Ariana Resources PLC (AAU.L) Update on proposed JV

Ariana Resources plc (“Ariana” or the “Company”), the AIM-listed exploration and development company operating in Europe, is pleased to announce an update on its proposed new joint venture with Özaltin Holding A.S., via its subsidiary,

Özaltin Insaat, Ticaret and Sanayi A.S. (collectively “Özaltin”) and with Proccea Construction Co. (“Proccea”) (collectively “the Parties”). Özaltin will be acquiring 53% of both the Salinbas Project (“Salinbas”) and the existing Zenit Madencilik San. ve Tic. A.S. (“Zenit”) joint venture which is currently owned by Ariana in a 50:50 partnership with Proccea.

Highlights:

· Proposed new joint venture with Özaltin by way of a partial disposal of the interests of the Company in Zenit and Salinbas in exchange for US$30 million in cash (“the Transaction” or “the Joint Venture”).

· The Parties are at an advanced stage of finalising the proposed definitive joint venture agreements governing the Transaction.

· The Transaction terms remain substantially the same as those summarised in the announcement of 25 November 2019, but contain certain structural changes, as detailed below.

· Agreements concerning both Zenit and Salinbas will be completed concurrently, such that Özaltin will own 53% of Zenit and of Salinbas from the outset, with Proccea acquiring its stake of 23.5% in Salinbas from Ariana for US$5.75 million cash.

· Ariana intends to distribute a circular to Shareholders to convene a General Meeting seeking approval for the Transaction during October.

· Subject to a capital reorganisation, court and shareholder approval, and the authorisation of a distribution of an intercompany dividend from Turkey, the Company aims to pay a special dividend to shareholders amounting to approximately 50% of net proceeds after costs and tax, on completion of the Transaction.

Dr. Kerim Sener, Managing Director, commented:

“Over the past few months Ozaltin, Proccea and Ariana have been working towards preparing the required agreements in order for the proposed Joint Venture to proceed. Following the formal commitment by Ozaltin to finalise the definitive agreements in July, the parties have completed final and mutual legal and corporate due diligence. In addition, certain corporate and other structural changes have now been finalised, which enable the deal to be completed, having secured preliminary government approvals in Turkey.

“We would like to take this opportunity to thank Proccea for their introduction to, and significant involvement in working with, Ozaltin to complete the necessary steps in order to conclude this Transaction. We are also expecting that Proccea will continue to be actively involved in developing the Salinbas Project, and that they will continue to act in our interests in the context of the expanded Joint Venture.”

Current Developments:

· Pontid Madencilik San. ve Tic. Ltd. (owner of Salinbas) has been converted to the joint stock company, Pontid Madencilik San. ve Tic. A.S. (“Pontid”), ahead of the completion of the Transaction.

· Licences owned by Pontid have been reissued by the General Directorate of Mining and Petroleum Affairs (“GDMPA”) to reflect the new name and type of company.

· Approvals have been sought and received from the GDMPA regarding the change of ownership of the Zenit licences and are in the process of being sought for Pontid following the change of company type.

· Approvals for the completion of the Transaction have also been sought and received from the bankers to Zenit and consent is being sought from the Competition Authority in Turkey to ensure the Transaction can proceed.

Summary of Transaction

Further to the Memorandum of Understanding (“MoU”) announced on the 25 November 2019, Ariana intends to partially dispose various interests held in Turkey to Özaltin, including jointly with Proccea, 53% of Zenit for US$50 million (to be split equally between Ariana and Proccea), in addition to an initial 17% of Pontid Madencilik San. ve Tic. A.S. for US$5 million. Özaltin commits to injecting a further US$8 million of equity into the Salinbas Project in order to acquire 53% of the project from the outset. This will be mirrored by a commitment from Proccea to acquire 23.5% of Salinbas for US$5.75 million in cash.

On completion of the Transaction, all interests in the projects by the parties will be held through Zenit, with Pontid becoming a 100% owned subsidiary. Zenit will be owned 53% by Özaltin, 23.5% by Ariana and 23.5% by Proccea. Ariana and Proccea will maintain board representation on Zenit, with one director each, and Özaltin will be able to appoint two directors. Management control will remain with Proccea, and both Ariana and Proccea shareholdings will be protected within the Joint Venture by being non-dilutive and free-carried and subject to full minority protection rights. Shareholder control of Zenit will be based on agreement of 75% of the voting shares, equivalent to three out of the four directors.

Prior to the Transaction Ariana holds:

1. 50% of Zenit Madencilik San. ve Tic. A.S. (“Zenit”), which operates the Kiziltepe Mine and its associated exploration and development properties, notably the Tavsan Project; and

2. 100% of Pontid Madencilik San. ve Tic. A.S. (“Pontid”), which holds the Salinbas Project, upon which preliminary exploration work has defined a JORC Measured, Indicated and Inferred Resource of c. 1.5 million oz gold.

Following the Transaction Ariana will:

1. hold 23.5% of Zenit which will hold the Kiziltepe Mine, Tavsan Project and associated exploration and development properties, in addition to the Salinbas Project;

2. be free-carried on further costs associated with the development of the Salinbas Project;

3. be party to a shareholder and Joint Venture agreement, retaining representation on the Zenit board;

4. be responsible for exploration across the Joint Venture, which will be reimbursed at cost plus a bonus of two times the exploration cost for increases to project resources of over 10% or following the vend-in of new projects; and

5. will have received payments totalling US$35.75 million to reflect the reduction in ownership percentages.

It is the intention of the Board to distribute a special dividend amounting to approximately 50% of net proceeds after costs and tax to shareholders, once a capital reorganisation is completed, Court approval is obtained and a General Meeting can be convened; the dividend distribution will also be dependent on the payment of an intercompany dividend from Turkey.

The Company will also utilise its enhanced capital position to fund further growth of Ariana’s business. The latter activity will involve the acquisition of new exploration and development projects either within Turkey or in other regional jurisdictions and provide for the advancement of the Company through the development of other assets held in whole or in part outside of the arrangements contemplated by the Transaction. In order to advance its active and advanced development projects in Turkey, Ariana will complete a management and services agreement with Proccea governing the ongoing development of the Joint Venture over a period of two years, while the Salinbas Project is being advanced through feasibility. Further to the completion of the proposed Transaction, Ariana will continue as a mineral exploration and development company in accordance with is core strategy.

About Ozaltin Holding A.S.

Özaltın Holding A.Ş. is a conglomerate active in Turkey and several other countries, in the construction, transportation, energy, tourism and agriculture sectors. The company was initially established as Özaltın Construction in 1965 by Nuri Özaltın, who originated from Artvin Province in Turkey. Recent large-scale construction projects include hydroelectric dams, with installed annual power production capacity of 5.5 billion KWh and the Gebze-Orhangazi-İzmir Motorway Build-Operate-Transfer Project of which it is a 22 year consortium partner. More information on the company can be found at www.ozaltin.com.tr

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

About Ariana Resources:

Ariana is an AIM-listed mineral exploration and development company operating in Europe. It has interests in gold production in Turkey and copper-gold assets in Cyprus. The Company is developing a portfolio of prospective licences in Turkey, which contain a depleted total of c. 2.1 million ounces of gold and other metals (as at July 2020).

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