Interim Results

30 September 2011 AIM / PLUS Markets: AAU INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2011 Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, announces its interim results for the six months ended 30 June 2011. Highlights * Solid progress towards becoming Turkey's next gold producer - advancing the Red Rabbit Gold Project towards production in Q4 2012 * Total resource inventory currently 448,000 ounces of gold equivalent - objective to increase to one million ounces in the medium term * Ongoing exploration at Red Rabbit Gold Project generating exciting results - two new vein discoveries at the Kiziltepe Sector containing up to 10.7 g/t and 7.74 g/t gold equivalent * Consolidation of licences in flagship project area - acquisition of additional highly prospective exploration licence areas in the wider Red Rabbit area * Focused on expanding resource inventory through new ground acquisitions and exploration in Western Turkey - licence auctions expected during Q4 2011 and several attractive targets identified * European Goldfields Joint Venture yielding positive results in north-eastern Turkey - results of recent drilling expected Q4 2011 * £1.2 million cash in bank Dr. Kerim Sener, Managing Director, commented: "Our sights remain firmly set on becoming Turkey's next gold producer, and we are delighted with the continued progress made at our most advanced asset, the Red Rabbit Gold Project.  As we near the conclusion of our feasibility studies on Red Rabbit we are looking forward to focusing our efforts on renewed exploration across several new project areas. "Before our JV partner, Proccea Construction Co., takes management control of the Red Rabbit Joint Venture ahead of the construction phase, we are also gearing up to a new drilling programme to test new targets across the Kiziltepe Sector.  This programme will be focused on indentifying the potential for resource expansion in the vicinity of the planned operation at Kiziltepe. "Much of the earlier part of this year was focused on evaluating the results of our regional exploration programmes in Western Turkey.  The exploration team has built several enviable datasets and we are now in an excellent position to rapidly assess new opportunities across the region.  We have already set our sights on a number of targets, which are expected to become available as part of the Turkish Government's licence auctions process. "We therefore expect the next few months to be busy and look forward to updating shareholders on news of the licence process, further results from ongoing exploration programmes and of course, updates on our programme at Red Rabbit." Chairman's Statement This has been another busy period for your Company, characterised by the continuing rapid advancement of our flagship Red Rabbit Gold Project ("Red Rabbit") towards production and the exciting results being generated elsewhere in our portfolio.  Our total resource inventory now stands at 448,000 ounces of gold equivalent, and current exploration is generating encouraging results, supporting the Board's confidence in our ability to increase this to one million ounces in the medium term. Red Rabbit, in western Turkey, is made up of two key assets, Kiziltepe and Tavsan, which are within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey.  This province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  Located 75km apart, Kiziltepe, and subsequently Tavsan, are being advanced towards production in joint venture with a leading Turkish construction and engineering firm, Proccea Construction Co., which is earning into 50% of the project on expenditure of US$8 million. The JV with Proccea is split into two stages: Phase 1 is focusing on a feasibility study and Environmental Impact Assessment ('EIA'), with a budget of US$1.4 million and with management control remaining with Ariana; and Phase 2 will focus on the construction of the mine, with a commitment of US$6.6 million and management control moving to Proccea.  Red Rabbit is drawing to the end of Phase 1, with the Definitive Feasibility Study (DFS) and the Environmental Impact Assessment (EIA) due for completion by the end of 2011.  The Company has already brought the project successfully through an internal pre-feasibility and we are looking towards advancing relationships with lending institutions in expectation of DFS and EIA completion. Once we commence production at Red Rabbit, scheduled for Q4 2012, we anticipate processing 150,000 tonnes ore per annum, corresponding to an average production of approximately 20,000 ounces per year of gold equivalent over a mine life of approximately 7 years.  With this in mind, even if we take a conservative approach to long-term gold prices, Ariana has the potential to generate significant revenues and has ample scope to expand the resource base within current mine life. Following completion of Phase 1, our team's time will be freed up to focus on delineating further gold and silver resources proximal to Red Rabbit, to feed into the current 448,000 ounce gold equivalent resource. This strategy aims to extend the mine life and further improve the economic fundamentals of the project.  