Ariana Regulatory News (AAU)

31 May 2018

AIM: AAU

SIGNIFICANT RESOURCE INCREASE AT KEPEZ PROSPECT

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company with gold mining operations in Turkey, is pleased to announce a Joint Ore Reserves Committee ("JORC") Resource update for the Kepez Prospect ("Kepez" or "the Prospect"). Kepez is part of the Red Rabbit Joint Venture ("JV") with Proccea Construction Co. and is 50% owned by Ariana through its shareholding in Zenit Madencilik San. ve Tic. A.S. ("Zenit").

Highlights:

· Global resource of c. 371,000t at 2 g/t Au and 14 g/t Ag for 23,900 oz gold and 164,300 oz silver (all categories)*.

· New estimate represents a c. 270% increase on a gold only basis from the previous estimate of c. 8,800 oz gold.

· Kepez demonstrates potential to be mined as a series of satellite pits to the Kiziltepe mining operation.

· Potential resource extensions are represented by a number of drill holes including 9.6m @ 3.0 g/t Au + 119 g/t Ag, 6m @ 2.7g/t Au + 16 g/t Ag from near surface.

· Environmental Impact Assessment ("EIA") extension granted recently to cover part of the Kepez North area; mining permit application process currently underway.

Dr. Kerim Sener, Managing Director, commented:

"This resource update for Kepez indicates the potential to add at least one year of production from this satellite area to the Kiziltepe mining operations. Furthermore, the higher confidence Indicated resource at Kepez North, which contains approximately 60,000 tonnes at 4.6 g/t Au and 34.7 g/t Ag, shows potential for several months of high-grade production. This part of the resource has also been shown to have good metallurgical characteristics from previous bulk testwork.

"We envisage this area being developed as a series of shallow open-pits, developed as satellites to the Kiziltepe mining operations, within short trucking distance from the processing plant. In addition, we believe there is scope to enhance this resource further and additional drilling is being planned by the joint venture accordingly. The proximity of this area to the Kiziltepe operations makes such satellite operations highly viable."

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

* All Mineral Resource figures in the announcement are quoted gross with respect to the Red Rabbit Joint Venture, of which 50% is owned by Ariana.

Resource Estimate

Zenit Madencilik San. ve Tic. A.S. (Zenit) engaged Odessa Resources Pty. Ltd. to review a Joint Ore Reserves Committee ("JORC") compliant Mineral Resource estimate for the Kepez Prospect, which was compiled internally by the joint venture team. The Mineral Resource estimate is based largely on work completed between 2006 and 2015, though also involves some historical exploration data. In compliance with JORC 2012, the Mineral Resource Estimate detailed here includes material scientific and technical information in respect of the Project. The Mineral Resource will inform an infill drilling programme to target those areas that remain in the Inferred category, in addition to testing extensions of known mineralisation along strike and at depth.

Geological Summary

Gold mineralisation within the Kepez district is epithermal and vein-hosted in style, with associated silver, typically structurally controlled at the contact of, or in association with Miocene aged dacitic to rhyodacitic volcanic rocks and underlying Cretaceous aged multi-lithic ophiolite rocks in the case of Kepez North. In the Kepez West area the mineralisation is dominantly associated with rhyodacitic volcanic rocks, although part of the ophiolitic units occur to the north and also appear to exert some influence on the distribution of mineralisation.

The Kepez North prospect is situated 14km haulage distance from the Kiziltepe mine-site. The prospect contains 2.5km of dominantly north-trending and bifurcating low-sulphidation style veins occurring over a series of ridges near the village of Kepez. The Kepez North main vein is approximately 600m long and up to 20m wide (Figure 1). It is positioned at the contact between dominantly dacitic pyroclastic and ophiolitic rocks and dips at 50o to the west. The majority of the gold mineralisation in this vein occurs in a matrix supported hydrothermal quartz breccia which occurs in a limited zone approximately 100m in strike. The mineralisation is silver rich with some veins showing a Ag:Au ratio of between 4:1 and 8:1. In places, a pyrite content of up to 40% is observed but is typically 1 to 5%. Additional ore grade material in the form of scree above the Kepez North hanging wall (c. 7g/t Au + 65g/t Ag) has been defined and included in the resource model.

The Kepez West prospect is located 12km haulage distance from Kiziltepe mine-site. The area generally lacks exposed outcrops, likely due to farming activities occurring over several hundred years having disturbed much of the ground. However, sporadic outcrops, sub-crop and quartz float material are present and coincide largely with an east-west structural corridor of argillic and silicic alteration. The general trend of the Kepez West vein system is east-west with an apparent 20o dip towards the south (Figure 1), although this is not well-constrained due to the limited drilling in this area. However, there is potential shown in some drilling for mineralised extensions to be identified based on current drilling, notably including the following intercepts 9.6m @ 3.0 g/t Au + 119 g/t Ag, 6m @ 2.7g/t Au + 16 g/t Ag from within 10m of surface (as previously reported on 16 March 2016).

http://www.rns-pdf.londonstockexchange.com/rns/7482P_-2018-5-30.pdf 

Figure 1: Map of the Kepez Prospect, showing the main resource areas (in red). An inset map shows some additional detail in the Kepez North area. Selected drill hole results are also identified in these areas.

