30 September 2016
AIM: AAU
INTERIM RESULTS
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, is pleased to announce its unaudited interim results for the six months ended 30 June 2016.
Highlights:
- Profit on Ordinary Activities before tax of £0.75 million, reflecting a profit from the sale of certain lithium licences in Australia and adjustments in respect of the Red Rabbit Gold Project ("RRGP") Joint Venture.
- Construction of the Kiziltepe Mine, nearing completion with Tailings Storage Facility ("TSF") development underway ahead of commissioning, coinciding with mining and stockpiling of vein material.
- On track to deliver first gold pour at Kiziltepe in late Q4 2016, following completion of the TSF.
- Drill testing of extensions of mineralised zones at Kiziltepe in Q3 2016 for c. 3,000m yield positive results, second follow-up programme to commence in late October.
Michael de Villiers, Chairman, commented:
"It is very pleasing to see the tremendous progress made by the construction crews at the Kiziltepe Mine. We remain on track to commission the project during Q4 2016, with our first gold pour targeted for later in this quarter. Work at the tailings storage facility is continuing apace and all of the major work for the process plant is now complete, with piping and electrical installation fully underway. I would like to take this opportunity to commend the diligence and commitment of our Joint Venture team and partners at Proccea.
Meanwhile we have committed to undertake further drill-testing of vein extensions across the Kiziltepe Sector, following a successful programme in late 2015, which led to increases in our resource base at Kiziltepe and Kizilcukur. We have recently completed additional drilling at Kiziltepe during our first phase programme for 2016, from which we have already announced positive results. We are now working on initiating a second phase of drilling to follow-up on these results during late October, with the aim of demonstrating the potential to expand our resource and ultimately increase mine life.
We have also added significant value to the company through lithium deals we have completed during early 2016 in Western Australia which contributed significantly to our maiden profit of £0.753 million and further deals of this nature are still being assessed by our technology-metals subsidiary, Asgard Metals. This has demonstrated our ability to act nimbly and very cost-effectively in to new jurisdictions, with an emphasis on low-risk, high-return opportunities.
We look forward to keeping the market updated on our progress across our exploration and development portfolio in the coming months."
Contacts:
| Ariana Resources plc | Tel: +44 (0) 20 7407 3616 |
| Michael de Villiers, Chairman | |
| Kerim Sener, Managing Director | |
| Beaumont Cornish Limited | Tel: +44 (0) 20 7628 3396 |
| Roland Cornish / Felicity Geidt | |
| Beaufort Securities Limited | Tel: +44 (0) 20 7382 8300 |
| Jon Belliss | |
| Panmure Gordon (UK) Limited | Tel: +44 (0) 20 7886 2500 |
| Adam James / Tom Salvesen | |
Editors' note:
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 are fully funding all exploration work on the JV properties, while Ariana owns 49%. The total resource inventory within this JV is 1.09 million ounces of gold.
The Company's flagship assets are its Kiziltepe 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 at the Red Rabbit Project stands at c. 525,000 ounces of gold equivalent.
