Aim-listed exploration and development company Ariana Resources reported on Monday that due diligence drilling has begun at the Salinbas gold project, in Turkey, as part of a joint partnership announced last month.

About 600 m of reverse circulation drilling will be undertaken by contractor Global Magnet Sondaj.

"Fortunately, weather conditions are expected to be reasonable through the period of drilling and the programme will likely conclude within one week,” said Ariana MD Dr Kerim Sener.

In the meantime, detailed technical, environmental and financial due diligence were under way by the designated independent consultant of the proposed partner on the Kiziltepe and Tavsan projects.

Two separate teams were being sent out to the sites during the current week and will be conducting their independent assessments of each of the projects.

In addition, preparation of the definitive legal agreements concerning the proposed joint venture (JV) between Ariana, Proccea and the proposed partner was under way, Sener stated.

The companies last month announced a nonbinding memorandum of understanding (MoU) proposing a series of interlinked transactions, which would enable Ariana to partially monetise the Kiziltepe mine, held via a 50:50 JV with Proccea Construction through Zenit, and the earlier-stage Salinbas gold project, targeting the funding of the Salinbas asset to production.

The MoU contemplates the disposal of various interests to the proposed partner, including 17% of the Salinbas project for $5-million and jointly with Proccea, 53% of Zenit for $50-million.

Further, the proposed partner would then inject $8-million of equity into the Salinbas project through an earn-in arrangement and organise the bank finance to enable this project to be brought into production. 

Ariana currently holds 50% of Zenit, which operates the Kiziltepe mine and its associated exploration and development properties, notably the Tavsan project, and 100% of Greater Pontides Exploration, which holds the Salinbas project.

Under the terms of the MoU, once the proposed partner has acquired 17% of Greater Pontides a further budget of $8-million will be made available by way of earn-in to take the proposed partner to a total 53% to achieve the completion of a feasibility study and environmental impact assessment of the Salinbas project and its associated works.

In parallel to the earn-in arrangements, the proposed partner will acquire 53% of Zenit, which will at the appropriate time, absorb Greater Pontides, such that on the successful completion of the earn-in on Salinbas by the proposed partner, Ariana will hold 23.5% of Zenit, which will hold the Kiziltepe mine, associated exploration and development properties and the Salinbas project.

The proposed partner will ultimately hold 53% of Zenit, with Ariana and Proccea holding 23.5% each.