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Ariana – good news: construction complete. Now for paperwork….

By Nigel Somerville | Tuesday 14 February 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Great stuff this morning from AIM-listed Ariana (AAU). The last bits of work to get the mining plant at Kiziltepe were indeed completed during the 10-day window of improved weather as previously indicated by the company, and as I had speculated at the weekend. Red Rabbit is ready to roll - now it is down to the final paperwork trail and then it is all systems go. The transition from pie-in-the-sky explorer to gold/silver production and cash-flow is almost complete.

The paperwork trail and associated bureaucracy of getting the building of a mine in the middle of the Turkish countryside approved has, I gather, been quite a process, with the demands not so dissimilar to getting the go-ahead for building on London greenbelt land. So there has been quite an amount time spent liaising with various ministries.

I am given to understand that the final paperwork trail in Turkey goes as follows (with each step dependent on the previous one):

1)      Final technical sign-off for the tailings dam (very soon, it is hoped)

2)      Final Ministry approval (how long is a piece of string…)

3)      Local government Operations Permit (perhaps 10 days)

The company said this morning that formal production from the plant is expected to commence in the coming weeks so with tailings dam sign-off seemingly imminent the only unknown is how long Ministry approval is going to take. One would hope that the Turks will move a little more quickly than their Greek neighbours have in relation to the plans of AIM-listed would-be Greek holiday resort operator Minoan (MIN)!

The mine, already looking at a life-span of 11.5 years, but with ongoing exploration work expected to take that up to at least 15 years in the fullness of time, clearly has a long life ahead of it and so having to wait a few more weeks to see a nice mug-shot of MD Kerim Sener at the first gold pour (except it will be gold and silver, and mainly silver) is no big deal. After that, it will be production ramp-up and then the promised land of cashflow into Ariana’s coffers.

Meanwhile, with the shares still below the 2p mark, I still reckon there is a good bit of upside available both for short-term spivs and longer term patient investors – notwithstanding my inclination to take a bit of cash off the table as/when the opportunity arises above the 2p mark in order to lighten a bit of an oversized load.

Still a buy.

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