Beaufort Securities Limited and Panmure Gordon (UK) Limited are joint 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
Ariana Resources Plc
Unaudited Condensed Consolidated Interim Financial Statements
for the six months ended 30 June 2016
Condensed consolidated statement of comprehensive income
| Note | 6 months to 30 June 2016 | 6 months to 30 June 2015 | 12 months to 31 December 2015 | |
| £'000 | £'000 | £'000 | ||
| Administrative costs | (360) | (343) | (797) | |
| General exploration expenditure | - | (9) | (10) | |
| Exploration costs - written off | - | - | (521) | |
| Other income | 4 | 425 | - | 15 |
| Operating profit/(loss) | 65 | (352) | (1,313) | |
| Finance costs | 5 | - | (111) | (148) |
| Investment income | 43 | 33 | 66 | |
| Profit on disposal of available for sale investments | 626 | - | - | |
| Share of profit on dilution of interest in joint venture | 6 | 279 | 68 | 68 |
| Share of profit/(loss) of joint venture | 6 | 130 | (259) | (133) |
| Profit/(loss) on ordinary activities before tax | 1,143 | (621) | (1,460) | |
| Taxation | 8 | (390) | - | - |
| Profit/(loss) for the period | 753 | (621) | (1,460) | |
| Other comprehensive income: | ||||
| Exchange differences on translating foreign operations | 83 | (126) | (374) | |
| Fair value adjustment on other financial asset classified as available for sale | 12 | - | 122 | 160 |
| Fair value adjustment on available for sale investments | 433 | - | (87) | |
| Other comprehensive income for the period net of tax | 516 | (4) | (301) | |
| Total comprehensive income for the period | 1,269 | (625) | (1,761) | |
| Profit/(loss) for the period attributable to owners of the parent company | 753 | (621) | (1,460) | |
| Total comprehensive income attributable to owners of the parent company | 1,269 | (625) | (1,761) | |
| Profit/(loss) per share (pence): | ||||
| Basic and diluted | 9 | 0.09 | (0.09) | (0.20) |
Condensed consolidated balance sheet
Condensed consolidated interim statement of financial position
| | | |||
| Note | 30 June 2016 £'000 | 30 June 2015 £'000 | 31 December 2015 £'000 | |
| ASSETS | ||||
| Non-current assets | ||||
| Trade and other receivables | 45 | 31 | 42 | |
| Available for sale investments | 10 | 51 | 109 | 22 |
| Intangible exploration assets | 11 | 1,789 | 2,156 | 1,654 |
| Land, property, plant and equipment | 351 | 329 | 324 | |
| Investment in Joint Venture | 6 | 3,239 | 2,704 | 2,830 |
| Total non-current assets | 5,475 | 5,329 | 4,872 | |
| Current assets | ||||
| Trade and other receivables | 12 | 1,110 | 1,075 | 989 |
| Other financial asset | 13 | - | 97 | 14 |
| Available for sale investments | 10 | 575 | - | - |
| Cash and cash equivalents | 822 | 55 | 319 | |
| Total current assets | 2,507 | 1,227 | 1,322 | |
| Total Assets | 7,982 | 6,556 | 6,194 | |
| EQUITY | ||||
| Called up share capital | 14 | 5,805 | 5,686 | 5,797 |
| Share premium | 14 | 8,845 | 7,948 | 8,764 |
| Other reserves | 720 | 720 | 720 | |
| Share based payment reserve | 578 | 578 | 578 | |
| Translation reserve | (452) | (287) | (535) | |
| Retained earnings | (8,085) | (8,386) | (9,274) | |
| Total equity attributable to equity holders of the parent | 7,411 | 6,259 | 6,050 | |
| Non - controlling Interest | - | 3 | 3 | |
| Total equity | 7,411 | 6,262 | 6,053 | |
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | 571 | 294 | 141 | |
| Total current liabilities | 571 | 294 | 141 | |
| Total Equity and Liabilities | 7,982 | 6,556 | 6,194 |
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 | Non-controlling interests | Total attributable to equity holder of parent |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 1 January 2015 | 5,640 | 7,583 | 720 | 578 | (161) | (7,887) | 3 | 6,747 |
| Changes in equity to 30 June 2015 | ||||||||
| Loss for the period | - | - | - | - | - | (621) | - | (621) |
| Other comprehensive income | - | - | - | - | (126) | 122 | - | (4) |
| Total comprehensive income | - | - | - | - | (126) | (499) | - | (625) |
| Issue of share capital | 46 | 368 | - | - | - | - | - | 414 |
| Share issue costs | - | (3) | - | - | - | - | - | (3) |
| Transactions with owners | 46 | 365 | - | - | - | - | - | 411 |
| Balance at 30 June 2015 | 5,686 | 7,948 | 720 | 578 | (287) | (8,386) | 3 | 6,262 |
| Changes in equity to 31 December 2015 | ||||||||
| Loss for the period | - | - | - | - | - | (839) | - | (839) |
| Other comprehensive income | - | - | - | - | (248) | (49) | - | (297) |
