Member Info for Strangerstill

From the Xinhai web site.

Shandong Xinhai Mining Group Co., Ltd. (“Xinhai Mining”), founded in 1997, is an international enterprise with nearly three decades of mining expertise. Its dual-engine strategy combines “mineral resources investment and development” with “full-industry-chain mining services.” Committed to integrated mining solutions through its EPC+M+O model, the Group provides global clients with one-stop, end-to-end services, including mineral processing tests, mine design, equipment manufacturing and supply, construction for mining, mineral processing, and tailings storage facilities (TSF), equipment installation, mine construction management, and production operation, empowering clients to maximize mineral resource value.

Looking at projects that Xinhai is involved in Xinhai typically takes about a 10% interest in the client company and provides the services to bring the project into production. Xinhai does provide funding at competitive rates with the funding secured on the project. If xinhai funded Dokwe than as long as Ariana can repay the loan Xinhai will own 10% of Ariana shares and would probably operate the mine and processing plant under contract. Ariana currently has about £28 million in cash, with the shares in Zenit valued at about £14 million which will probably be sold when funding is needed (Zenit is going public so the shares should be easily traded). The metallurgical work and DFS are already paid for so that in Q1 next year Ariana will have a DFS, revised reserves and access to a substantial amount of cash. Ariana is already talking to funders (according to KS) and I see no reason why Ariana would not go on to develop a 100% owned mine at Dokwe. If a takeover bid was launched, I suspect that the Board would resist unless the offer was close to the DCF value of Dokwe. It appears that Xinhai has a good track record at delivering mining projects in a relatively short time. My prediction is that Ariana will develop Dokwe as a 100% owned project and that Xinhai will operate the mine and processing plant.

Ariana has £28.3 million in the bank with no need to raise funds until it is ready to build the mine at Dokwe.

Dokwe has 1.1 million oz of gold reserves with a lot more exploration to be carried out.

Xinhai have taken a strategic investment in Ariana holding 10% of the shares in exchange for developing the Dokwe DFS. Xinhai is a leading EPC + M + O company and will take Ariana all the way to a fully operational mine at which point Xinhai will operate the mine for Ariana. Xinhai’s business model is to take a mining business all the way to production providing all services eventually making their money from running the mine and processing plant. Xinhai have a very good track record of bringing mines into production very quickly. Xinhai also provides development funding at competitive rates.

The recent valuation of Ariana by Zeus put a value of 9 pence per share. Zeus’s analysis was very conservative using a gold price of $,3.250, assuming that Dokwe will not be operational until 2030 and taking only 55% of the resulting DCF into the valuation. It defies logic that the shares are currently trading at 1.7 pence.

Ariana must be categorised as contrarian as every time there is good news the share price goes down.

Ariana now accounts for its holding in Zenit under fair value and not under equity. The rational for this is the recognition that Ariana has no significant influence over the management of Zenit and thus no influence on any dividend payments. Ariana is at the complete mercy of Ozaltin when it comes to the distribution of any profit via dividends.

I suspect that today is an over reaction and the long term drop will be about 15%. This downgrade of reserves to resources has been coming ever since CAML flagged that the ore body was more fragmented and the geology more complex at SASA. I suspect that with the ongoing drilling at SASA the reserves will increase again.

On another note CAML are increasing their holdings in Aberdeen Minerals.

Aberdeen Minerals welcomes a new £850,000 investment into the company agreed with its largest shareholder, London-based Central Asia Metals Plc (“CAML”).

This investment will fund “Phase 3” exploration drilling and geophysics at the Arthrath Project area and other activities in Aberdeenshire, North East Scotland, where the company is exploring for nickel, copper and cobalt in partnership with local landowners.

The new equity investment is to be made through the exercise of £0.85 million in share warrants, out of a total of £2 million in warrants issued to CAML at the time of its £3 million Initial Investment in June 2024. Exercise of this tranche of warrants, which remains subject to final documentation, will increase CAML’s shareholding in Aberdeen Minerals from 28.4% to 32.6%.

