3 June 2016
AIM: AAU

FINAL AUDITED RESULTS FOR THE YEAR 31 DECEMBER 2015

NOTICE OF ANNUAL GENERAL MEETING ("AGM")

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, announces its final audited results for the year ended 31 December 2015.    

The Report and Accounts will be posted to shareholders as applicable, and are available on the Company's website www.arianaresources.com, together with the Notice of AGM, and extracts are set out below.

The AGM will be held at the East India Club, 16 St James's Square, London SW1Y 4LH on 28 June 2016 at 11.00 am.

Chairman's Statement

The past year has been rewarding and transformational for Ariana Resources PLC. ('Ariana'). During September 2015, we commenced mine construction at the Kiziltepe Sector of our flagship Red Rabbit Gold Project in Turkey. We have also successfully broadened Ariana's portfolio into lithium, a technology-metal, which has seen its price rise nearly 40% in the past five years. Moreover, demand for lithium is forecast to double in the next decade.

In March this year, I visited our Kiziltepe gold-silver mine to review progress on mine construction. I was struck by the excitement of our exploration team, the team of Proccea Construction Co ('Proccea') and the local community as the mine rapidly takes shape.  With over 160 people now working at the site, it is a hive of activity, which we have tried to reflect in the photographs of construction progress we have been releasing periodically. I am pleased to report that construction is on schedule for completion later in the second half of this year.

I would like to commend our partners Proccea for their drive and professionalism in keeping the mine construction on schedule.  We are also encouraged by the continuing positive support we receive from the local community in Sindirgi.  It is heartening to see local companies becoming such active stakeholders in the development of the mine.

Despite the challenging circumstances in the precious- metals market since 2013, our strategy has remained resolutely focused on generating exposure to gold and silver production via our Red Rabbit JV and on broadening our portfolio.  Our aim has been both to increase our resource base in Turkey and to diversify into technology-metals, such as lithium, thereby adding value for our shareholders at this inflection point in the commodity market cycle.

With the Kiziltepe mine scheduled for completion this year, we have concentrated on enhancing the economics of the Red Rabbit Project by enhancing the resource base.  I am pleased to report to shareholders that our drilling programme over the past year was an outstanding success. In March, we announced 100% increase in our Kizilçukur resource to 33,000 ounces of gold equivalent, which we envisage as a potential satellite operation to our Kiziltepe mine. Given the high grades at Kizilçukur, it is logical to bring this operation forward by vending this discovery into our Red Rabbit joint venture.  The discovery cost of the enhanced resource was only US$7 per ounce, or a fifth of the cost of industry benchmarks.  This result clearly demonstrates the excellence of our geological team and its leadership as well as showing how well placed resources can yield outstanding results.

Also in March we were particularly encouraged by drilling results at Kepez West, which is part of the Red Rabbit joint venture. Our drilling programme has also confirmed the potential for Arzu Central within the core Kiziltepe area to host additional resources. A JORC Exploration Target of 92,000 oz Au and 1,100,000 oz Ag has been established within Arzu Central. Finally, our most recent drilling has confirmed an increase in our resources at Kiziltepe to c. 248,000 oz gold equivalent not accounting for several subsidiary veins on which further resources have already been estimated. Remarkably the discovery cost of these additional ounces was only US$5 per ounce; again at a fraction of the normal cost. With the increase in the resource at Kiziltepe, we now expect that mine life can be increased from 8 years to potentially 11.5 years, based on a current designed throughput rate of 150,000 tonnes per annum.

In viewing Ariana's resources, it is also important to include the discovery of over 1 million ounces of gold equivalent at Salinbs in the Artvin Province of north-eastern Turkey. An independent Scoping Study completed last year reinforced the value of Ariana's joint venture strategy with Eldorado Gold Corporation ('Eldorado') and highlighted further exploration upside. Ariana holds 49% of this joint venture and Eldorado is currently funding all general holding costs as well as additional exploration to determine the potential for the joint venture to host further resources.

Ariana's progress is also now occurring against the backdrop of a turnaround in the precious-metals market.  After four years punctuated by some sharp falls, the price of gold has soared 20% in the first three months of this year. Moreover, whilst central bankers have been bolstering their reserves, the demand from both institutional and private investors has also increased sharply.  This appears to be the consequence of stock market turmoil and the pernicious effects of prolonged ultra-low or negative interest rates across Western-world economies. A further favourable economic development for our mining operation has been the 70% plunge in oil prices since 2014.

