Ariana Resources (LSE:AAU) — Investor Presentation

0:03 Good morning, ladies and gentlemen, and welcome to the ARIANA RESOURCES PLC Investor Presentation. Throughout this presentation, investors will be in listen 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. Just simply type in your question in the box below and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it is appropriate to do so. These will be made available to you via your Investor Meet company dashboard, and you'll receive an e mail notifying you when they're ready. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. And I'd now like to hand over to Michael DeVilliers, Chairman Karim Sena, Managing Director and William Payne, CFO of ARIANA RESOURCES. Good morning to you, gentlemen.

0:57 Good morning, all.

1:01 Good morning, ladies and gentlemen. Thank you very much for taking the time to listen to the ARIANA RESOURCES presentation, which is being undertaken ahead of our general meeting on the thirtieth of this month concerning the proposed transaction between ourselves Bersault and Holdings and Prestea Construction.

1:25 This presentation is largely for information purposes ahead of that meeting and to give shareholders the opportunity to ask the company questions that may be on their minds as a result of the distribution of the circular, which occurred on Monday. So we hope that shareholders have now received the circular. In any case, a digital copy of the circular is available online through our website under the investors tab at circular. You can find that there and download it. So I'll jump straight into the presentation. My intention is to go through this fairly quickly and to perhaps give a little bit more time for opportunities to ask the company questions.

2:12 A lot of this material shareholders would have seen before. We've provided some further updates since the last opportunity we had to present. So we hope that shareholders find this presentation useful. So moving straight into the presentation. Now the proposed joint venture with Ozalten Holdings and Prosea Construction, Prosea being our existing JV partner on the Kuzeleke Gold Silver Mine in Western Turkey along with the Tarsan development project. That new JV structure, we're planning to move into that framework during the course of early next year, once we've gone through the general meeting process and received final regulatory approvals in Turkey.

3:01 But as we stand today, we've demonstrated three years of profitable operations out of the Kuzuldeppe mine with our existing JV partners, PROSIR. The JV has paid off a significant amount of debt, well over $33,000,000 in principle. And we're continuing to pay down a working capital loan as we speak. So that really underscores a very strong track record both operationally at the mine site, but also in terms of our exploration and development work across Turkey over fifteen years of having operated there. We've set ourselves several significant growth targets across the existing JV, which, of course, will now be expanded to encompass all projects.

3:51 So that will be Khozl Tepe, Tafsun and indeed, Salembash, all within one framework under the Zenith Majdinjalik joint venture. We've got a very strong cash position as a result of operations during the course of this year. Obviously, we've benefited from very favorable commodity price situation. And operationally, we've continued to do very well in dealing so much so that we go from strength to strength. And we're ending this year in a highly cash positive position. And of course, we're now in receipt of the prepayments from result in holdings as part of the JV agreements as proposed.

4:41 So this slide just summarizes where we stand today in terms of market cap, shares an issue and so on. Just a little bit of a summary there showing key holdings the holdings of directors. As you can see in the graph showing share price and volume over the course of this last year, we've tracked up very nicely indeed and volumes certainly continue to hold very firm. This one I won't dwell on. You know us very well, I would imagine, by this stage. But there, just for your information, you can always come back to the presentation to obtain any further detail on the directors.

5:28 So just to focus now on the operations in Turkey. Revenue wise, we've achieved $126,000,000 of total revenue since operations commenced in early twenty seventeen, right up to the end of October this year. Our average revenue per gold ounce continues to track at high levels, $15.70 per ounce to the end of October. That was the last reporting period. And that's largely down to the contribution of silver, silver being a byproduct credit to the operation. On the debt side of things, did mention earlier that we paid off our construction capital loan to Kefinars Bankersen, that was $33,000,000 paid off by April of this year. We've currently got another $4,700,000 working capital loan to KF Finance Bankers, which we're paying down to the end of October twenty twenty one.

6:36 Gold production wise, most of this production has come out of a single pit, the Aarzu South Pit. I'll talk about that in further detail later on. And as you can see from the gold and silver production numbers there, it's about a ten:one split between those two commodities in terms of output. Now most importantly, I suppose for a gold mining operation is the cash cost. And we're fortunate that we've continued to operate really to a large degree in the lower quartile internationally. And our average cash costs are still under about US500 dollars per ounce.

7:22 And this slide speaks to that a little bit further, compares us to a number of our peers. This graph was put together by our brokers, Pamir Gordon, a little while back now, but it largely illustrates the points that we write down in that lower end on the left hand side of the graph and cash costs there at that particular point in time, just about $400 per ounce. And we remain in that $400 $500 per ounce range to a large degree. The key thing being real key takeaway from this is that there are very few companies in the junior gold mining space that are able to operate at these sort of levels.

8:11 And this is largely down to a very solid operating team in Turkey that have proven their worth. And also the operating environment in Turkey. Turkey itself represents the fourth lowest cost producer for gold operations globally. And a large part of this is just down to low cost operating environment that we are beneficiaries of. The other important point that we can draw from this slide is that through the course of our exploration over fifteen years or so in Turkey, we've continued to implement cutting edge technologies in our exploration programs. And we've assessed our exploration projects on a careful sort of risk balanced approach to a large degree.

