(Alliance News) - Ariana Resources PLC on Friday said income from the Kiziltepe mine in Turkey was up in the third quarter, and it is on track for annual production guidance.
Shares in Ariana were down 2.4% at 2.00 pence in London on Friday morning.
The exploration and development firm posted income of USD11.8 million for the three months ended September 30 from Kiziltepe, part of Ariana's Red Rabbit joint venture with Proccea Construction Co.
Ariana owns a 50% stake in the joint venture via its Zenit Madencilik San ve Tic AS holding, though all figures are given gross with respect to the joint venture.
The USD11.8 million represents a 22% quarter-on-quarter increase from USD9.7 million in the three months to June 30, with the average realised gold price up 13% at USD1,476 per ounce versus USD1,307 per ounce in the second quarter.
Production increased by 7.7% to 6,933 ounces of gold from 6,438 ounces, and Ariana said it is on track for its annual production guidance of 25,000 ounces of gold, having achieved nine month production of 20,667 ounces.
Operating cash costs fell an estimated 8.3% to USD540 per ounce from USD589 per ounce. Operating mill availability was running at 99.6% with utilisation at 99.4%. This compares to second quarter availability at 99.2% and utilisation at 95.8%.
Process recoveries of gold were 93.6%, declining quarter-on-quarter from 95.2%.
As at September 30, 78% of the USD33 million Kiziltepe loan had been repaid, versus 69% on June 30, and Ariana said it is on track for full repayment by April 2020.
Ariana Managing Director Kerim Sener said: "The third-quarter results from the Kiziltepe mine continue to build on a very successful year of operations. Operating cash costs per ounce for the period are estimated at USD540 per ounce, reflecting in part the pushback on the southern boundary of the Arzu South pit and the commencement of pre-stripping at Arzu North and Derya, in addition to a build-up of process plant consumables inventory and increased maintenance.
"The gold price continued to remain very favourable throughout the period, averaging USD1,474 per ounce - 13% above our feasibility base-case. This pricing environment is now reflected in our Q3 results, which demonstrates record quarterly revenue for the mine to date."
By Anna Farley; annafarley@alliancenews.com
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Ariana (AAU)