A second part of our strategy of broadening and strengthening Ariana's portfolio is our focus on commodity diversification through technology-metals, such as lithium, which is associated with several gold provinces worldwide and which is used in renewable energy applications. Ariana's Red Rabbit silver resources of 3.15Moz are also significant in the context of renewable-energy demand worldwide.

The importance of technology-metals, such as lithium and silver, cannot be underestimated. Lithium is used to produce the high density lithium-ion batteries for storing solar energy on a scale usable in power grids, buildings and cars, in addition to their established use in powering computing,
telecommunications devices and many other everyday devices. Silver is now used in the production of solar photovoltaic cells in addition to its many existing traditional uses.

A major shift in global energy from fossil fuels to renewable- energy, in addition to decentralised power-generation and storage is underway.  The price per watt of electricity generated by solar has more than halved in the last decade, whilst installations of solar panels have increased six-fold since 2010 alone.  In particular, the current global demand for lithium has led Goldman Sachs to dub lithium 'the new gasoline'.

During 2014, our technology-metals subsidiary, Asgard Metals Pty Ltd ('Asgard'), secured the rights to a package of highly prospective lithium-tantalum tenements at Pilgangoora in Western Australia.  In a deal that formally concluded after the year end, we were able to vend this project to Dakota Minerals Limited ('Dakota') for a cash payment of A$147,000 and 22,500,000 Dakota shares through an agreement made in December 2015.  As part of our future strategy, we will continue to identify and monetise further projects in the technology-metals sector.

In a related development, in March this year we concluded a Memorandum of Understanding with AIM-listed Metal Tiger PLC ('Metal Tiger') for the exploration of lithium-tantalum opportunities in the Malay Peninsula.  We are excited at the prospect of working with our colleagues at Metal Tiger and their Thai joint venture partner in this strategic collaboration.

With the ground-breaking progress of the past year and the creation of new opportunities, I feel very privileged to be part of Ariana's development at such an exciting time. I would like to take this opportunity to thank both the Ariana team as well as the teams at Proccea and Zenit for all their hard work and dedication over the last year. They have all done an excellent job and we are now well positioned to take advantage of the upturn in the mineral cycle.

M J de Villiers
Chairman
3 June 2016

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
Loeb Aron & Company Ltd.	Tel: +44 (0) 20 7628 1128
Anthony Kluk

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2015

	Note	2015 £'000	2014 £'000
Administrative costs		(797)	(739)
General exploration expenditure		(10)	(76)
Exploration costs - written off		(521)	(65)
Other income	4	15	-
Operating loss	5	(1,313)	(880)
Finance costs	6	(148)	(185)
Share of profit on dilution of interest in joint venture	7	68	228
Investment income		66	74
Share of loss of joint venture	7	(133)	(122)
Loss on ordinary activities before tax		(1,460)	(885)
Taxation	9	-	-
Loss for the year		(1,460)	(885)
Other comprehensive income
Exchange differences on translating foreign operations		(374)	(19)
Fair value adjustment on available for sale investments	14a	(87)	-
Fair value adjustment on other financial asset classified as held for sale	16	160	(96)
Other comprehensive income for the year net of tax		(301)	(115)
Total comprehensive income for the year		(1,761)	(1,000)
Loss attributable to: Owners of the parent Company		(1,460)	(885)
Non-controlling Interests		-	-
Loss for the year		(1,460)	(885)
Total comprehensive income attributable to: Owners of the parent Company		(1,761)	(1,000)
Non-controlling Interests		-	-
Total comprehensive income for the year		(1,761)	(1,000)
Loss per share (pence)
Basic and diluted	11	(0.20)	(0.14)

Continuing operations

None of the Group's activities were acquired or discontinued during the current or previous year.
The accompanying notes form part of these financial statements.

Consolidated Statement of Financial Position

For the year ended 31 December 2015

	Note	2015 £'000	2014 £'000
Assets
Non-current assets
Trade and other receivables	15	42	37
Other financial asset	16	-	13
Available for sale investments	14a	22	109
Intangible exploration assets	12	1,654	2,146
Land, property, plant and equipment	13	324	369
Investment in joint venture	7	2,830	2,895
Total non-current assets		4,872	5,569
Current assets
Trade and other receivables	17	989	861
Other financial asset	16	14	250
Cash and cash equivalents		319	44
Total current assets		1,322	1,155
Total assets		6,194	6,724
Equity
Called up share capital	19	5,797	5,640
Share premium	19	8,764	7,583
Other reserves		720	720
Share based payments reserve		578	578
Translation reserve		(535)	(161)
Retained earnings		(9,274)	(7,887)
Total equity attributable to equity holders of the parent		6,050	6,473
Non-controlling interest		3	3
Total equity		6,053	6,476
Liabilities
Current liabilities
Trade and other payables	18	141	248
Total current liabilities		141	248
Total equity and liabilities		6,194	6,724

The financial statements were approved by the Board of Directors and authorised for issue on 3 June 2016.

