PUBLICATION OF CIRCULAR

8 February 2021

AIM: AAU

PUBLICATION OF CIRCULAR IN RESPECT OF CAPITAL REDUCTION AND UPDATE ON COMPLETION OF THE JOINT VENTURE

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed exploration and development company operating in Europe, is pleased to announce the publication of its circular to shareholders (the "Circular"), concerning the proposed reduction of share capital via a cancellation of the Company's share premium account, the cancellation of the deferred shares and the authority for the Company to buy back shares.

Highlights:

·  Circular published on the Ariana Resources website, under Circulars (accessible via: https://arianaresources.com/investors/circulars) and which has been posted to shareholders today.

·  General Meeting to consider and, if thought fit, approve certain resolutions, which are proposed as special resolutions, to be convened on 26 February 2021.

·   Completion of the Joint Venture with Ozaltin Holding A.S. and Proccea Construction Co. is progressing as planned, following the receipt of approval from the Competition Authority, as announced on 19 January 2021.

Dr. Kerim Sener, Managing Director, commented:

"This timely circular is being distributed in advance of the completion of our new Joint Venture with Ozaltin and Proccea. The proposed General Meeting concerns a capital reorganisation which will enable the Company to pay a special dividend. Since receiving shareholder ratification of the joint venture agreements signed at the end of last year and the approval received from the Competition Authority in Turkey last month, we are expecting to conclude all remaining formal corporate procedures in the near future. We are continuing to advance rapidly on all fronts and we look forward to keeping the market updated on our progress."

Michael de Villiers, Chairman, commented:

"We have come a long way since the inception of the Company as a junior explorer some 15 years ago. Our strategy has enabled us to create a mechanism by which our shareholders will be rewarded through the distribution of dividends; a status which is quite unlike the majority of exploration and development companies globally. We are now focused on positioning the Company so that we can reward shareholders with a special dividend following completion of the JV and possibly additional dividends in the future. We trust that our shareholders will support this initiative and vote alongside the Board in supporting all of the proposed General Meeting resolutions."

Terms of the Proposed Capital Reduction

Under the current share structure, Ariana would need to generate profits in excess of £9.6 million before it was able either to pay a dividend or return cash to Shareholders in other ways. The Directors are consequently proposing to modify the Company's share structure to enable investors to obtain returns on their shareholdings without having to wait until retained earnings of in excess of £9.6 million have been generated.

At the date of the Circular, the Company has in issue 1,075,677,943 Ordinary Shares of £0.001 each, together with 554,949,474 Deferred Shares of £0.009 each. Over the years, the Ordinary Shares have been issued at varying prices, which gave rise to a Share Premium of £11,864,727 as at 30 September 2020. Since the Company's formation, it has accumulated retained losses of £9,568,727 as at 30 September 2020 and is likely to continue to have made losses after that date.

The Directors believe the large level of these accumulated losses is detrimental to the interests of Shareholders and hence are looking at means of improving the Shareholders' position. For example, the suggested special dividend relating to the new joint venture arrangements with Ozaltin Holding A.S. (which were approved by the Company at a General Meeting held on 30 December 2020) would not be possible to the degree envisaged with the present level of deficit in retained earnings.

A Company is permitted to reduce its share capital by the Companies Act 2006 (Chapter 10). The reduction in its share capital can then be offset against the losses in retained earnings. The Directors accordingly propose to cancel the entire Share Premium Account as at the date of a Court Hearing and to cancel all of the Deferred Shares of £0.009 each (which were a necessary by-product of a reduction in the nominal value of its ordinary shares from £0.01 to £0.001, carried out on 28 June 2013). The effect of this, and the offset of the remaining deficit on distributable reserves mentioned above against the Share Premium Account which is reduced to nil, is to generate distributable reserves of £7.48 million. As at the date of posting of this Circular the share premium account is £12,053,227.

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

Contacts:

Editors' Note:

About Ariana Resources (details as current and before completion of the JV):

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). 

The Red Rabbit Project is comprised of the Company's flagship assets, the Kiziltepe and Tavsan gold projects, and is part of a 50:50 Joint Venture with Proccea Construction Co.  Both assets are located in western Turkey, which hosts some of the largest operating gold mines in the country and remains highly prospective for new porphyry and epithermal deposits.  The Kiziltepe Sector of the Red Rabbit Project is fully permitted and is currently in production.  The total depleted resource inventory at the Project and its wider area is c. 500,000 ounces of gold equivalent (as at April 2020).  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on production is payable to Franco-Nevada Corporation. At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

The 100% owned Salinbas Gold Project is located in north-eastern Turkey and has a total resource inventory of c. 1.5 million ounces of gold.  The project comprises three notable licence areas: Salinbas, Ardala and Hizarliyayla, all of which are located within a multi-million ounce Artvin Goldfield.  The "Hot Gold Corridor" contains several significant gold-copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas and 7km south of Hizarliyayla.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation on the Salinbas Gold Project.

Ariana is also earning-in to 50% of UK-registered Venus Minerals Ltd ("Venus") and has to date earned into an entitlement to 16%.  Venus is focused on the exploration and development of copper-gold assets in Cyprus.

Panmure Gordon (UK) Limited is broker to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser and Broker.

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.

Ends.