In this respect, ongoing exploration is generating exciting results, underpinning the high prospectivity of the project area.  Indeed, two new discoveries at Kiziltepe were recently announced: the Gamze Vein where continuous high-grades of up to 10.7 g/t gold equivalent were identified; and a new buried gold-silver vein system, the Hande Vein, where grades of up to 7.74 g/t gold equivalent were reported. Our other exploration interests, which are in north-eastern Turkey, are primarily focused around the Ardala and Salinbas Projects, which are being developed in JV with AIM-listed European Goldfields.  European Goldfields owns 51% of this JV and, as the operator, is fully funding all exploration work on the properties until delivery of a feasibility study.  Initial results from both of these projects have been highly encouraging, with high grade gold mineralisation of up to 55m @ 7.8g/t of gold demonstrated from trench sampling at Salinbas.  Exploration drilling campaigns have been underway, with results expected towards the end of 2011. Ariana also holds a 13% investment in Tigris Resources Limited, a private Jersey-based exploration company, which is focused on the exploration of copper and gold deposits in south-eastern Turkey.  This area of Turkey is for the most part underexplored, and represents a significant opportunity for the discovery of multi-million ounce gold discoveries. Financial Overview Our balance sheet remains healthy with £1.2 million cash in bank, having completed a £1.16m funding in February with the placing of 24.5 million new shares at 4.75p per share. These funds, together with a £5 million Standby Equity Distribution Agreement (SEDA) finalised in January 2011, provides us with the flexibility to enable us to move quickly on exploration and development opportunities meeting our stringent investment criteria. Outlook Looking ahead, I believe that Ariana's consistent strategy, focused on value creation, will deliver significant returns for our shareholders.  As the pace of Red Rabbit's development gathers, we anticipate the publication of the DFS and EIA in the coming months, ahead of permitting in H1 2012.  Once the permitting process is concluded, construction will commence and this phase is anticipated to take six to eight months.  Based on current forecasts we remain on target to become Turkey's next gold producer in late 2012. In tandem with this, we are focused on expanding our resource inventory through further exploration, which is where our team excels.  Ariana has set its sights on a number of new gold exploration targets which we have identified as highly prospective, and which are expected to become available as part of the Turkish Government's licence auctions process.  News on the results of these auctions is expected in the coming months, as are the results of other exploration programmes from across our wholly owned portfolio and joint venture projects. Finally, on behalf of the board, I would like to thank all of our people for their hard work during the past six months. Our thanks also go to our shareholders, whose continued support of Ariana has helped us reach this exciting pre-production stage in the Company's life. Michael Spriggs Chairman 30 September 2011  Contacts: Ariana Resources plc Tel: +44 (0) 20 7407 3616 Michael Spriggs, Chairman Kerim Sener, Managing Director Beaumont Cornish Limited Tel: +44 (0) 20 7628 3396 Roland Cornish / Felicity Geidt Fairfax I.S. PLC Tel: +44 (0) 20 7598 5368 Ewan Leggat / Laura Littley St Brides Media & Finance Ltd Tel: +44 (0) 20 7236 1177 Hugo de Salis / Susie Geliher Ariana Resources Plc Unaudited Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2011 Condensed consolidated statement of comprehensive income   6 months to 6 months to 12 months to   30 June 30 June 31 December   2011 2010 2010     £'000 £'000 £'000 Continuing Operations Administrative costs   (403)       (195)       (466) Share options   (478)       - - Other income   24 7 277 Write down of intangible assets   - - (326) ------------------------------------------------- Operating Loss   (857) (188) (515) Investment income   3 5 9 ------------------------------------------------- Loss on ordinary activities before tax   (854) (183) (506) ------------------------------------------------- Taxation   - - (17) Loss for the period   (854) (183) (523) ------------------------------------------------- Other comprehensive income: Exchange differences on translating foreign operations   (101) 4 (1) ------------------------------------------------- Other comprehensive income for the period, net of tax   (101) 4 (1) ------------------------------------------------- Total comprehensive income for the period   (955) (179) (524) ------------------------------------------------- Loss for the period attributable to owners of the parent company   (854) (183) (523) ------------------------------------------------- Total comprehensive income attributable to owners of the parent company   (955) (179) (524) Loss per share (pence): Basic and diluted    0.35          0.09        0.25  onsolidated balance sheet Condensed consolidated interim statement of financial position     30 June 30 June 31 December 2011 2010 2010 £'000 £'000 £'000 ASSETS Non-current assets Trade and other