Ariana Resources says Kiziltepe mine to produce 90% more gold than feasibility

() said the Kiziltepe mine in western Turkey is expected to produce about 19,000 ounces of gold this year, around 90% higher than anticipated in the feasibility plan for this stage.

Average monthly production from the joint venture mine is expected at approximately 27,000 tonnes of ore, peaking during the second quarter, while a stockpile of over 240,000 tonnes, representing well over a year of current production capacity, has already been built up on site, the AIM-listed company said.

“This year’s production guidance from the joint venture follows on from the completion of our arrangements with Ozaltin Holding AS and Proccea Construction Co,” said Dr. Kerim Sener, managing director of Ariana. “With the enhanced JV now formally underway, we are pleased to report on JV plans to increase the operational capacity at Kiziltepe. This will see a marked positive impact on production output and will continue to ensure the lowest possible unit costs.”

“During Q1 2021, mining has largely focused on the Arzu North open-pit, within which significant additional gold mineralisation has been encountered outside of the original mine reserve,” he added. “This bodes well for JV production plans and may have a positive impact on the mining schedule.”

Ore throughput to the mill during 2021 is expected to be about 325,000 tonnes, once operating capacity is increased as planned, which represents a 115% increase over the feasibility plan. The average gold grade to be mined is expected to be about 2.1 grammes a tonne and gold recovery is expected to exceed 90%.

Ariana, which has a 23.5% stake in the mine, did not provide any output guidance for silver as it is treated as a by-product credit.

Kemel was upbeat on the outlook for gold and silver.

“The continued positive economic environment for gold and silver underpins the performance of the Kiziltepe mine, with both commodities continuing to trade at near 5-year highs. With the growing concerns over unsustainable levels of debt within major economies, gold and silver are expected to continue to hold their time-honoured position in the minds of investors.”

He noted that the Turkish Liras decline versus the US dollar will help reduce dollar-based unit costs.  

A plant expansion to an operating capacity of up to 500,000 tonnes of ore per annum is well underway and scheduled for completion early in the third quarter and a new mill has recently been installed. 

Ariana said the Coronavirus pandemic had not affected gold production directly, although some supply issues had been encountered, specifically relating to the plant expansion programme.

The expansion plan is being funded through a capital loan of US$6.6mln, of which 25% has already been repaid, with nine equal quarterly payments remaining.