Ariana Resources plc Turkish Gold June 2013 Disclaimer: The - - PowerPoint PPT Presentation

ariana resources plc
SMART_READER_LITE
LIVE PREVIEW

Ariana Resources plc Turkish Gold June 2013 Disclaimer: The - - PowerPoint PPT Presentation

Ariana Resources plc Turkish Gold June 2013 Disclaimer: The Presentation is being distributed on request only to, and is directed at, authorised persons The content of information contained in these slides and the accompanying or exempt


slide-1
SLIDE 1

Ariana Resources plc

Turkish Gold

June 2013

slide-2
SLIDE 2

| Ariana Resources Plc | June 2013

2

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

  • r 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

  • ther 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

  • f 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 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

  • pinions 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.

slide-3
SLIDE 3

| Ariana Resources Plc | June 2013

3

Strategy

  • Targeting production at the

Red Rabbit Gold Project (RRGP)

  • Create long-term value by

driving assets up the development curve to production

  • Generate exploration targets

with multi-million ounce gold potential

Operation

  • Turkey: geologically

prospective, politically and economically stable

  • Highly experienced

management team with extensive local and geological knowledge

Ariana Resources plc: An overview

Strategic partnerships

  • RRGP JV in western Turkey

with Proccea Construction Co.

  • JV NE Turkey with Eldorado

Gold Corp

  • Strategic investment in

Tigris Resources

Exploration Discovery Development Production Increase in market cap

slide-4
SLIDE 4

| Ariana Resources Plc | June 2013

4

Key Data: Market fundamentals

Shares in Issue

417.0 m

Market Capitalisation

£4.38 m

at 1.05p

Warrants

3.0 m

3.0m: 2p expiry 19 Apr 2018

Options

16.0 m

12.5m: 5p expiry 21 Mar 2018 2.2m: 8.8p expiry 19 July 2015 1m: 13p expiry 22 Aug 2015 0.3m: 13p expiry 1 Sept 2016

Fully Diluted

436.0

Date of Listing

28 July 2005

  • Max. / Min. Price (YTD)

1.45p (18 Mar 2013) 1.02p (30 May 2013)

Average Daily Volume (3M)

3,473,090

slide-5
SLIDE 5

| Ariana Resources Plc | June 2013

5

Key Data: Market fundamentals

Share Price p Volume x1,000000

Name % held

Beaufort Nominees Ltd 8% Eldorado Gold Corporation 7% TD Direct Investing Nominees Ltd 6% Mr Bruce Rowan 6% Barclayshare Nominees Ltd 6% Hargreaves Lansdown Nominees Ltd 6% Starvest 5% SVS Nominees Ltd 5% Harewood Nominees Ltd 4% Share Nominees Ltd 3% Remainder of the top 20 13% Management 3% Other shareholders 19%

1 2 3 4 5 6 7 Mar 13 Apr 13 May 13 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 Mar 13 Apr 13 May 13

slide-6
SLIDE 6

| Ariana Resources Plc | June 2013

6

Directors & Management: A century of experience

  • Dr. Kerim Şener

Managing Director

BSc Geology, MSc Mineral Exploration, PhD Gold Metallogenesis

  • Founder director, Turkish background
  • Expert in gold deposit geology

Michael Spriggs

Chairman

BA & MA Geology, MSc Geology & Mineral Sciences

  • Experienced geologist and mining

company chairman

  • Former investment banker with SG

Warburg (now UBS)

Michael de Villiers

Director

B.Comm Professional Accountant

  • Experienced mining company director
  • Involved in gold & industrial mineral
  • perations in Africa, Central Asia & Europe
  • Director of Eurasia Mining (AIM)

William Payne

CFO

BA Accountancy

  • Experienced in accountancy, audit &

finance

  • Director of several companies
  • Partner in top 20 UK accounting firm

Soner Koldaş

Technical Director

BSc Mining & Mineral Process Engineering, MSc Rock Mechanics & Mining Geology

  • Extensive operation and management

experience in South Africa and Turkey

  • Experienced in design, planning and

execution of mine and process plants

Erhan Şener

General Manager

BA Economics, MA Western European Integration

  • Experienced general manager in

extractive industries and manufacturing

  • Chairman of Zenit Madencilik
slide-7
SLIDE 7

| Ariana Resources Plc | June 2013

7

Turkish gold production in tonnes

Turkey: A unique mineral resource destination

1 Moz Ovacik mine begins production 16.9 Moz Kisladag mine begins production 1.4Moz Mastra mine begins production 6.3 Moz Copler mine begins production

Europe’s largest gold producer

Ankara

Turkey

Kremnica 1.2Moz Lahoca 1.2Moz Rosia Montana 14.6Moz Chelopech 4.71Moz Mastra 1.4Moz Copler 6.3Moz Bolkardag 0.1Moz Kisladag 16.9Moz Efemcukuru 2.2Moz Ovacik 1Moz Kucukdere 0.3Moz

2.2Moz Efemçukuru mine begins production

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

slide-8
SLIDE 8

| Ariana Resources Plc | June 2013

8

Strategy: Development, discovery & exploration

Development Discovery Exploration Red Rabbit JV

Production planned for 2014:

  • Production of approx.