The assay results at Dokwe Central are very encouraging. The DRC9 results were good showing that Dokwe Central is open at depth and to the south. The drilling went down to 150 metres below cover and was angled to explore further potential at Dokwe Central. Interestingly the final 46 metres of drill contained 8 metres of core with no gold and 38 metres of core at an average grade of 1.72 g per ton. I am looking forward to further assay results for Dokwe Central and, more importantly, the assay results from the drilling to the NE of Dokwe North which might increase the reserves at Dokwe North in an extension to the current pit design.

In 2022 after the final dividend had been paid the market cap of Ariana was about £46.7 million. At that time Kiziltepe was in production with an estimated 3 years of processing life left, Tavsan was not fully permitted and there was no funding in place to build the mine, Western Tethyan Resources (WTR) was in its infancy. Dokwe was not even a glimmer on the horizon. Ariana owned 23.5% of the JV. The price of copper was about 4.3 $ per lb and gold was $1,940 per oz.

Since then, Kiziltepe processing life has been extended to at least 2026, Tavsan has been built and is in production, WTR has progressed with some good exploration results. Dokwe has 1.1 million oz of gold in an already optimised pit with more exploration underway, the project has funding for the current exploration, metallurgical work and the development of a Definitive Feasibility Study. Dokwe is 100% owned by Ariana and Ariana still owns 23.5% of the JV. The price of copper is now 5.43$ per lb and gold is $4,425 per oz. The market cap of Ariana is now £32.15 million which is only 69% of the market cap in 2022. This is totally absurd.

The big problem for Ariana is that the private shareholders talk it down and continue to sell shares thus driving the share price down and ensuring that there will be more dilution in the future. Even Shandong’s options are at 2.5p per share, 67% above the current share price. Shandong must be confident that the share price will increase significantly.

There is a lot of speculation about Tavsan and the development of Salinbas. The delay in the completion of the mine and processing plant at Tavsan due to the legal challenge to the mine was unfortunate but unforeseen. The three partners in the JV agreed to use the cash flow from Kiziltepe to fund the majority of the Tavsan development, the variance to the JV agreement would have needed a 75% vote and Ozaltin could not have forced this agreement by itself. The delay caused a cash flow crisis for Ariana, but the company is now on a good financial footing with a clear path forward for the development of Dokwe, albeit with some regrettable dilution. There will probably be future dilution but the result could at worst be a 30% to 40% share of a 100,000 oz pa gold producer with a free carry on the mine build.

Turning to the development of Salinbas. Salinbas is several years away from the building of a mine and processing plant. The exploration stage is still underway, and the project then needs permitting and a feasibility study. The CIL plant at Kiziltepe will be producing gold for another two to three years and then will be redundant. I expect that the JV will dismantle the plant and rebuild at Salinbas for a lot less than the cost of a new plant. At peak production the Kiziltepe plant can produce up to 25,000 oz of gold per annum from high grade ore, the JV could augment this with a heap leach plant producing 30,000 oz of gold per annum from lower grade ore once the CIL plant is operational and producing profit and cash flow without having to rely on the profit and cash flow from Tavsan. The plant could be built using the cash flow directly or by raising a loan backed by the profit and cash flow.

The RNS is positive and states that the geology is as expected for a continuation of the gold bearing mineralised zones. The important information will be from the assay results which I expect to be positive. Renniks2018 has a very good analysis in ADVFN. I view the RNS as positive and eagerly await the first assay results which are expected in the next few weeks.

There is still a lot of negativity about Ariana and the share price is a fraction of the true value of the assets of the company. I am positive about the future for Ariana, however whether the future is good or fantastic will depend on what happens in 2026.

Looking ahead I will forecast the following.

Turkey

The JV will have an increase in reserves for the Kiziltepe satellite pits and for Tavsan (Tavsan has a planned 15,000 metres of drilling). I believe that the Kiziltepe plant will be operational into 2027 using high grade ore from Tavsan and the Kiziltepe satellite pits (in particular Kizilcukur).

