Ariana Resources plc December 2017 Ariana Resources PLC Dec 2017 - - PowerPoint PPT Presentation

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Ariana Resources plc December 2017 Ariana Resources PLC Dec 2017 Disclaimer 2005 (as amended) (the Financial Promotion Order ): Investment Professionals (as defined in Article The content of information contained in these slides and the


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SLIDE 1

Ariana Resources PLC – Dec 2017

December 2017

Ariana Resources plc

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SLIDE 2

Ariana Resources PLC – Dec 2017

Disclaimer

The content of information contained in these slides and the accompanying verbal presentation (together, the “Presentation”) has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”). Reliance upon this Presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. If any person is in any doubt as to the contents of this Presentation, they should seek independent advice from a person who is authorised for the purposes of FSMA and who specialises in advising in investments of this kind. This Presentation is being supplied to you solely for your information. This Presentation has been prepared by, and is the sole responsibility of, Ariana Resources plc (the “Company”). The directors of the Company have taken all reasonable care to ensure that the facts stated herein are true to the best

  • f their knowledge, information and belief.

This Presentation does not constitute, or form part of, an admission document, listing particulars or a prospectus relating to the Company, nor does it constitute, or form part of, any offer or invitation to sell

  • r issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company nor

shall it or any part of it, or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into any contract therefor. No reliance may be placed for any purpose whatsoever on the information contained in this Presentation or on its completeness, accuracy or fairness thereof, nor is any responsibility accepted for any errors, misstatements in, or omission from, this Presentation or any direct or consequential loss however arising from any use of, or reliance on, this Presentation or otherwise in connection with it. By accepting this Presentation you confirm, represent and warrant that you have consented to receive information in respect of securities of the Company and other price-affected securities (as defined in the Criminal Justice Act 1993 (“CJA”) which makes you an “insider” for the purposes of Part V of the CJA, and you agree not to deal in any securities of the Company until such time as the inside information (as defined in the CJA) of which you have been made aware has been made public for the purposes of the CJA and until such time that the Placing has been publicly announced by the Company, or the Company decides not to proceed with the Placing. This Presentation may not be reproduced or redistributed, in whole or in part, to any other person, or published, in whole or in part, for any purpose without the prior consent of the Company. The contents

  • f this Presentation are confidential and are subject to updating, completion, revision, further verification

and amendment without notice. The Presentation is being distributed on request only to, and is directed at, authorised persons or exempt persons within the meaning of FSMA or any order made thereunder or to those persons falling within the following articles of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Financial Promotion Order”): Investment Professionals (as defined in Article 19(5)) and High Net Worth Companies (as defined in Article 49(2)). Persons who do not fall within either of these definitions should not rely on this Presentation nor take any action upon it but should return it immediately to the Company. This Presentation is exempt from the general restriction in section 21 of FSMA relating to the communication of invitations or inducements to engage in investment activity on the grounds that it is made only to certain categories of persons. Neither this Presentation nor any copy of it should be distributed, directly or indirectly, by any means (including electronic transmission) to any persons with addresses in the United States of America (or any of its territories or possessions) (together, the “US”), Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland, or to any corporation, partnership or other entity created or

  • rganised under the laws thereof, or in any other country outside the United Kingdom where such

distribution may lead to a breach of any legal or regulatory requirement. The recipients should inform themselves about and observe any such requirements or relationship. The Company’s ordinary shares have not been, and are not expected to be, registered under the United States Securities Act 1933, as amended, (the “US Securities Act”) or under the securities laws of any

  • ther jurisdiction, and are not being offered or sold, directly or indirectly, within or into the US, Canada,

Japan, Australia, the Republic of South Africa or the Republic of Ireland or to, or for the account or benefit of, any US persons or any national, citizen or resident of the US, Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland, unless such offer or sale would qualify for an exemption from registration under the US Securities Act and/or any other applicable securities laws. Forward-looking Statements This Presentation and/or documents referred to in it contain forward-looking statements. These statements relate to the future prospects developments and business strategies of the Company and its subsidiaries (the “Group”). Forward-looking statements are identified by the use of such terms as “believe”, “could”, “envisage”, “estimate”, “potential”, “intend”, “may”, “plan”, “will” or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements contained in this Presentation are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialises, or if underlying assumptions prove incorrect, the Group’s actual results may vary materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward-looking statements. These forward-looking statements speak only as at the date of this Presentation. No undertaking, representation, warranty or other assurance, expressed or implied, is made or given by