21,000oz Au equiv. pa in first 5 years: 8 year mine life

  • Potential for further resources

to be defined at Kiziltepe

  • Additional 215,000 oz Au

resource at Tavsan

  • Ariana currently owns 82% of

the Red Rabbit JV in western Turkey

Eldorado Gold JV

Resource expansion:

  • 1.09 Moz Au maiden JORC

resource defined for Ardala & Salinbas

  • 4,000m drilling programme

at Ardala & Salinbas

  • Ariana owns 49% of the

Eldorado JV in north-eastern Turkey

WAVE province & strategic

Targeting +1Moz deposits:

  • New licences secured

through licence auctions

  • Secured access to 20-year

Newmont database for Turkey

  • Strategic investment in Tigris

Resources - focus on frontier gold province of south-eastern Turkey

slide-9
SLIDE 9

| Ariana Resources Plc | June 2013

9

Exploration, discovery & development: Across prospective regions in Turkey

slide-10
SLIDE 10

| Ariana Resources Plc | June 2013

10

Development: Red Rabbit Gold Project

  • Global JORC resource of 448,000 oz Au
  • equiv. across Kiziltepe (233Koz) and Tavsan

(215Koz)

  • Feasibility Study demonstrates:
  • JORC Reserves: 1.1M tonnes @ 3.1 g/t

Au and 39.8 g/t Ag for 115,000 oz Au & 1.47M oz Ag

  • Mine life of 8 years: TSF design capacity

15 years

  • Annual processing capacity of 150,000

tonnes of ore

  • Approx. 21,000 oz Au equiv. in first 5

years

  • DFS and EIA underway*:
  • Baseline studies complete – EIA process

has commenced at Ministry of Environment

  • Geotechnical and hydrogeological drilling

at TSF site complete – engineering design now completed

  • 90% of freehold land already acquired at

Arzu South

*Definitive Feasibility Study (DFS), Environmental Impact Assessment (EIA)

Kiziltepe Kepez Karakavak Tavsan Kizilcukur

slide-11
SLIDE 11

| Ariana Resources Plc | June 2013

11

Road to Value

P r

  • j

e c t R i s k

Scoping Study Pre-Feasibility Study Interim-Feasibility Study Definitive-Feasibility Study EIA Certification Construction /

  • ther permits

Completion of Finance Q2 2013 Q3 2013 Q4 2013

$

slide-12
SLIDE 12

| Ariana Resources Plc | June 2013

12

Development: Red Rabbit Gold Project

  • JV with Turkish partner Proccea Construction
  • Co. – a company specialising in gold-silver

processing plant design/build; also a 2.75% shareholder in Ariana

  • Proccea earning into 50% on expenditure of

US$8 million

  • Phase 1: DFS and EIA with a budget of

US$1.4 million, management control with Ariana

  • Phase 2: Construction with a

commitment of US$6.6 million: management control with Proccea

  • Ariana currently retains 86% of the JV project
  • Proccea is currently sole funding the project

through the EIA process

  • Debt financing planned for the remaining

capital requirement (US$29.5) – discussions have commenced

Trial mining at Kiziltepe

slide-13
SLIDE 13

| Ariana Resources Plc | June 2013

13

Production Partner Proccea Construction

  • Proccea Construction Co. is a design, supply

and construction company with specialist experience in process plant design and implementation

  • Heap-leach operations
  • CIL, CIP & CIC
  • Merrill Crowe plants
  • ADR plants
  • Responsible for the construction / provision of:
  • Kisladag (gold) ADR plant CIC carbon

columns

  • Mastra (gold) Electrowinning cells
  • Eti Gumus (silver) Manufacturing of

Merrill-Crowe plant, commissioning

  • Extensive experience in S.America,

Europe, Africa & Middle East

ADR circuit at Kisladag

slide-14
SLIDE 14

| Ariana Resources Plc | June 2013

14

Feasibility Study: Robust fundamentals

  • Base case of US$ 1,265 / oz gold and US$ 20 / oz silver.
  • Financial model established on a pre-tax* 100% equity basis, excluding debt

financing and loan interest charges.

  • Capital cost estimated at US$29.5 million, including US$14.2 million for the

processing plant and EPCM.

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

royalties: inclusive of State royalty and 2.5% NSR.

