Interim Results
28 September 2012
AIM: AAU
INTERIM RESULTS
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, announces its results for the six month period ended 30 June 2012.
Highlights:
Project development continues at the Red Rabbit Gold Project ('Red Rabbit') in western Turkey. While work remains underway on the Feasibility Study, Ariana has completed new exploration drilling at the Kiziltepe Sector which has returned intercepts including 12.1m @ 16.5 g/t gold ('Au') equiv., 7.6m @ 7.60g/t Au equiv. and 5.8m @ 5.71g/t Au equiv.
Ariana takes on management of the Eldorado Joint Venture in NE Turkey from which intercepts of 9.5m @ 7.20 g/t Au equiv., 11.3m @ 5.76 g/t Au equiv. and 25m @ 3.48 g/t Au equiv. are reported from Salinbas.
Participation in a placing for Tigris Resources ('Tigris') to enable Tigris to complete drilling of its first target in SE Turkey from which grades of up to 37.8 g/t Au have been returned from channel sampling.
New exploration in western Turkey is underway on new licences acquired via government auction earlier in the year.
Chairman's Statement
It is pleasing to see the progress being made by the team on several fronts in Turkey. Our flagship Red Rabbit Gold Project in western Turkey, which has a current JORC resource of 448,000 oz gold equivalent is continuing to be advanced though its feasibility programme and via exploration. We have also taken the operational lead on our highly encouraging Artvin Joint Venture with TSX and NYSE quoted Eldorado Gold Corporation and have maintained our exposure to exploration success in south-eastern Turkey through our recent participation in a placing for Tigris Resources.
At our Red Rabbit Project (currently 86%-owned), development has been somewhat delayed due to changes in permit approval procedures in Turkey, which has impacted all sectors. This is affecting our ability to access the proposed site of our Tailings Management Facility for the final technical drilling required for our Feasibility Study and Environmental Impact Assessment. Despite this issue, the team is continuing to advance the project via additional technical work on the Feasibility Study and on new exploration. This exploration has been exceptionally pleasing with new vein systems being confirmed by drilling and bonanza grades being reported from the gap-zone between Arzu South and Arzu North. One intercept within this gap-zone showed the highest grades ever reported from Kiziltepe of 3.2m @ 38.7 g/t Au + 511 g/t Ag (48.0 g/t Au equiv.) and which itself included 1m @ 65.9 g/t Au + 760 g/t silver ('Ag') (79.7 g/t Au equiv.).
During the reporting period, Ariana has also been acquiring much of the freehold land over the Arzu South pit-area via our 99% owned subsidiary, Camyol. These land acquisitions have been funded by Ariana directly and represent a significant part of our project budget. The acquisitions have enabled the Company to substantially de-risk our primary resource/reserve area, which represents a major advancement for the project overall.
We are continuing to explore funding options for the Red Rabbit Joint Venture with Proccea Construction Co., and relevant technical documentation, including our Pre-Feasibility report, has been shared with several banks and institutions. Pending resolution of the permitting for drilling of the Tailings Management Facility, the Company expects to conclude its Feasibility Study and its Environmental Impact Assessment. This will act as the next major catalyst in the development of the Red Rabbit Project.
We are presently committed to initiating a drilling programme on our Artvin Joint Venture property of Salinbas, which is 49% held by Ariana. The Joint Venture is being funded by our partners Eldorado Gold Corporation, with an allocated budget of US$1.77 million in 2012-2013. This property has yielded several highly encouraging intercepts and the orebody remains open to the south and to the east, in the direction of the Ardala Cu-Au-Mo porphyry, which remains under licence to the Joint Venture. Past results from Salinbas include 21.5m @ 6.63 g/t Au + 19.8 g/t Ag and 12.0m @ 6.78 g/t Au + 36.5 g/t Ag from drilling and 55m @ 7.80 g/t Au + 9.2 g/t Ag and 46m @ 8.33 g/t Au + 39.0 g/t Ag from trenching.
Post-period end, the Company participated in a share placement for Tigris Resources, to help enable Tigris to continue with its first drilling programme on a porphyry-related target in Tunceli Province in SE Turkey. We are encouraged to note that Tigris has successfully identified a major intrusive centre, which is mineralised by sheeted-veins and stockworks, carrying grades of up to 37.8 g/t Au in composite channel samples. Drilling of this intrusive centre is underway with 1,500 metres budgeted.
