Arian raises funds for Julietta

A recently announced financing of 6.5 million units at 90cents each will provide Arian Resources (ARA.U-T) with funds with which to continue development of its Julietta gold-silver deposit in the Magadan region of Russia’s Far East.

The private placement is the first stage of a program aimed at providing the equity portion of project financing. The remainder of the financing is expected to be completed later this year by way of a public offering.

The junior is endeavoring to become the second Western-financed gold producer in the Magadan region. Amax Gold is the first such producer there — its 50%-owned Kubaka mine produces 300,000 oz. per year at a cash cost of US$185 per oz.

Arian says all permits necessary for construction at Julietta are in hand.

Subject to completion of financing, construction is scheduled to start in March 1998, with production slated to follow in May 1999.

The company hopes to produce at an initial rate of 127,000 gold-equivalent ounce in the first three years, when production would be reduced to 70,000 gold-equivalent ounce per year for seven years. Those production figures could increase, however, if additional reserves are found.

According to Arian, the potential to increase reserves is good. Recent drilling near the mine identified possible reserves of 98,000 tonnes grading 43 grams gold and 500 grams silver per tonne.

According to a bankable feasibility study, minable reserves (proven, probable and possible), excluding the recently identified possible reserve, stand at 1.1 million tonnes of 20 grams gold and 340 grams silver. Operating costs are estimated at US$123 per gold-equivalent ounce.

According to Arian, a gold sales agreement with government officials is believed to be similar to a deal obtained by the owners of the Kubaka mine.

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