Ariana Regulatory News (AAU)

28 Jul 2005 08:00

Ariana Resources PLC28 July 2005 ARIANA RESOURCES PLC ADMISSION TO AIM AND SHARE PLACING DEALINGS COMMENCED LONDON -28 July 2005- Ariana Resources plc ("Ariana" or "the Company":AIM:AAU),the gold exploration company focused exclusively on Turkey, announces,following a successful fundraising, its admission to AIM and the commencement ofdealings in its Ordinary Shares. Beaumont Cornish and Ambrian Partners are theCompany's nominated adviser and broker respectively. Highlights: * Focused on Turkey which is highly prospective and under explored * Applying a unique proprietary geological database, with 60% of Turkey analysed * Holding 61 licences covering approximately 1,000 sq km, with two advanced projects and over 100 targets Steven Poulton, Chief Executive, stated: "We have spent three years developing a comprehensive exploration database onTurkey and have applied it to secure licences over the highest priority targets.Our technology driven strategy is rapidly yielding exploration success, asdemonstrated by the discovery of the Kinik gold prospect. In a deal with NewmontMining Corporation in January 2005 we acquired the Sindirgi gold project, whichhosts over 45km of gold bearing epithermal quartz veins. Despite current marketconditions, we have raised the funds necessary to advance our portfolio ofproperties and we would like to thank our investors for their confidence". Michael Spriggs, Chairman, commented: "Turkey is a stable and attractive country in which to invest and explore. Ithas a long history of metal mining and its geology, which remains largely underexplored, is highly prospective for the discovery of potentially world classgold and copper-gold deposits. The successful move to AIM is a tribute to thehard work of Ariana's team. We are delighted to welcome our new investors at anexciting stage in the development of Ariana and look forward to working for allshareholders to maintain the Company's strong momentum". About Ariana Resources plc Ariana Resources plc is a dynamic exploration company focused on the discoveryof multi-million ounce potential epithermal and porphyry gold deposits withinthe highly prospective Tethyan metallogenic belt of Turkey. For further information on Ariana Resources plc you are invited to visit theCompany's website at www.arianaresources.com or contact one of the following: Ariana Resources plcSteven Poulton Tel: 01235 511 767info@arianaresources.com Mobile: 0797 408 6712 Ambrian Partners LtdRichard Chase Tel: 020 7776 6461 Beaumont CornishRoland Cornish Tel: 020 7628 3396 Bankside ConsultantsMichael Padley / Susan Scott Tel: 020 7367 8888 PLACING STATISTICS Placing Price 12pExisting Ordinary Shares 21,719,400Number of Placing Shares 9,711,665Enlarged Share Capital 31,431,065Percentage of Enlarged Share Capital subject to the Placing 30.9%Market Capitalisation of the Enlarged Ordinary Share Capital at the Placing Price £3,771,728Gross proceeds of the Placing and Subscription £1,165,400Estimated net proceeds of the Placing receivable by the Company £908,728 OVERVIEW The Company is employing a dynamic exploration strategy with an emphasis on thesystematic application of remote-sensing technologies to generate, prioritiseand advance exploration targets. The Ariana Group "the Group": * is focused on gold exploration in Turkey * has a dynamic and technology-driven management team * is applying a unique in-house target database developed and refined since 2002 * has approximately 1,000 sq km of licences acquired to date, with two advanced projects * is seeking to discover multi-million ounce gold resources. INTRODUCTION The Company's operating subsidiary, Ariana Exploration & Development Ltd("AEDL") was incorporated in 2002 for the purpose of exploring for, acquiringand developing economic gold and other mineral deposits in Turkey. Since itsformation, AEDL has compiled a substantial, proprietary geological database onTurkey, which it is employing in the search for epithermal vein andporphyry-related gold deposits. Turkey offers highly prospective andunder-explored geology, a rapidly and positively evolving political landscapeand an increasingly sophisticated investment climate. During the course of 2002-2003, AEDL constructed a detailed digital GeographicalInformation System ("GIS") on Turkey, assimilating geological, mineraloccurrence, structural and mineral