Additionally, we completed a share placing for £625,000 in July 2012 which along with a Standby Equity Distribution Agreement supported US$2 million loan facility secured earlier in the year, places the Company in an adequate position to implement our present work programmes and in to 2013. Importantly, this placing has enabled Ariana to follow up on its exploration of licences acquired via government auction earlier in the year.
Going forward we are also considering a number of new opportunities within Turkey that are being made available through the auction process. We are also looking at opportunities in the wider area, in line with our strategy to become one of the key companies operating in the region.
I would like to take this opportunity to thank our loyal shareholders, Board of Directors and management team for their support over the period. With the high level of background activity underway, I look forward to reporting against key milestones on several fronts during the latter part of this year and in to the next
** ENDS **
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 |
| Susie Geliher / Lottie Brocklehurst | |
Editors' note:
Dr Kerim Sener, BSc (Hons), MSc, PhD, is the Managing Director of Ariana Resources plc. A graduate of the University of Southampton in Geology, he also holds a Master's degree from the Royal School of Mines (Imperial College, London) in Mineral Exploration and a doctorate from the University of Western Australia. He is a Fellow of The Geological Society of London and has worked in geological research and mineral consultancy in Southern Africa and Australia. He has read and approved the technical disclosure in this regulatory announcement.
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 Eldorado Gold Corporation in north-eastern Turkey. Eldorado owns 51% of this joint venture and is fully funding all exploration work on the JV properties, while Ariana owns 49% and is the operator.
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 12.5% 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 at www.arianaresources.com.
Ends
Unaudited Condensed Consolidated Interim Financial Statements
for the six months ended 30 June 2012
Condensed consolidated statement of comprehensive income
| Restated | ||||
| Note | 6 months to 30 June 2012 | 6 months to 30 June 2011 | 12 months to 31 December 2011 | |
| £'000 | £'000 | £'000 | ||
| Continuing Operations | ||||
| Administrative costs | (322) | (403) | (1,291) | |
| General exploration expenditure | (41) | - | (181) | |
| Share options | - | (478) | - | |
| Other income | 14 | 23 | 74 | |
| Operating Loss | (349) | (858) | (1,398) | |
| Finance costs | 4 | (90) | - | - |
| Investment income | 25 | 3 | 51 | |
| Loss on ordinary activities before tax | (414) | (855) | (1,347) | |
| Taxation | 6 | - | - | - |
| Loss for the period | (414) | (855) | (1,347) | |
| Other comprehensive income: | ||||
| Exchange differences on translating foreign operations | 52 | (94) | (239) | |
| Other comprehensive income for the period, net of tax | 52 | (94) | (239) | |
| Total comprehensive income for the period | (362) | (949) | (1,586) | |
| Loss for the period attributable to owners of the parent company | (414) | (855) | (1,347) | |
| Total comprehensive income attributable to owners of the parent company | (362) | (949) | (1,586) | |
| Loss per share (pence): | ||||
| Basic and diluted | 7 | 0.15 | 0.35 | 0.54 |
Condensed consolidated balance sheet
Condensed consolidated interim statement of financial position
| Restated | ||||
| Note | 30 June 2012 £'000 | 30 June 2011 £'000 | 31 December 2011 £'000 | |
| ASSETS | ||||
| Non-current assets | ||||
| Trade and other receivables | 12 | 83 | 12 | |
| Available for sale investments | 169 | 72 | 169 | |
| Land, property, plant and equipment | 426 | 197 | 311 | |
| Intangible assets | 8 | 5,125 | 4,446 | 4,627 |
| Total non-current assets | 5,732 | 4,798 | 5,119 | |
| Current assets | ||||
| Trade and other receivables | 720 | 288 | 340 | |
| Cash and cash equivalents | 725 | 1,445 | 908 | |
| Total current assets | 1,445 | 1,733 | 1,248 | |
| Total Assets | 7,177 | 6,531 | 6,367 | |
| Equity | ||||
| Called up share capital | 9 | 2,694 | 2,518 | 2,597 |
| Share premium | 6,843 | 6,201 | 6,481 | |
| Other reserves | 720 | 720 | 720 | |
| Share options | 578 | 578 | 578 | |
| Translation reserve | (124) | (31) | (176) | |
| Retained earnings | (4,664) | (3,758) | (4,250) | |
| Total equity attributable to equity holders of the parent | 6,047 | 6,228 | 5,950 | |
| Liabilities | ||||
