knew that there was enough ore to see the mine through to 2025, and the recent revised resource estimate for Kepez North suggests at least another year’s mining to add to that. The latest news could potentially add a substantial further increase – all good news as we await confirmation that the expanded capacity being installed at the Kiziltepe mine is all up and running. With also news on the second mine at Tavsan due any time and drilling at Salinbas ongoing which should eventually lead to a third, as well as assets in Cyprus and Kosovo, and a tasty cash-pile sitting in the bank things look very well set for Ariana going forwards. And of course there is that special dividend being ponied up in three parts over the next year or so, with ex- and payment dates due imminently. At 4.65p I think Ariana’s shares are dirt cheap and despite a general sense of market gloom towards gold miners I still rate the stock as a BUY at up to 5.5p, retaining a target of 7.5p for now – but with a resource upgrade clearly on the way, that target may be too conservative.
Filed under: Ariana Resources, Abingdon Health, Ian Westbrook, Zoetic, Advanced Oncotherapy
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