Ariana Resources (LSE:AAU) — Final results for the year ended 31 December 2019

0:04 Good morning, ladies and gentlemen, and welcome to the ARIANA RESOURCES Investor Presentation relating to their final results for the year ended 12/31/2019. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. These will be available via

0:35 your Investor Meet company dashboard. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. I'd now like to hand over to Michael DeVillas, Chairman and Kiran Senna, CEO of ARIANA RESOURCES PLC. Good afternoon, gentlemen.

0:54 Good morning, and thank you very for joining us. This is an opportunity for us to meet our shareholders and fellow investors via a new modern methodology, which very kindly Mark has put together. It's an opportunity for us to discuss the results, for Karen to give an up to date presentation, and for us to take questions. As you well know, we're not able to meet in person, and we're not able to have an open AGM, which will be on the August 28. So I urge you to ask your questions now, which we will answer the best we can online, and if not, through other mediums later. I'm now going to hand over to Karim and leave you to enjoy his presentation on our results. Thank you. Thank you very much, Michael, and good morning to everybody.

1:43 I'd like to provide an updated presentation on the company that brings everything right up to date, including latest announcement that we provided to the market this morning concerning Salamash project. This expands on the work that we've completed on that particular project over the past year in particular. So I'll go through the slides you'll see these slides move as we progress. So you don't need to do anything on your side. Usual disclaimer. Firstly, we start with a financial review and I'll go through this fairly quickly just because this is the summary that's provided in any case in the annual report, which is now being uploaded to our website.

2:36 And of course, this is mirrored in the announcements that we provided to market the other day. And so the headline is that profit after tax increased threefold from the previous year to just shy of GBP 7,000,000. That was primarily as a result of the JV that we hold in Western Turkey and JV turnover grew by 21%. And that's partly as a result of the favorable moves that we've seen in the gold price over the period. And that of course resulting in significant JV profits are 50% share of which amounted to just shy of GBP 8,000,000. In addition to that, if shareholders remember, we held a subsidiary in Turkey that was responsible for acquiring certain freehold land over the top of the primarily the ARIANA RESOURCES at the Khozl Tepe mine.

3:37 And that we use that to acquire the freehold land in the early years of the joint venture. That of course needed to end up inside the joint venture at some point and that moment was resolved at the end of last year. So we're booking a profit of GBP 600,000 as a result of that transaction. The rest of it, probably don't need to dwell on too much, say for the penultimate point regarding the Cypriot project and our earn into Venus Minerals Limited. We'd already undertaken certain expenditure on developing the Cypriot assets prior to those that expenditure being reflected in a share transaction, which we actually completed post period end in May of this year.

4:28 So in summary then on the financials, the earnings per share increasing from last year from 0.21p per share to 0.65p per share in this last year. So a very pleasing end to the period. So that summarizes where we brought ourselves to the end of last year. But I think it's just important to just run through in a more general sense what the company is and what we represent. It is a sustainable and profitable business and that is primarily as a result of the joint venture that we hold in Western Turkey with Prosia Construction, which is a fifty-fifty JV.

5:19 That JV substantially paid down the primary debt for the construction of the Kuzeltepe mine. That was a debt facility with Turkier Finansbanken for $33,000,000 As of period end, we paid down almost all of it. And by the end of April of this year, we paid the full $33,000,000 back. We have a small amount of JV debt remaining payable to Tutke Finance and that is that's working capital that needs to be paid back between now and the end of October of next year. There's about $7,000,000 left to be paid on that. Through the joint venture and indeed our exploration development programs across all our projects, we've demonstrated a very strong track record as a company, growing from a grassroots gold explorer in Turkey with a large portfolio of exploration stage assets, greenfield assets primarily to a substantially derisk portfolio that comprises projects that are currently being mined in the case of Kuselpepe are through the going through the process of feasibility and EIA.

6:39 And ultimately, want to bring to production as is the case with Tarshan. And in with the example of Sullenbosch that representing the largest single resource in the portfolio. And based on this morning's announcement that resource having grown a further 50% to 1,500,000 ounces. So we've demonstrated throughout the portfolio, the opportunities for growth and we've identified those growth targets for the future. So the company is evolving rapidly. Turkey has represented a very solid foundation for the company. It's really been the cradle of the company so to speak.

7:25 But there are also opportunities that we're now looking at very seriously in the immediate vicinity of Turkey and Cyprus is a very good example of that.

7:36 This next slide identifies some of the key metrics for the company. As you can see there, the share price again has healthily moved this morning as a result of our announcement. So even though I uploaded this only a couple of hours ago, this is already out of date. And that of course further reflecting very positively on the share price graph, which shows the last year of share price growth. So excuse the size of the font there, but from about 2p this time last year to just around 5.5p now.

8:24 So very healthy progress there. So moving on to the operations and the key parameters concerning the operation. The JV revenue to date since production commenced on Khozl Tepe in April 2017 through to the last quarter that we reported on in March of this year, revenue was $106,000,000 and produced at an average revenue per gold ounce to the end of that quarter, just over $1,500 per ounce. And that's by virtue of the fact that this is a gold and silver mine. So the silver is providing a byproduct credit.

