Ariana Resources plc Turkeys Next Gold Producer June 2015 Ariana - - PowerPoint PPT Presentation

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Ariana Resources plc Turkeys Next Gold Producer June 2015 Ariana - - PowerPoint PPT Presentation

Ariana Resources plc Turkeys Next Gold Producer June 2015 Ariana Resources PLC - June 2015 Disclaimer The Presentation is being distributed on request only to, and is directed at, authorised persons or The content of information contained in


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SLIDE 1

Ariana Resources PLC - June 2015

Ariana Resources plc

Turkey’s Next Gold Producer

June 2015

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SLIDE 2

Ariana Resources PLC - June 2015

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 of their knowledge, information and belief. This Presentation does not constitute, or form part of, an admission document, listing particulars

  • r a prospectus relating to the Company, nor does it constitute, or form part of, any offer or

invitation to sell or 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,

  • r published, in whole or in part, for any purpose without the prior consent of the Company. The

contents of 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 organised 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 other 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

  • ffer 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 or on behalf of the Company or any of its directors, officers, partners, employees or advisers or any other 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

  • f 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 - June 2015

Ariana Resources

An Overview

  • AIM-listed gold development and exploration company focused on Turkey
  • Turkey is a significant gold producing country and geologically highly prospective
  • Revised mining code, environmental legislation and supportive tax regime
  • Highly experienced management team with extensive local and geological knowledge
  • Three advanced projects with strong in-country partners

Development

Planned production 2016

Discovery

>1Moz resource

Exploration

Targeting +1Moz deposits

Proccea JV - Red Rabbit Project Eldorado JV - Artvin Project WAVE province

  • 69.6% holding
  • Fully funded near-term (H2

2016) low-cost (US$600/oz) production in western Turkey

  • Significant exploration upside
  • Imminent construction start
  • 49% holding
  • 1Moz JORC Resource in

eastern Turkey

  • Fully funded by Eldorado
  • Secured access to 20-year

Newmont database for Turkey

  • Significant potential for further

resources to be defined

  • Investment in Royal Road

Minerals (TSX-V)

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SLIDE 4

Ariana Resources PLC - June 2015

Key Data

Market Fundamentals

Exchange AIM: AAU Market Capitalisation (GBP) £8.2m Options & Warrants 40.4m Shares in issue 683m Min / Max Price (52 week) 0.75 - 1.22 Share Price 1.15p Average daily volume 1,660,690 Shareholder % holding Lanstead Capital 14.1 Barclayshare Nominees 8.8 Hargreaves Lansdown (Nominees) 8.1 TD Direct Investing 4.6 Beaufort Nominees Ltd 4.6 JIM Nominees Ltd 4.3 Eldorado Gold Corporation 4.1 Mr Bruce Rowan 3.6 HSDL Nominees Ltd 3.6 Starvest PLC 2.8 Management 4.0

Top Shareholders

5 10 15 20 25 30 0.2 0.4 0.6 0.8 1 1.2 1.4 Mar 15 Apr 15 May 15 Jun 15

Share price & volume

Share price (p) Volume millions

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SLIDE 5

Ariana Resources PLC - June 2015

Michael de Villiers

Executive Chairman. B.Comm Professional Accountant

  • Experienced mining company director
  • CFO of Eurasia Mining (AIM), previously FD of Mercator Gold

(ECR Minerals plc), Oxus Gold plc & Navan Mining plc

  • Involved in gold and industrial mineral operations in Africa, Central

Asia & Europe

  • Dr. Kerim Şener

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

  • Expert in gold deposit geology, founding director with 17 years experience
  • Adjunct Research Fellow at the Centre for Exploration Targeting,

University of Western Australia

  • Non-executive director of Royal Road Minerals (TSX-V)

William Payne

CFO, BA Accountancy

  • Experienced in accountancy, audit & finance
  • Director of several companies including Sprue Aegis plc (ISDX)
  • Partner in Wilkins Kennedy, a top 30 UK accounting firm