9:10 And as a result of that, we've been able to maintain industry leading discovery costs that are now just under $10 per ounce once we completed our last resource updates earlier on this year, particularly for the Solenbosch project, which is now 1,500,000 ounces. So this is, you know, a key metric by which any exploration and development company can be measured. So just to underscore where we stand currently, we've announced recently the completion of the JV agreements that will enable us to enter into an enhanced JV with our existing JV partners for SIR Construction, but bringing in Ozalten Holdings.

10:02 Ozalten Holdings are a major Turkish construction and engineering company. They have been involved in several large projects across Turkey, government funded contracts, and particularly in recent times, hydroelectric dams, associated power distribution infrastructure and also motorways. So they were responsible for the motorway build between Izmit and Istanbul, including the Orhan Gazi Bridge across the Sea Of Marmara. So these are very high level contracts, and they're used to operating in quite challenging terrain and certainly adept at operating in environments like Artvin, where we find our Sullenbosch project.

10:53 And more so, as Alton, they originate from the Artvin province. So they are very, very much local, and this is an absolutely critical part of how we see the Southern Rush project being advanced. So we're in the privileged position now of bringing ERZALTON in to our enhanced joint venture. They will be taking 53% of that JV. And Proseer and ourselves will be directed to 23.5% each in that joint venture. But of course, as part of that, we are in the process of divestment, and we will be netting $37,750,000 from result and indeed from Proseer in part payments.

11:43 In addition to that, we are also working on Cyprus through a UK registered Venus Minerals. Venus Minerals has an operating subsidiary in Cyprus. They've been focused on copper gold assets there. And I'll talk further on that later in the presentation. But at the same time, the last point perhaps answers one of the questions that we've received in the for the Q and A, and that is whether we're looking out for other business opportunities. And the answer to that question, can deal with that straight away, is that we always look at other opportunities. It's an ongoing process. It's part of our DNA. And in the case of Asgard Metals, which we established a few years back here in Australia, we were very successful indeed in the lithium space at a particular inflection point in the lithium market, and we did very well indeed as a result of that investment.

12:43 So we're not averse to looking out for, let's say, left field type opportunities like that. But our general focus is going to be maintained in the region around Turkey, and there's very good reason for that. We've established fifteen years of successful operations in Turkey, and we plan to continue operating in Turkey through the existing JV framework. But also, the team that we've established from the fifteen years of operations is a rock solid team, and we want to continue to make use of that team to the best degree possible. And it makes sense to have a regional strategy within similar geology through that part of the Tethy and Metallogenic Belt. So Venus, of course, is part of that overall strategy.

13:34 So this is a map of Turkey showing the distribution of the key projects, Khozl Tepe and Tafsan forming part of the existing joint venture with Brusea, the Red Rabbit joint venture, of which we own 50% currently. But as I said, we will be diluting to 23.5% as a result of the divestment there. In addition to that, in the same general area, we have the Kuzelchukwu project and Yvelindi project. And these are currently 100% held by ARIANA, but they are also in the process now of being sold into joint venture ahead of the final conclusion of the proposed transaction.

14:25 And from that, we will be securing a further $2,000,000 So that $37,750,000 that I mentioned earlier does include that $2,000,000 following the sale of Kuzotoku and Ivlin into the joint venture. And then outside of Western Turkey, we have the Salembas asset, again, currently 100% held by ARIANA. But that and its holding company, Pontid, will be sold into the enhanced Zenith joint venture as part of this transaction. So that's a process that we imagine concluding early next year. And also shown on that map is Cyprus to the south.

15:13 So moving on to the Kuzlitepe project, Kuzlitepe sector of the Red Rabbit project. This is our first mine in Turkey. It was developed in joint venture with PROSIR Construction from 2010 when we entered into that original joint venture. And we, together with PROSEA, we brought this project through feasibility and into environmental impact assessment permitting and then finally into construction with PROSEA as manager at that stage, taking on the responsibility of the operations on-site. And as part of that process, moving it through the environmental impact assessment and bringing the project on stream, we secured strategic investment status through the Turkish Ministry of Economy, which provided for a whole raft of incentives that enabled reduction in corporation tax, among other benefits to the joint venture.

16:18 In addition to that, we've also received very strong community support, which goes from strength to strength. We're very privileged to be operating in the environment that we are in and around. And a lot of that staff that we employ are from local villages and towns. And it's been very encouraging to see the staff operate so effectively over the three plus years since the mine went on stream. Now largely down to our partners, PRCESIA Construction, they were responsible for not only designing but building a state of the art processing facility and Tailings Dam.

17:06 And indeed, they are continuing to work on enhancements to the operation. And part of that, it involves the expected increase to processing capacity, taking our annual throughput from about 200,000 tonnes of ore per annum, which is already significantly above our feasibility base case of 150,000 tonnes of ore per annum. But our intentions now with PROSEA are to advance that all the way up to 500,000 tonnes of ore per annum. And we're expecting to increase to the higher rates over the course of this next year, but particularly from June or so onwards at this stage.