9:14 I've already run through the debt, so we don't need to dwell on that any further. Production, again, the key thing is that the operation not only has provided significant revenue, but we've also undertaken that as an operating cost cash cost range that is market leading in so since operations commenced from US330 dollars an ounce to US612 dollars an ounce. At the moment, we're hovering in the US500 dollars to US550 dollars sort of range. And this is how we compare albeit that this slide this graph rather is a little bit outdated.

10:04 But it certainly shows that ARIANA is comfortably producing at the very lower end of the cash cost range in comparison to a number of gold mining peers. And we've been able to do this, as I said, based on our track record, not any of production, but also exploration because at the end of the day, the exploration cost adds to what can be referred to as the all in sustaining cost.

10:40 Bearing in mind what we've raised from the markets since IPO being about $21,000,000 And if you look at that in respect of the ounces that we've discovered and with today's announcements, actually we're maintaining industry leading discovery cost per ounce of less than $15 in fact. I've redid the calculation just a little earlier and we're just shy of $13 per ounce now. So that's a very healthy place to be for any exploration company. You want to be finding ounces at the lowest cost possible.

11:22 So the company is clearly growth orientated. We have by virtue of our existing project at Khozl Tepe, mine they're producing at an annualized rate of about 20,000 ounces of gold per annum over the course of its feasibility mine life, which was eight years. We're obviously going through the process of expanding the resource base, which will lead to an expanded reserve base and therefore enhanced life of mine. We've already demonstrated in the last couple of years production at a rate of up to 27,000 ounces per year. But the life of mine average will still end up being around 20,000 ounces. And through both the growth and longevity that we are demonstrating at Kuseltepe, we're also looking to expand operations to our other key asset, which is the Tarshan deposit, which is also housed within the JV that we hold with Precia Construction.

12:29 And Tarshan, we're expecting to produce at a rate of about 30,000 ounces per annum, ultimately taking the JV production to perhaps 50,000 ounces per annum. In addition to that, as I've already mentioned, Soleimbash is absolutely key. The latest announcement further reinforces that. It is going to be a multi million ounce asset. The trajectory on our resource is quite clear. We've gone from about a million ounces to 1,500,000 ounces. There's plenty of additional scope to grow that resource in the vicinity across the three licenses that we hold as part of that project. But the project because of its scale, we do require input in the form of a further partner.

13:20 And late last year, we announced that we were considering a partnership with a large Turkish firm. We were more recently able to announce the incoming partner as being result in holding. And the intention there is to not only fast track Sunnabas to the mining stage, but they'll also be participating in expanded joint venture, ultimately involving ourselves, PROSEA and Ozalten. In addition to that and outside of Turkey, we are in the process of evaluating series of copper gold projects in Cyprus. And this represents or is represented by a portfolio of copper gold assets at Greenfields exploration stage all the way through to Jawke resource stage.

14:15 And there's further work that we'll be undertaking on that portfolio through Venus Minerals in due course. And also lastly, it's worth mentioning that through an Australian subsidiary, we've also kept ourselves fairly nimble looking out for any opportunities in the technology metal space. And we've done very well with prior investments in that area.

14:43 So focusing back on Turkey, this is the distribution of the projects across the country. The area A defines the joint venture that we hold with PRCESIA construction, Khozl Tepe being the operating mine, Tarshan being the development project. Within that area sits an asset that we hold 100% of and that's Kozolchukwur. But by virtue of the joint venture, we're able to the point of our choosing sell Kozolchukwur into the joint venture three times the exploration cost. There's another example of an asset that sits in the vicinity of, but not within the JV area and that's even India.

15:29 So that's just sits just outside of it. And even India is another project that we hold outright and we demonstrated a small resource on. And if you look at current gold prices, that resource despite being relatively low grade starts to look very attractive in the context of the JV. Then in Northeastern Turkey, we have the 100% held Solenbosch project and they're just on the south the position of Cyprus.

16:01 So moving on to the Red Rabbit joint venture to run through this in a little bit more detail. As I've indicated, this is the fifty-fifty joint venture with PROSIR Construction. They are both partners and managers of the joint venture. We were successful some years back in securing strategic investment status from the Turkish Ministry of Economy. So we've got strong government level support for the project. In addition to that, we've got very strong community support for the project and we employ a very large number of people that from local areas, nearby villages and nearby towns. A lot of those have been a lot of those individuals have been able to seek employment and be employed at the mine site.

16:50 And so it's a very beneficial operating environment for us all. Now because of our involvement with procedure construction, they have they've had a specialization in design processing plant, gold and silver processing plant, EPCM. So the process plant that we have established at Kasl Tepe is absolutely state of the art and the tailings dam is built to very high specifications as required by the Turkish Ministry of Environment and the Turkish State Water Works. As I've indicated that capital loan with Tutke Finans has now been fully repaid.

