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Gold price, Red Rabbit grade maintain project payback pace

Turkey-focused exploration and development company Ariana Resources says continuing robust operating margins at the half-owned Kiziltepe gold-silver mine have it on track to repay 70% of project debt by the end of June.
Gold price, Red Rabbit grade maintain project payback pace Gold price, Red Rabbit grade maintain project payback pace Gold price, Red Rabbit grade maintain project payback pace Gold price, Red Rabbit grade maintain project payback pace Gold price, Red Rabbit grade maintain project payback pace

Ariana's 50%-owned Kiziltepe mine in Turkey

Ariana is in joint venture with Turkey's Proccea Construction Co at Red Rabbit, including Kiziltepe, which achieved commercial production in mid-2017.

Higher average gold prices received (up 5.3% at US$1,488.51/oz for the March quarter vesus the December 2018 quarter), and Kiziltepe's 4.83g/t average head grade milled and 93.7% average recoveries, helped the JV generate 2.2% better gold-silver gross sales income of US$10.9 million and offset higher openpit mine stripping rates linked to a pit-wall pushback.

Gold and silver output was down 2.9% and 7.4% quarter-on-quarter, respectively, to 7,296 ounces and 84,109oz. Reported operating cash costs rose 14.3% on the quarter to $399/oz.

"Operating cash costs per ounce continue to remain low, despite the high strip ratios incurred during the pushback of the southern pit wall at Arzu South," Ariana managing director Dr Kerim Sener said.

"This was helped by the planned drawdown on stockpiles, maintenance of significant by-product silver credit and high grades through the plant during the period." 

The pushback is expected to continue to restrict ore supply from the openpit in the June and September quarters, but Ariana did not expect this to impact metal output significantly.  

Sener said at the end of March, 60%, or $19.6 million, of the JV construction capital loan of $33 million had been repaid, with this likely to increase to 70% by the end of the June quarter.

In March, Ariana set guidance for 2019 at 25,00oz of gold. 

Ariana's shares (AIM:AAU) dropped 1.24% Monday to 2p (US2.55c), about 33% higher than the 1.5p seen at the start of January.