alteration data derived from open filesources. This database, which is under constant expansion and refinement by theCompany, underpins Ariana's strategy of evaluating large volumes of geological,geographic and satellite-acquired data, to generate a pipeline of explorationtargets for rapid field appraisal and development. EXPLORATION AND MINING IN TURKEY While legends and historical records indicate that mining has been taking placein Turkey for over 8,000 years, little modern exploration for gold has beenundertaken, despite the country's significant geological potential. Turkey is geologically complex and remains geothermally and tectonically activetoday. Alpine deformation between the Eurasian and Arabian plates resulted inthe amalgamation of three major tectonic and metallogenic belts. Newmont, Teck Cominco, BHP Billiton, Rio Tinto, Barrick and Eldorado Gold allhave direct or indirect interests in the country, as do an increasing number ofmid-tier and junior exploration companies. The Eldorado Gold-owned five millionounce Kisladag gold deposit in Western Turkey is currently under development,with initial production planned for late 2005. In the meantime Anatolia Mineralsis advancing the four million ounce resource at the Copler gold deposit in NorthEastern Turkey. Further encouragement for investment in the sector has beenprovided by the introduction of a new mining law, implemented in 2004. Foreign investment in the country is encouraged and has seen a rapid increase inthe last few years. GDP growth is in excess of 5 per cent. per annum, inflationis down from 70 per cent. to single figures, the budget deficit has been cut by40 per cent. to 11 per cent. and industrial output and productivity areincreasing rapidly. Turkey: * is politically and economically stable * is a member of the European Customs Union * has a supportive mining legislation * is highly prospective and under explored * hosts significant recent gold discoveries THE GROUP'S EXPLORATION STRATEGY The Group has developed a comprehensive understanding of the key geologicalparameters controlling the location of known gold mineralisation in Turkey. TheDirectors consider that the optimal strategy for exploration success requires arolling sequence of regional targeting, licence acquisition and reconnaissanceexploration. This strategy aims to generate rapidly and efficiently a pipelineof projects, which can be developed, based on their merits, from targets toprospects through to defined resources. This systematic methodology has alreadyyielded exploration success, with the identification of the Kinik Gold Prospect. Regional prioritisation is achieved through the simultaneous analysis ofmultiple geoscientific datasets, developed and maintained in-house, withintegrated geological models for the occurrence of epithermal andporphyry-related gold deposits. Regional targeting is achieved by prioritisingareas which exhibit key geological, structural and metallogenic attributes ofthe chosen geological model. The Group has applied advanced satellite-borneremote-sensing techniques, namely, Landsat and ASTER (Advanced SpaceborneThermal Emission and Reflection Radiometer) sensors to delineate areasexhibiting potential gold-bearing hydrothermal alteration signatures. Thesetechniques enable the discrimination of areas containing clay and iron-oxideminerals which are, in places, related to the hydrothermal alteration of thehost rocks. Such alteration is recognised as a diagnostic feature of thedeposits sought by the Company, and its identification by remote-sensingprovides a rapid, accurate and successful targeting methodology. The Group employs its GIS database to guide the acquisition of new licences overselected target areas, identified from the integration of geological andremote-sensing data with areas of available ground for application. Geologicalmodelling is used to prioritise those areas which have the strongest indicationsfor potential gold systems. Areas containing targets that are already held byother parties are noted and placed on a watch list and scheduled for negotiationor for acquisition. The methodical exploration strategy being employed by the Group is highlyefficient and cost-effective. The decision to 'develop or drop' explorationlicences can be made systematically and with great confidence. Exploration risks are reduced as ground is assessed and turned over