Ariana Resources reported in early September that mine construction has begun at the Kiziltepe gold project on the joint-venture Red Rabbit property in western Turkey. Proccea Construction Co. is Ariana’s partner in the project and is managing construction. The companies anticipate that the mine will pour its first gold in the second half of 2016. Production is planned to average 20,000 ounces per year (oz/y) of gold.
Final negotiations on major Turkish-supplied plant components are complete and long lead orders have been placed. A mining contract has been awarded, and site works were scheduled to begin in October. Installation of the perimeter security fence for the mine site was under way, and four prefabricated buildings had been completed and were awaiting delivery to the site.
Ariana Managing Director Kerim Sener said, “Our partners, Proccea, are working diligently and swiftly through the mine construction schedule. Meanwhile, our exploration team is preparing for a resource development trenching and drilling program, which we are currently expecting to commence in October.
“This is an exciting time for the company, and recent developments have highlighted the value of our business model: promoting project development partnerships cored by focused and cost-efficient exploration.”
The Red Rabbit joint-venture agreement required Proccea to contribute $8 million during three phases of development, culminating in the permitting of the Kiziltepe mine. In return, Proccea received a 50% equity stake in the project.
Kiziltepe will be an open-pit, high-grade, moderate strip-ratio, carbon-in-leach operation. The financial model calls for a payback of 2.4 years based on $31.1 million initial capital and cash costs estimated at between $588 and $611/oz.
Recent discoveries in the Red Rabbit project area have identified significant vein systems, including intersections of bonanza grades of up to 79.7 g/mt gold equivalent.
