Ariana share price drops despite promising drilling results
Promising drilling results
Ariana Resources, the UK-based gold exploration, development and production company, has announced promising results from its Hizarliyayla drilling program within the Salinbas Project in Turkey. The analysis and geological data have shown new areas of interest and extended the area where minerals are found. This supports the possibility that there could be a large deposit of minerals in molten rock, similar to the nearby Hod Maden deposit which is considered world-class in size and richness.
Following these positive results, Ariana has commenced an additional 3,000 meters of diamond drilling to further explore the Salinbas and Ardala zones and extend the original program.
Recent merger
In early July Ariana Resources agreed to an all-share merger with Zimbabwe-focused gold miner Rockover Holdings. The merger has increased Ariana’s ownership of Rockover to 62.5% and secured 100% ownership of the 1.83 million ounces of gold Dowke Gold Project in Zimbabwe, which has a 13-year expected mine life.
According to Ariana’s Managing Director, Dr Kerim Sener, the merger marked a significant milestone for Ariana through the acquisition of a major new gold development project. It embarked the company on a new chapter beyond its established Turkish operations.
With gold prices reaching repeated new highs, the merger provides Ariana exposure to this strong market through Rockover’s Dowke deposit. Together with the positive drill results from Turkey, Ariana should be well positioned for significant growth.
Technical analysis of the Ariana Resources share price
The Ariana Resources share price has been trading in a clearly defined downtrend channel since September 2020 and is currently trading around its July 2023 low at 2.05 pence with the psychological 2.00p mark being tested as well.
Ariana Resources weekly candlestick chart
Despite Wednesday’s promising drilling results the Ariana Resources share price has fallen 14% year-to-date (YTD) and remains bearish, trading in five months lows.
Ariana Resources daily candlestick chart
Since last week Ariana Resources share price has been trading below its 200- and 55-day simple moving averages (SMAs) at 2.27p to 2.31p and slid to the mid-point of its multi-year downtrend channel.
While it remains below its late July high at 2.50p, the Ariana Resources share price remains under pressure and may well revisit its 18 March low at 1.90p. Below it lies the February trough at 1.62p.
For a bullish reversal to take hold, a rise and daily chart close above the July peak at 2.70p would need to be seen. Only then could the downtrend channel resistance line at 2.94p and the May peak at 3.18p be back in the frame.