17:38 The current operating parameters of the mine, we relatively recently updated the resource back in April. We presented both undepleted and depleted resource. These are the depleted numbers shown here. And a large part of that is sitting within the measured and indicated jolt categories. So we believe that there's scope to bring a large part of these resources into ultimately into reserve proven and probable. So current mine life based on this is about six further years. So we believe that there's basically, we've grown the mine life from an eight year mine life for the purposes of the feasibility study and we're slowly growing that to ten years plus.

18:30 And we'd certainly like to see the mine running for very many more years. And so our exploration programs are designed with that in mind. Probably don't need to dwell on those other parameters there. We've already run through the cash costs and it's probably worth just mentioning the grades. The grades that we're seeing coming off the mine now are in the sort of 2.5 gram to three gram per ton range at this point. This is what the mine site looks like taken from a drone looking roughly towards the Southwest. This image was taken a couple of years ago when the ARZU South pit was not fully developed. So that pit is now fully almost fully mined. We've just got a little bit more mining to go at ARZU South through August.

19:28 But then we'll be continuing mining in the other areas such as Arazu North, which is just over the hill there on the right hand side and the hill and sort of middle distance at Baimu. So we expect a few more pits to be developed in the vicinity on those additional veins. In addition to that, there are a number of other structures that will probably be explored with drilling and ultimately bring into resource indeed reserve in due course and I'll touch on that further later on. So it's a very neat mine site. It's very well served by infrastructure. You can see the asphalt road that connects Sundargha town again there in the middle distance out towards the town of Simov.

20:16 And the distance between our office in Sundargha to the mine site is about fifteen minutes drive. So it's a very benign and indeed pleasant place to work.

20:32 This next slide shows the it's almost as if we're looking 180 degrees from where we were previously with that perspective. So we're now looking north at the ARIANA RESOURCES, AARSU North and Delhi Pits primarily and there you can see Banu in the foreground. The blue pits are the feasibility designed pits which are essentially the shapes that we've been working to so far, particularly in the case of our Azu South. The red areas are the Whittle optimized pits. Now these are being further revised. So these are actually grown in size yet again.

21:19 And indeed our new mining plans at AZU North and Dalia in particular accommodating an enlarged size of pits. But as you can see in this image, you can trace the AZU South vein structure all the way through to AZU North under a sequence of cover rocks shown in that teal color. We drilled that area, that's the connection zone and proven the existence of the vein system at depth there. There's a lot more work that we need to do to prove that up properly at the moment that's largely an inferred resource. But interestingly, the grades that we encounter in the Northwest End of AZU South are very good.

22:06 And indeed so good that that area could potentially be mined by underground methods. But also there's the opportunity to potentially expand the pit in that direction. So at the moment, we're sort of working with those two ideas in mind either continuing expanding the open pits or going underground. So we've continued to grow this resource, which is the key. There are further targets in the immediate vicinity and we've compiled those in the form of a Jorg exploration target, shy of a million tons at about two grams per ton. So these areas would need to be further drill tested in time to demonstrate that we've got scope to develop those as additional open pits in the future.

22:55 And here we are looking down on Kasl Tepe. There you can see the the AZU South pits. It's sort of dotted with drill holes there. The position of the process plant and the other pits at ARIANA RESOURCES and Daria and indeed BANU. But this map is particularly useful because it shows the position of a series of additional veins, some of which only had cursory drilling to date, but show potential. So some of these form part of that jaw exploration target that I was referring to. And as you can see, the vein system is very extensive. There's a lot more drilling that we'll probably need to do in time that targets depth extensions to these veins.

23:42 We're also quite excited by the near surface potential in the Northwest continuity of the ARIANA RESOUR North vein. Despite grades being relatively lower in that direction, it looks relatively close to surface and easily accessible with an extension to the ARIANA North Pit. So that's something that we're also considering in terms of our expansion plans. And then beyond the Khozl Tepe mine site itself and the Khozl Tepe Vein field specifically, this map shows the distribution of the joint venture licenses. Khozl Tepe itself is shown in the bottom left hand corner of that map. But then there's a series of additional prospects that sits within what we refer to as the Sundaruga Gold Corridor, which is that sort of washed out area running towards the Northeast.

24:35 Kepes West and Karakawaka are certainly key prospect areas and Kepes itself, there's a high grade resource that we're planning to mine and truck down to Kuzuldeppe in fairly short order. In addition to that, in the Far Northeast, we have the Kuzuldhepe property, which I referred to several slides back. So Kuzuldhepe is 100% held by ARIANA, but we have the opportunity to sell Kuzucukuru into the joint venture of three times the exploration cost. We've already demonstrated a resource there at about 30,000 ounces and we plan to mine high grade part of that and truck that down to Kuzucukuru again in due course.

25:22 Then further to the Northeast of Khuzultepe about 75 kilometers in fact to the Northeast sits the Tarshan development project. And at Tarshan, a few years back, we completed a scoping study. So back in 2016 based on the then resource that provided for four years of mine life at a processing capacity of 675,000 tons of ore per annum. We've more recently in June of this year, we've expanded that resource quite substantially. We added another 50% to the contained ounces, again substantially de risking it into largely measured and indicated categories as well.