17:54 Now one of the things that has contributed to the proposed capacity increase at Khozu Tepe is the recognition that we've got significant zones of lower grade mineralization that were never properly factored into the resource estimation when we were first evaluating this project. The project was largely viewed as a relatively small high grade system that could be mined by open pit. But as our operations have continued, we've determined that there are opportunities for identifying large lower grade zones of mineralization.

18:40 And in order to deal with that in a cost effective way, we need to increase our throughput to ensure that our unit costs remain relatively low. So that's all the work in progress and we'll provide further updates to the market on the proposed capacity increase. But as I said, from the second half of next year, we're expecting that's those enhancements to be realized. So this photo shows the general layout of the mine sites, the processing plant and associated facility shown in those blue buildings there. The Argyll South Open Pit, we're no longer producing from operations there came to an end in August of this year.

19:33 And we shifted all operations to the ARZU North Open Pit area, which is shown to the right of that photograph. So both at ARZU North and also very nearby the Deliya Pit that lies adjacent to it. So we'll be operating at ARZU North in Deliya now for another few years before we eventually move on to Banu, which is sort of slightly left of center in that image. And indeed, as we move on to identify other zones of mineralization, which I'll come on to in the following slide, we're planning to see these operations across these pits continue to able to we've

20:24 progress we've in And in fact, particularly in the the AARSU North and Delhi areas, it will be these red pits that we will be mining to currently. So we're already operating on the enhanced case at this point in time, which eventually brings us back to ARIANA RESOURCES, in fact. And you can see on the left hand side of the ARIANA RESOURCES PIP, there's an extension in red shown there. That area is has been confirmed as containing economic mineralization. And it's an area that we're really quite excited about.

21:11 And that's an area that we will either continue with open pit operations once operations are in Northern Delhi have come to an end, or there is the possibility still that we could look at underground mining from this area and under the hill shown in teal color there, all the way through along the same structure towards RS 2 North. And we're actually planning now a further drilling program to test some of these areas in a little bit more detail than we have in the past. This area between Arazu South and Arazu North was last tested in two thousand fifteen, sixteen, that that sort of period. And we identified the extensions to the vein system at that stage, And they've certainly proven to be really quite interesting and worthy of follow-up.

22:10 And with the work that we completed on drilling the ARIANA RESOURCES extension on the left hand side there, we've proven that this mineralization is almost certainly going to be economic. So very exciting indeed. But that's just one part of the overall plan to enhance operations at Kuseltepe. Now the Kuseltepe system is a gold silver vein field, the veins shown in this map in dark blue. The areas that are being drill tested, you can see marked with all these little dots here. Hope you can see the see the cursor here. If not, I'll I'll just if may, I'll be able to draw on here. No.

23:01 I can't draw on there. Never mind. So just quickly reflecting on our South here and ZARU North, Delhi here. So it's this area, this gap zone that we're particularly interested in now and to undertake further drilling in that region, but also extensions of ZARU North in this direction towards Jaila up in the Northwest. And then of course, are other veins throughout this vein field that need further drill testing. And indeed, beyond the Kuzzle Pepe vein field itself, now shown in this area to the bottom left of the map, Kuzzle Pepe is part of a much broader system of epithermal gold silver mineralization that is confined to what we refer to as the Sundarco Gold Corridor, which is broadly northeast trending zone of epithermal mineral systems.

24:06 In the Kepes area, Kepes North and Kepes West in particular, very interesting and will almost certainly become part of enhanced operations at Khozupepe. We're expecting these areas to be mined in the future. But also the Karakarak area slightly further to the Northeast. We're planning a drilling program there as well, which that drilling in fact might happen at tail end of having drilled Khozil Pepe. And then even further off into the Northeast is the location of the Khozl Chukla property,

24:38 which I mentioned earlier. So the intention is, of course, now to bring this project fully into the joint venture and for this to be part of the satellite operations feeding the Khozl Tepe processing plant. Now moving on to Taubshan. Taubshan is part of the existing JV with Khozl Tepe construction. It's located 75 kilometers to the Northeast of Khozl Tepe. The geology is slightly different. It is an epithermal system, but it's gently dipping or indeed flat lying zone of mineralization from surface. The grades are generally lower than at Khozlopepe, although there are some higher grade components of it. But we're looking to develop this as a standalone or largely standalone heap leach production opportunity.

25:27 And we've brought the project through feasibility. We're looking to enhance that feasibility further with some additional drilling that will likely commence towards the end of Q1 into Q2 of next year, I would imagine. But we'll provide further updates on that as our drilling programs continue. In addition to that, we are we've also undertaken a resource update on Tafshan previously based on rock salt channel sampling that we completed last year. This enhanced the project really very significantly indeed and identified other opportunities for growing the resource. So the drilling program would be looking at expanding that resource further and only adding to the economics of the operation.