receivables 90 126               12 Available for sale investments   72 - 71 Land, property, plant and equipment 200 184 176 Intangible assets   4,993 4,304 4,343 ------------------------------------------------------- Total non-current assets   5,355 4,614 4,602 ------------------------------------------------------- Current assets Trade and other receivables   304 160 835 Available for sale investments   - 66 56 Cash and cash equivalents   1,454 1,240 755 ------------------------------------------------------- Total current assets   1,758 1,466 1,646 ------------------------------------------------------- Total Assets   7,113 6,080 6,248 Equity Called up share capital   2,518 2,217 2,220 Share premium   6,201 5,175 5,167 Other reserves   720 720 720 Share options   578 100 100 Translation reserve   (38) 67 63 Retained earnings   (3,602) (2,631) (2,748) ------------------------------------------------------- Total equity attributable to equity holders of the parent    6,377           5,648   5,522 Non-controlling interest   415 - 415 ------------------------------------------------------- Total Equity                         5,937           6,792 5,648 ------------------------------------------------------- Liabilities Current liabilities Trade and other 311 payables   321 432 ------------------------------------------------------- Total current liabilities   321 432 311 ------------------------------------------------------- Total Equity and 6,248 Liabilities   7,113 6,080 Condensed consolidated interim statement of changes in equity Condensed consolidated interim statement of   Total changes in   attributable         Trans- to equity Non- Share Share  Other Share lation Retained holder of controlling  capital premium reserves options reserve  losses parent interest Total   £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2010 1,709 4,738 720 100 64 (2,448) 4,883 - 4,883 ---------------------------------------------------------------------------------- Changes in equity to 30 June 2010 Other comprehensive income- exchange 3 - differences on retranslation of foreign operations - - - - - 3 3 Loss for the period - - - - - (183) (183)   - (183) ---------------------------------------------------------------------------------- Total comprehensive 3 income - - - - (183) (180) - (180) Issue of share capital 508 507 - - - - 1,015           - 1,015 Expenses offset - - against share premium   (70) - - - (70) (70) ---------------------------------------------------------------------------------- Balance at 30 June 2010 2,217 5,175 720 100 67 (2,631) 5,648 - 5,648 ---------------------------------------------------------------------------------- Changes in equity to 31 December 2010 Other comprehensive income- exchange (4) - differences on retranslation of foreign operations - - - - - (4) (4) Loss for the period - - - - - (340) (340)           - (340) ---------------------------------------------------------------------------------- Total comprehensive (4) income - - - - (340) (344)           - (344) Issue of share capital 3 11 - - - - 14           - 14 Expenses offset against share premium - (19) - - - - (19)           - (19) Non- controlling 415 interest - - - - - - - 415 Increase in share of 223 assets of subsidiary - - - - - 223           - 223 ---------------------------------------------------------------------------------- Balance at 31 December (2,748) 415 2010 2,220 5,167 720 100 63 5,522 5,937 ---------------------------------------------------------------------------------- Changes in equity to  30 June 2011 Other comprehensive income-exchange differences on retranslation of foreign operations - - - - (101) - (101)           - (101) Loss for the period - - - - - (854) (854)           - (854) ---------------------------------------------------------- Total comprehensive income - - - - (101) (854) (955)           - (955) Issue of share capital 298 1,092 - - - - 1,390           - 1,390 Expenses offset against share premium - (58) - - - - (58)           - (58) Share options - - - 478 - - 478           - 478 ---------------------------------------------------------- Balance at 30 June 2011 2,518 6,201 720 578 (38) (3,602) 6,377 415 6,792 ---------------------------------------------------------- Condensed consolidated interim statement of cash flows Condensed consolidated interim cash flow statement     6 months to 6 months to 30 June 30 June 12 months to 2011 2010 31 December 2010     £'000 £'000 £'000 Cash flows from operating activities Cash generated from operations   (79) (154) (1,200) -------------------------------------------------------------------------------- Net cash outflow from operations   (79) (154) (1,200) -------------------------------------------------------------------------------- Cash flows from investing activities Purchase of land, property, plant and equipment   (41) (4) (15) Purchase of investments   - (66) (137) Purchase of intangible assets   (650) (394) (400) Interest received   3 5 9 -------------------------------------------------------------------------------- Net cash used in investing activities   (688) (459) (543) -------------------------------------------------------------------------------- Cash flows from financing