26:11 So this needs to be reflected in the pre feasibility and indeed feasibility study works that are underway. The PFS in fact is complete. We're now working on the feasibility itself in parallel with the completion of the EIA. But we're looking at ultimately expanding mine life here from that originally envisaged four year life, which is very short for a mine to a much more sensible six years. Now I'm quite confident that we can probably take this to about eight years, given the additional resource potential that sits within the immediate vicinity of the Tamshan ore bodies that we've defined to date. So we envisage production here at a rate of 30,000 ounces per annum as of previously indicated.

27:02 The potential at Tarshan sits across a number of licenses that we hold and indeed a number of pits that we're looking to develop. The original resource that we'd announced that comprised a series of about roughly speaking about five pits. But as we found from the latest rock saw channel sampling work, there are near surface resource extensions that actually enable some of these pitched pits to start merging into larger pits.

27:40 So I now envisage that we'll probably be looking more like three or four larger pits. But the work that we need to do on the new resource is yet to be undertaken, but we'll be completing that work fairly soon in terms of optimization of those resources to demonstrate what is demonstrably economic. We'll be providing further announcements on that in due course. But the upside exists in the vicinity of those pits and in that map, apologies for the font size, but several target areas have been defined based on near surface channel sampling work and indeed some outlying drill holes that demonstrates very good great continuity in those areas.

28:37 So there's plenty of scope for the exploration target that we've defined to continue to add to the resource base. So that wraps up Western Turkey and our interest there both in our own rights and primarily in our joint venture with PROSIR Construction. And outside of the joint venture up in Northeastern Turkey, we have the Salembas project. Now this was originally picked up by us in 2007 or the core license was picked up in 2007. It was originally joint ventured by us with European Goldfields.

29:22 They had a 51% stake. They and indeed the following company Eldorado Gold, which acquired European Goldfields from 2013 spent a total of $9,000,000 on the Sullenbosch project and other areas in Northeastern Turkey. We were then able to acquire the Sullenbosch project outright. So we bought out their 51% stake for in return for a net smelter return royalty. Since that time, so since late twenty sixteen, we've had to methodically progress the advancement of the licenses from exploration stage through to operational stage.

30:15 And that process took a little longer than expected. It took us another almost three years to work through. But we completed all of that work last year. So the three licenses that are shown in that map are the key project licenses now, Idartha, Sullenbosch and Hazarli Islay licenses going towards the South. These licenses are now all at operational status, all of which were granted during the course of last year. The other license has been given a five year term extension as an operating license. Sullenbosch and Hazal Ljolle have been given ten year operating license status. So the tenure is very sound and we've now accelerated activities exploration activities on these projects as a result, which included drilling in the Ardvilles, Sullenbosch area last year in May into early June.

31:14 And then it's on the back of that work, that drilling plus some of the due diligence drilling that was undertaken by Erzalten in November of last year. All of that data has been integrated into what we announced this morning, the revised resource statement. So that was a very pleasing technical advancement of the project. The key thing is that the Solenbosch project sits within highly prolific copper gold province. The project licenses actually sit along what is clearly a gold and copper gold trend shown on that map as running from Berta through Ardvola, Salombas, Zoldy Isle and then down to Hod Maden. Hod Maden being the big discovery that was made a few years back.

32:05 Currently over 4,000,000 ounces gold equivalent. And the Lydia and Sandstorm JV is looking to develop that further. But this trend that I'm referring to actually, you can think of it as being wider and longer than shown on this map. It actually runs over about 100 kilometers in fact. And there's a series of copper gold projects that are dotted along that trend, including in the Far South, the use of fairly gold properties of Tach and Chorakwa and they contain another about 2,200,000 ounces of gold. It contains the Cera Tepe deposit and series of other prospects including Yanukla to the North. So it's a phenomenally prospective area and we're very excited to be right in the hub of that area.

33:06 So the Sullenbosch project itself, some of these figures I've actually revised to include the latest announcement and the data out of the latest resource. The scoping study that's outlined there still relates to the old resource. We haven't obviously revised that and hasn't been time to revise that in the context of the new resource. So it's there just really for historical purposes. So that scoping study was based on the prior resource. There's not no huge change to the resource numbers in any case for Sullenbosch. If anything, the gold grade has gone up a little bit as has silver. And obviously, if we were to run that scoping study at today's gold price, these would be even more positive numbers certainly in terms of NPV because this scoping study was run at a gold price of $12.50 dollars an ounce.

34:08 So in due course, we'll be obviously revising the scoping study and indeed, as we look towards developing Sullenbosch in the context of an expanded JV with result in and procedure construction, we'll be advancing this straight through to pre feasibility.

34:29 There is obviously further upside at Sullenbosch and that upside is the result of the prospectivity of the Ardela porphyry primarily. So the artery of the porphyry is shown there in pink. This sits in well, this is the core of the porphyry in fact, what's called the potassium core. So it's the high grade core containing the high grade gold and copper and molybdenum. This sits right at the bottom of the Ardala and Injasur Valleys and then upslope from that going from about 600 meters above sea level to about twelve fifty meters above sea level is the development of the sullenbosch style of mineralization, which occurs along a lithological contact. So it's a rock unit contact.