| Total comprehensive income | - | - | - | - | (248) | (888) | - | (1,136) |
| Issue of share capital | 111 | 889 | - | - | - | - | - | 1,000 |
| Share issue costs | - | (73) | - | - | - | - | - | (73) |
| Transactions with owners | 111 | 816 | - | - | - | - | - | 927 |
| Balance at 31 December 2015 | 5,797 | 8,764 | 720 | 578 | (535) | (9,274) | 3 | 6,053 |
| Changes in equity to 30 June 2016 | ||||||||
| Profit for the period | - | - | - | - | - | 753 | - | 753 |
| Other comprehensive income | - | - | - | - | 83 | 433 | - | 516 |
| Total comprehensive income | - | - | - | - | 83 | 1,186 | - | 1,269 |
| Issue of share capital | 8 | 81 | - | - | - | - | - | 89 |
| Non-controlling interest - share of net assets in subsidiary | - | - | - | - | - | 3 | (3) | - |
| Transactions with owners | 8 | 81 | - | - | - | 3 | (3) | 89 |
| Balance at 30 June 2016 | 5,805 | 8,845 | 720 | 578 | (452) | (8,085) | - | 7,411 |
Condensed consolidated interim statement of cash flows
| 6 months to 30 June 2016 | 6 months to 30 June 2015 | 12 months to 31 December 2015 | ||
| £'000 | £'000 | £'000 | ||
| Profit/(loss) for the period | 1,143 | (621) | (1,460) | |
| Adjustments for: | ||||
| Depreciation | 1 | - | 1 | |
| Disposal/write down of intangible exploration assets | 50 | 5 | 521 | |
| Other financial asset charges | - | 111 | 148 | |
| Foreign exchange movement | 83 | (126) | (374) | |
| Fair value adjustment on available for sale investments | (433) | - | 87 | |
| Investment income | (43) | (33) | (66) | |
| Profit on disposal of available for sale investments | (626) | - | - | |
| Changes in: | ||||
| Joint venture asset | (409) | 191 | 65 | |
| Exchange movements in non-current assets | (56) | 115 | (132) | |
| Trade and other receivables | 123 | (133) | (3) | |
| Trade and other payables | (102) | 46 | 108 | |
| Cash used in group operations | (269) | (445) | (1,105) | |
| Income tax paid | (60) | - | - | |
| Net cash used in group operations | (329) | (445) | (1,105) | |
| Cash flows from investing activities | ||||
| Purchase of land, property, plant and equipment | (10) | (1) | (13) | |
| Payments for intangible assets | (136) | (89) | (260) | |
| Investment income | 43 | 33 | 66 | |
| Net cash used in investing activities | (103) | (57) | (207) | |
| Cash flows from financing activities Proceeds from disposal of available for sale investments | 832 | - | - | |
| Proceeds from issue of share capital and swap repayments | 103 | 513 | 1,587 | |
| Net cash proceeds from financing activities | 935 | 513 | 1,587 | |
| Net increase in cash and cash equivalents | 503 | 11 | 275 | |
| Cash and cash equivalents at the beginning of period | 319 | 44 | 44 | |
| Cash and cash equivalents at end of period | 822 | 55 | 319 |
Notes to the interim financial statements for the six months ended 30 June 2016
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 primarily 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 2015, 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 2015 were approved by the Board of Directors on 3 June 2016 and delivered to the Registrar of Companies. The financial information for the periods ended 30 June 2016 and 30 June 2015 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 2015.
The Group and Company financial statements have been prepared on a going concern basis. As an exploration and development company the Directors are mindful that there is an ongoing need to monitor overheads and cash associated with the exploration and development programme; and to raise additional working capital on an ad hoc basis to support the Group's activities.
The Group's ability to continue its operations and to realise its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs. These financial statements do not give effect to any adjustments which would be necessary should the Group be unable to continue as a going concern and therefore be required to realise its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.
The Company raised £922,000 in the six month period from the consideration in cash and shares for the disposal of tenements in the Pilbara region of Western Australia and associated available for sale investments (£834,000) and the issue of new equity (£88,000) and the Directors remain confident that if future funding is required they will be able to raise this finance to meet the Group exploration and development programme and associated overhead cost.
