One of the biggest hurdles in Ariana Resources' (AAU:AIM) career has been cleared as the miner finally secures a forest permit, enabling construction work to start on its Red Rabbit gold mine in Turkey. The shares respond favourably to the news, rising 53% to 1.3p.
The £8.6 million cap has been waiting 13 months for the piece of paper, something that's historically been the hardest permit to secure in the country as miners like Stratex International (STI:AIM) and former AIM-quoted European Nickel fully know. Stratex spent a similar amount of time waiting for its Altintepe permit and the nickel miner much longer.
Managing director Kerim Sener says the permitting delays are not restricted to the mining industry in Turkey, adding that Ariana's forestry permit should have only taken three months to obtain.
It is now fully funded to start the eight-month construction period, meaning it should be a fully-fledged gold producer by early 2016. It already has a mining permit. The next step is to pay 2.5 million Turkish lira ($931,780) for forestry fees within the next three months.
Ariana is targeting 21,000 ounces of gold equivalent production per year in the first five of the eight year mine life of the Kiziltepe section.
The other part of Red Rabbit is called Tavsan, an area that has the potential to be a standalone operation. Sener says the project is currently 'on the back burner' until Kiziltepe is operational. Further drilling and metallurgical test work is required to advance Tavsan. 'There's an opportunity to run a heap leach operation at Tavsan. We can't share the plant at Kiziltepe because of Tavsan's different grades and the trucking distance is too far.'
Sener says he would prefer Tavsan to be up and running during Kiziltepe's life, but says another option would be to wait for the first mine to be depleted before moving some equipment over to start Tavsan.
AIM-quoted Metal Tiger (MTR:AIM) rises 22.6% to 0.95p off the back of the permitting news, having recently become a small investor in Ariana. 'We have agreed in principle to jointly look at new opportunities in Turkey,' says Sener.