The JV will start to distribute dividends to its member companies, the halt in dividends was agreed by all three companies until Tavsan was built and operational. Tavsan is now operational and Ariana have stated (8th October 2025) that dividends from Zenit will be renewed in 2026. Whatever your feelings about including Ozaltin in the JV it did allow Ariana to pay a dividend and invest in exploration prospects leading eventually to the purchase of Dokwe.

Dokwe

The dividend payments will keep Ariana solvent through the further exploration, feasibility study and mine and processing plant design stages which will happen in 2026. Ariana has stated that all permits have been obtained for Dokwe.

The 11,000 metre drilling campaign will confirm the existence of further gold ore bodies at Dokwe, it is yet to be seen how significant the extra resources will be but, bearing in mind that Ariana has already proved to be excellent at prospecting, I expect that there will be a significant increase in gold reserves at Dokwe.

Looking further ahead I expect that Ariana will be able to raise funds to build the mine and processing plant at Dokwe as long Ariana sticks to the plan to build the plant in stages. The JV, when it was just Proccea and Ariana, raised $31.9 million of debt to fund Kiziltepe on a gold reserve of 195,000 oz when the price of gold was much less than it is now. I believe that Proccea will be involved in Dokwe in some form or other because of its expertise in designing and running mining operations. I hope that Ozaltin is not involved.

Dokwe is key to Ariana’s future and I believe that it will be a very valuable resource and Ariana would not have it in its portfolio if it hadn’t sold part of the JV to Ozaltin and used the money to invest in exploration targets.

Cyprus

The high price of copper might encourage the sale of Venus or enable an IPO.

Western Tethyan Resources

WTR will slowly plough ahead under its own steam becoming a more valuable investment with little input from Ariana.

I believe that 2026 will be a very important year for Ariana and that the share price will be significantly higher by the end of the year.

In the last 6 weeks the RNSs that have come out of Ariana have all been good news.

Tavsan was declared operational with the first gold pour expected before the year end – 8th October.

A fully funded 11,000 metre drill exploration was announced for several sites at Dokwe, these sites all along prospective shear zones of which only 10% have been fully explored. The results of the exploration to be incorporated into the final feasibility study mid 2026. – 23d October

All the initial drilling pads in place and 4,000 metres of drilling commenced at Dokwe concentrating on a strong soil anomaly to the NE of the proposed pit at Dokwe North. The initial analysis results expected before the year end. - 4th November

High grade drilling results have been announced from Tavsan with an ongoing drilling programme taking place. Mineralisation is now confirmed to extend beyond the current JORC Resource, both at depth and along strike and in areas between planned pits. – 13th November

Ariana is fully funded for the next year, and Ariana has stated that dividends will be paid by the JV once Tavsan is fully operational and producing profit and cash flow. Ariana is not going to go bust. Ariana is being cautious on Dokwe and have already said that an incremental approach to building processing capacity at Dokwe is being considered to reduce any share dilution.

All this and the share price has dropped from 1.95 pence to 1.4 pence in the last 6 weeks. It is beyond absurd. Take today two sells (total 213,982 shares) early in the trading session dropped the price from 1.425 to 1.375, subsequently 8 buy trades (total 587,222 shares) took place at or very near the ask without any change in the share price. Then two buys (total 503,599 shares) at an average price of 1.381 pence per share took place and the share price dropped further to 1.35. Something fishy is going on, the market makers are helping to drive the price down. Prices and trades at 12:00 18/11/2025.

The current market cap is less than the value of Ariana's share of the JV never mind the value of all the other assets held by Ariana.

Zeus Capital has produce several papers recently on Ariana in which it has stated that the fair value of Ariana is under review. I have attempted to put a valuation on Ariana component parts.

Gold exploration costs between $60 per oz and $100 per oz for economically mineable gold in the ground, currently gold reserves in the ground have been changing hands for more than $200 per oz. I will use $80 per oz (approx. £60 per oz) to value mineable gold reserves.

Gold in production will be valued at a conservative $1,000 (£770) profit per oz with a 50% reduction in the value of future profits.