26:19 Right now, the project is still in the EIA permitting process through the Ministry of Environment. And we'll provide further updates on where we get to with that into early next year. We have been hopeful, in fact, that we'd have the EIA sign off by the end of this year. But this is one area where we have been impacted fairly significantly as a result of coronavirus and various ministries in Turkey having slowed down a lot of operations, assessment operations of these sort of projects over the course of the year. So we're now expecting further feedback in early twenty twenty one on that. But while that's is has been underway, we've continued to advance the project with continued with land acquisitions at Tarshan. So that's the purchase of freehold land within the footprint area of the feasibility design for the processing plant and other infrastructure.

27:29 The most recent work that we've completed relating to the resource update and the exploration target in particular, where we're most excited, in fact, is an area that we call the south zone, which occurs just slightly to the southwest of the main zone designed open pit area, which is sort of central to that map. And some of these drill intersects are also shown on that map. And it's that south zone that looks to be a not only structural but a lithological repeat of the main zone. And we see evidence of strong mineralization there as demonstrated by those grades.

28:17 So this could really add very significantly to the project. And then outside of our current joint venture with PRCESIA, we have currently 100% held Solenbosch project in Northeastern Turkey. And this was originally part of a joint venture with Eldorado Gold and prior to that with European Goldfields. And we secured a 100% of this project in late twenty sixteen. And as part of that, we continued our own exploration across the project in recent years. We were particularly keen to ensure that all the licenses were upgraded to mining status, which we successfully concluded last year.

29:04 And this, for the first time, gave us a concrete basis by which to move this project into a new joint venture framework because we realized that this is the sort of project that will require significant inputs of not only expertise but capital as well. And we recognize the importance of attracting a significant major partner, be it a foreign company or a Turkish company. But we felt that a Turkish local company would be the best fit

29:39 for for various reasons, but the most important reason being that, you know, having that local expertise and capability is just so important in an area like Turkey. And so we were very successful, I think, in attracting the likes of Ozanthan Holding that and they've looked very seriously at projects of this sort of scale. And, you know, they were immediately attracted to to the project, and I think we've reached a very sensible

30:15 structured framework with them about how we move this project forward within the context of an expanded joint venture. The work that we completed last year, which involved drilling, we did a fair amount of drilling during just before the summer of last year. And it was that drilling that was important in the definition of our next resource. We announced that resource update around mid this year, increasing the overall resource from about 1,000,000 ounces to 1,500,000 ounces of gold. A lot of that being in the Solenbosch area at higher grade, but also a lower grade zone of mineralization that involves copper and molybdenum as well.

31:02 And indeed, some other base metals like lead and zinc within the Ardela porphyry area. And so it's a very exciting system and it certainly has economic legs as demonstrated from the scoping study that we completed a few years ago now admittedly. But that scoping study importantly was undertaken with a pretax base case of US1250 dollars an ounce. If we rerun numbers using current gold prices or not you know, $1,700 an ounce, so not even current, it would be that much more attractive. And and clearly, this is the sort of thing that's interested as often.

31:49 And there's certainly opportunities to grow that resource further as demonstrated in this three-dimensional model of the sun shown in yellow, the antler porphyry shown in pink, and then our exploration target areas shown in blue there. Now one of these targets we've now proven up is the Sullenbosch Main extension, just on the top end there of the Sullenbosch main system. So that panel has proven its worth. It is there. Parts of Solenbosch North, we've also snagged in drilling undertaken last year. And then Solenbosch South remains completely untested by drilling. But there's also further exploration upside in the vicinity of the porphyry and also on the eastern side of the porphyry that's that has not been drill tested at all.

32:45 And in fact, this next map shows the summary of the exploration that we've completed to date. So this is a plan view, the sun bush ore body shown in yellow outline and those areas around some of those jock exploration targets shown in the magenta red colors. Those are the anomalous areas with gold geochemistry. But you can see to the south of the porphyry, shown in pink outline, there's a significant area of mineralization and alteration there that has not received a single drill hole to date. And indeed to the north of the porphyry as well, some really significant rock chips and rock chip channel samples that were obtained in that area as well.

33:38 So it's a very exciting area and really, we feel that we've only scratched the surface, so to speak. But it demonstrates that there's an opportunity, an immediate economic opportunity to develop Sunnenbuch. But I think in a broader sense over the longer term, there's a real exploration opportunity here as well to continue to grow this resource into quite something. This

34:06 table summarizes the the JORC exploration target that we've defined. So this was put together last year. Part of this, I suppose, is reflected in our latest resource update because, as I said, some of these areas have been drill tested to a degree, but still very limited at this time at this time. So the point of this is that there's a significant exploration upside on the opportunities to grow the resource. And this is what's particularly exciting for us as an exploration company and indeed for Zoltan, who intends to spend another $8,000,000 on the feasibility and EIA stage of this project. So that underlines our operations in Turkey.