  • r on behalf of the Company or any of its directors, officers, partners, employees or advisers or any
  • ther person as to the accuracy or the completeness of the information or opinions contained herein and

to the extent permitted by law no responsibility or liability is accepted by any of them for any such information or opinions. Notwithstanding the aforesaid, nothing in this paragraph shall exclude liability for any representation or warranty made fraudulently.

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Ariana Resources PLC – Dec 2017

Exploration, Development, Production

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Exploration:1Moz Salinbas Project represents a major opportunity for growth within a highly prospective region which also hosts the 4Moz Hot Maden project Development: Tavsan represents revenue generative upside targeting 50,000 oz Au p.a. from the Red Rabbit JV Production: Red Rabbit JV revenue expected at >US$ 5M per quarter at current gold price from the Kiziltepe gold mine

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Ariana Resources PLC – Dec 2017

Turkey

Europe’s Largest Gold Producer

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1 2

1. DEVELOPMENT: Salinbas Project Area 2. PRODUCTION: Red Rabbit Project Area 10 active gold mines

  • inc. Ariana’s 50%-owned Kiziltepe Mine:

Red Rabbit Gold Project

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SLIDE 5

Ariana Resources PLC – Dec 2017

Salinbas Project

Exploration & Development

Resource drilling at Salinbas using the Ariana drill rig

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Ariana Resources PLC – Dec 2017

Hot Gold Corridor

A Multi-million Ounce Goldfield

  • Major goldfield containing multi-million ounce gold-

copper projects

  • 4Moz Hot Maden Project: 15km south of Ariana’s

Salinbas project and now owned 30% by Sandstorm Gold Ltd. after US$175m deal

  • c.1Moz Au equiv. JORC resource at Salinbas/Ardala
  • Project area includes the Salinbas Au-Ag deposit, the

Ardala Cu-Au-Mo porphyry and the Hizarliyayla Au-Ag system among others

  • Salinbas: 10Mt @ 2.0 g/t Au and 10.2 g/t Ag
  • Ardala: 16Mt @ 0.6 g/t gold, with copper (0.22%)

and molybdenum (0.014%) zones

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Ariana Resources PLC – Dec 2017

Salinbas Project

+1Moz JORC Resource

  • Company transformative &

substantial exploration upside

  • Scoping study* completed on

Salinbas deposit alone; further revisions underway

  • c.US$9 million spent by previous

JV with Eldorado Gold before project acquisition

  • Outright acquisition from Eldorado

Gold in 2017

100% Ariana Resources

7 Mine life: 10 years C1 Cash Costs: US$770/oz Processing: CIL Production Rate: 50,000 oz Au p.a. JORC Resource: 9.96Mt for 650Koz Au (Inferred & Indicated) In-pit grade 2.0 g/t Au; 10.2 g/t Ag Net- present value (8%): US$108M Internal Rate of Return: 28% Payback (initial US$53M capex) : 3.3 years Royalty: State Right and 2% NSR to Eldorado Gold

*Pre-tax case at US$1,250/oz, as at April 2015 Scoping by Auralia Mining Consulting Pty. Ltd. (April 2015)

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SLIDE 8

Ariana Resources PLC – Dec 2017

Exploration Update

Game-changing potential

  • Partially explored project area with much of

the Hot Gold Corridor (“HGC”) contained within project licences

  • Recent exploration resulted in the definition
  • f a number of high priority targets:
  • Significant multi-element anomalism

identified at Ardala North indicating strong potential for gold-silver and base- metal mineralisation

  • Several untested targets associated with

Au-Cu-Mo porphyries in the Ardala area

  • Potential new zones of “Salinbas-type”

epithermal Au-Ag mineralisation

  • Exceptional potential to host multi-

million ounce gold deposits and significant base-metal systems

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SLIDE 9

Ariana Resources PLC – Dec 2017

Exploration Update

Ardala North

  • Potential for sizable multi-element

mineral systems to occur in the vicinity

  • f the Ardala Porphyry which itself is

significantly enriched in gold:

  • 135 m @ 2.28g/t Au + 0.29% Cu +

113g/t Mo

  • 355 m @ 0.57 g/t Au + 0.31% Cu +

150 g/t Mo

  • 1.4 x 0.2km significantly anomalous

zone containing exceptional rock-chip assay results:

  • 11.20 g/t Au + 131 g/t Ag + 3.26% Cu +

0.24% Pb

  • 4.21 g/t Au + 815 g/t Ag + 3.80% Cu +

10.26% Pb

  • 4.35 g/t Au + 64 g/t Ag + 1.15% Cu +

0.25% Pb.

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Ariana Resources PLC – Dec 2017

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SLIDE 11

Ariana Resources PLC – Dec 2017

Red Rabbit JV

Gold & Silver Production

First Gold Pour at Kiziltepe, March 2017

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Ariana Resources PLC – Dec 2017

Kiziltepe Gold-Silver Mine

Economic Overview

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Pre-tax case at c.US$1,300/oz, as at June 2013 DFS by Tetra Tech, figures calculated on a 100% equity basis excluding debt finance charges.

Location Sindirgi, 130km north-east of Izmir, western Turkey JORC Reserves & Resources 1.1M tonnes for 140,000oz Au eq. (proven & probable) 338Koz global resource (3 May 17 update) Processing CIC/CIL Mine Life 8 years based on DFS (11.5 yr potential) Production Rate 20,000 oz Au eq. p.a. (target c.25,000 oz p.a.) Processing Capacity 150,000 tonnes of ore p.a. (targeting 180,000 t.p.a) In-pit grade 3.1 g/t Au; 39.8 g/t Ag Costs C1 Cash Costs: US$600/oz (Q3: US$570 per oz) Net-present value (8%): US$34M Internal Rate

  • f Return:

38% Payback (initial

US$31M capex):

2.4 years (on-track) Royalty:

State Right and 2.5% NSR to Franco Nevada

Construction Debt:

US$33M, first repayment Dec 2014 (c.US$ 6M already repaid)

Interest Rate:

n/a - participatory bank loan, repayments made typically monthly

Loan terms:

Non-recourse, secured against shares in operating company and freehold land

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SLIDE 13

Ariana Resources PLC – Dec 2017

Kiziltepe Mine Site

Primary Infrastructure

Arzu South Banu

  • Kiziltepe contains primary

mining infrastructure for Red Rabbit JV

  • 50:50 JV with Proccea

Construction Co. as manager

  • Operating company Zenit

Madencilik employs 160 staff

  • Strong local community and

government support – largest single investment of its type in the area

  • Strategic Investment Status

granted by Ministry of Economy

  • State-of-the-art processing

facility plus most modern/best- practice tailings dam in Turkey

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SLIDE 14

Ariana Resources PLC – Dec 2017

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Laboratory CIL Processing Plant Mine Administrative Buildings Arzu South Open Pit

Kiziltepe Gold-Silver Mine

Aerial View

Sındırgı

Population: 12,67 in 2010

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SLIDE 15

Ariana Resources PLC – Dec 2017

Red Rabbit JV

Gold and Silver Production

  • Production commenced in March 2017
  • Commercial production achieved by July with

cash costs for Q3 estimated at US$ 570/oz

  • Gross JV revenue in Q3 was US$ 5.05M
  • Targeting mill throughput in excess of

180,000tpa, up from design plan of 150,000tpa

  • Process recovery of gold exceeding feasibility

expectations at 95%

  • c.46,000 tonnes of ore at 2.14g/t Au

stockpiled, representing over three months of production

  • Expecting delivery of c. 20,000 oz Au eq. p.a.

from H2 2017 for a period of 8 years initial mine life

Zack Van Coller & Dr Kerim Sener holding first doré bar, March 2017

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SLIDE 16

Ariana Resources PLC – Dec 2017

Kiziltepe Gold-Silver Mine

Resource Update

  • Potential total LOM at Kiziltepe Sector
  • f 11.5 years including satellite

deposits (up from 8, as per DFS)

  • JORC Mineral Resource increased in

2017 to 338,500 oz Au equivalent

  • Substantial increase in tonnage to c.