Dokwe

One million oz of mineable gold in an already optimised pit, with all permissions in place, gives a valuation of £60 million which is 100% attributable to Ariana, this does not take into account the fact that the recognised resource at Dokwe is 1.4 million oz.

Turkey

Kiziltepe has at least 2.5 years of production left from the adjacent pits, with the ASX listing giving a 2024 depleted resource, including the satellite pits, of 170,000 oz of gold with reserves of 47,000 oz at Kiziltepe and Kizilcukur combined.

Tavsan has 311,000 oz of gold in reserve.

Taking the two together it I estimate that there should be approximately 330,000 oz of gold which should give a profit of about £240 million, or discounted for future profits £120 million of which £28 million is attributable to Ariana.

Salinbas contains a resource estimate of 598,000 oz gold which has a valuation of £48 million of which £11 million is attributable to Ariana. I have not included a valuation for Ardala as it is relatively low-grade ore.

So, Turkey and Dokwe have a combined valuation of about £99 million and this does not put any valuation on Venus Minerals, Western Tethyan Resources or the Australian investments. Ariana Resources is severely undervalued, and its value will only increase with any increases in reserves from the current drilling program at Dokwe.

On reading the recent RNSs I believe the drilling program at Dokwe will have little delay on the production of a final FS. The Dokwe North pit has already been optimised and the only thing that could change this is the results of the Drilling at the prospect that is to the NE of Dokwe North. In the RNS dated 15 October 2025 Ariana stated that four initial targets are to be tested, through a 26-hole program, including extensions to the Dokwe North and Central deposits, among others; site preparations are completed. Significant gold-in-soil anomaly identified to the NE of Dokwe North will be drill-tested as a priority (10 holes). Drilling is expected to yield initial assay results before the year end.

So, the initial results of the drilling to extension to Dokwe North will be available inside two months and thus any changes to the pit design can then be incorporated into the FS. It is the rest of the FS work including the costings and design of the processing plant that will take the time so the drilling program will have little impact on the delivery of the FS. The assay results, if positive, will increase the value of the reserves and thus the value of Ariana. Gold in the ground has recently been exchanging hands at over $200 per oz so the more gold that is discovered in the ground the more Dokwe is worth. Investors are worried that Ariana is a cheap takeover target, but I suspect that there are enough long-term shareholders who understand the true value of the company to resist a low value takeover bid.

There is a lot of disquiet from shareholders around the fact that Ariana is not going to produce the final FS until it has carried out its program of further exploration at Dokwe but shareholders should not be unhappy at this. Ariana stated in the ASX prospectus (5.12) that it was going to use the monies raised by the ASX listing mainly to carry out further prospecting at Dokwe. The latest RNS details the geology of Dokwe and states that the current gold finds are on the shear zones of which only 10% have been thoroughly investigated giving 1.1 million oz of gold. Whatever you think about KS he is a good geologist and seems to believe that there will be significant reserves of gold in the unexplored shear zones, if this is the case then Dokwe would be worth significantly more as an asset. It makes sense to incorporate the findings of the planned 11,000 metres of drilling into the final FS as the increase in asset value will make the raising of the capital to build the mine easier and less expensive either in loan costs or in share dilution.

A delay in the FS might not be a bad thing at present as hopefully it will then be published after the current dip in the price of gold. The price of gold will remain high going forward as the geopolitical and economic uncertainties of the world have not gone away, the US economy appears to be getting increasingly rocky and the AI sector, which is trading on very high P/Es, has the potential for a large readjustment if investor sentiment declines or the sector does not deliver.

Dokwe

The Ariana geologists believe that the gold anomaly discovered to the NE of Dokwe North is very similar to Dokwe North. Dokwe North contains an In-pit Measured and Indicated MRE of 19.7Mt at 1.54g/t Au for 977,000 ounces of gold. The geologists at Arian have a proven track record and plan 11km of drilling to develop the reserves at Dokwe. Assuming that they are correct and there is a significant increase in the gold reserves at Dokwe then Ariana is correct in incorporating the extra reserves into a FS.