34:56 Now moving on to Cyprus and our earning with Venus Minerals. So as I mentioned earlier, Venus Minerals itself is a UK registered company that holds a 100% of Venus Minerals in Cyprus. Our arrangement with Venus Minerals is to earn into 50% on expenditure of €3,000,000 over a three year period. We've spent €1,200,000 so far, giving us entitlement to 12%. We're, at this stage, planning to continue our expenditure commitment for Venus, and we'd like to see Venus move into a drilling program focused specifically on the Magellan project on which we've already defined JORC twenty twelve resources of 9,500,000 tonnes at 0.65% copper with associated zinc. And indeed, the thing that excites us the most perhaps is the as yet unquantified gold and indeed silver content of these volcanogenic massive sulfide systems that are prevalent in Cyprus.

36:08 That the gold content in particular is an area that haven't really seen very much attention in Cyprus over decades. It was not ever really considered an important part of these systems, but it clearly is. And the work that we've done to date demonstrates that perhaps a third, if not more than a third

36:29 of the value of these ore bodies associated with the gold content. So this is an area that we want to evaluate further. It's very exciting. We've got a huge database at our fingertips that have been put together by the Venus team in Cyprus over many years. And we've got an excellent excellent team out there that are well versed in the exploration and discovery of these sort of systems on the island. So we're moving this project forward at pace now. Admittedly, during the course of this last year, we have been impacted to some degree by coronavirus had sort of slowed down a few of the operations that we'd planned. But I'm thinking positively about next year, and we're certainly moving forward with our plans for drilling at Magellan.

37:25 So in summary, the investment proposition for ARIANA, obviously, I'm giving this presentation in a time of flux for the company, positive flux. Now that we've signed the joint venture agreements with Ozalta and with PROCES. It will catapult ARIANA into a new domain. We will be significantly capital rich. And as a result of that, we intend on advancing our existing portfolio further, continuing to add value across that portfolio and indeed enhancing our portfolio with further exploration projects within the region. In any case, we would retain 23.5% of the Zenith joint venture projects. And we obviously have operational cash flow coming through from Khozylkepe at the very least, but later stage from the Tauschan mine when we can bring that on stream.

38:31 And indeed, further into the future at Salmonbuch as well, we expect. And so we would imagine that there would be a continuing dividend flow from our Turkish operations. And as part of our contribution to the joint venture, we will be continuing to explore throughout Turkey, continue to identify new opportunities for the company, the joint venture company within its existing portfolio, but also looking at other development opportunities elsewhere in Turkey, should we feel that we need to add to that project portfolio going forward. The last point, I think, is really critical that ARIANA does represent a business that is built on very solid foundations.

39:24 We have had fifteen years of very successful operations in Turkey now, But we are at this inflection point in the company's development. It's a very exciting time indeed. We'd certainly like to see shareholders come along for the next stage of the development of the company, where we're poised for very rapid growth and further diversification. And on that, I will finish off. And thank you again for your time today to listen to the presentation. I look forward to answering questions. Karim, thank you very, very much indeed. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. But just ahead of the company going into the Q and A session, I'd like to remind you that a copy a record of the recording will be available along with a copy of the slides and the published Q and A, which you can access via your Investor Meet company dashboard.

40:21 I'd also like to remind you that your feedback is incredibly important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. And we'd very much encourage you to do that where and should you have the time to do so. Karim, Michael, obviously, investors had the ability to submit questions, which I know you have in front of you ahead of the event. And of course, you've had a number of that have come in during the event. And perhaps if I could ask you just to read out the questions either that have come in beforehand or during the event and then give you responses where it's appropriate to do so. And then, of course, I'll take the floor back at the end. Okay. Thank you very much, Mark. So on the Q and A that has been made available through the Investor Me Company site, we have received a number of questions.

41:13 Some of those questions we have answered in written format, which people can review. But some of these, I'll and Michael and I will attempt to answer now. And I'll start with question number one. What will be the realistic time scale in driving production up to around 50,000 ounces of gold per year? Now as we move into the new structure of the joint venture with Ozalten and PROSEA. Our role within that joint venture is shift somewhat. We will have obviously somewhat less of a say in the way that that joint venture proceeds across its portfolio, retaining only 23.5% stake in the business.

42:05 But we do have board representation. So there'll be one ARIANA Board member. PROSEA will be contributing one of their own Board members. And as often, we'll have the opportunity for to appoint two Board members. So PROSEA will retain management control of that joint venture, And in fact, that was a very important part of how the enhanced JV agreements were brought together, both ourselves and as often recognized the contribution of PROSEA to date within the existing framework. And it's very important to maintain that sort of continuity and to ensure that PROSEA continued to manage these projects going forward.

42:56 But in terms of answering the question specifically and the steps that we, as a joint venture, planning to take to move production to 50,000 ounces of gold per year. In part, I've already answered in the presentation, and it relates to the enhancement of production at Khazaltepe itself. So that's the processing plant expansion that we're planning to undertake during the course of next year. Our current production capacity is about 20 to maximum 25,000 ounces a year at Khozaltepe. With these enhancements, we plan to maintain that sort of output going forward despite declining grades.

