Mining company Ariana Resources announced the placing of 56,250,000 new shares on Friday in order to develop projects aside from their main Kiziltepe mine, including the 1-million ounce Salinbaş project and Tavşan.
The shares are available at a price of 1.6 pence per share, with the miner hoping to raise gross proceeds of approximately £900,000 before expenses.
Dr. Kerim Sener, Managing Director, said of the decision: “We are pleased to be raising GBP900,000 at this important time in the evolution of the Company. Following the recent acquisition of 100% of the 1 million ounce Salinbas Project and the completion of a highly encouraging scoping study at Tavsan, the funds raised will be utilised to advance these projects in particular.
“Both projects require additional value additive work that it is important that we conduct during the winter months and immediately ahead of the exploration field season.
“Completing this work while Kiziltepe is in the process of entering production, will contribute significantly towards our strategy to enhance our production profile towards 50,000 oz gold per annum.”
In a research note, Panmure Gordon analyst Kieron Hodgson maintained a buy rating on the stock, despite the dilution of shares:
“Panmure Gordon maintain Buy recommendation but adjust the target price to 2.46p (2.71p).
“We take a highly conservative approach to our valuation for Ariana Resources. The company has indicated a desire to reach a minimum production rate of 50koz/pa, providing an achievable target for the medium term given the assets base contained within the group.”
Ariana Resources are miners primarily engaged in the acquisition, exploration and development of gold and technology-metals in Turkey and Australia. Their key assets are the Kiziltepe and Tavsan gold projects, both in Western Turkey, but Ariana also owns 100 percent of the Salinbas Gold Project, comprising the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects.
Ariana Resources (LON:AAU) shares are currently trading down 7.89 percent at 1.75 (0952GMT).