Estimation Methodology

The Kepez North and West veins were modelled as three-dimensional wireframes from sectional interpretation using cut-off grades of 0.5 g/t Au. The dimensions of the modelled quartz veins vary significantly and are typically 500m to 1,400 m in strike length, although smaller segments are also present. The veins dip to the west by 50o at Kepez North and to the south by 20o at Kepez West and dip lengths are typically 150m to 200m. Where continuity was not established between sections, extrapolation along strike was limited. The continuity of the various structures is reflected in the Mineral Resource classification and is based on the extents of available drilling data. Drilling data comprised 20 diamond holes in Kepez North and 20 Reverse Circulation ("RC") and 8 diamond drill holes in Kepez West.

Compositing was completed in Minesite Torque using a 1m best-fit routine, applying hard domain boundaries, which forced all samples to be included in one of the composites by adjusting the composite length, while keeping it as close as possible to the selected interval of 1m; no top cut was applied to the data. Specific gravity was determined based on the Tetra Tech feasibility study (dated 2013) for the nearby and geologically very similar Kiziltepe deposit. The average ore density identified from this study and used here resource estimation is 2.50 g/t cm3.

A block model was constructed for each vein separately to incorporate both the vein and the halo which were modelled as a whole. Model rotation was not required as the veins strike north-south or east-west. Sub-blocking was not used but block percentages were used to record the percentage of each of the mineralised structures within a block and weighted percentages were used to calculate tonnages.

Gold and silver were estimated separately for each of the vein zones using inverse distance weighted squared method, providing a global estimate. Estimation was limited to the blocks inside the wireframe of each vein zone. The number of informing samples per estimated block was limited to prevent individual holes or samples having too large an influence on the estimate. A single pass strategy was used in the interpolation as the drilling data is not dense enough to categorise material as measured or indicated, other than part of the Kepez North estimate for which extensive surface sampling data is available to support the drilling data. An ellipsoidal search of 50m x 25m x 15m was used.

Resource Classification

The Kepez resource model was classified according to JORC 2012 (Table 1). In the Kepez area Indicated Mineral Resources are those blocks or part blocks that are part of the vein zone and outcrop at surface from which a significant amount of surface sampling data has been obtained. This relates only to part of the Kepez North area and such blocks are supported by some historic diamond drilling data, as detailed in the Tetra Tech feasibility study (2013). Inferred Mineral Resources are those blocks or part blocks that are part of the vein zone and were estimated based on drilling data alone. Inferred Mineral Resources represent areas where sample density was too low to assign a higher resource category.

Confidence in the estimate of the Mineral Resources in the Kepez North area is sufficient to allow the results of the application of technical and economic parameters to be used for detailed mine planning. Some drilling will be planned to help support further studies in addition to assisting the targeting of future exploratory and resource drilling in order to expand the resource further.

Table 1: 2018 Kepez JORC 2012 compliant Mineral Resource estimate, based on 28 diamond and 20 RC drill holes. Gold equivalent is the sum of the gold ounces and the gold equivalent ounces of silver based on a price ratio of 60:1. The Indicated part of the resource previously reported in the Tetra Tech feasibility study of 2013 remains unchanged.

Contacts:

Editors' Note

The information in this report that relates to Mineral Resources is based on information compiled by Mr. Alfred Gillman of Odessa Resources Pty. Ltd., who is a fellow of the Australasian Institute of Mining and Metallurgy. Mr. Gillman is a consultant to Ariana Resources plc and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the subject matter of the report to qualify as Competent Person and defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results Mineral Resources and Ore Reserves (JORC Code). Mr. Gillman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Dr Kerim Sener, BSc (Hons), MSc, PhD, is the Managing Director of Ariana Resources plc. A graduate of the University of Southampton in Geology, he also holds a Master's degree from the Royal School of Mines (Imperial College, London) in Mineral Exploration and a doctorate from the University of Western Australia. He is a Fellow of The Geological Society of London and has worked in geological research and mineral consultancy in Africa, Australia and Europe. He has read and approved the technical disclosure in this regulatory announcement.

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. 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. 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. A 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.

Glossary of Technical Terms:

"Ag" the chemical symbol for silver;

"Au" the chemical symbol for gold;

"cut-off grade" The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification;

"g/t" grams per tonne;

"Indicated resource" a part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;

"Inferred resource" a part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and has assumed, but not verified, geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited or of uncertain quality and reliability;

"Inverse Distance Weighted Squared" a conventional mathematical method used to calculate the attributes of mineral resources. Near sample points provide a greater weighting than samples further away for any given resource block;

"m" Metres;

"JORC" the Joint Ore Reserves Committee;

"JORC 2012" is the current edition of the JORC Code, which was published in 2012. After a transition period, the 2012 Edition came into mandatory operation in Australasia from 1 December 2013;

"m" Metres;

"oz" Troy Ounces. One Troy Ounce is equal to 31.1035 grams;

Ends.

JORC Table 1

Ariana Resources Kepez Project

The table below is a description of the assessment and reporting criteria used in the Kepez Project Mineral estimation that reflects those presented in Table 1 of The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012). The Mineral Resource statement was prepared for the Kepez Project.