Management

International & Turkish Expertise

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SLIDE 6

Ariana Resources PLC - June 2015

Turkey

Unique Mineral Resource Destination

  • A. 1Moz Ovacik mine
  • B. 16.9Moz Kisladag mine
  • C. 1.4Moz Mastra mine
  • D. 2.2Moz Efemcukuru
  • E. 6.3Moz Copler mine
  • F. Mastra gold
  • G. Kaymaz & Himmetdede production start 2015

1.4 4.3 5.4 5 5 8 10 11 14.5 17 24.4 29.5 33.5 31 5 10 15 20 25 30 35 40

A B C D E F G Current operating mines Tethyan Metallogenic Belt Porphyry copper-gold Skarn copper-gold Epithermal gold

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SLIDE 7

Ariana Resources PLC - June 2015

Exploration, Discovery & Development

Across Prospective Regions in Turkey

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SLIDE 8

Ariana Resources PLC - June 2015

Red Rabbit Gold Project

Mine Construction & Exploration

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Ariana Resources PLC - June 2015

Red Rabbit JV

Partnership Overview

Proccea Construction

Turkish JV partner

Ariana Resources shareholder Gold-silver processing plant EPCM specialists; responsible for the construction / provision of:

  • Kisladag (gold) ADR plant, CIC carbon

columns

  • Eti Gumus (silver) Manufacturing of

Merrill-Crowe plant, commissioning

  • Extensive global experience

Current Holding 69.6% Ariana Resources 30.4% Proccea

  • Proccea earning into 50% on expenditure of

US$8 million

  • Phase 1: DFS & EIA - US$3.5m
  • Phase 2: Construction - further

commitment of US$4.5m

  • Proccea sole funding project to start-up,

management control now with Proccea

  • Strategic Investment Status granted by the

Turkish government; current incentives exceed US$2.2m

  • US$33m credit agreement with Turkiye

Finans Katilim Bankasi A.S. for the remaining capital requirement

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SLIDE 10

Ariana Resources PLC - June 2015

  • DFS & EIA complete
  • Key mining licence and permits secured for

up to a further 20 years

  • US$33m mine finance secured
  • Support from Turkish Government
  • Forestry permit approval received
  • Strategic Investment status granted
  • 100% of freehold land acquired for primary
  • pen pit: additional land acquisitions in

process

Mine construction to commence imminently: first gold pour expected H2 2016

Red Rabbit Gold Project

Significant Milestones

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SLIDE 11

Ariana Resources PLC - June 2015

Definitive Feasibility Study Summary

Mine life : 8 years C1 Cash Costs : US$600/oz Processing : CIC/CIL Production Rate : 20,000 oz Au p.a. Processing capacity : 150,000 tonnes of ore p.a. TSF design capacity : 15 years Global JORC Resource : 221Koz JORC Reserves : 1.1M tonnes for 140,000oz (proven & probable) In Pit Grade : 3.1 g/t Au; 39.8 g/t Ag

*base case at US$1,304/oz

Development

Project Overview

Project Economics

Net-present value (8%): US$34m Internal Rate of Return: 38% Payback (initial US$31.1 capital) : 2.4 years

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SLIDE 12

Ariana Resources PLC - June 2015

Feasibility Study

Robust Fundamentals

  • Financial model established on a pre-tax* 100% equity basis, excluding debt financing and loan

interest charges: modelling undertaken when oil was US$100 per barrel

  • Capital cost estimated at US$31.1 million, including US$15.1 million for the processing plant plus

EPCM

  • Cash costs comprise operating costs including on-site and all off-site charges and royalties:

inclusive of State royalty and 2.5% NSR

  • Turkish Lira gold price remains at historically high levels: ranging 2,400-3,250TL/oz for last 4

years (June 2015: 3,250TL/oz)