Company Statement of Financial Position

For the year ended 31 December 2015

	Note	2015 £'000	2014 £'000
Assets
Non-current assets
Other financial asset	16	-	13
Available for sale investments	14a	22	109
Investments in group undertakings	14b	274	274
Total non-current assets		296	396
Current assets
Trade and other receivables	17	8,604	7,605
Other financial asset	16	14	250
Cash and cash equivalents		-	-
Total current assets		8,618	7,855
Total assets		8,914	8,251
Equity
Called up share capital	19	5,797	5,640
Share premium	19	8,764	7,583
Share based payments reserve		578	578
Retained earnings		(6,232)	(5,556)
Total equity		8,907	8,245
Liabilities
Current liabilities
Trade and other payables	18	7	6
Total current liabilities		7	6
Total equity and liabilities		8,914	8,251

The financial statements were approved by the Board of Directors and authorised for issue on 3 June 2016.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2015

	Share capital £'000	Share premium £'000	Other reserves £'000	Share based payments reserve £'000	Translation reserve £'000	Retained earnings £'000	Total attributable to equity holders of parent £'000	Non- controlling Interest £`000	Total £`000
Changes in equity to 31 December 2014
Balance at 1 January 2014	5,550	6,900	720	578	(142)	(6,906)	6,700	-	6,700
Loss for the year	-	-	-	-	-	(885)	(885)	-	(885)
Other comprehensive income	-	-	-	-	(19)	(96)	(115)	-	(115)
Total comprehensive income	-	-	-	-	(19)	(981)	(1,000)	-	(1,000)
Issue of share capital	90	725	-	-	-	-	815	-	815
Share issue costs	-	(42)	-	-	-	-	(42)	-	(42)
Non-controlling Interest - share of net assets in subsidiary	-	-	-	-	-	-	-	3	3
Transactions with owners	90	683	-	-	-	-	773	3	776
Balance at 31 December 2014	5,640	7,583	720	578	(161)	(7,887)	6,473	3	6,476

The accompanying notes form part of these financial statements.

Changes in equity to 31 December 2015	Share capital £'000	Share premium £'000	Other reserves £'000	Share based payments reserve £'000	Translation reserve £'000	Retained earnings £'000	Total attributable to equity holders of parent £'000	Non- controlling Interest £`000	Total £`000
Loss for the year	-	-	-	-	-	(1,460)	(1,460)	-	(1,460)
Other comprehensive income	-	-	-	-	(374)	73	(301)	-	(301)
Total comprehensive income	-	-	-	-	(374)	(1,387)	(1,761)	-	(1,761)
Issue of share capital	157	1,257	-	-	-	-	1,414	-	1,414
Share issue costs	-	(76)	-	-	-	-	(76)	-	(76)
Non-controlling Interest - share of net assets in subsidiary	-	-	-	-	-	-	-	-	-
Transactions with owners	157	1,181	-	-	-	-	1,338	-	1,338
Balance at 31 December 2015	5,797	8,764	720	578	(535)	(9,274)	6,050	3	6,053

The accompanying notes form part of these financial statements.

Company Statement of Changes in Equity

For the year ended 31 December 2015

	Share  capital £'000	Share premium £'000	Share based payments reserve £'000	Retained earnings £'000	Total £'000
Changes in equity to 31 December 2014
Balance at 1 January 2014	5,550	6,900	578	(4,708)	8,320
Loss for the year	-	-	-	(752)	(752)
Other comprehensive income	-	-	-	(96)	(96)
Total comprehensive income	-	-	-	(848)	(848)
Issue of share capital	90	725	-	-	815
Share issue costs	-	(42)	-	-	(42)
Transactions with owners	90	683	-	-	773
Balance at 31 December 2014	5,640	7,583	578	(5,556)	8,245
Changes in equity to 31 December 2015
Loss for the year	-	-	-	(749)	(749)
Other comprehensive income	-	-	-	73	73
Total comprehensive income	-	-	-	(676)	(676)
Issue of share capital	157	1,257	-	-	1,414
Share issue costs	-	(76)	-	-	(76)
Transactions with owners	157	1,181	-	-	1,338
Balance at 31 December 2015	5,797	8,764	578	(6,232)	8,907

The accompanying notes form part of these financial statements.

