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Ariana Resources raises £1 mln in institutional placing to fund Red Rabbit exploration

Published: 18:47 01 Apr 2010 AEDT

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Ariana Resources (AIM: AAU) has raised £1 million through a placing of 50 million new shares at 2p each to certain institutional investors. The proceeds will be used to progress the company’s ongoing gold and silver exploration and development work in Turkey.

"We are delighted with the support from the market for the company”, Ariana MD Dr Kerim Sener commented. “We are utilising the funds from this placing to continue our exploration and development work on our existing projects, notably in the Red Rabbit region and the wider WAVE Project Area in western Turkey, and in preparation for the funding of new opportunities.”

The new shares' admission is expected to become effective on or around Thursday 8 April 2010. 

The Red Rabbit project area consists of the Kiziltepe and Tavsan projects. Last week, the company said it is gearing up for an exploratory drilling campaign at Kiziltepe after results from a geophysical programme located several anomalies, and defined a significant exploration upside on the prospect.

Ariana said that several resistivity and chargeability anomalies may coincide with buried vein systems to the northeast of the Arzu South vein, and recorded one significant anomaly, which directly coincides with an area of extensive quartz vein float from which grades of up to 21.1 g/t (grams per tonne) of gold were reported.

An initial programme of drilling comprising several short test holes will be focused on three distinct trends that the anomalies coincided with, including one in the immediate vicinity of Arzu South, another beneath a hill which conceals part of the Arzu structure and one in the vicinity of the Vein 5 structure. Ariana plans to cover no more than 1,000 metres in the initial programme.

In February Ariana said its proposed joint venture with Proccea Construction had made significant progress towards production at Red Rabbit, having completed a scoping study and an environmental scoping assessment along with preliminary designs of the processing plant.

The scoping study was based on an envisaged production of 150,000 tonnes of ore per annum over a mine life greater than five years.

Ariana is targeting in its revised geological resource model a total resource of vein and halo mineralisation at a 1 g/t cut-off as being between 1.4 Mt (million tonnes) and 1.7 Mt at gold grades between 2.5 and 3.5 g/t and silver grades between 50 and 70 g/t. The average in-pit resource grade is expected to be 3.5 to 4.5 g/t gold and 50 to 70 g/t silver.

The completion of the feasibility and environmental impact studies is expected in the final quarter of 2010, while mine and plant construction are set to kick off in Q1 2011.

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