Ariana Resources on track to begin production of first gold mine

Ariana Resources is on track to begin production of its first gold mine mid-next year, Managing Director Kerim Sener said Friday.

The company's flagship Red Rabbit Gold project in Turkey is expected to produce 21,000 ounces (oz) of gold in the first five years and has a mine life of eight years.

The first stage on the tailings storage facility has been completed for inclusion in a feasibility study in May. Subject to financing, construction will then begin in the fourth quarter of this year.

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Sener said Ariana has come a long way since he helped start the company 10 years ago.

"We started off with an idea on a page of A4 paper and now we're close to production of our first gold mine," he told Sharecast and Digital Look.

"I think over the next 12 months we're going to see rapid growth."

Once in production, gold will be sold to the Istanbul Gold Refinery as its the mine's sole customer.

Over the past year, gold prices have fallen 6.6%. Gold futures tumbled Friday in mid-morning European trading to a level of $1,500 per ounce.

While Sener admits it will be hard to tell what the future of gold prices hold for the company when Red Rabbit production kicks off, he said the soft metal will always be in demand.

"It's difficult to say [...] but overall supply is not meeting demand and generally prices continue to remain high," he said.

His remarks come two days after the company announced it identified a potential 1.0m ounce deposit at its Salinbas/Ardala joint venture in north-east Turkey.

The joint venture with Eldorado Gold Corporation identified 180,000 oz of gold plus 820,000 oz of silver at Salinbas with a further 590,000 oz of gold and 3.3m oz of silver in the inferred category.

An additional 323,000 oz of inferred resources were identified at Ardala with some copper credits.