Consolidated Statement of Changes in Cash Flows

For the year ended 31 December 2015

	Note	2015 £'000	2014 £'000
Cash flows from operating activities
Cash absorbed from operations	20	(1,105)	(812)
Net cash outflow from operations		(1,105)	(812)
Cash flows from investing activities
Purchase of land, property, plant and equipment		(13)	(27)
Payments for intangible assets		(260)	(271)
Investment income		66	74
Net cash used in investing activities		(207)	(224)
Cash flows from financing activities
Proceeds from issue of share capital and swap repayments		1,587	868
Net cash proceeds from financing activities		1,587	868
Net increase/(decrease)in cash and cash equivalents		275	(168)
Cash and cash equivalents at beginning of year		44	212
Cash and cash equivalents at end of year		319	44

Company statement of cash flows

All bank transactions are undertaken by Ariana Exploration & Development Limited on behalf of Ariana Resources PLC and recharged accordingly. As such the Company had no cash transactions directly.

The accompanying notes form part of these financial statements.

Notes to the Consolidated Financial Statements

For the year ended 31 December 2015

 

1. General information

Ariana Resources PLC (the "Company") is a public limited company incorporated and domiciled in Great Britain. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (together the "Group") are related to the exploration for and development of gold and other minerals primarily in Turkey.

The Company's registered office address is Bridge House, London Bridge, London, SE1 9QR, United Kingdom.

The consolidated financial statements are presented in Pounds Sterling (£), which is the parent company's functional and presentation currency, and all values are rounded to the nearest thousand except where otherwise indicated.

Basis of preparation

The Group consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, effective for the Group's reporting for the year ended 31 December 2015.

The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act, the separate financial statements have been prepared in accordance with IFRS. These financial statements have been prepared under the historical cost convention (except for available for sale financial assets) and the accounting policies have been applied consistently throughout the Group.

Going concern

These financial statements have been prepared on the going concern basis. As an exploration company the Directors are mindful that there is an ongoing need to monitor overheads and costs associated with delivering the exploration programme, and raise additional working capital on an ad hoc basis to support the Group's activities.

At the year end the Group had cash and cash equivalents amounting to £319,000, equity swap proceeds recoverable within one year of approximately £14,000, together with available for sale investments with  a market value in the region of £21,000. The Group also expects to receive
repayment from its joint venture, Zenit Madencilik San. ve Tic. A.S. of costs incurred on their behalf in the region of £880,000 once the mine has become operational. The company through its 86% owned subsidiary, Asgard Metals Pty. Ltd, has since the year end completed the sale of a package of tenements to Dakota Minerals Limited ("Dakota"), an ASX listed company, for a cash consideration of AU$147,000 and 22,500,000 shares in Dakota itself. A subsequent disposal of 9,511,739 shares has raised working capital of approximately £790,000 for the Group. At the date of this report the Company still owns 12,988,261 shares in Dakota with a market value of approximately £985,000 and currently has a cash balance of £944,000.

The Directors have prepared cash flow forecasts for the Group for the period to 30 June 2017 based on their assessment of the prospects of the Group's operations. These cash flow forecasts include the normal operating costs for the Group over the period together with the necessary and specific expenditure to meet the minimum licence expenditure requirements, as well as a drilling programme for 2016. These forecasts indicate that the Group may require additional funds in the foreseeable future, depending on the precise extent and timing of the drill programme, the timing of the payment of any taxes relating to the sale of the Dakota shares, the commencement of profitable cash flow from Red Rabbit and the quantum and value of any future disposal of Dakota shares.

In assessing the going concern assumption for the Group, the directors have excluded any financing of the Red Rabbit joint venture because the joint venture partner is currently funding all the costs of the development through a mixture of its own resources and bank facilities as required to complete construction of the mine and commence production.

Despite challenging capital markets, the Company and Group have been successful historically in raising equity finance and in light of this, the directors have a reasonable expectation of securing sufficient funding to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the consolidated financial statements.