35:27 So the sullenbosch ore body shown in that image in yellow. So that's the drilled extensive sullenbosch at the moment. But the same potential geology exists in those blue areas. So these are our Jawke exploration target panels. The peripheries of which well in the case of Sullenbosch North, we've just started testing that with some of the drilling last year and also the Sullenbosch Main extension, which has been proven by follow-up soil and rock chip sampling. So we're very confident in some of these target areas coming goods in part or potentially wholly in the case of Stellenbosch Main Extension.

36:13 This same geology does extend beyond these blue areas and there's certainly potential on the Eastern Side of the Ingersoll Valley. So as you're looking at this image, closest to you, that area, those hills closest to you, there's certainly indications of mineralization there in the form of alteration and indeed from early rock chip sampling grades going up to two, two point five grams per ton. So that whole area is almost completely unexplored at this stage. And it certainly warrants further work. All we can say is as I advance to this next slide, here the porphyry core is outlined in pink, the sullenbosch panel again shown outlined in yellow and those jock exploration targets outlined in blue.

37:07 You can see the distribution of anomalism, geochemical anomalism from block chip or soil sampling that's been undertaken in the vicinity of the porphyry. It really is very extensive. And we very much feel that we're still just scratching the surface. There's a lot more work that needs to be done in this area, but we can only pursue that with drill testing ultimately and that's something that we want to do in the context of the expanded JV. Those blue panels that I identified in the earlier slides, we've sort of boiled those down to some numbers that people can understand better. So this is just the process of developing a jock exploration target.

38:01 This target is based on our current understanding of the geology of the Sullenbosch ore body primarily. So it relates to the Sullenbosch style of mineralization and it implies that we will we have the potential to identify other Sullenbosch styles of mineralization where the geology is conducive for that. Now if we apply the numbers that we get from Sullenbosch to these other areas, we end up with potential for another almost 1.5 to 2,500,000 ounces of gold. But as I said, this requires a lot more additional drilling and we want to undertake this further work in the context of an expanded partnership.

38:49 So that wraps up Turkey. Then outside of Turkey, we've commenced some targeting work a couple of years ago in fact on Cyprus. We were eventually able to secure an agreement and earn in agreement with Venus Minerals during late last year. And this work focuses primarily on the Trudos area of Cyprus. So this is specifically targeting volcanogenic passive sulfide deposits, which are seafloor depositions of metals. So in the context of black smokers that you see on divergent plate margins such as in the middle of the Atlantic Ocean, That's a good example. But what's happened here is that millions of years ago, the green units that you see on this map were what's called abducted onto the crust at Cyprus.

39:55 And so the sea floor itself was preserved in part at today's surface. And along certain contacts within these seafloor basalts that we see exposed today, we identify these volcanogenic massive sulfide systems. Cyprus has been known for these deposits for thousands of years. It's been mined since Bronze Age or indeed Copper Age prior to that. It's been a highly important source of copper for the world for very many years. However, an important part of the story was largely missed and that is the potential for gold.

40:43 And we're recognizing this potential as being really very significant. These are ultimately copper gold ore bodies. But the potential for copper sorry, the potential for gold is largely ignored because going back several decades, the gold price is not what it is today and was not considered particularly economic. We have to look at this in the lens of current circumstances and it makes Cyprus a wonderfully prospective area for an exploration company. And Venus has been operating in Cyprus for fifteen years. They've got a great in country team, very well connected team in Cyprus. And we've commenced the process of earning in by spending ultimately EUR 3,000,000 to earn into 50%. Currently, we're just north of 9% of Venus Minerals.

41:39 We are planning for an exploration resource drilling program in Cyprus. The exploration drilling may commence imminently, possibly as early as August that work is being finalized now. And then resource drilling possibly commence later this year, though the situation with coronavirus has obviously delayed certain plans in terms of moving rigs and people into the country. But it's a very exciting addition to our overall portfolio. So in summary, ARIANA represents the only AIM company that provides exposure to Europe's largest gold producing country, that being Turkey.

42:28 Turkey is an exceptionally prospective country for gold. And we've seen through the last fifteen, twenty years, a huge expansion of gold mining activity in the country. It's certainly one of Europe's success stories from a gold production perspective. So we're in absolutely the right place for this business. The team has demonstrated fundamental track record unlocking asset potential right across its portfolio and indeed developing that portfolio from what was essentially a greenfields asset base right through to producing projects.

43:13 In the case of producing projects, the existing JV don't need to go through these numbers. We've gone through them before, but it's fantastically profitable operation and certainly in the current gold price environment, we're doing very well indeed. We've obviously got the opportunities that stem from that being well funded for our future growth. So we haven't come back to the market for funding since mid-twenty seventeen. And with the dividend stream that we're receiving from the joint venture, there's minimal dilution risk to shareholders in terms of future placings.

44:00 Obviously, we're continuing to grow the resource base across the existing portfolio within the JV and indeed outside of the JV in the case of Sullenbosch. Every ounce that we add to the resource base is another boost for the company. And to be doing it, as I said, less than $15 an ounce is exactly where we want to be for our shareholders. We're also looking at diversifying the company. So utilizing the skill sets that we've developed over fifteen years in Turkey to jurisdictions that sit in the vicinity of Turkey. So we can use essentially the same infrastructure, utilize the same team very effectively.