4. Other income
| 6 months to 30 June 2016 | 6 months to 30 June 2015 | 12 months to 31 December 2015 | |
| £'000 | £'000 | £'000 | |
| Consideration in cash and shares for disposal of tenements in the Pilbara region of Western Australia | 468 | - | - |
| Exploration costs associated with tenements | (50) | - | - |
| Consultancy fees | 7 | - | 15 |
| | 425 | - | 15 |
5. Finance cost
| 6 months to 30 June 2016 | 6 months to 30 June 2015 | 12 months to 31 December 2015 | |
| £'000 | £'000 | £'000 | |
| Swap charges on other financial assets | - | 111 | 148 |
6. Interest in joint venture
| The Group accounts for its joint venture with Proccea Construction Co in Zenit Madencilik San ve Tic AS ("Zenit") using the equity method in accordance with IAS 28 (revised). At 30 June 2016 the Group has a 50% (30 June 2015: 69.58%) interest in Zenit. Summarised financial information of the joint venture, based on its translated financial statements, and reconciliations with the carrying amount of the investment in the consolidated financial statements are set out below:- |
| Summarised statement of financial position | 30 June 2016 | 30 June 2015 | 31 December 2015 |
| £'000 | £'000 | £'000 | |
| Non-current assets | 24,253 | 4,947 | 6,764 |
| Current assets | 821 | 263 | 10,097 |
| Current and non-current liabilities | (18,596) | (1,324) | (12,793) |
| Equity | 6,478 | 3,886 | 4,068 |
| Proportion of the Group's ownership | 50% | 69.58% | 69.58% |
| Carrying amount of Investment in Joint Venture | 3,239 | 2,704 | 2,830 |
| Summarised statement of Profit and Loss | 30 June 2016 | 30 June 2015 | 31 December 2015 |
| Other income | 202 | - | 104 |
| Administrative expenses - including exchange gains/(losses) | 58 | (372) | (295) |
| Profit/(loss) for the period | 260 | (372) | (191) |
| Proportion of the Group`s ownership | 50% | 69.58% | 69.58% |
| Group`s share of profit/(loss) for the period | 130 | (259) | (133) |
| Increase in share of net assets following issue of shares in Zenit | 279 | 68 | 68 |
| Movement in interest in Joint Venture for the period | 409 | (191) | (65) |
7. 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 and Lithium in Australia.
| 30 June 2016 | 30 June 2015 | 31 December 2015 | |||||||
| 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 | - | (360) | (360) | - | (343) | (343) | - | (797) | (797) |
| Exploration Expenditure | - | - | - | (9) | - | (9) | (531) | - | (531) |
| Other income` | 425 | - | 425 | - | - | - | 15 | - | 15 |
| Profit on disposal of available for sale investments | 626 | - | 626 | - | - | - | - | - | - |
| Finance and swap costs | - | - | - | - | (111) | (111) | - | (148) | (148) |
| Movement in interest in a joint venture | 409 | - | 409 | (191) | - | (191) | (65) | - | (65) |
| Investment income | - | 43 | 43 | - | 33 | 33 | - | 66 | 66 |
| Tax | (390) | - | (390) | - | - | - | - | - | - |
| Profit/(loss) after tax | 1,070 | (317) | 753 | (200) | (421) | (621) | (581) | (879) | (1,460) |
| Assets | |||||||||
| Segment assets | 7,395 | 587 | 7,982 | 6,372 | 184 | 6,556 | 5,074 | 1,120 | 6,194 |
| Liabilities | |||||||||
| Segment liabilities | (398) | (173) | (571) | (24) | (270) | (294) | (24) | (117) | (141) |
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 located primarily in Turkey.
| 30 June 2016 | 30 June 2015 | 31 December 2015 | |||||||
| 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 | 5,423 | 52 | 5,475 | 5,219 | 110 | 5,329 | 3,916 | 956 | 4,872 |
8. Taxation
The Group`s corporation tax charge for the period arises on taxable profits arising in its Australian subsidiary, Asgard Metals Pty. Ltd. The Group has UK & Turkish losses carried forward on which no deferred tax asset is currently recognised in the financial statements as the recovery of the benefit is dependent on future profitability, the timing of which cannot be reasonably foreseen.
9. Profit per share
The calculation of basic profit per share is based on the profit after taxation attributable to ordinary shareholders of £753,000 divided by the weighted average number of shares in issue during the period, being 803,737,35
10 Available for sale investments
| Company | Non-current £'000 | Current £'000 | Total £'000 |
| Valuation at 1 January 2015 and 30 June 2015 | 109 | - | 109 |
| Fair value adjustment | (87) | - | (87) |
| Valuation at 31 December 2015 | 22 | 22 | |
| Additions | - | 380 | 380 |
| Disposals | - | (209) | (209) |
| Fair value adjustment | 29 | 404 | 433 |
| Valuation at 30 June 2016 | 51 | 575 | 626 |
| Net book value | |||
| At 30 June 2016 | 51 | 575 | 626 |
| At 31 December 2015 | 22 | - | 22 |
| At 30 June 2015 | 109 | - | 109 |
The non-current available for sale investment represents the cost of the Group`s investment in Royal Road Minerals Limited, a company listed on the Toronto Venture Exchange.
