The Chesterfield Hotel in Mayfair was the setting for Ariana Resources (LON:AAU) latest investor presentation last Wednesday evening.
Hosted by Proactive Investors, Ariana shared the billing with Western Potash (TSX.V:WPX) who have a “solution” mining project in Regina Canada and Resource Generation (ASX:RES), who are developing a coal mine in South Africa.
Having attended a few of these Proactive events, one knows their success is always dependent on the calibre of company/management presenting and the mood of the room on the night!
This time round the event was very well supported with a lively mix of finance professionals and private investors. To compliment the event, Proactive's Wendy Durham even produced a new in-depth research note on Ariana which is well worth a read (click here to view).
This time round the event was very well supported with a lively mix of finance professionals and private investors. To compliment the event, Proactive's Wendy Durham even produced a new in-depth research note on Ariana which is well worth a read (click here to view).
Ariana's MD, Kerim Sener presented the company’s investment case to a receptive audience, though it was clear from the post event conversations that most had not previously heard about the company.
That being the case, with just 30 minutes of stage time, the big challenge was to concisely introduce the company whilst doing justice to all aspects the investment case.
Not as easy as it may seem. Ariana has some very significant irons in the fire; not least of which being the pending Proccea JV on the Red Rabbit project (click here for latest update), so there was always a danger that, depending on how the delivery went, the proverbial cake could have been obscured by a rather oversized cherry!
But with the support of a well-crafted presentation (click here to view ) Kerim managed to talk people through the Ariana story, doing justice to all aspects and giving additional detail as and when required.
So what did we learn?
With the presentation geared towards the uninitiated, the natural starting point was the country itself; Turkey being an economic powerhouse in the region with a thriving gold market, mining friendly legislation, situated on the highly prospective Tethyan Metallogenic Belt...and so on.
All good stuff (click here to view our value proposition on Ariana) and it also served as a good refresher for existing investors. We also noted that good progress is being made with the EGU JV and Ariana’s own ongoing exploration work is all very much on track.
But what about the Proccea JV?
Kerim elaborated on certain details here making a point of commenting on how pleased they were with the results of the project scoping study (estimating a project cash cost of between US$350 and $400 per ounce), the good cooperation with Proccea and the rate of progress.
But one of the more intriguing nuggets we gleaned was that under the terms of the JV agreement, as Ariana continues to prove up more ground within in the Red Rabbit project area, the Company has the right, but not the obligation, to sell the resource into the JV for 3x the exploration cost.
This was a really interesting detail as it gives some background to the principles by which the two parties have agreed to divide the spoils.
In order to prolong the life of the mine, Ariana needs to continue exploration work to expand the resource within the Red Rabbit project area.
But with ongoing exploration work at Ariana’s cost, a formula was needed to provide the Company with an appropriate financial incentive to prove up more ounces for the benefit of the JV.
With this solution, when selling resources into the JV, Ariana will recover all of its exploration costs, plus a reasonable premium on top. And since there is no obligation, only the right, to sell additional resource into the JV, the company would also be free to consider any outside interests, thereby maximising its potential returns. Very reasonable!
With the presentation over the networking began. Ariana had pulled in a full team for the evening, including all the main board directors, as well as their broker from Alexander David Securities. They were certainly in demand as between them they worked the room, collecting and handing out business cards and talking Turkey!
The next event will be the Minesite presentation on 16th March (for details click here)
To subscribe to Ariana Resources company updates, click here
Previous Miningmaven articles on Ariana Resources
3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!
30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey
10 February 2010 Ariana Resources: Lets get this show on the road!
18 February 2010 Ariana Resources: Limbering up for the Main Event!!
To view the latest 2010 presentation from Ariana , click here
This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
So what did we learn?
With the presentation geared towards the uninitiated, the natural starting point was the country itself; Turkey being an economic powerhouse in the region with a thriving gold market, mining friendly legislation, situated on the highly prospective Tethyan Metallogenic Belt...and so on.
All good stuff (click here to view our value proposition on Ariana) and it also served as a good refresher for existing investors. We also noted that good progress is being made with the EGU JV and Ariana’s own ongoing exploration work is all very much on track.
But what about the Proccea JV?
Kerim elaborated on certain details here making a point of commenting on how pleased they were with the results of the project scoping study (estimating a project cash cost of between US$350 and $400 per ounce), the good cooperation with Proccea and the rate of progress.
But one of the more intriguing nuggets we gleaned was that under the terms of the JV agreement, as Ariana continues to prove up more ground within in the Red Rabbit project area, the Company has the right, but not the obligation, to sell the resource into the JV for 3x the exploration cost.
This was a really interesting detail as it gives some background to the principles by which the two parties have agreed to divide the spoils.
In order to prolong the life of the mine, Ariana needs to continue exploration work to expand the resource within the Red Rabbit project area.
But with ongoing exploration work at Ariana’s cost, a formula was needed to provide the Company with an appropriate financial incentive to prove up more ounces for the benefit of the JV.
With this solution, when selling resources into the JV, Ariana will recover all of its exploration costs, plus a reasonable premium on top. And since there is no obligation, only the right, to sell additional resource into the JV, the company would also be free to consider any outside interests, thereby maximising its potential returns. Very reasonable!
With the presentation over the networking began. Ariana had pulled in a full team for the evening, including all the main board directors, as well as their broker from Alexander David Securities. They were certainly in demand as between them they worked the room, collecting and handing out business cards and talking Turkey!
The next event will be the Minesite presentation on 16th March (for details click here)
To subscribe to Ariana Resources company updates, click here
Previous Miningmaven articles on Ariana Resources
3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!
30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey
10 February 2010 Ariana Resources: Lets get this show on the road!
18 February 2010 Ariana Resources: Limbering up for the Main Event!!
To view the latest 2010 presentation from Ariana , click here
This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.
All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.
The author owns shares in Ariana Resources Plc.
The author owns shares in Ariana Resources Plc.
Copyright © miningmaven 2009
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