European Goldfields Joint Venture

Reconnaissance exploration in eastern Turkey for large porphyry Cu-Au and related deposits identified potential in north-eastern Turkey and resulted in the acquisition of the Ardala Project by the Company. This project, in addition to several other licences, is now being advanced through a Joint Venture agreement with European Goldfields Limited. A Joint Venture exploration company, 49% owned by Ariana Resources and named Pontid Madencilik San. ve Tic. Ltd., was established in 2008. The Joint Venture includes a free-carry to Bankable Feasibility at 20% or 10%, for initial projects or new projects, respectively.  Funding of development costs thereafter is undertaken on a pro-rata basis and if Ariana is diluted to <5% during this period of joint funding then Ariana will adopt a 1.5% NSR

In its first year, European Goldfields committed to and exploration budget of $1million, rising to $2.2 million in year 2.  Exploration and drilling is underway on the principal prospects and the JV is targetting deposits with the potential to host > 1 million + oz gold.

Ardala and Salinbaş

The Ardala prospect is located in the Pontide Metallogenic Province of Turkey and lies approximately 80km southeast of the coastal city of Hopa and 20km east of Artvin. The prospect was acquired according to a royalty agreement for which a 1.5% NSR will be payable in the event that the project enters production.

The prospect hosts a porphyry copper-gold (plus molybdenum) mineralised system associated with a series of nested quartz-diorite intrusions of Eocene age within an Upper Cretaceous volcano-sedimentary sequence. Exposed parts of the porphyry have dimensions of 600m by 700m and interpretation of ground magnetic data suggests further lateral continuity beneath limestone units. Twenty-seven drill holes were undertaken on part of the mineralised system in the early 1990s for which an outline (non-JORC) resource of 20Mt at an average grade of 0.25% Cu, 0.45 g/t Au and 65 ppm Mo was established. A phased programme of drilling has been underway since 2009.  The results at the Ardala prospect indicate a large system of porphyry mineralisation and further exploration/drilling is planned to establish the full extent of the porphyry extension in 2011.

A major new soil anomaly, named the Salinbaş Target, was discovered on the property, to the south-west of the area drilled by previous operators. The Salinbaş Target is just over 1km from the area drilled in the 1990s and has a strike of about 1km and width of 0.3km. An additional licence was secured in this area to cover the Salinbaş Target and trenching identified multiple zones of high-grade mineralisation over significant widths.  The deposit has the potential to add to the JV resource base and indicates the upside potential for the Eastern Pontide region of Turkey. highlights of which included 46m at 8.33 g/t Au and 32m at 5.43 g/t Au. A phased programme of drilling is due to commence in 2011.