3.8Mt with inclusion of subsidiary veins which do not currently form part of the mine plan

  • New resource excludes certain satellite

veins (e.g. Kepez) which could increase the LOM further

  • JORC Exploration Target of a further c.

1.25Mt @ 1.8 g/t Au and 31 g/t Ag established for vein extensions across Kiziltepe that have not yet been drill tested

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SLIDE 17

Ariana Resources PLC – Dec 2017

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Red Rabbit Gold Project Area

595koz Current JORC Resource* Additional 425koz as Management Upside Estimate

Only 6% (2km) of the total vein system (34km) defined to date has been drill-tested and contains the current resource *Excluding Ivrindi

Additional Potential 200Koz

338Koz 9Koz 33Koz 215Koz Current JORC Resource Ounces

Additional Potential 100Koz Additional Potential 25Koz Additional Potential 100Koz

Discovery Potential

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SLIDE 18

Ariana Resources PLC – Dec 2017

Red Rabbit Gold Project

Tavsan Sector

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Pre-tax case at US$1,250/oz, as at November 2016 Scoping by Auralia Mining Consulting Pty. Ltd.

Location 210km north-east of Izmir, 72km east of Kiziltepe Mine JORC Resource 215Koz Global resource Whittle resource: 2.7M tonnes for 139,000oz Au (indicated & inferred) Processing Heap Leach Mine Life 4 years Production Rate 30,000 oz Au eq. p.a. Processing Capacity 675,000 tonnes of ore p.a. In-pit grade 1.6 g/t Au; 3.0 g/t Ag Costs C1 Cash Costs: US$630/oz Net-present value (8%): US$42m Internal Rate of Return: 80% Payback (initial

US$20M capex):

1.1 years Royalty:

State Right and 2% NSR to Sandstorm Gold

First Production Target

2020 at 30 koz p.a

Management Resource Target

300,000oz Au of which 200,000oz Au open-pittable

Semi-autonomous with Kiziltepe

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SLIDE 19

Ariana Resources PLC – Dec 2017

Tavsan Sector

Resource Development

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  • Current resource under revision following

improved geological understanding

  • Six significant target areas confirmed
  • 6m @ 3.37g/t Au + 3.67g/t Ag
  • 9m @ 1.30g/t Au + 4.32g/t Ag
  • Extensive new geochemical target areas

identified demonstrating clear potential for resource growth

  • New discovery of the South Zone
  • Structural repeat of the Main Zone

resource area - partly obscured by cover rocks

  • Trial mining stockpile of c.28,000 tonnes to

date at an average grade of 1.41 g/t gold.

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SLIDE 20

Ariana Resources PLC – Dec 2017

Tavsan Sector

Development Plan

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  • Fast-tracking further development, with initial discussions underway with potential lenders
  • Internal pre-feasibility study work underway and commencing with resource estimation
  • Planning dedicated drilling programme, further metallurgical test-work and EIA to commence

under the JV during 2018

Geological cross-section through the northern extension of the South Zone based on limited previous drilling: shows good continuity of mineralised jasperoid (in orange) occurring relatively near surface

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SLIDE 21

Ariana Resources PLC – Dec 2017

Resource Development Schedule

Conceptual Overview: Targeting 50Koz pa JV Production

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2016 2017 2018 2019 2020 2021 2022 2023 2024

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Kiziltepe (221Koz) Construction Commissioning Production Kepez (9Koz) Permitting Production Karakavak Drilling Yukaricamli Drilling Kizilcukur (33Koz) Scoping Feasibility Permitting Production Tavsan (215Koz) Drilling Scoping Feasibility Permitting Construction Commissioning Production TOTAL PRODUCTION

20Koz 20Koz 20Koz 20Koz 20Koz 20Koz 20Koz 30Koz 30Koz 30Koz 30Koz 30Koz 20Koz 20Koz 20Koz 50Koz 50Koz 50Koz 50Koz 50Koz 12Koz

