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Kerim Sener, MD of Gold Junior Ariana Resources Audio Interview Transcript

Published: 16:19 14 Aug 2009 AEST

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Hello, this is Harry Norman for Proactive Investors, and welcome to another Proactive audio interview.  Today I'm talking with Kerim Sener, Managing Director of Ariana Resources.


Thank you very much for joining us for this interview.


Thank you Harry.

First of all congratulations on Ariana Resources maiden gold production.  Is it true we are going to be able to buy commemorative ingots from this gold?

That is correct, our plans at present are to refine the gold further at the Istanbul  gold refinery, or a suitable alternative also based in Istanbul. And we’re attaining quotes on the production of different size ingots from 1 through to about 10 ounces; and we’ll take a decision based on the initial orders that we’ve received for the optimal size of the ingots to be produced, and then we’ll proceed on that basis, marking up the cost of the ounces by a modest amount to cover the cost of the ingot production.

Ariana’s main gold production came from Kitziltepe, one of the prospects that make up the Sindirgi project.  What has been happening over the last 12 months at Sindirgi?

That's correct, the production came from the Kitziltepe prospect, as you know we have a number of other prospects within the Sindirgi project including Kepez and Karakavak. At Kepez we’ve undertaken further surface sampling over an area that we understood tocontain high grade mineralisation, and we’ve determined that there is indeed a substantial volume of broken loose rock over existing old workings that could amount to several tens of thousands of tonnes of material. 

And we’re looking to evaluate this further to determine the resource potential of that area, as a potential high grade source for feeding to the Eti Gumus mill.  The current estimated grade based on the sampling that we’ve undertaken shows a grade of over 7 grams per tonne. 


At the Karakavak prospect we’ve been planning for geophysics; we intend to undertake geophysics within a fairly short space of time now, we’re just waiting for the geophysics field teams to be ready.

And we’ll also be undertaking detailed geological mapping and have discovered several new vein systems which are being further mapped out in detail and sampled ahead of the geophysics.  At Kiziltepe the gold production came from the Arzu South vein from which we mined 5,177 tonnes of dry ore which was processed at the Gumuskoy plant located about 243 kilometres away by road from Kiziltepe and we’re intending to undertake further trial mining over the course of the next 12 months.


Elsewhere on the Sindirgi project we’re doing evaluation work on a number of new licenses.

I understand  you also plan to do some trial mining at the Tavsan project?

At Tavsan we've been undertaking an evaluation of all the exploration data, we understand where there was potential for further resource extensions and we’ve planned to drill in those areas where there's the opportunity to do so.  Beyond that we’ve been further compiling the license package at Tavsan and tidying it up and also making preparations for a certain amount of trial mining. 


The reason for this trial mining is that we have to satisfy the Turkish Mining Authorities that we are progressing certain licenses through to production; so we have to undertake certain batch mining and sampling from certain locations within Tavsan and we tend to do that from a higher grade portions, that there are certain areas within the deposit that contain grades of 4 to 5 grams per tonne. And we’re in discussions at the moment with Eti Gumus about possibly sending some of that material, albeit on a small scale, I'm mean we’d only be talking about a few hundred tonnes of material, off to the Gumuskoy plant for processing there.


What is the red rabbit concept and what difference do you hope the concept will make for Ariana Resources?


The red rabbit concept, Kitziltepe means red hill,  Tavsan means rabbit, so the name comes from just a shortening of the two words together.  We decided to Anglicise it just for ease of reference, and because we consider it as very much distinct from Kiziltepe and Tavsan which are it's constituent parts. 


The red rabbit concept basically brings those two projects together and considers them as one. So we automatically go from a situation where we have two smallish deposits now combined into a project that, on paper at least, shows some potential.  About 230,000 ounces of measured and indicated resource, and a further 170,000 ounces in inferred resource; which means that we could be on a conceptual basis mining 30,000 ounces per year over a seven year mine life, which is quite an acceptable minimum mine life and production rate. 