43:43 But another important part of that is Tawshan and bringing Tawshan on stream producing at a rate of about 30,000 ounces per year. Now described where we've got to with Tarshan and we've advanced it really very significantly over this course of this last year. And we're positioning that project to move into development as soon as we can once we've got the EIA sign off and we can complete other permitting and land acquisition processes. So there's a very clear strategy that's being pursued by the joint venture. And that strategy, I think, is only ever going to be built on once we move into the enhanced joint venture with Ozalten.

44:28 They're obviously going to be equally keen to see production become further enhanced across all our sites. And then, of course, in the future, there is the opportunity to bring a project like Sunbush on stream as well. So I hope I 've been able to answer that question sufficiently. Question two there was a a written response. Question three, I'd like to know how the Talshant site differs from the Kuzele Tepe site or will the operational model be roughly identical? And please advise if Tarshan is too far from Kuzele Tepe to make use of Kuzele Tepe's plant facilities. So the project is not very far from Khozl Tepe. As I said, it's 75 kilometers to the Northeast of Khozl Tepe.

45:22 But the geology is slightly different and the processing route that we've determined will be optimal is heap leach. So that is different to Kasluteppe. Now there are likely to be several synergies between the two operations and there's certain elements of the infrastructure that is likely to be shared. And, you know, some of this infrastructure could well in involve well, it'd be using the same geological and mining teams to a large degree in terms of planning. The lab infrastructure for the assaying of gold and silver is likely to all be handled out of Kuselgepi. So there's a reasonable amount of infrastructure that will almost certainly be shared. And possibly some of the back end processing infrastructure could be shared as well in the future.

46:12 But really, these will be treated as two separate operations because of that slightly different style of mineralization. Question four was another written response. Question five, how is the pandemic situation playing out in Turkey and Cyprus, and how has the company been affected? Now like everywhere around the world, Turkey and Cyprus have not been spared. It's not been a particularly easy year. Travel has certainly been restricted and or curtailed in some cases during parts of the year. And this certainly affected our exploration plans in Cyprus, as I mentioned.

47:03 And we were only able to start an exploration drilling program really at the very end of the year, which is a shame. But we've done our best to sort of speed up again on that. In terms of Turkey, operationally, we haven't been affected at all at the Kuzu Tepe mine site despite rising case numbers in the region. But the mine site the team there were they implemented several measures very early on. In fact, they were implementing measures in mid March to to ensure that they could not only identify cases, but also mitigate the risk of any spread of cases within the mine team.

47:52 And over the course of the year, the summer period, there was certainly it was a little bit easier. Some of the restrictions that we'd implemented on-site, we eased a little bit. But as we approach the winter, you know, we had to get back on top of controlling and the risk mitigation procedures that we'd established earlier on in the year. And now we have a fully fledged track and trace team at the mine site to ensure that any cases identified in the area from the associated villages, that we know who the mine team has come in contact with so that we can isolate any individuals that are tested positive.

48:47 And and also, we've determined methods to keep the mine operational on the basis of a skeleton team if needs be. But at this point in time, operations are continuing very much as normal, albeit with very regular checks, temperature checks at the mine gates during the course of the day, everyone wearing face masks through throughout the mine site. So they've they've had a very sensible approach to continuing business. So, you know, touchwoods that will continue, but they've they've done the best they possibly can and I think they have to be commended for that. Question six, why is the joint venture agreement taking longer than expected? What is the timeline for final regulatory approval?

49:38 Well, I would say that as I was just discussing on coronavirus, I mean that was certainly contributed to an element of delay in how we put the agreements together. But not only that, it actually affected the due diligence period that Zoltan was pursuing much earlier on in the year. Their designated consultants had various delays towards the tail end of their due diligence process. So they were only in a position to finalize their reporting to us often just before the summer, in fact. So as often we're not able to formally commit to the joint venture until early July, and then we announced that to market in, I think it was the July 1 actually, that they had committed. And then it was from there on that we started putting all the building blocks in place to enable the JV to proceed.

50:43 And there were several conditions precedent to complete the transaction. And some of these were corporate structural issues that had to be dealt with through Turkish authorities. And some of these on their own, they were processes that took a couple of months. So it was just a series of matters that had to be dealt with over the course of several months starting from July of this year. So in that sense, I'd say that actually there was no delay. We moved the agreements as forward as best we could under the circumstances. And it's not something that we were prepared to rush either.

51:29 We've either got to enter the right agreement or no agreement. There's no point entering into a bad agreement. So we feel that we've dealt with this very well indeed. And now we're at the final hurdle or hurdles, ARIANA shareholder approval being one of them. And then of course, regulatory approval in Turkey, principally related to the competition authority. So we're expecting that process not to take too long. It's difficult to say, in fact, how long that process will take. It's not actually a process that we're familiar with. But we're at this stage, we're not expecting any significant delay to that final hurdle in Turkey.