44:51 And Cyprus is the first of what we hope to be a number of opportunities that we develop within Eastern Europe. And obviously, we're not going to ignore the potential for developments in technology metals, copper itself being one of those, but any metal associated with copper being of interest in the electrification, decarbonization agenda that is so important in today's world. So we have a business that's built on solid foundations. We are poised for rapid growth and diversification. So with that, I'd like to thank you all for listening in and we'd be happy to take questions. Thank you, Kiran and Michael. Thank you very much indeed. Ladies and gentlemen, could you please continue to submit your questions using the Q and A tab, which is situated on the right hand corner of your screen.

45:49 But just want the company to take a few moments to review investor questions submitted already. I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. And before I hand back to Kieran and Michael, I'd like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations. Kieran, Michael, obviously, we had investors had the ability to pre submit questions ahead of today's live presentation. I thought if it was possible, perhaps we could address some of those now. And then we can perhaps ask you to look at the live Q and A just to see what from there and if anything comes in during the pre submitted questions.

46:40 So the first question we have is, what effect has Turkish political instability had on your longer term strategy for the company? Okay. Well, I think it is it's interesting that the question is phrased that way that there's this perception of political instability in Turkey. Actually, Turkey is politically stable. It's had an AKP government in place for the past eighteen years. That's AKP government has been led largely for most of that time, in fact, for seventeen of those years by President Erdogan initially as Prime Minister and then luckily as President. So from a political perspective, the country is stable.

47:31 However, the country has faced several headwinds, which have influenced investor perceptions of the country. And those headwinds include the situation in Syria over the last almost decade and other regional events that have impacted the region around Turkey and indeed within Turkey. There's also unfortunately, as a result of that instability in the region, there has been a number of internal terrorist incidents that have been influenced by those external factors. But there are also domestic terrorism issues that Turkey has dealt with for very many decades.

48:22 And this is all added to the perception of Turkey as being less stable perhaps than some other countries in Europe. And that's unfortunate. But I think that if you look at it purely from a mining perspective, that political stability has been essential. So having a single government in place for so long, That government has actually been instrumental in developing the mining industry and indeed identifying that industry as being strategically important to the country. So we are and our gold mining peers in Turkey are beneficiaries of that. So for that, we're very grateful.

49:10 The fact that we've been able to secure things like the strategic investment status from the Turkish Ministry of Economy, which really is hugely beneficial for companies that are planning to develop mines, because there are within those incentive schemes, are massive benefits like a reduction in corporate tax from 20% to 2%. The Turkish government providing various tax exemptions, be it VAT or customs duty exemptions. Interest rate support is provided by the Turkish government. The support that they provide, social insurance payments to mine employees for a large part of the mine life. All of those things are hugely beneficial for mining companies.

49:59 So it's been a fantastic environment to operate in. And as I said a little earlier, Turkey has gone from having zero gold mines twenty years ago to knocking on the door of 20 gold mines operating in the country within that twenty year period, which is phenomenal. There's no other country like it in that part of the world or in very many other places in the world. So I think that the question needs to look at that political instability in that broader context. Thank you. Question here around share consolidation. Have the board considered a 10 for one share consolidation like MARL? This so that the 1,000,000,000 shares could come a more respectable 100,000 shares.

50:49 The share price unit would also then look more attractive to investors rather than just appear as just another dubious penny share. Yes. The answer to that is that we have investigated that and researched it. But we do not see any particular advantage in undertaking a share consolidation at this point in time. In the majority of cases where share consolidations occur, there's almost certainly a drop in the value, the new value of the shares in a period following the share consolidation. And so we don't see any reason to subject the company or its shareholders to a potential drop or valuation as a result of that.

51:40 And the other thing is, if it's not broken, why try and fix it? Thank you. Two more questions, obviously, that were pre submitted and obviously I am mindful time because I see there's a number of questions coming in, although I think you are coming across some of these through the presubmitted ones. The next question is, is it possible to say when shareholders will get to see the full deal details? And how long will be given to consider them before ratifying it? Yeah. So essentially, all the key deal terms were provided in the announcement that we made at the end of November concerning the as yet at that time unnamed incoming partner. So I'd ask shareholders, investors to refer to that announcement because that actually provides a lot of detail.

52:33 Since that time, there have been certain steps that we're in the process of taking to refine the methodology of bringing the deal about to bring the joint venture together. And I'll go on to explain that in a little bit more detail. And then it was only in early July that we were able to announce as often as the incoming partner to put the overall JV proposed JV in better context, result in being a major construction firm responsible for large scale government contracts such as hydroelectric facilities in very rugged difficult terrain and major infrastructure projects such as the Istanbul Izmir Motorway and associated infrastructure such as the Oranganzi Suspension Bridge.