Scenario NPV 10 (US $M) NPV 8 (US $M) IRR (%) Payback year Cash Cost (US $/ oz Au)

Minus 10% 10.0 12.7 19.5 3.2 678 Base case 18.7 22.0 27.1 2.9 682 Plus 10% 27.4 31.3 34.3 2.6 685 US $1,500 /oz Au 36.1 40.6 41.1 2.3 689 US $1,650 /oz Au 44.8 49.8 47.8 2.1 693

* Corporation tax is 20% in Turkey

slide-15
SLIDE 15

| Ariana Resources Plc | June 2013

15

Development: Mine site layout

Arzu North Arzu South Derya Banu Plant Site Waste Dump TSF 500m

slide-16
SLIDE 16

| Ariana Resources Plc | June 2013

16

Discovery: Exceptionally mineralised zone

  • Highest grades ever recorded from the

Kiziltepe deposit including:

  • 12.1m @ 16.5 g/t Au equiv.
  • Incl. 3.2m @ 48.0 g/t Au equiv.
  • Incl. 1m @ 79.7 g/t Au equiv.
  • Exploration drilling has proven the Arzu

North vein system extends southeast beneath cover

  • Additional prospective zone extends

towards the Arzu South structure

  • 34m @ 1.04g/t Au equiv.
  • 7.6m @ 7.60g/t Au equiv.
  • 5.8m @ 5.71g/t Au equiv.
  • Results highlight significant potential within

the Arzu Central zone

  • Follow-up deeper drilling programme is

planned

Emel vein Derya vein Arzu North Arzu South

Drilling at Kiziltepe

slide-17
SLIDE 17

| Ariana Resources Plc | June 2013

17

  • 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 know high grade shoots.

  • Exploration drilling plan planned during

Kiziltepe mine construction 2014.

Discovery: Arzu central exploration target

slide-18
SLIDE 18

| Ariana Resources Plc | June 2013

18

Discovery: Regional targets

  • Ariana and RRGP JV holds under licence all

prospective areas within the Sindirgi Gold Corridor

  • Potential to substantially increase global

resource, enhancing economic fundamentals and extending mine life

  • Target to keep Kiziltepe plant running for

>10 years following further discoveries

  • Ariana can sell resources into the JV at 3X

exploration cost within the Red Rabbit AOI (excluding JV licences)

Kizilcukur Kepez 9,000oz (Indicated) Karakavak Licence recently converted to 10 year operational status Yukaricamli Kiziltepe 224,000oz (Measured & Indicated) Camalani Not yet drill tested Not yet drill tested

slide-19
SLIDE 19

| Ariana Resources Plc | June 2013

19

Discovery & Exploration: Eldorado Gold JV & Tigris Resources

  • 49:51 Ariana/Eldorado Gold JV: Eldorado is

funding all exploration

  • JORC resource estimate of 1.09 Moz Au

inferred and indicated

  • Highly prospective Ardala and Salinbas

projects and surrounding tenements

  • US$4.5 million spent by JV to date; US$2.2

million to be spent in 2013: 4000m drilling

  • Best intercepts from Salinbas include 9.5m

@ 6.48 g/t Au + 39.4 g/t Ag, 11.3m @ 4.98 g/t Au + 42.8 g/t Ag

  • 11.5% investment in Tigris Resources
  • Focused on highly prospective and

underexplored parts of south-eastern Turkey

  • Porphyry and intrusion-related gold and

copper systems exploration

  • 1,500m drilling programme completed in

2012 on the Kolonkaya Project: best result 10m at 6.4 g/t Au with surface samples up to 65.8 g/t Au

slide-20
SLIDE 20

| Ariana Resources Plc | June 2013

20

Exploration: Newmont Database

Rock (#25k) Stream (#24k) BLEG* (#18k) Sampling type

  • 10 year non-exclusive licence on Newmont’s Turkish exploration database valued at US$20m.
  • 20 years of Newmont data, from stream sediment sampling through to geophysical datasets and

drilling.

  • The database will be analysed with priority given to the region surrounding the Red Rabbit

Project in order to aid the discovery of additional resources for the planned Kiziltepe operation.

  • 1 % Net Smelter Return royalty and Right of First Refusal on any discovery made by Ariana

within 5km of any data point (excluding existing Ariana tenements).

* Bulk Leach Extractable Gold

slide-21
SLIDE 21

| Ariana Resources Plc | June 2013

21

Investment Summary: Building value across the portfolio

  • Development: Red Rabbit Gold Project
  • Gold production 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: Western, NE and SE Turkey
  • Extensive exploration footprint across Turkey
  • Comprehensive BLEG database covering Western Turkey along with Newmont’s Turkey

database.

  • Joint venture and strategic investment - exposure to new discoveries through partnerships

with Eldorado Gold and Tigris Resources

  • Highly qualified board and management team with strong Turkish networks and local geological

expertise

slide-22
SLIDE 22

| Ariana Resources Plc | June 2013

22

Contacts

  • Dr. Kerim Sener, Michael de Villiers & Michael

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

Exploration Discovery Development Production Increase in market capitalisation

Susie Geliher St Brides Media & Finance Ltd T: +44 (0) 207 236 1177 E: susie@sbmf.co.uk