activities Proceeds from issue of share capital   1,332 945 940 Proceeds from sale of investments   134 - 12 Proceeds from shares issued to non-controlling interest   - - 638 -------------------------------------------------------------------------------- Net cash proceeds from financing activities   1,466 945 1,590 -------------------------------------------------------------------------------- Net increase/(decrease) in cash and cash equivalents   699 332 (153) Cash and cash equivalents at the beginning of period   755 908 908 -------------------------------------------------------------------------------- Cash and cash equivalents at end of period     1,454 1,240 755 -------------------------------------------------------------------------------- Notes to the interim financial statements for the six months ended 30 June 2011 1. General information Ariana Resources Plc (the "Company") is a public limited company incorporated and domiciled in Great Britain and whose registered office is Bridge House, London Bridge London SE1 9QR. The principal activities of the Company and its subsidiaries (the "Group") are related to the exploration for and development of gold and other minerals in Turkey. The Company's shares are traded on AIM, a market operated by the London stock Exchange. 2. Basis of preparation The condensed interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 Interim Financial Reporting.  The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2010, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The condensed interim financial statements set out above do not constitute statutory accounts within the meaning of the Companies Act 2006.  They have been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union.  Statutory financial statements for the year ended 31 December 2010 were approved by the Board of Directors on 17 May 2011 and delivered to the Registrar of Companies.  The financial information for the periods ended 30 June 2011 and 30 June 2010 are unaudited. 3. Significant accounting policies The condensed interim financial statements have been prepared under the historical cost convention. Except as described below, the same accounting policies have been followed in these condensed interim financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2010. Changes in accounting policy and disclosures (a) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2011 but not currently relevant to the Group. The following standards and amendments to existing standards have been published and are mandatory for the Group's accounting periods beginning on or after 1 January 2011 or later periods, but not currently relevant to the Group. A revised version of IAS 24 "Related Party Disclosures" simplified the disclosure requirement for government-related entities and clarified the definition of a related party.  This revision was effective for periods beginning on or after 1 January 2011. An amendment to IFRS 1 "First-time Adoption of International Financial Reporting Standards" relieved first-time adopters of IFRSs from providing the additional disclosures introduced in March 2009 by "Improving Disclosures about Financial Instruments" (Amendments to IFRS 7).  This amendment was effective for periods beginning on or after 1 July 2010. Amendments to IFRS 7 "Financial Instruments: Disclosures" were designed to help users of financial statements evaluate the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position.  These amendments were effective for periods beginning on or after 1 January 2011 but are still subject to EU endorsement. Amendments to IAS 32 "Financial Instruments: Presentation" addressed the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer.  These amendments were effective for periods beginning on or after 1 February 2010. IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments" clarified the treatment required when an entity renegotiates the terms of a financial liability with its creditor, and the creditor agrees to accept the entity's shares or other equity instruments to settle the financial liability fully or partially.  This interpretation was effective for periods beginning on or after 1 July 2010. An amendment to IFRIC 14 "IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction", on prepayments of a minimum funding requirement, applies in the limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements.  The amendment permitted such an entity to treat the benefit of such an early payment as an asset.  This amendment was effective for periods beginning on or after 1 January 2011. (b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2011 and not early adopted. The Group's assessment of the impact of these new standards and interpretations is set out below. IFRS 10 "Consolidated Financial Statements" builds on existing principles by identifying the concept of control as the determining factor whether an entity should be included within the consolidated financial statements of the parent company.  The standard provides additional guidance to assist in the determination of control where this is difficult to assess.  This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. IFRS11 "Joint Arrangements" provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form (as is currently the case).  