| Current liabilities | ||||
| Borrowings | 10 | 654 | - | - |
| Trade and other payables | 476 | 303 | 417 | |
| Total current liabilities | 1,130 | 303 | 417 | |
| Total Equity and Liabilities | 7,177 | 6,531 | 6,367 |
Condensed consolidated interim statement of changes in equity
| Condensed consolidated interim statement of changes in | Share capital | Share premium | Other reserves | Share options | Trans-lation reserve | Retained losses | Total attributable to equity holder of parent |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 1 January 2011 | 2,220 | 5,167 | 720 | 100 | 63 | (2,903) | 5,367 |
| Changes in equity to 30 June 2011 | |||||||
| Other comprehensive income- Exchange differences on retranslation of foreign operations | - | - | - | - | (94) | - | (94) |
| Loss for the period | - | - | - | - | - | (855) | (855) |
| Total comprehensive income | - | - | - | - | (94) | (855) | (949) |
| Issue of share capital | 298 | 1,092 | - | - | - | - | 1,390 |
| Share issue costs | - | (58) | - | - | - | - | (58) |
| Share options | - | - | - | 478 | - | - | 478 |
| Balance at 30 June 2011 | 2,518 | 6,201 | 720 | 578 | (31) | (3,758) | 6,228 |
| Changes in equity to 31 December 2011 | |||||||
| Other comprehensive income- Exchange differences on retranslation of foreign operations | - | - | - | - | (145) | - | (145) |
| Loss for the period | - | - | - | - | - | (492) | (492) |
| Total comprehensive income | - | - | - | - | (145) | (492) | (637) |
| Issue of share capital | 79 | 280 | - | - | - | - | 359 |
| Balance at 31 December 2011 | 2,597 | 6,481 | 720 | 578 | (176) | (4,250) | 5,950 |
| Changes in equity to 30 June 2012 | |||||||
| Other comprehensive income- Exchange differences on retranslation of foreign operations | - | - | - | - | 52 | - | 52 |
| Loss for the period | - | - | - | - | - | (414) | (414) |
| Total comprehensive income | - | - | - | - | 52 | (414) | (362) |
| Issue of share capital | 97 | 362 | - | - | - | - | 459 |
| Balance at 30 June 2012 | 2,694 | 6,843 | 720 | 578 | (124) | (4,664) | (6,047) |
Condensed consolidated interim cash flow
Condensed consolidated interim statement of cash flows
| Restated | ||||
| 6 months to 30 June 2012 | 6 months to 30 June 2011 | 12 months to 31 December 2011 | ||
| £'000 | £'000 | £'000 | ||
| Cash flows from operating activities | ||||
| Cash generated from operations | (612) | (54) | (626) | |
| Net cash outflow from operations | (612) | (54) | (626) | |
| Cash flows from investing activities | ||||
| Purchase of land, property, plant and equipment | (115) | (41) | (179) | |
| Proceeds from sale of Zenit | - | - | 164 | |
| Proceeds from sale of investments | - | 135 | 135 | |
| Purchase of investments | - | - | (98) | |
| Purchase of intangible assets | (488) | (650) | (960) | |
| Interest received | 25 | 3 | 51 | |
| Net cash used in investing activities | (578) | (553) | (887) | |
| Cash flows from financing activities | ||||
| Proceeds from borrowings | 1,115 | - | - | |
| Proceeds from issue of share capital | 459 | 1,332 | 1,691 | |
| Repayment of borrowings | (477) | - | - | |
| Interest and financing fees | (90) | - | - | |
| Net cash proceeds from financing activities | 1,007 | 1,332 | 1,691 | |
| Net increase/(decrease) in cash and cash equivalents | (183) | 725 | 178 | |
| Cash and cash equivalents at the beginning of period | 908 | 730 | 730 | |
| Cash and cash equivalents at end of period | 725 | 1,455 | 908 |
Notes
Notes to the interim financial statements for the six months ended 30 June 2012
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 listed on the Alternative Investment Market of 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 2011, 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 2011 were approved by the Board of Directors on 23May 2012 and delivered to the Registrar of Companies. The financial information for the periods ended 30 June 2012 and 30 June 2011 are unaudited.
3. Significant accounting policies
The condensed interim financial statements have been prepared under the historical cost convention.
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 2011.
During the year ended 31 December 2011 the Company changed the method by which it consolidated the results of its joint venture, Zenit Madencilik San ve Tic AS., from acquisition accounting to proportional consolidation. Further details on this are contained in the Company's annual financial statements for that year, and the consolidated results for the six month period to 30 June 2011 have been amended accordingly.
