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Ariana Resources

  • BY: Andrew Hore |
  • POSTED: 20/02/2011 |

Ariana Resources has raised £1.16m at 4.75p a share in order to finance its Turkish gold exploration projects.

Three directors took up shares in the placing, which was equivalent to 9.79% of the enlarged share capital.

Ariana’s core project is the Red Rabbit gold project in western Turkey. This has been put in a 50/50 joint venture with Proccea Construction. Proccea has to spend $8m to earn that 50% stake. The first $1.4m will be spent on a feasibility study and environmental impact assessment. The rest will finance the beginning of construction and when this cash is spent Proccea will take management control of the project. The total capital cost of the mine could be $25m. The rest of the cost is likely to be debt financed. Gold production should start at the end of 2012.

Other resources in the region could be put into the Proccea joint venture.

Ariana has a 49/51 joint venture with AIM-quoted European Goldfields in north east Turkey. Ariana’s partner is spending $5.2m on exploration over a three year period. Ariana could be diluted to a 20% stake in the projects part of the joint venture if they are funded up to a definitive feasibility study. 

Money raised in the latest placing will be used for the other interests plus the acquisition of additional licences.  Ariana has 100% of the Ivrindi gold prospect, where the licence has been upgraded. Additional drilling is planned to test mineralisation.

Ariana has a $5m Standby Equity Distribution Agreement with Yorkville. So far £150,000 of this facility has been used. This money was raised at 3.76p a share and it covered the cost of setting up the facility. 

At 5p a share, Ariana is valued at £11.3m.

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