So on the face of it it's something that looks like it could be a goer.  Obviously a lot of work needs to be done; the resource is pretty much okay, good to go, in effect but it's metallurgical work that needs to be undertaken. And we’d look to combining the ore from Kitziltepe with the ore from Tavsan and looking at different blend characteristics, blend ratios, as well as different crush ratios to see what the optimal recoveries are going to be.  That's the most critical part of making the red rabbit project stand up on its own.  If that metallurgical test work is proved positive then we’ll move fully forwards towards a feasibility study of the project. 


The idea entails trucking a higher grade material from Kiziltepe, 125 kilometres by road and then blending the high grade ore with the low grade ore from Tavsan on to the heap leach pads.  What this does for us as a company is that it consolidates our two projects, makes them simpler to manage because we’re now thinking of just one project; and it also brings Tavsan very much central into our strategy for developing the company.

Kerim, is your recently acquired Muratdag project potentially part of the red rabbit concept?

The Muratdag project certain falls within the region of interest for the red rabbit project concept, but presently the license that we acquired from Newmont is in upgrade to operational status; and so it's not a project that we’ll commit funding to till we receive the upgraded license. But potentially yes, in the longer term it does fall within the red rabbit project area.

What's happening with Ariana's joint venture with European Goldfields in the Pontide region of North East Turkey?

Our joint venture with European Goldfields is going very well; as you know it's managed entirely by European Goldfields and funded by European Goldfields. But we provide certain logistical support to the team, both in the back office and also in the field. 


The team has been very successful in undertaking additional exploration around our Ardala project which is a porphyry system and has been successful in identifying a new target zone, initially by some good prospecting work followed up by soil geochemistry which has demonstrated a potentially significant zone of near surface mineralisation. 


What they've discovered is called the Salinbas Target, it's a hydrothermal breccia zone containing very high grades of gold up to about 10 grams per tonne on average with a peak of just over 20 grams per tonne; and it's 230 meters long, about 5 to 15 meters wide. So it's a screaming drilling target and preparations are being made to be able to undertake that drilling during the course of this year. There is further work to be done, as that's not the limit of the mineralised area, and further targets are being identified in the region. 


Coupled to that the Artvin area in which these porphyry and epithermal systems sit is clearly a highly prospective part of Turkey; and the European Goldfields team is methodically going about piecing together other exploration projects within that area, picking up new licenses both in auction and as free ground and also doing deals.  They've recently announced a deal with Aldridge in that part of the country as well.  So I think that the joint venture has got off to a very good start; in just over a year it's gone from start up to making it's first very serious discovery.


What is Ariana Resources financial situation?


We’re currently in a closed period so I will have to decline that question.

What can we expect from Ariana Resources over the next 12 to 18 months?

Over the next 12 to 18 months we expect to continue trial mining, at least another batch or two of mineralisation to be sent from Kiziltepe off to the plant at Gumuskoy.  We’re in discussions with Eti Gumus currently about how we’re going to coordinate that and the volume of material that they're requesting from us. And we hope to complete those discussions fairly soon. 


Beyond that we intend to undertake the initial test work required for the red rabbit project, that's the metallurgical work that I was talking about earlier so that we can progress that project towards the beginnings of a feasibility type study in the 4th quarter of this year. 


In addition to that we’re also planning to re-initiate, through grass roots exploration, both in the region between Kiziltepe and Tavsan to identify other potential areas of mineralisation that could be added to the red rabbit project concept and also elsewhere in Turkey, primarily in Western Turkey but potentially anywhere within Turkey to identify new large mineral systems that have previously been overlooked.



This interview was recorded on the 8th Jul 2009.  Remember, Proactive Investors is not an investment advice service.  Make sure you register at proactiveinvestors.co.uk for our weekly newsletter which will keep you informed about our articles, interviews and events. 

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