4. Finance cost
Restated
| Interest on borrowing | 6 months to 30 June 2012 £'000 | 6 months to 30 June 2011 £'000 | 12 months to 31 December 2011 £'000 |
| Interest on convertible loan | 16 | - | - |
| Facility fees | 74 | - | - |
| 90 | - | - |
5. Segmental analysis
Management currently identifies one division as an operating segment - mineral exploration. This operating segment is monitored and strategic decisions are made based upon this and other non-financial data collated from exploration activities.
Principal activities for this operating segment are as follows:
Mining - incorporates the acquisition, exploration and development of gold resources in Turkey.
| June 2012 | Restated June 2011 | December 2011 | |||||||
| Mining | Other reconciling items | Group | Mining | Other reconciling items | Group | Mining | Other reconciling items | Group | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Administrative costs | - | (322) | (322) | - | (881) | (881) | - | (1,291) | (1,291) |
| General exploration expenditure | (41) | - | (41) | - | - | - | (181) | - | (181) |
| Other income | 14 | - | 14 | 23 | - | 23 | 74 | - | 74 |
| Finance costs | - | (90) | (90) | - | - | - | - | - | - |
| Investment income | 25 | 25 | - | 3 | 3 | - | 51 | 51 | |
| Tax | - | - | - | - | - | - | - | - | - |
| Loss after tax | (27) | (387) | (414) | 23 | (878) | (855) | (107) | (1,240) | (1,347) |
| Assets | |||||||||
| Segment assets | 6,875 | 302 | 7,177 | 5,299 | 1,232 | 6,531 | 5,291 | 1,076 | 6,367 |
| Liabilities | |||||||||
| Segment liabilities | (138) | (992) | (1,130) | (155) | (148) | (303) | (217) | (200) | (417) |
| Additions to segment assets | |||||||||
| Intangible assets | 488 | - | 488 | 650 | - | 650 | 960 | - | 960 |
| Property plant & equipment | 115 | - | 115 | 41 | - | 41 | 177 | 2 | 179 |
| Depreciation | (17) | - | (17) | (17) | - | (17) | (36) | (1) | (37) |
Other income includes consultancy and licence fees.
Reconciling items include non mineral exploration costs and transactions between Group and associate companies.
Geographical segments
All of the Group`s mining assets and liabilities are located in Turkey.
| June 2012 | Restated June 2011 | December 2011 | |||||||
| Turkey | United Kingdom | Group | Turkey | United Kingdom | Group | Turkey | United Kingdom | Group | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Carrying amount of segment non current assets | 5,563 | 169 | 5,732 | 4,718 | 80 | 4,798 | 4,949 | 170 | 5,119 |
6. Tax
The Group has incurred tax losses for the period and a corporation tax charge is not anticipated.
7. Loss per share
The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of £414,000 divided by the weighted average number of shares in issue during the period, being 266,908,645.
8. Additions and disposals of intangible assets
Exploration, evaluation and development of mineral resources
| Six months ended 30 June 2011 | £'000 |
| Opening net book amount 1 January 2011 | 3,840 |
| Additions and capitalised depreciation | 650 |
| Disposals | (44) |
| Closing net book amount 30 June 2011 | 4,446 |
| Six months ended 31 December 2011 | |
| Opening net book amount 1 July 2011 | 4,446 |
| Additions and capitalised depreciation | 349 |
| Disposals | (74) |
| Exchange movements | (94) |
| Closing net book amount 31 December 2011 | 4,627 |
| Six months ended 30 June 2012 | |
| Opening net book amount 1 January 2012 | 4,627 |
| Additions and capitalised depreciation | 488 |
| Disposals | (26) |
| Exchange movements | 36 |
| Closing net book amount 30 June 2012 | 5,125 |
9. 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 Value | Share Premium | |
| shares | £'000 | £'000 | |
| At 1 January 2011 | 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 |
| Shares issued in period (net of expenses) for cash | 7,841,578 | 79 | 280 |
| At 31 December 2011 | 259,672,334 | 2,597 | 6,481 |
| Shares issued in period (net of expenses) for cash | 9,657,175 | 97 | 362 |
| Balance at 30 June 2012 | 269,329,509 | 2,694 | 6,843 |
10. Borrowings
A convertible loan of $750,000, bearing interest at 10% and repayable within one year, was drawn down in January 2012 and repaid in June 2012, at the same time as a new loan of $1m on the same terms was drawn down. Under the new loan, conversion into new ordinary shares is at the lender's option at a price 3.77 pence per ordinary share.
11. Post period events
In July 2012 the company raised £625,000 by issuing 41,666,668 new ordinary shares at 1.5 pence per ordinary share.
12. Approval of interim financial statements
The interim financial statements were approved by the Board of Directors on 27 September 2012.
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
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