rapidly,while the potential for exploration success is increased. The Company is focusedon generating and developing economic gold resources, and this is enhanced bythe Group's proven ability to generate drill targets from grassrootsopportunities. In May 2003, AEDL sponsored a remote-sensing research project focused on WesternTurkey with Imperial College, London. The pilot study was successful inverifying, independently, the location of hydrothermal alteration signaturesassociated with several known gold occurrences and generating numerous newanomalies. AEDL has extended the remote-sensing programme to cover a total ofapproximately 420,000 sq km in prospective areas of Western and North EasternTurkey. Over 100 exploration targets have been identified to date and these havebeen ranked in order of prospectivity by integrating the remote-sensing datawith the Group's GIS data. During 2004, AEDL, through its 100 per cent. owned Turkish subsidiary GalataMadencilik Sanayi ve Ticaret Limited irketi ("Galata"), acquired licencescovering an area approximately 210 sq km, mainly within the largely Miocene ageauriferous West Anatolian Volcanic and Extensional (WAVE) geological province ofWestern Turkey. Initial exploration by AEDL has focused on the Ivrindi District,which hosts the Kinik Gold Prospect. A reconnaissance channel sample along aroad cut at Kinik returned 48m of mineralisation, including higher grade zonesof 3.21 g/t over 10m, 3.09 g/t over 5m and 1.4 g/t over 13m. The Directorsconsider that further exploration at Kinik is warranted, as supported by theCompetent Person's Report ("Competent Person's Report") prepared by SRKConsulting Limited ("SRK"). In December 2004, AEDL completed a pre-IPO financing of £715,000 in order toadvance its existing projects, generate new targets and examine acquisitionopportunities. On 31 January 2005, AEDL (through Galata) acquired the SindirgiGold Project and accompanying historical data from Newmont, for a totalconsideration of US$400,000. Newmont retains a Net Smelter Return Royalty on theSindirgi Gold Project of 1.5 per cent., 2.0 per cent. and 2.5 per cent., basedon the price of gold trading below US$400, between US$400 and US$450 and aboveUS$450 per ounce respectively. Since 2002, the Group has assembled 58 exploration licences and three operatinglicences covering an area of approximately 1,000km. GOLD PROJECTS Sindirgi Gold Project - Purchased from Newmont Mining Corp. The Sindirgi Gold Project comprises three operation and eight explorationlicences covering an area of approximately 235 sq km in the Sindirgi District ofBalikesir Province, Western Turkey. The area was originally targeted during theCompany's regional remote-sensing studies and was acquired in early 2005 fromNewmont Mining Corporation. Since its discovery during a regional stream sampling programme in 1990,exploration by previous owners on the project has comprised reconnaissanceexploration, geological mapping, rock-chip and soil sampling and drilling. Muchof this activity was concentrated in the early 1990s by Eurogold Madencilik A.S.("Eurogold") and Tuprag Metal Madencilik San. ve Tic. Ltd. ti., an operatingsubsidiary of Eldorado Gold Corporation ("Eldorado"), and most recently in theearly 2000s by Newmont. This has resulted in the discovery of five priorityprospect areas; Kiziltepe, Kepez, Karaduz, Kavakliduz and Kizilcukur (from southwest to north east), on which the Company will focus the majority of its initialexploration efforts. Over 45km of epithermal veins have been defined and a total of 4,379m of diamonddrilling has been completed on the Sindirgi Gold Project. Initial 3D modellingby SRK from existing drilling on the southern portion (600m strike length) ofthe Arzu Vein has outlined a geological model of 1.1Mt at an average grade of4.2 g/t gold for 150,000 ounces (not yet in accordance with the JORC Code). TheDirectors consider that the Sindirgi Gold Project area is situated in a highlyprospective region that has potential to host significant low-sulphidationvein-hosted economic grade gold mineralisation. As such, the near term potentialfor defining economic resources from several selective open pits, hostingbetween 25,000 and 100,000 ounces each is worthy of investigation. SRK supportsthis view and has confirmed that the prospects defined to date on Sindirgidisplay characteristics of the upper parts of epithermal systems. Sindirgi: Kiziltepe Gold ProspectThe Kiziltepe Gold Prospect is the most advanced prospect in the Sindirgi GoldProject and is situated in the western side of the area. Features of the Kiziltepe Gold Prospect are summarised as follows: * Approximately 20km of low-sulphidation epithermal quartz veins * Individual veins are exposed over 350 to 700m of strike length and width varies between 1m and 14m. * Geological model of 150,000 ounces determined from approximately 5 per cent. of the known vein system The main veins trend north-west and north-north-west, and dip to the north-east.Previous exploration includes stream-sediment sampling, mapping, rock-chipsampling and drilling. The Competent Person's Report suggests the Arzu Vein hasa potential strike length of over 1.2km with gold grades between 3.32 g/t and23.29 g/t, in drilling intersections above a 3 g/t cut off range between 1.2m at3.8 g/t and 7.5m at 10.6 g/t. Kiziltepe selected drill intercepts above 3 g/t cut off: Hole Vein From (m) To (m) Length (m) Grade Au (g/t) KT01 Arzu South 51.95 63.00 11.06 3.72 KT02 Arzu South 63.40 67.20 3.70 9.38 KT03 Arzu South 76.30 86.40 9.95 7.23 KT06 Arzu South 35.40 49.50 13.97 3.85 KT16 Arzu North 79.10 83.40 4.35 4.08 RSC6 Arzu South 28.00 34.00 5.69 10.23 RSC8 Arzu South 45.00 52.50 7.50 10.55 The Competent Person's Report includes an appraisal of the tonnage and grade ofthe Arzu Vein. The extent of the vein in the south is well-defined by drillingand a reasonable estimate of potential volume has been made in this sector. SRKconsidered that, given the poor core recovery, considerable bias may exist inthe sample grades. SRK has produced a preliminary geological model for thesouthern part of the Arzu Vein, from existing drilling results, of 150,000ounces of gold (based on an average grade of 4.2 g/t, estimated density of 2.5 t/m3, 600m of strike length, average vein width of 2-10m and a depth of between 100 and 200m). This does not constitute a Mineral Resource estimate forJORC Code purposes. The Group will undertake a scoping study for defining economic resources ofgreater than 250,000 ounces on the Kiziltepe Vein system. Sindirgi: Kepez Gold Prospect * Approximately 8km of low-sulphidation style epithermal quartz veins * Channel samples results include a 5m wide silicified zone, returning an average grade of 9.5 g/t Au to the east of historical workings Sindirgi: Karaduz Gold Prospect * Approximately 4km of low-sulphidation style epithermal quartz veins * Rock-chip sampling over a zone of silicification returned a best value of 2.5 g/t Au Sindirgi: Kavakliduz Gold Prospect * Approximately 3km of low sulphidation style epithermal quartz veins * Reconnaissance rock-chip sampling returned several anomalous values up to 3.5 g/t Au Sindirgi: Kizilcukur Gold Prospect * Multiple parallel veins passing through the northern licence boundary * Little work has been carried out on the extensions of this system within the licence boundary Sindirgi Gold Project: New targets * In February 2005, the Group commissioned Geosense Limited to undertake processing of ASTER data over the Sindirgi Gold Project * The study has generated many new targets, for both low- and high-sulphidation style alteration Ivrindi Gold Project - Grassroots Discovery The Ivrindi Gold Project contains the Kinik and Camavsar licences, covering anarea of 30km2 in Balikesir Province, Western Turkey. The licences were acquiredfollowing delineation of Landsat remote-sensing alteration anomalies spanning1.5km x 0.5km and 4km x 0.5km, respectively. At the Kinik Gold Prospect, rock-chip sampling identified gold mineralisation(up to 5.32g/t Au) along a fault zone between altered andesite and limestone.Further rock-chips taken approximately 900m east-north-east from this areareturned anomalous gold (up to 1.39 g/t Au). A follow-up channel sample along aroad cut returned 48m of mineralisation, with higher grade sections of 3.21 g/tover 10m, 3.09 g/t over 5m and 1.4 g/t over 13m (using a 0.5g/t Au cut-off) anda peak grade of 10.42 g/t. The continuation of the alteration zone to the eastof the area channel sampled was determined by a series of composite rock-chipssamples which yielded grades ranging from 0.13 to 1.46 g/t Au. A pilot (13samples) Mobile Metal Ion (MMI) soil geochemical survey was undertaken to thewest of the channel sample, and confirmed the strike continuation of themineralised zone in that