It will help Ariana to raise the funds to build the mine if there is a significant increase in the reserves. Loan funding will be easier and at a lower rate of interest if the underlying assets are significantly greater. If a JV is the route forward, then a partner would have to pay more to enter a JV if the reserves are significantly greater. If the funds are raised through a share issue, then it is reasonable to expect a higher price to be paid if there is a significant increase in gold reserves at Dokwe. I am sure that Arian is working on the FS but it is being prudent in waiting to incorporate the results of the drilling campaign into the FS. We have to sit tight, as they say good things come to those that wait, sometimes.

I have watched the latest interview with KS and feel that at last the Board have come up with a decent strategy.

The plan to carry out a further 11,000 metres of drilling a Dokwe before the FS is finalised is a good move. KS seems very convinced that there is an ore body to the NE of Dokwe North that is similar to the one that is currently at Dokwe North itself. KS is a very good geologist and if Ariana can substantially increase the reserves at Dokwe this will be a significant help in raising the funding for the subsequent mine and processing plant build without further dilution. It will make it easier to raise a larger loan at lower interest rates if the securing asset is worth more thus reducing the risk of dilution. KS also stated that the plan was to build the processing plant in steps to reduce the initial capital spend, once again this will enable Ariana to start production at Dokwe with minimal or no dilution and to bring the mine into production earlier. Processing plant expansion can proceed once the mine is producing profit and cash flow.

When I viewed the interview the impression that I got was that Ariana is pursuing a strategy whereby Ariana can keep 100% ownership and control over Dokwe whilst it is brought into production. Maybe they have reviewed what has happened with the JV in Turkey and do not want that situation to occur with Dokwe. The JV in Turkey is not controlled by Ariana and the development of the resource in Turkey is really controlled by Ozaltin.

We are waiting for Ariana to confirm the production of gold from the heap leach process at Tavsan, it could be a lengthy wait depending on the leaching process.

Type of Gold Heap Leaching Process

The industrial gold heap leaching process can be divided into two types, one is short-term gold heap leaching and the other is long-term gold heap leaching.

In the short-term gold heap leaching process, the ore is usually crushed to less than 20 mm. When processing gold-bearing quartz veins, it is often crushed to less than 6 mm. The crushed ore heap is leached on a permanent bottom mat, with stack height of generally 3-6 meters, per heap processing volume of 100-10000 tons, and per heap leaching cycle of generally 7-30 days. After a cycle of leaching is completed, the waste is removed from the bottom mat, and then a new batch of crushed gravel is piled up for the next cycle of leaching.

During long-term gold heap leaching method, using open-pit mining of loose and unbroken low-grade ore, which may contain some giant gravel, but most of the feedstock is less than 150 mm, and the capacity is 10,000-2,000,000 tons of ore per heap. The heap is similar to a truncated cone with 6-10-meter height. This heap has a long leaching period of about 4-5 months, which is based on the principle of leaching most of the useful mineral in the heap and may require a leaching period for several years. After the leaching is completed, the waste is piled on the bottom pad.

The summary of projects and development plans is interesting, and I am pleased that Ariana is going to push ahead with its drilling programme at Dokwe. I am convinced that there is good potential for a significant increase in gold reserves at Dokwe. It is interesting that Zeus (16th September 2025) has stated ‘The claims allow for mining to commence without the requirement for further permitting.’ this should enable the mine to go ahead quickly after the PFS and funding.

Regarding Tavsan Ariana has stated ‘production from the Tavşan Mine due to be augmented through its heap-leach imminently’ which on the surface of it is good news. The question is what does Ariana mean by imminently, as a sailor imminently means within 6 hours, for the man on the Clapham omnibus it probably means within a couple of weeks, for a cosmologist it probably means within a few million years. Take your pick, are you optimistic or pessimistic.

The report of 8m @ 197.22 g/t Au (inclusive of a 1m intercept of 1,568 g/t Au) is misleading as nearly all the gold in the 8 m is as a result of the 1 m @1,568 g/t .

The total gold in the 8 metre intercept is 8 * 197.22 = 1,578 g leaving only 10 g in the other 7 m giving 1.4 g/t for the rest of the core apart from the 1 m intercept.