New Accounting Standards and Interpretations

Effective and adopted during the year

Effective during the year

      ·   Annual improvements 2011-2013

Accounting standards in issue but not yet effective:
At the date of authorisation of these financial statements the following standards and interpretations, which have not been applied in these financial statements and which are considered potentially relevant, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

·    Annual improvements 2010-2012
·    Annual improvements 2012-2014
·    IFRS 9: Financial Instruments
·    IFRS 15: Revenue from contracts with customers
·    IFRS 16: Leases
·    Amendments to IAS 1 Disclosure Initiative
·    Amendments to IAS 16 and IAS 38: Clarification of acceptable Methods of Depreciation and Amortisation
·    Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
·    Amendments to IAS 7: Disclosure Initiative
·    Clarifications to IFRS 15: Revenue from Contracts with Customers

None of the new standards, interpretations and amendments, which are effective for periods beginning after 1 January 2015 and which have not been adopted early, are expected to have a material effect on the Group's future financial statements.

Significant accounting policies

Basis of consolidation
The consolidated financial statements comprise the financial statements of Ariana Resources PLC and its subsidiaries for the year ended 31 December 2015.

Subsidiaries are all entities over which the Group has power to direct  relevant activities. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The cost of an acquisition is measured at fair value of the assets and equity instruments acquired, and the liabilities incurred or assumed at the date of exchange.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balance between group entities are eliminated on consolidation.

The Group has applied IFRS 11 to all joint arrangements as of 1 January 2015. The Group identifies joint arrangements as those arrangements
in which two or more parties have joint control, where joint control is evidenced by the contractually agreed sharing of control of an arrangement, which exists where the decisions about the relevant activities require the unanimous consent of the parties sharing control.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor.

Joint operations are identified as those agreements whereby the parties have rights to the assets and obligations for liabilities relating to the arrangement. Joint operations are accounted for by recognising the operator's relevant share of assets, liabilities, revenues and expenses. The Group currently has no joint operations in existance.

Joint ventures are identified as those agreements whereby the parties have rights to the net assets of the arrangement and are accounted for using equity accounting in accordance with IAS 28. Interest in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that form part of the Group's net investment in the joint
ventures), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.

An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The results and assets and liabilities of our investments in our associates are incorporated in these financial statements using the equity
method of accounting except when classified as held for sale. Investments in associates are carried in the Group statement of financial position at cost as adjusted by post-acquisition changes in the Group's share of the net assets of the associates, less any impairment in the value of individual investments. Losses of the associates in excess of the Group's interest in those associates are not recognised.

In the Company accounts, investments in subsidiary undertakings are held at cost.

Income and expense recognition

The Group's other income otherwise represents consultancy fees and interest receivable from bank deposits. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective rate of interest applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Operating expenses are recognised in the statement of comprehensive income upon utilisation of the service or at the date of their origin and are reported on an accrual basis.

Foreign currency translation

Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The consolidated financial statements are presented in Pounds Sterling, which is the Group's presentation currency.

Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the comprehensive income statement.

Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
• income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transaction); and
• all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to shareholders' equity. When a foreign operation is sold, such exchange differences are recognised in the statement of comprehensive income as part of the gain or loss on sale.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Land                             -          not depreciated
Computer equipment     -          between 25% & 33%
Drilling equipment         -          between 10% & 20%
Fixtures and fittings       -          between 5% & 33%
Motor vehicles              -          between 20% & 25%

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of comprehensive income.

Depreciation charged on exploration and evaluation assets is capitalised within intangible exploration assets.

Intangible exploration assets
Intangible assets represent exploration and evaluation assets (IFRS 6 assets), being the cost of acquisition by the Group of rights, licences and know how. Such expenditure requires the immediate write-off of exploration and development expenditure that the Directors do not consider to be supported by the existence of commercial reserves.

All costs associated with mineral exploration and investments, are capitalised on a project-by-project basis, pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads and these assets are not amortised until technical feasibility and commercial viability is established.  If an exploration project is successful, the related expenditures will be transferred to mining assets and amortised over the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished or a project abandoned, the related costs are written off.

The recoverability of all exploration and development costs is dependent upon the discovery of economically recoverable reserves, the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition thereof.

Exploration and evaluation assets shall no longer be classified as such when the technical feasibility and commercial viability of extracting mineral resources are demonstrable. When relevant, such assets shall be assessed for impairment, and any impairment loss recognised, before reclassification to mine development.

Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets (except for intangible exploration assets) to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount  of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Available for sale financial assets

Available for sale financial assets include non-derivative financial assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. Shares in unlisted companies are recorded at cost. Any other financial assets within this category are measured subsequently at fair value, with changes in value recognised in equity, through other comprehensive income. Gains and losses arising from investments classified as available for sale are recognised in the consolidated statement of comprehensive income when they are sold or when the investment is impaired. In the case of impairment of available for sale assets, any loss previously recognised in equity is transferred to the consolidated statement of comprehensive income. Impairment losses recognised in the consolidated statement of comprehensive income on equity instruments are not reversed through the consolidated statement of comprehensive income. Impairment losses recognised previously on debt securities are reversed through the consolidated statement of comprehensive income when the increase can be related objectively to an event occurring after the impairment loss was recognised in the consolidated statement of comprehensive income.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset only when the contractual rights to cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amount it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or expired.

Financial Assets:

Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost less any provision for impairment.

Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on-demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash with three months or less remaining to maturity and are subject to an insignificant risk of changes in value.

Other financial assets
The equity swap agreement entered into with Lanstead Capital L.P. in 2013 is a non-derivative available for sale financial asset and its fair value has been determined by reference to the Company's share price at the balance sheet date.  Any gain or loss arising from a change in the fair value of an available for sale financial asset is recognised in other comprehensive income.

Financial liabilities and equity instruments:

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

The costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that would otherwise have been avoided.

Trade and other payables
Trade and other payables are initially measured at their fair value, and
are subsequently measured at amortised cost using the effective interest rate method.

Share-based payments
For such grants of share options, the fair value as at the date of grant is calculated using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that are likely to vest, except where forfeiture is only due to market-based conditions not achieving the threshold for vesting.

Where shares are issued in settlement of goods or services supplied, the relevant expense is recorded in the consolidated statement of comprehensive income, with the related share issue recorded within share capital and share premium.

Shareholder warrants
The shareholder warrants entitle shareholders to a number of common shares based upon the number of shares they subscribed for at the date of issue of the warrant instrument. The warrants relate to a transaction with the equity holders as opposed to a transaction in exchange for any goods or services. The equity component of the instrument is not considered material and there is no liability component arising as a result of these warrants. Upon exercise of the warrant, the proceeds received, net of attributable transaction costs, are credited to share capital and where appropriate share premium.

Taxation

Current income tax assets and liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting year, that are unpaid at 31 December 2015. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year.

Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted as at 31 December 2015 Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the consolidated statement of comprehensive income, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited to equity. The deferred tax asset arising from trading losses carried forward as referred to in Note 9 has not been recognised. The deferred tax asset will be recognised when it is more likely than not that it will be recoverable.

Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors who have been identified as responsible for allocating resources and assessing performance of the operating segments.

Accounting estimates and judgements:

The Group makes estimates and judgements regarding the future. Estimates and judgements are continually evaluated based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed as follows:

Accounting for Joint Venture
Management have reviewed the criteria of IFRS 11 and made a  judgement that despite its 69.58% shareholding, Zenit is a joint venture rather than a subsidiary due to the contractual agreement to share control of that company.

Intangible exploration assets
The Group determines that exploration costs are capitalised at the point the Group has a valid exploration licence. The recovery of the cost of the Group's exploration projects is reviewed in the light of future production estimates based upon ongoing geological studies. Over the longer term the actual mineable resources achieved may vary significantly from the
current estimates.

Impairment of assets
The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.

2. Staff costs

	2015 £'000	2014 £'000
Wages and salaries	288	273
Social security costs	4	6
	292	279

Total staff costs, including those capitalised within intangible assets, amounts to £378,000 (2014: £436,000).The average monthly number of employees (including Executive Directors) during the year was as follows:

	2015 Number	2014 Number
Exploration activities	10	10
Administration	4	4
	14	14

3.  Directors' emoluments

	2015 £'000	2014 £'000
Basic salary and fees	244	239
	244	239

Key management personnel consist of only the Directors. Details of share options and interests in the Company's shares of each Director are shown in the Directors' Report.

	Year	Salary & fees £'000	Pension £'000	Total £'000
Michael de Villiers	2015	98	-	98
	2014	94	-	94
Kerim Sener	2015	110	-	110
	2014	109	-	109
William Payne	2015	36	-	36
	2014	36	-	36

Kerim Sener in addition to his directors remuneration mentioned above, received a salary amounting to £nil from Galata Madencilik San. ve Tic. Ltd. during the year (2014: £7,222)

William Payne's services are provided by a firm of Chartered Accountants, further details of which are set out in Note 24.