direction. To date, early stage reconnaissance exploration by the Group on the Camavsarlicence includes five stream sediment and 24 rock-chip samples yielding a peakrock-chip of 0.12 g/t Au. The Directors consider that there is potential todefine economic mineralisation at Kinik through drilling and that furtherdiscoveries are possible on both licences. These views are supported by theCompetent Person's Report. Bergama Project The Bergama Project hosts the Umit Tepe licence, covering approximately 12km2,in Izmir Province, Western Turkey. The licence is situated in an area containinga number of known gold occurrences. The Group has undertaken reconnaissancegeological mapping and first pass stream-sediment and rock-chip sampling. A peakrock chip grade of 1.41 g/t Au was returned from a zone of skarn mineralisationat Maden Tepe in the northeast sector of the licence. Further skarn bodies havebeen identified in the central part of the licence. Results indicate that theseskarns are magnetite-marcasite-pyrite-chalcopyrite bearing, with iron valuesexceeding 50 per cent., copper values up to 1 per cent. and silver values up to23 g/t. OTHER LICENCE AREAS Canakkale ProvinceThe Group has six exploration licences over an area totalling approximately132km2 in Canakkale Province in North West Turkey. Two of these licences,Cirpilar and Katrandai, are located in an area showing signs of epithermalalteration within a fault-bounded block of Tertiary-age volcanic rocks. Afurther two exploration licences have been acquired at Kosedere and Cinarpinar,near the district seat of Ayvacik. These licences are located in Miocene daciticto rhyolitic volcanic and pyroclastic rocks adjacent to a late Miocene granitoidand are located on areas showing strong hydrothermal alteration in proximity toepithermal Cu, Pb and Zn mineralisation. To the North of Canakkale the Yenice exploration licence is located in andesiticporphyry. Porphyry-related gold deposits are situated to the immediate north ofthe licence. The Ramazanlar exploration licence is located in Eocene andesiticvolcanic rocks. Field reconnaissance by the Group has located an area ofargillic alteration with minor quartz-barite veins. Gumushane ProvinceIn the North East of Turkey, the Group holds three contiguous explorationlicences (Akcakale, Cayragin Tepe and Uzunparmak Tepe) which are located in theGumushane Province. These licences cover an area of approximately 35km2 and arelocated in part on the Gumushane intrusive and volcanic suite. CURRENT TRADING AND FUTURE PROSPECTS At present, the Company has no trading profits, as its principal activity isexploration in Turkey through its operating subsidiary. The Directors believethe areas in which the Company has selected to operate offer opportunities forpotential growth and enhancement of the Company's financial prospects. TheDirectors intend to develop the Company by undertaking: * detailed evaluation of the Kiziltepe gold prospect in the Sindirgi Gold Project as part of a scoping study for defining economic resources; * systematic exploration of the Group's other prospects; and * continual generation of new prospects and opportunities. Following Admission the Company will have paid up nominal share capital of£314,310 and an estimated net cash balance of £908,728. DIRECTORS AND STAFF Directors Michael Spriggs BA (Hons.) MA MSc (Non-Executive Chairman) aged 62. Michael has 35 years' mining sector experience having graduated from Oxford University with a BA (Hons.) in 1964 and an MA in 1968. He obtained anMSc in Geology and Mineral Sciences from the University of Leicester in 1969. He worked for a number of major mining groups, including Anglo American, Falconbridge and Rio Tinto. Michael spent 11 years with the mining team of the UK investment bank SG Warburg (now UBS) from 1986-97. He was appointed Head of the South African Mining Equities Research Team and was subsequently appointed Director of Corporate Finance. In 1997 he was appointed a partner at College Hill, the UK public relations consultancy, as head of the Mining Team.Michael is Non-executive Chairman of AIM listed Vane Minerals plc and Van Dieman Mines plc.He is also a Member of The Institute of Materials, Minerals and Mining and aChartered Engineer. Steven Poulton BSc (Hons.) MSc MCSM, (Chief Executive Officer) aged 29. StevenPoulton graduated from the University of Southampton with an honours