The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities.  This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. IFRS 12 "Disclosure of Interest in Other Entities" is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.  This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. IFRS13 "Fair Value Measurement" improves consistency and reduces complexity by providing, for the first time, a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs.  It does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards.  This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. IAS 27 " Separate Financial Statements" replaces the current version of IAS 27 " Consolidated and Separate Financial Statements" as a result of the issue of IFRS 10 (see above).  This revised standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. IAS 28 "Investments in Associates and Joint Ventures" replaces the current version of IAS 28 "Investments in Associates" as a result of the issue of IFRS 11 (see above). This revised standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement. Amendment to IAS 1 "Presentation of Financial Statements" require items that may be reclassified to the profit or loss section of the income statement to be grouped together within other comprehensive income (OCI).  The amendments also reaffirm existing requirements in OCI and profit or loss should be presented as either a single statement or two consecutive statements.  These amendments are effective for periods beginning on or after 1 July 2012, subject to EU endorsement. 4. Tax The Group has incurred tax losses for the period and a corporation tax charge is not anticipated. 5. Loss per share The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of £854,000 divided by the weighted average number of shares in issue during the period, being 243,293,387. 6. Additions and disposals of intangible assets Exploration, evaluation and development of mineral resources Six months ended 30 June 2010 £'000 Opening net book amount 1 January 2010 3,910 Additions 394 -------- Closing net book amount 30 June 2010 4,304 -------- Six months ended 31 December 2010 Opening net book amount 1 July 2010 4,304 Additions net of write down 39 -------- Closing net book amount 31 December 2010 4,343 -------- Six months ended 30 June 2011 Opening net book amount 1 January 2011 4,343 Additions 650 -------- Closing net book amount 30 June 2011 4,993 7. Called up share capital and share premium Authorised share capital of the company is 500,000,000 ordinary shares at 1 pence each Details of issued capital are as follows:   Number of Nominal Share shares Value Premium     £'000 £'000 ---------------------------- At 1 January 2010 171,049,239 1,709 4,738 Shares issued in period (net of expenses) for cash 50,684,862 508 437 ---------------------------- Balance at 30 June 2010 221,734,101 2,217 5,175 Shares issued in period (net of expenses) for cash 245,432 3 (8) ---------------------------- At 31 December 2010 221,979,533 2,220 5,167 Shares issued in period (net of expenses) for cash 29,851,223 298 1,034 ---------------------------- Balance at 30 June 2011 251,830,756 2,518 6,201 8. Approval of interim financial statements The interim financial statements were approved by the Board of Directors on 29 September 2011. **ENDS** About Ariana Resources Ariana is an exploration and development company focused on epithermal gold- silver and porphyry copper-gold deposits in Turkey.  The Company is developing a portfolio of prospective licences selected on the basis of its in-house geological and remote-sensing database, on its own in western Turkey and in Joint Venture with European Goldfields Limited in north-eastern Turkey.  European Goldfields owns 51% of this joint venture and, as the operator, is fully funding all exploration work on the JV properties until delivery of a feasibility study. The Company's flagship assets are its Sindirgi and Tavsan gold projects which form the Red Rabbit Gold Project.  Both contain a series of prospects, within two prolific mineralised districts in the Western Anatolian Volcanic and Extensional (WAVE) Province in western Turkey.  This Province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epithermal deposits.  These core projects, which are separated by a distance of 75km, are presently being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co.  The total resource inventory of the Company stands at 448,000 ounces of gold equivalent. Ariana also has a strategic investment in Tigris Resources Limited (www.tigrisresources.com), a private Jersey-based exploration company, which is focused on the exploration of copper and gold deposits in southeastern Turkey.  Ariana retains approximately 13% of Tigris Resources Limited. Fairfax I.S. PLC are brokers to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser. For further information on Ariana you are invited to visit the Company's website atwww.arianaresources.com. This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Ariana Resources plc via Thomson Reuters ONE [HUG#1551003]

Companies

Ariana Resources (AAU)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today