4.  Other income

Other income represents:

	2015 £'000	2014 £'000
Consultancy and other income	15	-

5.  Operating loss

The operating loss is stated after charging:

	2015 £'000	2014 £'000
Depreciation - owned assets	1	1
Operating lease - office rental	4	4
Write down of Intangible exploration assets	521	65
Net foreign exchange gains	(10)	(3)
Fees payable to the Company's auditor for the audit of the Company's annual accounts	33	33
Fees payable to the Company's auditor for other services:
- The audit of the Company's subsidiaries	15	12

6.  Finance cost

	2015 £'000	2014 £'000
Swap charges on other financial assets	148	185

7. Share of profit loss of interest in joint venture

In July 2010 the Group entered into an agreement with Proccea Construction Co. ("Proccea") such that Galata Madencilik San. ve Tic. Ltd. ("Galata") would transfer its principal assets at Sindirgi and Tavsan, collectively known as the "Red Rabbit Gold Project" into a new wholly owned subsidiary, Zenit Madencilik San. ve Tic. A.S. ("Zenit"). Proccea earn their 50% share in Zenit by investing US$8m in the capital of Zenit, US$1.4m of such funds to be spent on a Feasibility Study and an Environmental Impact Assessment ("EIA"), with the balance on initial mine construction, once the Feasibility Study and EIA are completed satisfactorily. Proccea's stake in Zenit increased during the year to 30.42% (2014: 26.53%) as further shares were issued to them in accordance with the joint venture agreement. Ultimately profits from Zenit will be shared in the ratio of 51% the Group and 49% Proccea, but key decisions require approval from both the Group and Proccea.

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	2015 £'000	2014 £'000
Non-current assets	6,764	4,991
Current assets	10,097	401
Current and Non-current liabilities	(12,793)	(1,451)
Equity	4,068	3,941
Proportion of the Group's ownership	69.58%	73.47%
Carrying amount of Investment in Joint Venture	2,830	2,895

Summarised statement of Profit and Loss	2015 £'000	2014 £'000
Other income	104	-
Administrative expenses - including exchange losses	(295)	(166)
Loss for the period	(191)	(166)
Proportion of the Group's ownership	69.58%	73.47%
Group`s share of loss for the year	(133)	(122)
Increase in share of net assets following issue of shares in Zenit	68	228
Movement in interest in Joint Venture for the year	(65)	106

8. 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 is as follows:

• Mining - incorporates the acquisition, exploration and development of gold resources primarily in Turkey.

 

	2015			2014
	Mining £'000	Other reconciling items £'000	Group £'000	Mining £'000	Other reconciling items £'000	Group £'000
Administrative costs	-	(797)	(797)	-	(739)	(739)
General and specific exploration expenditure	(531)	-	(531)	(141)	-	(141)
Other income	15	-	15	-	-	-
Finance and swap costs	-	(148)	(148)	-	(185)	(185)
Movement in interest in a joint venture	(65)	-	(65)	106	-	106
Investment income	-	66	66	-	74	74
Tax	-	-	-	-	-	-
Loss after tax	(581)	(879)	(1,460)	(35)	(850)	(885)
Assets
Segment assets	5,074	1,120	6,194	6,232	492	6,724
Liabilities
Segment liabilities	(24)	(117)	(141)	(44)	(204)	(248)
Additions to segment assets
Intangible assets	260	-	260	271	-	271
Property plant & equipment	13	-	13	26	1	27
Depreciation	-	(1)	(1)	-	(1)	(1)

Other income includes consultancy and licence fees.

Reconciling items include non-mineral exploration costs and transactions between Group and associate companies.

Geographical segments

The Group's mining assets and liabilities are located primarily in Turkey.

	2015			2014
	Turkey £'000	United Kingdom £'000	Group £'000	Turkey £'000	United Kingdom £'000	Group £'000
Carrying amount of segment non-current assets	3,914	956	4,870	5,150	419	5,569

9. Taxation

	2015 £'000	2014 £'000
Current tax expense in respect of the current year	-	-

The charge for the year can be reconciled to the loss per the statement of comprehensive income as follows:

	2014 £'000	Restated* 2013 £'000
Loss before tax	(1,460)	(885)
Loss multiplied by the standard rate of corporation tax in the UK of 20.25% (2014: 21.50%)	(296)	(190)
Disallowable expenses	(14)	21
Effect of different tax rates and laws of subsidiaries operating in other jurisdictions	(1)	(1)
Effect of fair value adjustment on other financial asset	15	(20)
Losses to carry forward	296	190
Current tax charge	-	-

