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Western Tethyan Completes Due Diligence

2 Mar 2023 07:00

RNS Number : 5838R
Ariana Resources PLC
02 March 2023

2 March 2023




Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral exploration and development company with gold mining interests in Europe, is pleased to announce that its 75% held Western Tethyan Resources Ltd ("WTR") subsidiary has completed its due diligence on the Slivova Gold Project ("the Project") in Kosovo, which is owned by TSX-V listed Avrupa Minerals Ltd. ("Avrupa"). Accordingly, WTR is expecting to complete a definitive Earn-In Agreement on the Project.


Slivova Concept Study completed during the Due Diligence phase contemplates a low initial capex and moderate operating cost project, offering attractive economics.

WTR has now initiated a Preliminary Economic Assessment Study (PEA) for the project with UK-based consultants Bara Consulting UK and Knight Piesold.

Earn-In Agreement is expected to be completed by the parties within the coming weeks.

As previously announced, Slivova represents a sediment-hosted gold deposit containing 640,000t @ 4.8 g/t gold and 14.69 g/t silver and several less explored potential satellites.

Dr. Kerim Sener, Managing Director, commented:

"We are looking forward to further advancing the development of the attractive Slivova Gold Project in Kosovo. We see a number of upside possibilities for the project and will be investigating these systematically during the period of earn-in, once agreed, by Western Tethyan and Avrupa Minerals."

Mentor Demi, Managing Director of Western Tethyan Resources, added:

"We are very pleased to have successfully completed the Due Diligence on the Slivova Gold Project and to be entering into the Definitive Earn-In Agreement with Avrupa Minerals Ltd in due course. Our systematic exploration approach has resulted in the confirmation of potentially economic resources at Slivova with significant upside opportunities. We look forward to providing further updates on the Slivova PEA in addition to the exploration results, in the near future."

Paul W. Kuhn, President and CEO of Avrupa Minerals Ltd, added:

"We are excited that the Slivova Gold Project is moving forward after several years of dormancy. WTR and Ariana will be great partners due to strong exploration abilities from both groups and experience in building small, but highly successful gold mining operations from Ariana. By deciding to go straight into a PEA/Scoping Study from due diligence says a lot of good about the deposit and the partnership."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Summary of Project

The Slivova Gold Project covers 32km2 and is valid for 7 years of exploration (Figure 1). The license area was subject to a previous joint venture between Avrupa and Byrnecut International Ltd ("Byrnecut"), until 2019 when the license was terminated after Byrnecut had incurred exploration expenditures in excess of US$ 7 million.

The Peshter Main Gossan and Gossan Extension zones are hosted within a steeply-dipping package of intercalated pebble to cobble conglomerates and finer-grained sandstone units with subordinate shale horizons. The mineralisation is interpreted to be controlled by the host lithology and is associated with strong silicification and de-calcification. Gold mineralisation in the Main Gossan and Gossan Extension is concentrated in the calcareous pebble conglomerate and calcareous sandstone. The reactive nature of the matrix appears to have provided the best environment for base and precious metal mineralisation.

A total of 40 drill holes define the Mineral Resource for 4,161.65 m of predominantly HQ, NQ and NWT diameter diamond drilling core. Drill hole spacing in the core of the deposit is approximately 15m x 15m. An Indicated Mineral Resource (NI 43-101) was subsequently defined at Slivova of 640,000 Mt @ 4.8 g/t gold and 14.68 g/t silver, for approximately 98,700 ounces of gold and 302,000 ounces of silver (see: https://avrupaminerals.com/wp-content/uploads/2018/08/NI43101_AvrupaMinerals_Slivovo.pdf). A significant part of the exploration licence remains to be explored in detail and there are indications of further mineralisation in the immediate vicinity (Figure 1), which will require drill-testing.