Scenario Gold Price (US$/oz Au) NPV 10 (US $M) NPV 8 (US $M) IRR (%) Payback year Cash Cost (US $/ oz Au) Minus 30% 913 3.5 5.7 13.7 3.6 588 Minus 10% 1,174 21.5 24.8 30.3 2.7 596 Base Case 1,304 30.4 34.4 37.8 2.4 600 Plus 10% 1,434 39.4 44.0 45.0 2.2 603 Plus 30% 1,695 57.4 63.1 58.8 1.8 611

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SLIDE 13

Ariana Resources PLC - June 2015

Red Rabbit

Exploration Overview

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

Potential 200Koz 100Koz 50Koz 100Koz

221Koz 9Koz 17Koz 215Koz Current JORC Resource Ounces

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SLIDE 14

Ariana Resources PLC - June 2015

Red Rabbit

Exploration Overview

Kiziltepe Tavsan

Kiziltepe Sector Tavsan Sector

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SLIDE 15

Ariana Resources PLC - June 2015

Discovery

Arzu Central Exploration Target

  • Exploration Target of up to 92,000 oz Au and 1,100,000 oz Ag established at Arzu Central
  • Future potential to add to the resource base and enhance economics
  • Targeting an increase the current mine life beyond 8 years
  • Potential for further resource ounces to be delineated down-dip of known high grade shoots
  • Exploration drilling planned during Kiziltepe mine construction phase
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SLIDE 16

Ariana Resources PLC - June 2015

Eldorado Gold JV

Exploration & Development

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SLIDE 17

Ariana Resources PLC - June 2015

Eldorado Gold JV

1Moz JORC Resource

  • Eldorado funding all exploration
  • Approx. US$8 million spent by JV to date;

project sale process underway

  • Estimated JORC resource of ~1Moz Au

equiv.

  • Continuity of mineralisation towards porphyry

with increasing widths of mineralisation

Current Holding 49% Ariana Resources 51% Eldorado Salinbas Scoping Study Summary*

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

Project Economics

Net-present value (8%): US$108m Internal Rate of Return: 28% Payback (initial US$53.3 capital) : 3.3 years

*base case at US$1,250/oz

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SLIDE 18

Ariana Resources PLC - June 2015

Valuation

Comparable Transactions Basis

  • Comparable transactions (on sale of assets) over the past 10 years in Turkey provide a weighted

average US$53.9 per resource ounce (dashed blue line)

  • Provides a guide to the potential value of the Company’s resource inventory

* Caldag is a nickel deposit but the resource has been calculated as a gold equivalent. All other deposits are gold dominant with variable amounts of silver.

200 400 600 800 1000 1200 1400 1600 1800 20 40 60 80 100 120 140 160 180 US$/oz US$/oz Au Price

?

US$/oz

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SLIDE 19

Ariana Resources PLC - June 2015

Summary

Exposure to near-term, low-cost, fully funded, fully permitted gold production in Turkey with significant exploration upside across the country Mine Construction and Production: Red Rabbit Gold Project

  • Gold production targeted for H2 2016 projected at 21,000 oz Au equiv. per year during first 5

years of operation

  • Mine life of 8 years with significant upside potential from regional exploration and discovery
  • Robust project economics based only on the Kiziltepe Sector - the Tavsan Sector represents

immediate resource upside (capacity for additional 30,000 oz p.a. production) Exploration & Development : Western, NE and SE Turkey

  • Shareholder value crystallisation through proposed sale of Artvin Project
  • Strategic partnerships - exposure to new discoveries through associations with Eldorado Gold

and Royal Road Minerals

  • Comprehensive exploration database covering Western Turkey in addition to Newmont’s Turkey-

wide database

  • Highly competitive all-in cost of discovery (US$22 per ounce) vs. industry norms (approx. US$40

per ounce)

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SLIDE 20

Ariana Resources PLC - June 2015

Contacts

  • Dr. Kerim Sener & Michael de Villiers

Ariana Resources PLC T: +44 (0) 207 407 3616 E: info@arianaresources.com Lottie Brocklehrust St Brides Partners Ltd T: +44 (0) 207 236 1177 E: Lottie@stbridespartners.co.uk