53:33 So it's result in represents a very powerful partner to bring into a project like Sullenbosch specifically. The other thing is that they have local cloud because the result in family come from the region. So it's not just the fact that result and have deep pockets and engineering capabilities, but they're also locally very well connected. So there's a clear strategy and desire from our side to bring them in as the key partner to make to unlock the key value from Solenbosch. In terms of just to come back to what I said earlier about the next steps that we're taking. We've recognized a methodology by which we can accelerate the proposed JV on Sullenbosch and to ultimately bring Sullenbosch into the expanded Zenith joint venture, such that all parties have shareholdings of 53%, a result in 23.5% ARIANA, 23.5% PROCIA.

54:44 And the certain corporate restructuring that we need to do in Turkey, which is currently underway on our side. So this relates specifically to the company that holds the Solenbosch asset. There are certain steps that we need to take, which it will take a couple of months to sort out. We're already about a month in. And once we've got that resolved, then we'll be able to provide further update on how the JV is going to be how it's going to come together and how it will be financed. But in terms of key deal terms, in terms of the gross numbers and indeed what ARIANA will be netting from the proposed JV, none of that changes.

55:29 So there will be a cash payment for initial five sorry, initial cash payment of GBP 5,000,000 for 17% of the Sullenbosch asset with the commitment buyers often to spend for the $8,000,000 to earn into its 53% of that project. But they're also committing to spend $50,000,000 to acquire a 53% stake in the Zenit joint venture. There's also the provision for PROSEA to acquire its 23.5% stake in the Sullenbosch JV and we'll provide further detail on that as soon as we can. Thank you. As I said, just mindful of time, obviously, we're coming up to the hour. Perhaps if we can address this and then pick a handful of the live Q and A that would that would be great. So the final question is, is it possible to comment on the progress towards a dividend policy and specifically the special one off payment?

56:29 Yeah. Michael, do want to answer that one? Yes. Well, the one off payment, we we will know more about when we have concluded it. And the prospect of having a No. I I'll I'll answer it. No problem. So on the dividend policy, we obviously, we're planning to enable Sorry, Karen. I think there is a small interference coming from William. Okay. I might I might just remove William. There we go. Sorry. Please go ahead, Kieran. Yeah. Michael, are you there, or shall I answer? If you carry on, Kieran, I've got Yeah. Okay. Alright.

57:17 So, yes, there's certain work that we have to do on our side to ensure the dividend can be paid. We have to demonstrate a distributable reserve. There's a process that we have to adhere to ensure that. So there's a little bit of work that we need to do in the company accounts. That work was actually underway much earlier this year, but we sort of put it on hold while we're working through the finalization of the audit. And unfortunately, the audit was delayed in itself because of the situation around coronavirus and the auditors not being able to complete their field work in Turkey within the specified time period. So we've obviously we now have the final results out of the way that work on enabling providing the structure to enable the dividend to be paid is going to be restarted.

58:11 Michael and that's why I asked Michael if he could respond on this subject. He's responsible for working through those issues. In terms of a policy, we don't have a policy defined as yet, but we will. And that will all be undertaken in parallel with the completion of the Ozalten deal. And we will be presenting both the deal and indeed our expected dividend policy that reflects the deal in terms of a special one off dividend. And then thereafter, we will be looking at a longer term dividend policy. But there's a lot more work that we need to do on the various projects in terms of resource growth, defining reserves.

59:02 So we can have sight of our true mine life ahead of us and the expected profits that we might be generating over the course of the next five, ten years for instance. Thank you, Kerem. Michael, you're you're Sorry. Go ahead, Michael. I'm sorry. Kerem, you've answered it the way I would have. I just I don't know why my mic is malfunctioning, but I'm back again. Perfect. Thank you. Thanks. That that may well have been my fault, Michael. Apologies for that. But obviously, we had the the dog which has now now gone, so we've sorted that out. So apologies for that. Thank you very much indeed. So that's the presubmitted question. Now obviously, have now had a good opportunity to put some more questions through to you guys, which are available, as you will see on your Q and A panel. Could I ask you just to read out the question and then perhaps give the answers where you can? And obviously, to investors where we don't get a chance to answer the questions, obviously, the company review all questions submitted today. And of course, we'll publish responses through the appropriate means on the platform after the meeting has ended. If I could hand back to you guys, as I say, if you just read out the question with your response, that'd be great. Thank you.

1:00:19 Okay. Thanks. So I'll go through these more or less in order. So the first question from John G, the MOU was to be concluded originally by end of Feb. Since then with all the resource updates and the other reasons for the increase in our inherent value, surely the terms need to be adjusted to protect shareholder interests. Well, I'd say that shareholder interests are protected by us going through the process of expanding the resource base to begin with. And you can't change a deal that's been agreed because that from deal making terms, you don't change halfway through because you just lose the deal. And the key is to ensure that we have a solid partner on a project like Sullenbosch.

1:01:11 And the work that we've done to add value to Sullenbosch ultimately be reflected and ultimately will be to the interests of shareholders. Then Karim, it might be worth discussing the question on Turkish lira. Oh, okay. Yep. So from Andrew r, how does the fluctuations in the Turkish that affect your finances, good or bad? Well, if you really look back at what's occurred over the last three years, the Turkish lira has in a general sense declined in value with respect to the dollar.