Significant sulphide mineralisation in the form of pyrite, with minor amounts of sphalerite, chalcopyrite, pyrrhotite and arsenopyrite occurs with the gold and silver mineralisation, although it is interpreted that the main high-grade gold mineralising event occurred after the sulphidation event. Leach analyses on 255 mineralised samples from four holes evenly spaced through the deposit demonstrated that the majority of the mineralisation is amenable to conventional hydrometallurgical processes. Further metallurgical testwork will be undertaken as a priority to determine the optimal process route.

Figure 1: Main resource area and surrounding prospects at the Slivova Project, showing the surface sampling results of prior exploration. Inset on the top right is the same area, shown within the boundaries of the licence. Inset on the bottom right is the Slivova licence, shown in relation to the borders of Kosovo.

Terms of the Agreement

Under the terms of the HoT, WTR has the right to acquire, in multiple stages, up to 85% of the Slivova Gold Project, by completing a series of exploration and development milestones and making staged payments to Avrupa. WTR also has the right to withdraw from the Project prior to the end of a six-month due diligence ("DD") period but it must fund a minimum Euro 25,000 of exploration work during the first three months of due-diligence.

Due Diligence Phase

Exclusivity from September 1, 2022 ("Effective Date") to March 1, 2023.

Euro 35,000 cash payment upon signing;

Euro 100,000 investment during the DD Phase; if WTR decides to vacate the Project before completion of 6-month DD, a minimum of Euro 25,000 must be spent;

Euro 35,000 cash payment at the end of the 6-month DD period;

Definitive Agreement to be completed and signed following the DD period.

Earn-In Phases

Stage 1:

Euro 30,000 cash payment on September 1, 2023;

If WTR elects to enter the Definitive Agreement, it will invest total Euro 800,000 during first two years from the Effective Date (minimum of Euro 150,000 must be spent by September 1, 2023, post DD Phase), for exploration, drilling, baseline environmental and social surveys, landowners, etc., for 51% of the project.

Stage 2: After completion of Stage 1, during the third year from the Effective Date, WTR will invest Euro 1,000,000 for NI 43-101 resource estimation, commencement of full Environmental Impact Statement ("EIS"), etc., for 75% of the project.

Stage 3: During fourth and fifth year from the Effective Date, WTR must complete the EIS, Feasibility Study ("FS"), and Mining License application, for 85% of the Project.

Stage 4: WTR completes success payments to previous JV partner, Byrnecut accordingly:

Euro 125,000 in cash within 30 days of the first to occur of: 1) Completion of a positive FS (minimum 15% IRR) or; 2) Avrupa or related party making a decision to proceed with development of a mining operation within the license area;

Euro 125,000 within 30 days of issuance of a mining license for the Project, and

Euro 125,000 within 30 days of commencement of mine construction within the license area;

100 troy ounces of gold within 30 days of commencement of commercial production ("CCP"), then increasing by 75 troy ounces per year until and including the third anniversary of commercial production when 325 troy ounces will be delivered.

Stage 5: Avrupa participates in the mine build or dilutes to 1% NSR.

About Western Tethyan Resources

Western Tethyan Resources Ltd ("WTR") is a UK-registered, mineral exploration and Development Company focused on South East Europe. The company has a strategic alliance with Newmont Corporation and Ariana Resources and is currently focused on exploration for major copper-gold deposits in the Lecce Magmatic Complex and Vardar Belt. The company is assessing several other exploration project opportunities across Eastern Europe, targeting major copper-gold deposits across the porphyry-epithermal transition.

For further information on Western Tethyan Resources you are invited to visit the Company's website at www.westerntethyanresources.com

About Avrupa Minerals Ltd

Avrupa Minerals Ltd. (www.avrupaminerals.com) is a growth-oriented junior exploration and development company directed to discovery of mineral deposits, using a hybrid prospect generator business model. The Company holds one 100%-owned license in Portugal, the Alvalade VMS Project, presently optioned to Sandfire MATSA in an earn-in joint venture agreement. The Company now holds one 100%-owned exploration license covering the Slivova gold prospect in Kosovo, and is actively advancing four prospects in central Finland through the recently-announced acquisition of Akkerman Finland Oy. Avrupa focuses its project generation work in politically stable and prospective regions of Europe, presently including Portugal, Finland, and Kosovo. The Company continues to seek and develop other opportunities around Europe.


