LONDON (Alliance News) - Ariana Resources PLC Thursday said the Red Rabbit gold project in Turkey is still on track to begin production in the second half of this year, and said its partner has committed to earning its 50% stake in the project.
Ariana is currently constructing the gold project with Proccea Construction Co under a joint venture, and its partner is building up its stake in the project through ongoing investments.
Ariana said Proccea has continued to invest, and said it currently holds a 42% stake after investing a further USD2.4 million during 2015 and early 2016.
Ariana said Proccea has formally committed to provide the last remaining USD2.1 million in order to take its stake in the project to 50%, which would leave both companies as equal partners in the project.
By the time Proccea earns its 50% stake, the company would have invested a total of USD8.0 million into the project.
Ariana said the USD33.0 million construction finance facility is also in the process of being drawn down in order to fund the development of the Kiziltepe gold mine, which is part of the Red Rabbit project.
That financing is being provided by Turkiye Finans Katilim Bankasi AS, and repayments will occur over a five-year period, with a two-year repayment holiday starting from the first funds being drawn down.
"Our joint venture company has been demonstrating excellent progress on the construction of the Kiziltepe Mine since site works commenced in September 2015. We are looking forward to providing further updates in due course and over the coming months," said Kerim Sener, managing director of Ariana.
Ariana shares were down 1.7% to 1.13 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Ariana (AAU)