How Ariana Resources PLC turned a £5 idea into £50 million

“Figuring out how to turn a £5 idea into a company worth about £50mln” – this is how Kerim Sener describes the process of transforming Ariana Resources () from an upstart explorer into a gold producer over the last eighteen years.

There’s been little stopping Ariana after it kicked off production at its first gold mine, Kiziltepe in western Turkey, four years ago.

As at end-2020 the mine had produced a total of 84,200 ounces of gold and 915,233 ounces of silver, recording US$134 mln in revenue since operations commenced in early 2017.

But Ariana is now spreading its wings, with plans to open at least two more mines in Turkey (Tavsan and Salinbas), as well as expand its interests into Cyprus, through its Venus Minerals Ltd earn-in.

“Following the conclusion of our recent deal with Ozaltin Holding A.S. and Proccea Construction Co. in Turkey, we’re now sitting on over £25mln in cash, and we are now planning to grow our market capitalisation another tenfold,” says Kerim.

So, how did it all go right?

A shot at gold

It began eighteen years ago, with Kerim and his father driving 25,000km around Turkey in a second-hand car and sampling the ground for gold.

During 2004, they were surveying an area of hydrothermal alteration in volcanic rocks in western Turkey.  The area had been broadly identified as having potential for gold by Kerim when he was reviewing satellite imagery and other remote-sensing data during his PhD in geology at the University of Western Australia a year earlier.

At first, they were discouraged by generally low-grade gold samples, but things quickly turned around when they caught wind of a local rumour that the world’s largest gold miner, Newmont, had recently drilled a series of gold-bearing veins in an area to the north of the location they had been sampling, an area known as Kiziltepe. Ariana then discovered that Newmont was looking to sell all of its vein-type gold deposits worldwide, apart from Waihi in New Zealand.

Ariana was in the right place at the right time, and wasted no time in buying the Kiziltepe project from Newmont in early 2005, for US$400,000 plus a royalty. This became the listing asset for Ariana, which completed its IPO in 2005, raising just £1.2mln.

Golden opportunity

The probability of discovering a gold deposit capable of becoming a mine is incredibly low. Estimates suggest that one out of a thousand exploration targets becomes a prospect.  Out of those, only one in a hundred goes on to become a mine.

From the start, and despite these odds, Kerim explains that there was a “resolute focus” on making Kiziltepe a success.  And when it came to considering the possibility that Kiziltepe might fail, Kerim says his and the team’s motto was always: “Plan B is to make sure that Plan A works”.

A huge part of this tenacity came from selecting the right partners. In 2009, the first ore was mined from Kiziltepe and trucked on a trial basis to a processing plant located about 200km away. Following this first successful gold production, Ariana had considered signing an offtake agreement with the owners of the plant to fast-track the mine to production.

Ariana eventually decided against this course of action because it was clear that the relationship with the potential partner “wouldn’t have worked” in the long-run. 

However, it was during these negotiations that Ariana met the principals of a Turkish-owned company called Proccea Construction Co., who had designed and built part of the process plant. During the following year, Ariana and Proccea went on to strike up a joint venture ,…