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SLIDE 22

Ariana Resources PLC – Dec 2017

Summary

Historical cost of discovery US$15 per ounce

Development & Exploration: Turkey and beyond

  • 1Moz Salinbas Project represents a major opportunity for future growth within a highly

prospective region which also hosts the 4Moz Hot Maden project

  • Extensive in-house exploration database and access to Newmont’s Turkey-wide database

secured in exchange for a 1%NSR (expiring in 2023)

  • Shareholdings in junior exploration companies (e.g. NLI:ASX) and actively assessing

technology-metals projects globally Production & Development: Red Rabbit Gold Project JV

  • Gold production from Kiziltepe targeting 20 koz Au equiv. p.a. for at least 8 years at a cash

cost c. US$600/oz

  • Near term JV revenue expected at >US$ 5M per quarter at current gold prices
  • Mine life likely to be extended through further regional exploration and development work
  • Tavsan represents further revenue generative upside with capacity for an additional c.30,000
  • z Au p.a. production

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SLIDE 23

Ariana Resources PLC – Dec 2017

The Ariana Leverage

Historical cost of discovery US$15 per ounce*

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Every £1 expended by the Company:

  • £0.6 derived from project

partners or bank finance

  • £0.4 investor funding via AIM

*As at early June 2017

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SLIDE 24

Ariana Resources PLC – Dec 2017

Peer Group Comparison

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CEY: £1,560m MC for 250Koz/a production* HUM: £117m MC for future 86Koz/a production* VAST: £28.8m MC for 10Koz/a production* AAU: £14.5m MC for 10Koz/a production and c.25Koz/a future production* KEFI: £14.1m MC for future 86Koz/a production* STI: £6.2m MC as an ex-producer *Net equivalent production only

Source Yahoo Finance

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SLIDE 25

Ariana Resources PLC – Dec 2017

Michael de Villiers

Executive Chairman, B.Comm Professional Accountant

  • Experienced AIM mining company director with 27 years industry experience
  • Previously with Anglo American and Gold Fields International also past FD of

Eurasia Mining, Mercator, Navan & Oxus

  • Involved in gold and industrial mineral mines in Africa, Asia & Europe
  • Dr. Kerim Şener

Managing Director, BSc (Hons), MSc Mineral Exploration, PhD

  • Expert in gold deposit geology, founding director with 19 years experience
  • Responsible for discovery of >3.8Moz gold in E. Europe since 2007
  • Previously non-exec at ASX and TSX-V listed companies

William Payne

CFO, BA Accountancy

  • Experienced in accountancy, audit & finance
  • Director of several companies including Sprue Aegis (AIM)
  • Partner in Wilkins Kennedy, a top 20 UK accounting firm

Chris Sangster

Non-exec Director, BSc (Hons), GDE Mineral Economics

  • Experienced mining engineer & company director with 40 years industry experience
  • Senior management at KCM (Anglo American) on Zambian Copperbelt
  • Previously CEO of Scotgold Resources (AIM & ASX)

Management

International & Turkish Expertise

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SLIDE 26

Ariana Resources PLC – Dec 2017

Key Data

Market Fundamentals

26 Exchange AIM: AAU Market Capitalisation (GBP) £12.6m Shares in issue 1,051.6m Options & Warrants 45.3m Share Price 1.20p Min-Max Price (52 week) 1.25 – 2.26p Average volume (3 mth) 2.63m Shareholder % holding Hargreaves Lansdown Asset Mgt 14.3 Barclays Wealth 8.8 Halifax Share Dealing 6.8 Management 5.4 TD Direct Investing 5.9 Beaufort Nominees Ltd 4.1 Interactive Investor 3.5 SVS Securities 3.3 Jarvis Investment Management 3.2 AJ Bell Securities 3.1 Eldorado Gold Corporation 2.7 Mr Bruce Rowan 2.3

Top Shareholders Share price & volume

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SLIDE 27

Ariana Resources PLC – Dec 2017

www.arianaresources.com

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SLIDE 28

Ariana Resources PLC – Dec 2017

Contacts

Contacts:

  • Dr. Kerim Sener & Michael de Villiers

Ariana Resources PLC T: +44 (0) 207 407 3616 E: info@arianaresources.com

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