52:21 Question seven, I dealt with in a written response. Michael, I don't know whether you want to say anything more on that one. Capital reduction, yes. We did mention in the circular that we would continue with that once we completed the transaction. In any event, things are working in parallel. I think the view is that with the capital reorganization to allow us to declare a dividend is something that we're targeting to complete before end of q one twenty twenty one. Very good. Thanks. Question eight, how will the reduction of ownership ARIANA holds in its projects affect the company's strategy going forward? I would say that this it doesn't affect the company's strategy. There's an integral part of the company's strategy.

53:12 We've recognized the importance and value of joint venture arrangements in the way that we've enhanced our projects to date. We've had a successful joint venture with Proser Construction since 2010 in that fifty-fifty relationship. We had a 50 one-forty nine relationship with European Goldfields on Solenbosch from 2008. And then lastly with Europe with Eldorado Gold until 2016. So in both those cases, the joint venture partners were absolutely integral in the way that we were able to advance those projects forward.

54:01 And so we seek out value from identifying good partners, and we see that in the case of Zoltan as well. And we'd like to be able to move the enhanced JV forward along similar lines. So yes, we're reducing our ownership. But as a result of that, we're also benefiting in other ways. And of course, a key part of that is that we're through the divestment of our interests in the existing JV and at Salenbush, we are yielding a significant amount of capital, which we can then start deploying on the development of the company in other ways. And I've already alluded to how we intend to utilize some of that capital going forward.

54:55 And question nine, in fact, deals with this and I sort of dealt with it a little bit earlier on in the presentation, and that is the company reviewing other business opportunities. And so as in the case of my previous answer and what I discussed earlier on in the presentation, yeah, absolutely. This is what we do. It is part of our DNA. We're constantly looking out for good opportunities for the company. And we have, as I said, an exceptional team, regional team now split between Turkey and Cyprus within a highly prolific part of the Tethymetallogenic belt.

55:40 And it's something that we plan to expand upon further in due course. Question 10, related to news flow from Cypress, I provided a written response to that one. Question 11, at Khozl Tepe, what are the steps and time frames regarding the increase in operating capacity? Part of this, I've already dealt within the presentation. We have the PRCESEA team, construction and design team on-site in any case, that they've been there for a little while now. And the procurement process is ongoing. The situation with coronavirus has actually impacted procurement and delivery.

56:28 But as I mentioned, by mid next year onwards, we're expecting the plant capacity increase to have been implemented. Everything is in place now to be able to achieve that. All the long lead time orders have been placed and parts will be coming in from early next year. And they should all be installed during the course of H1. By H2, we should be ready to go. Question 12, I provided a written response for in regard to the Magellan Jawc resource update in Cyprus. Question 13, related to dividends, again, provided a written response.

57:14 And question 14 was what the local corporation taxes in Turkey, and again, a written response to that one. So those were all the pre submitted questions. And now I'll quickly take a look through some of the questions that have come in while we've been talking. I mean, some of these, we thought lack of time, we probably won't be able to deal with straight away. But some of these, we've already responded to in certain ways as in when will the dividend be decided. Well, there's there's a series of steps that we need to take regarding the dividend. And of course, we can't enter that process until we've dealt with concluding this transaction.

58:05 So the transaction is actually critical to that. There's a question from David L regarding the Blue Sky vision. Well, I hope we've been able to provide some indication of what the Blue Sky vision is. We've got a very good idea of how we need to develop this business. We've been very successful to date in identifying opportunities and adding value to those opportunities for the benefit of our shareholders. And we hope that the shareholders recognize that and are prepared to join us for the ride into the future as we identify other opportunities within the region.

58:54 Sorry, I've just lost my place now in the questions. Some other questions relating to dividends, I think we've answered those in terms of future dividends, future dividend flow, did touch on that very briefly. So this is the question from Brian S. Yes, because of our 23.5% stake in the enhanced joint venture and that JV continuing to maintain production at Khozu Tepe and then hopefully at the Tarshan site as well, increasing our overall production capacity to about 50,000 ounces per annum.

59:42 That growth in production will actually mean that despite our reduction in holdings, that the actual ounces attributable to ARIANA, if you look at it from that point of view, will be more or less unchanged. So we're basically growing the size of the pie. So our share of that pie is reducing, but because the pie is growing, what we net out of it, we're certainly from a strategic point of view, we're looking forward to seeing a continued dividend flow going forward. Another question from Leslie Kay regarding dividend policy.

1:00:27 I think we've addressed this point on dividend enough. John G, apportioning time between the joint venture project projects and Venus. Well, this is really important and I think this highlights the significance of ARIANA entering into substantial joint ventures with good JV partners. So in the case of Venus, Venus has its own team. Venus has its own management. Our contribution to that is a fairly high level technical contribution and of course financial contribution at this stage as we are into Venus.

