LONDON--Ariana Resources PLC (AAU.LN) said Wednesday it is buying the Salinbas gold project in Northeastern Turkey from Eldorado Gold (Netherlands) BV, a subsidiary of Eldorado Gold Corporation (EGO).

The gold exploration and development company, operating in Turkey, said Salinbas had been part of a 49:51 joint venture with Eldorado Sub since 2012. The project comprises three licenses which are owned 100% by the operating subsidiary, Pontid Madencilik San. ve Tic. Ltd. Two of the licenses are in process at the General Directorate of Mining Affairs for conversion to operational status.

Ariana has bought the 51% of Greater Pontides Exploration BV previously held by Eldorado Sub in exchange for a nominal cash consideration, and a net smelter return royalty of up to 2% to Eldorado Sub, giving it a 100% interest.

The three licenses are held by Pontid Madencilik, a 100% owned subsidiary of Greater Pontides. Ariana is buying Pontid with its management team intact and for $60,000 in cash, including certain fixtures and equipment.

Separate to the arrangement with Eldorado Sub, Ariana said advance royalty payments of $7,000 a year will be made to the original owner of the Ardala license for as long as Ariana holds the license. In addition a 1.5% net smelter royalty will be payable in the event that the project enters production. The Eldorado royalty on this license will be 0.5% net smelter return, to ensure the maximum royalty, it said.

The Salinbas Project is located within a multi-million ounce goldfield containing several significant gold-copper projects, notably the adjacent Hot Maden project. It contains a 10 metric tone indicated and inferred JORC resource, with an average grade of 2.0 g/t Au [gold] and 10.2 g/t Ag [silver].

Shares at 0855 GMT up 0.05 pence, or 3.28%, at 1.58 pence.

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

December 21, 2016 04:12 ET (09:12 GMT)

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