Ariana Regulatory News (AAU)

25 November 2019

AIM: AAU

NON-BINDING MoU FOR SALINBAS JOINT VENTURE

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, is pleased to announce that it has entered into a non-binding Memorandum of Understanding ("MoU") with a major Turkish construction and engineering company (the "Proposed Partner"). The MoU proposes a series of interlinked transactions which will enable the Company partially to monetise its successful development of the Kiziltepe Mine, held via a 50:50 joint venture with Proccea Construction Co. ("Proccea") through Zenit Madencilik San. ve Tic. A.S. ("Zenit"), and its earlier-stage Salinbas Gold Project, targeting the funding of the Salinbas asset to production.

Cautionary Statement

THE FINAL TERMS OF THE ARRANGEMENTS CONTEMPLATED BY THE MOU ARE NOT FINALISED AND THERE IS NO CERTAINTY THAT THE MOU WILL RESULT IN A BINDING AGREEMENT.

Dr. Kerim Sener, Managing Director, commented:

"This MoU represents a major development in the evolution of the Company, once the definitive agreements are implemented. It recognises the considerable value of our assets and the track-record and success of our exploration and development team. In particular, the contemplated joint partnership between Ariana, Proccea and the new partner, will create a formidable exploration, development and production group focused on Turkey. This will combine the unique skill-sets of each Partner in a mutually beneficial and synergistic manner. We look forward to advancing the proposed MoU in to a joint venture capable of unlocking the full value of our assets in Turkey, which will also target the development of a future pipeline of high-value production projects. It is the goal of the Partners to become one of the premier gold mining companies operating in Turkey."

Summary of Transaction

The MoU contemplates the disposal of various interests to the Proposed Partner, including 17% of the Salinbas Project for US$5 million and jointly with Proccea, 53% of Zenit for US$50 million (to be split equally by Ariana and Proccea). Furthermore, the Proposed Partner will then inject US$8 million of equity into the Salinbas Project via an earn-in arrangement and organise the bank finance to enable this project to be brought into production. The proposed joint venture would be subject inter alia to due diligence, entering into binding agreements and shareholder approval, no later than the end of February 2020.

Ariana currently holds:

1. 50% of Zenit Madencilik San. ve Tic. A.S. ("Zenit"), which operates the Kiziltepe Mine and its associated exploration and development properties, notably the Tavsan Project; and

2. 100% of Greater Pontides Exploration B.V. ("Greater Pontides"), which holds the Salinbas Project, upon which preliminary exploration work has defined a JORC Indicated and Inferred Resource of c. 1 million oz gold.

Under the terms of the MoU, once the Proposed Partner has acquired 17% of Greater Pontides a further budget of US$8 million will be made available by way of earn-in to take the Proposed Partner to a total 53% to achieve the completion of the Feasibility Study and Environmental Impact Assessment ("EIA") of the Salinbas Project and its associated works (to which Proccea will be contributing). This budget will be subdivided into the following major work programmes:

·; Additional drilling and resource estimation

·; Definitive Feasibility Study

·; EIA and permitting

·; Freehold land acquisition, public relations, new licences

In parallel to the above earn-in arrangements, the Proposed Partner will acquire 53% of Zenit, which will, at the appropriate time, absorb Greater Pontides, such that on the successful completion of the earn-in on Salinbas by the Proposed Partner, Ariana will:

1. hold 23.5% of Zenit which will hold the Kiziltepe Mine, associated exploration and development properties and the Salinbas Project;

2. be free-carried on further costs associated with the development of the Salinbas Project;

3. be party to a shareholder and joint operating agreement, retaining representation on the Zenit board;

4. be responsible for all exploration across the new joint venture, with a reward mechanism of three times the exploration cost for all new projects injected in to the JV in the future; and

5. will have received payments totalling US$30 million to reflect the reduction in ownership percentages.

The Proposed Partner will ultimately hold 53% of Zenit, with Ariana and Proccea holding 23.5% each.

It is the current intention of the Board to consider distributing part of this sum as a special dividend to shareholders, once the mechanics for doing so are established. The Company will also utilise its enhanced capital position to fund further growth of Ariana's business. The latter activity will involve the acquisition of new exploration and development projects either within Turkey or in other regional jurisdictions and provide for the advancement of the Company through the development of other assets held in whole or in part outside of the arrangements contemplated within the transaction.

Further to the completion of the proposed joint venture, Ariana will continue as a mineral exploration and development company in accordance with is core strategy.

Shareholder approval

In the event that the MoU progresses to binding legal agreements, the Company intends to announce full details of the Arrangements and seek approval from Shareholders.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Contacts:

Editors' Note

About Ariana Resources:

Ariana is an exploration and development company with mining operations focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey, the largest gold producing country in Europe. The Company is developing a portfolio of prospective licences originally selected on the basis of its in-house geological and remote-sensing database, which now contain a total of 1.6 million ounces of gold and other metals (as at end-2017). Ariana's objective is to cost-effectively add value to its projects through focused exploration and to develop its operations, primarily through well-financed joint ventures.

The Company's flagship assets are its Kiziltepe and Tavsan gold projects which form the Red Rabbit Gold Project. Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits. These core projects, which are separated by a distance of 75km, form part of a 50:50 Joint Venture with Proccea Construction Co. The Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is currently in production. The total resource inventory at the Red Rabbit Project and wider project area stands at c. 605,000 ounces of gold equivalent (as at end-2017). At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on production is payable to Franco-Nevada Corporation. At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

In north-eastern Turkey, Ariana owns 100% of the Salinbas Gold Project, comprising the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects. The total resource inventory of the Salinbas project area is c. 1 million ounces of gold equivalent. An NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

Panmure Gordon (UK) Limited are broker to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.

Ends.