1:01:14 But in terms of direct ARIANA management time, if that's what the question is, there's not a huge amount of ARIANA management time that goes into Venus because Venus is quite autonomous. And likewise, with our existing JV in Turkey, it's, you know, it's got its own framework, its own team, and it's largely autonomous. And this is, you know, clearly a successful formula that has worked for us a number of times. So we'd continue to build on that. Question from PLC, what will happen to the cash held in Zenith? This has partly been answered in my written response, but we've received over the course of this year $4,200,000 out of the Zenith joint venture.

1:02:08 And since early twenty eighteen, we've received 8,200,000 in dividend flow largely from the joint venture. So a good chunk of the distributable cash, so to speak, within the joint venture has already been distributed. We're obviously going to maintain a sensible balance of a few million dollars, I'd imagine, in working capital as we transition into the new joint venture. What else? Karim, I am obviously mindful of time and I know you've had Obviously, lots to go you were very kind obviously to address some of the pre submitted questions during the thing and there is written response on the others. Obviously, for every question you seem to be answering, another one comes through some of a similar nature. So perhaps maybe I could ask you to pick up on a couple more maybe where it's appropriate.

1:03:05 And then perhaps you could review these post the meeting, and then we can publish those out to investors where it's appropriate, if that helps. Sure. Thank you very much, Mark. So I'll quickly scan through some of these other questions that have come in. And just while you do that, obviously, I'd like to remind investors that on conclusion of the Q and A, we will redirect you for feedback. I can't stress enough, obviously, the importance of you as investors having your ability to give your views on the company directly to the management team. So enough of my waffling. I hope that's given you a few more seconds to just scale down the Yes. I'll hand back to you, Karim. Thank you. So another question from John G. What is the timing to complete Somnambush EIA?

1:03:51 Well, we have completed an EIA scoping study, which was an important part of how we proceed with a formal EIA. That work was undertaken for us by the team, the SRK consulting team out of Ankara. They did a very good job. So we now have an understanding of how we need to progress into the formal EIA, but that's not something that we'll be commencing until we've completed the transaction. So once we've established Ozalten Holding as a significant new shareholder within the enlarged Zenith mining JV, and then as we progress Sunnenbosch with Ozalten because they'll be contributing a further $8,000,000 to the development of Sullenbush and a part of that funding will be directed towards the EIA.

1:04:47 In terms of timing specifically, well, in EIA, you need a full year of environmental baseline. Now some of the baseline we've actually been dealing with already. But at the very least, it's a year of baseline studies and then the associated reporting as we move that project through feasibility. So feasibility the two things go hand in hand, the IA and feasibility, because you need to know what the project will look like from an infrastructure point of view in order to determine what its environmental impact will be. And we can't do the feasibility study until we've enhanced the resources. So there's a series of things, steps that we need to take and some of these steps are iterative and dependent on one another.

1:05:34 So it's not it's not a linear process. So it's quite difficult to commit to a specific time frame for something like that because it really does depend on how the project develops. Question from Steve B, were permits granted recently at Tarshan, didn't see an RNS? So this relates to we had a forestry application in for drilling at Tar Shan from some while ago, it was probably been about a year. And we received those drilling permits in the last quarter, late last quarter. And we've been planning in fact to see if we could get a drilling program underway on Tarshan before the winter setting.

1:06:22 But because we couldn't clear the area of trees in sufficient time, we were not able to commence that drilling program during this quarter. So we postponed that program to it'll probably be an early Q2 start, I would imagine, depending on what we're doing at Khozl Tepe and how much drilling we have underway at Khozl Tepe at that particular point in time because we have indicated in our announcement earlier this week that we're planning on a drilling program of up to 5,000 meters at Khozl Tepe alone. So there's a whole series of things that we need to keep the team occupied with over the course of the next few months. Many, many things. I'm just obviously mindful that I can see these things coming in for you.

1:07:12 Obviously, to all investors that submitted questions, the company will be able to review every single question. Of course, where appropriate, provide a response. And I'm just mindful of your time, Karim, obviously going through the hour as well and everything else. So perhaps if I just ask you just for a few closing remarks, a few closing comments. And then as I say, I will divert and investigate your feedback. Well, perhaps closing remarks might be better from the Chairman. Perfect. Thank you, Kiran, and thank you, Mark, for hosting us. For all of you who have attended, there have been a good number attending. I do want to just point out one administrative thing quickly before we say goodbye, and that is that the the the shareholders meeting on the December 30 is not an attendance meeting, so please do put all efforts you can into voting via your nominee holdings. Or if you have direct holdings and share certificates, you would have received notice of voting in the post already.

1:08:06 It's critical that you do vote so that we can pass this transaction. Thank you all for attending, and thank you, Karen, for an excellent presentation. Thank you. That's brilliant. Thank you, Michael, and thank you to Krym for for giving up an update to investors today. Could I ask investors please not to close this session as you'll be automatically redirected for the opportunity to provide feedback? If you access meeting from the website, the feedback page will appear. If you access this via the link sent to you by email, you'll simply be asked to log in to provide feedback, but it is very much appreciated by the company if you could do that. On behalf of the management team of ARIANA RESOURCES, I'd like to thank you very much for attending today's presentation. That now concludes today's session, and good morning to you all.