Ariana Resources (LON:AAU) updated on progress of the initial mine at its Red Rabbit gold-silver project in Turkey - saying a conditional financing arrangement to fund its construction had been reached with a Turkish bank.
Proccea, the firm's local joint venture partner on the project, said a conditional agreement had been agreed.
The initial mine will be at the Kiziltepe sector of the project and capital needed for construction and and start-up were estimated in the feasibility study to be US$31.1 million. The arrangement is for the full amount.
Dr Kerim Sener, Ariana's managing director told investors the progress was "encouraging".
"Following the receipt of the Environmental Impact Assessment, which was a major project milestone, our partners are continuing to fund the development of Kiziltepe through the permitting and construction stages," he said.
"With the final stage of permitting fast approaching, we look forward to updating our shareholders on new developments in due course."
Proccea is continuing sole funding of the project through to final construction. It is not a cost borne by Ariana.
To date it has spent around US$2.9 million on the JV since its inception in August 2010 and now holds 26.5% of the joint venture company and continues to earn-in on 50% of the project.
It spent around US$1.2 million on the joint venture's properties last year, with 65% of that on the licence containing the Kiziltepe gold-silver mine.
Last year, the joint venture firm - Zenit - completed further trial mining at Kiziltepe and approximately 4,800 tonnes of ore have now been stockpiled on site ready.
It is currently awaiting the approval of an extension to the mining licence that contains the Kiziltepe gold-silver mine.
Once that is approved, it may proceed to the final permitting stage of the project.
Speaking to Proactive, executive chairman Michael De Villiers pointed out: "We are not responsible for the funding of putting the thing into production - they are.
"We delievered the magic, we delivered the answers, we delievered the new exploration. They are delivering the hard tack to mine those ounces and they are delivering the money to make it happen."
Based on the feasibility study, Kiziltepe has a life of eight years based on current resources with payback of 2.4 years based on a price of US$ 1,304/oz gold and US$ 22.6/oz silver.
The company is confident it can double the resources based on current exploration work.