During February 2016, the Group, through its Australian subsidiary, Asgard Metals Pty. Ltd., completed the sale of a package of tenements in the Pilbara region of Western Australia to Dakota Minerals Limited, a company listed on the Australian Stock Exchange. The initial transactions included cash payments totalling A$147,000 and 22,500,000 fully paid ordinary shares and this consideration is reflected in other income at a valuation of £468,000. Additionally, during the period, the Group generated a profit on the disposal of some of its shares in Dakota Minerals Limited amounting to £626,000.
As at 30 June 2016 due to increases in both investments market valuation, a fair value adjustment totalling £433,000 has been reflected in these accounts.
1. Intangible exploration assets
| Six months ended 30 June 2015 | £'000 |
| | |
| Opening net book value 1 January 2015 | 2,146 |
| Additions | 99 |
| Costs written off | (5) |
| Exchange movements | (84) |
| Closing net book value 30 June 2015 | 2,156 |
| Six months ended 31 December 2015 | |
| | |
| Opening net book value 1 July 2015 | 2,156 |
| Additions | 161 |
| Costs written off Reallocation of project costs to Joint Venture Company | (516) (135) |
| Exchange movements | (12) |
| Closing net book value 31 December 2015 | 1,654 |
| Six months ended 30 June 2016 | |
| | |
| Opening net book value 1 January 2016 | 1,654 |
| Additions | 136 |
| Disposals | (50) |
| Exchange movements | 49 |
| Closing net book value 30 June 2016 | 1,789 |
12. Trade and other receivables
| 30 June 2016 £`000 | 30 June 2015 £`000 | 31 December 2015 £`000 | |
| Amounts owed by Joint Venture Company Other receivables | 941 70 | 822 173 | 880 63 |
| Prepayments | 98 | 80 | 46 |
| | 1,110 | 1,075 | 989 |
13. Other financial asset
The equity swap arrangement with Lanstead Capital L.P. came to an end following the receipt of their final capital repayment during March 2016.
| 30 June 2016 £`000 | 30 June 2015 £`000 | 31 December 2015 £`000 | |
| Fair value recognised at start of period | 14 | 263 | 263 |
| Capital repayments | (14) | (177) | (261) |
| Swap charges | - | (111) | (148) |
| Surplus on revaluation at end of period | - | 122 | 160 |
| Fair value recognised at end of period | - | 97 | 14 |
14. Called up share capital and share premium
| Allotted, issued and fully paid ordinary 0.1p shares | Number of | Share Capital | Deferred Shares | Share Premium |
| shares | £'000 | £'000 | £'000 | |
| At 1 January 2015 | 645,816,141 | 645 | 4,995 | 7,583 |
| Shares issued in period (net of expenses) | 45,132,953 | 46 | - | 365 |
| At 30 June 2015 | 690,949,094 | 691 | 4,995 | 7,948 |
| Shares issued in period (net of expenses) | 111,111,102 | 111 | - | 816 |
| At 31 December 2015 | 802,060,196 | 802 | 4,995 | 8,764 |
| Shares issued in period (net of expenses) | 7,814,928 | 8 | - | 81 |
| At 30 June 2016 | 809,875,124 | 810 | 4,995 | 8,845 |
15. Post period end event
During July 2016, the Company raised £475,000 before expenses through the issue of 31,666,666 new ordinary shares. The Group through its Australian subsidiary, Asgard Metals Pty. Ltd., has completed the sale of its interests in a package of tenements in the Northern Territory and Western Australia to Kingston Resources Limited ("Kingston"). The initial consideration included a cash payment to Asgard of A$20,000 and 6,600,000 fully paid ordinary shares in Kingston.
16. Approval of interim financial statements
The interim financial statements were approved by the Board of Directors on 30 September 2016.