Ariana Resources plc

Tel: +44 (0) 20 7407 3616

Michael de Villiers, Chairman

Kerim Sener, Managing Director

Beaumont Cornish Limited

Tel: +44 (0) 20 7628 3396

Roland Cornish / Felicity Geidt

Panmure Gordon (UK) Limited

Tel: +44 (0) 20 7886 2500

John Prior / Hugh Rich / Atholl Tweedie

Yellow Jersey PR Limited

Tel: +44 (0) 7951 402 336

Dom Barretto / Shivantha Thambirajah /Bessie Elliot


Editors' Note:

The information in this announcement that relates to exploration results is based on information compiled by Dr. Kerim Sener BSc (Hons), MSc, PhD, Managing Director of Ariana Resources plc. Dr. Sener is a Fellow of The Geological Society of London and a Member of The Institute of Materials, Minerals and Mining and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity that has been undertaken to qualify as a Competent Person as defined by the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and under the AIM Rules - Note for Mining and Oil & Gas Companies. Dr. Sener consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Ariana Resources:

Ariana is an AIM-listed mineral exploration and development company with an exceptional track-record of creating value for its shareholders through its interests in active mining projects and investments in exploration companies. Its current interests include gold production in Turkey and copper-gold exploration and development projects in Cyprus and Kosovo.

The Company holds 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a joint venture with Ozaltin Holding A.S. and Proccea Construction Co. in Turkey which contains a depleted total of c. 2.1 million ounces of gold and other metals (as at February 2022). The joint venture comprises the Kiziltepe Mine and the Tavsan and Salinbas projects.

The Kiziltepe Gold-Silver Mine is located in western Turkey and contains a depleted JORC Measured, Indicated and Inferred Resource of 222,000 ounces gold and 3.8 million ounces silver (as at February 2022). The mine has been in protable production since 2017 and is expected to produce at a rate of c.20,000 ounces of gold per annum to at least the mid-2020s. A Net Smelter Return ("NSR") royalty of 2.5% on production is being paid to Franco-Nevada Corporation.

The Tavsan Gold Mine is located in western Turkey and contains a JORC Measured, Indicated and Inferred Resource of 307,000 ounces gold and 1.1 million million ounces silver (as at November 2022). Following the approval of its Environmental Impact Assessment and associated permitting, Tavsan is being developed as the second gold mining operation in Turkey. A NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

The Salinbas Gold Project is located in north-eastern Turkey and contains a JORC Measured, Indicated and Inferred Resource of 1.5 million ounces of gold (as at July 2020). It is located within the multi-million ounce Artvin Goldeld, which contains the "Hot Gold Corridor" comprising several signicant gold- copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas. A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

Ariana owns 100% of Australia-registered Asgard Metals Fund ("Asgard"), as part of the Company's proprietary Project Catalyst Strategy. The Fund is focused on investments in high-value potential, discovery-stage mineral exploration companies located across the Eastern Hemisphere and within easy reach of Ariana's operational hubs in Australia, Turkey and the UK.

Ariana owns 75% of UK-registered Western Tethyan Resources Ltd ("WTR"), which operates across south-eastern Europe and is based in Pristina, Republic of Kosovo. The company is targeting its exploration on major copper-gold deposits across the porphyry-epithermal transition. WTR is being funded through a ve-year Alliance Agreement with Newmont Corporation (www.newmont.com).

Ariana owns 50% of UK-registered Venus Minerals Ltd ("Venus") which is focused on the exploration and development of copper-gold assets in Cyprus which contain a combined JORC Indicated and Inferred Resource of 17Mt @ 0.45% to 1.10% copper (excluding additional gold, silver and zinc.

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

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


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