1:02:05 Our earnings in Turkey are effectively dollar based earnings because we're selling gold. But the way that it works and I think this reflects on another question concerning the Istanbul refinery. The way that this works is that we sell our gold through the Istanbul refinery and it ends up with the Turkish Central Bank. So since early twenty eighteen, the Turkish Central Bank has had an option to acquire all gold produced in the country. Since early January twenty eighteen, they have consistently exercised that option.

1:02:52 So all gold has been sold to the Central Bank. Now we receive our payment at the spot price, so the U. S. Dollar spot price, but the payment itself is received in Turkish Lira the following morning. We then convert that Turkish Lira immediately back into dollars for a large part. Some is retained in Turkish Lira because our outgoings from an operational point of view are Turkish Lira denominated. So our revenue is effectively U. S. Dollars, but we've got a declining cost base in part because of the declining rate of the Turkish lira with respect to the U. S. Dollar. It was a question on dividends, which I think we've discussed.

1:03:42 There's a question on Yes. Site visits, which would be interesting one to discuss. Yeah. So from Paul, the will there be any possible site visits once this pandemic situation is clearer? Yeah. I mean, obviously welcome people to to visit sites. And in fact, we've run a number of site visits in the past. And typically, we would do that once every few years. So the last one we did back in 2018. So we're sort of almost due for another site visit to be fair. But I think that the current circumstances have added various levels of uncertainty onto travel international travel.

1:04:30 Although Turkey itself is in comparison to some countries doing relatively well with coronavirus in the sense that they've reduced rates of infection and the death rate as a proportion of the infection rate is relatively low. So Turkey has done quite well in a medical sense. So we are as I'd say as safe as we can be in our operating area and it is possible now to travel within Turkey freely. That wasn't the case a month or so ago. There were travel restrictions in place but those travel restrictions didn't apply to our industry. We could receive exemptions because we were strategic industry.

1:05:21 But in most cases, there were travel restrictions that as I said now being lifted. But having said that, I think people in Turkey are still continuing to be fairly cautious and people are wearing masks in public. And I think that that uncertainty is going to continue for quite some time yet. And we wouldn't be planning any trips until this uncertainty is lifted. Michael and Kieran, obviously, I'm just mindful of time and at the same point, I know that you want investors to provide you feedback, obviously, the results that you released. Perhaps you could address one more and then perhaps I could ask you to wrap up and then I'll redirect investors for feedback. Yes, I'll answer the last question that we've received from PLC.

1:06:11 The slide for Sonneboise shows production of 50,000 ounces per annum. That now seems a very low figure given a mine life of thirty years. Do you have plans to increase that figure? And what do you think the production is likely to be? So the answer to this in a way already provided and that is the figure of 50,000 ounces per annum comes from our scoping study, which was undertaken in 2015 based on the previous resource estimate. That work would need to be revised entirely. There are a lot of parameters in there that either we have better understanding of or in the case of the gold price itself, we've got a completely different input for the scoping study because that was run at 12:50 dollars an ounce. If we ran it at $1,700 or $1,800 an ounce, the resulting economics would look drastically different to the positive.

1:07:19 What we've done in the latest resource is that the grade of Sullenbosch specifically has gone up. But also we've demonstrated that there's a substantial lower grade resource associated with the Ardvula porphyry and the periphery of that porphyry where it interfaces with the sullenbosch ore body. That's a very exciting area for us from an exploration and resource development point of view because it could add a lot of tons at slightly lower grades. So I think that the reality is that we're probably going to have to revise our thinking on the project, so that we're no longer looking at sort of 50,000 ounce per annum production rate. And indeed, the throughput rates through the plant would have to increase quite dramatically.

1:08:08 The other thing to consider is that Sullenbosch itself is a gold silver ore body. But where it interfaces with the porphyry, we start seeing all the base metals coming in copper, lead, zinc, molybdenum. All of those things are going to add value if they can be extracted economically. But we may have to look at alternative processing routes to be able to do that. And the original scoping study looked at two process route options, heap leach and carbon in leach. Karsten, we currently use at Kuselpepe for instance. Heap leach could be doable as just difficult topographically and represents more of a challenge I think in that environment. So I think CIL is still the route for Sullenbosch itself, but we probably do need to think about how we'd extract maximum value from those base metals and molybdenum.

1:08:59 Thank you. Side question. That's give feedback. Mark, I thank you very much. I think think that's it's been an excellent forum and platform. I've reviewed the questions, and I think through the discussions we've had and the various answers we've given, we've answered, I think, all of them in one form or another. Thank you for an excellent forum. Thank you very much. Thank you. Thank you, everybody. Thank you, Michael, Kieran, and thank you really for updating investors really as part of your roadshow. Thank you very much again. Could I ask investors not to close this session as you'll be automatically to over open Thank On behalf of ARIANA RESOURCES, then Kerem, the the Michael and Investor Meet company, I'd like to thank you for attending today's presentation.

1:10:06 That now concludes today's session. Good morning to everybody.