degree inGeology and from the Camborne School of Mines with an MSc in Mining Geology.Steven worked for AIM and TSX-V listed Mano River Resources Inc. as OperationsManager and subsequently as Vice President Corporate Development. He isnon-executive Chairman of African Aura Resources Limited, a director ofExploration Capital Limited and a director of KSPM Associates Limited. He isalso a Fellow of The Geological Society of London, a Member of The Institute ofMaterials, Minerals and Mining and is a member of the UK Association of MiningAnalysts. Matthew Grainger BSc (Hons.) MSc MCSM, (Operations Director) aged 31. MatthewGrainger graduated with an honours degree in Earth Science and then completed amaster's degree at Camborne School of Mines in Mining Geology. He has worked inIreland and Spain as a project geologist with AIM listed Cambridge MineralResources plc and has worked as an independent consultant of KSPM AssociatesLimited for a number of clients engaged in mineral exploration and GIS. Matthewis a director of KSPM Associates Limited and is also a Fellow of The GeologicalSociety of London and a member of the UK Association of Mining Analysts. Kerim ener BSc (Hons.) MSc DIC PhD, (Exploration Director) aged 28. Kerim energraduated from the University of Southampton with a first-class honours degreein Geology and from the Royal School of Mines (Imperial College, London) with anMSc in Mineral Exploration. He went on to work for Independence Gold Mining Pvt.Ltd (Lonmin Zimbabwe) as an independent consultant with KSPM Associates Ltd. Hethen undertook a PhD at the University of Western Australia whilst working on anumber of consultancy projects in the Western Australian mining and explorationindustry, in addition to working directly with his PhD sponsor company, ASXlisted Northern Gold NL in the Northern Territory. He is a Fellow of TheGeological Society of London, a Member of The Institute of Materials, Mineralsand Mining and a member of the Society of Economic Geologists. Michael Etheridge BSc (Hons.) PhD (Non-Executive Director) aged 58. Michael(Mike) Etheridge has 34 years' experience in geological research and mineralconsultancy. He graduated from the University of Sydney with a first-classhonours degree in Geology and a PhD from the Australian National University. Hethen lectured in Geology at the University of Adelaide and at Monash Universitybefore becoming the Senior Principal Research Scientist for the Bureau ofMineral Resources from 1982-1989. In 1991 he co-founded Etheridge & Henley(later Etheridge, Henley, Williams) which then merged with SRK in 1997,following which he served as a Director of SRK Global from 1998-2001 and asChairman (Australasia) from 1998-2004. His current directorships include AIM andASX listed Ballarat Goldfields NL and TSX-V listed Geoinformatics ExplorationInc. Michael is also a Fellow of the Australian Institute of Geoscientists,Fellow of the Australian Academy of Technological Sciences and Engineering andFellow of the Australian Institute of Company Directors. Michael de Villiers B.Comm CFA (SA) (Non-Executive Director) aged 42Michael de Villiers qualified as a Commercial and Financial Accountant withErnst & Young in Cape Town. Michael has 15 years' experience in the mining andchemicals sectors which he gained as a financial manager working for mining andchemicals operations in Namibia, Botswana, Ghana, Bulgaria and, over the last 5years in the United Kingdom. He is currently Finance Director of AIM listedMercator Gold plc and was previously the Finance Director of Oxus Gold plc andNavan Mining plc. Staff In addition to management input from the Directors of Ariana, the seniormanagement for Galata in Turkey includes: * Erhan ener (General Manager), a Turkish national with twenty years' experience in senior management, and responsible for general administration and community relations. * Uur Aydin (Office Manager), a Turkish national with seventeen years' experience in accounting and personnel management with Eldorado Gold in Turkey, and responsible for general office management and group accounting. * Galata also employs the services of akir Guzel (Licence Manager) a Turkish national with twenty-one years' experience in licence applications, renewals and reporting, in addition to four Turkish field geologists. Ends This information is provided by RNS The company news service from the London Stock Exchange