The Group has UK losses carried forward on which no deferred tax asset is recognised in the financial statements as the recovery of this benefit is dependent on future profitability, the timing of which cannot be reasonably foreseen. Total UK losses carried forward amount to £7,205,000 (2014:
£5,597,000). Turkish tax losses carried forward at the year-end amounted to £909,000 (2014: £548,000). These losses can be carried forward and used against future taxable income rates of 21% and 20% respectively, although the Turkish losses expire after five years. Of the total Turkish tax losses of £909,000, £212,000 arose in 2011 and the balance in the subsequent years. The tax loss carried forward for the Australian subsidiary, Asgard Metals Pty. Ltd. amounted to £3,000 (2014: £4,000).

Reductions in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and 18% (effective from 1 April 2020) where substantively enacted on 26 October 2015. A further reduction to the UK corporation tax rate was announced in the 2016 Budget to further reduce the tax rate to 17% (to be effective from 1 April 2020). This will reduce the company's future current tax charge accordingly.

10. Loss of parent company

As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was £749,000 (2014: £752,000).

11. Loss per share

The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of £1,460,000 (2014: £885,000) divided by the weighted average number of shares issued during the year being 735,545,283 shares (2014: 638,024,916) in issue. There is no dilutive effect of share options or warrants on the basic loss per share.

12. Intangible exploration assets

Group	Deferred exploration expenditure £'000
Cost
At 1 January 2014	1,951
Additions	271
Exchange movements	(11)
Costs written off	(65)
At 31 December 2014	2,146
Additions	260
Exchange movements	(96)
Reallocation of project costs to Joint Venture Company	(135)
Costs written off	(521)
At 31 December 2015	1,654
Net book value
At 1 January 2014	1,951
At 31 December 2014	2,146
At 31 December 2015	1,654

None of the Group's intangible assets are owned by the Company.

Group	Land £'000	Computer equipment £'000	Drilling equipment £'000	Fixtures & fittings £'000	Motor vehicles £'000	Totals £'000
Cost
At 1 January 2014	236	29	267	22	39	593
Additions	24	2	-	1	-	27
Disposals	-	-	-	-	-	-
Exchange movements	(5)	(2)	(2)	-	-	(9)
At 31 December 2014	255	29	265	23	39	611
Additions	-	3	-	-	10	13
Disposals	-	-	-	-	-	-
Exchange movements	(39)	(1)	(5)	(1)	(1)	(47)
At 31 December 2015	216	31	260	22	48	577
Depreciation
At 1 January 2014	-	24	144	19	35	222
Charge	-	2	18	1	2	23
Disposals	-	-	-	-	-
Exchange movements	-	(1)	(2)	-	-	(3)
At 31 December 2014	-	25	160	20	37	242
Charge	-	1	15	1	4	21
Disposals	-	-	-	-	-	-
Exchange movements	-	(1)	(9)	-	-	(10)
At 31 December 2015	-	25	166	21	41	253
Net book value
At 1 January 2014	236	5	123	3	4	371
At 31 December 2014	255	4	105	3	2	369
At 31 December 2015	216	6	94	1	7	324

The technical feasibility and commercial viability of extracting a mineral resource are not yet demonstrable in the above intangible exploration assets. These assets are not amortised, until technical feasibility and commercial viability is established. Intangible exploration costs written off represent costs relating to certain projects that are no longer considered economically viable or where exploration licences have been relinquished.

13. Land, property, plant & equipment

The Group's land, property, plant and equipment are free from any mortgage or charge.

The Group's land, property, plant and equipment are free from any mortgage or charge.

None of the Group's land, property, plant and equipment is owned by the Company.

 

14a. Available for sale investments

Group and Company	Non-current £'000	Current £'000	Total £'000
At 1 January 2014	109	-	109
Fair value adjustment	(87)	-	(87)
At 31 December 2015	22	-	22
Net book value
At 31 December 2015	22	-	22
At 31 December 2014	109	-	109

The non-current available for sale investment represents the cost of the Group's investment in Royal Road Minerals Limited (previously known as Tigris Resources Ltd), a company listed on the Toronto Venture Exchange.  As at 31^st December 2015 its impairment in its market valuation has been reflected in these accounts.

14b. Investments in Group undertakings

Company	Shares in Group undertakings £'000
Cost and Net book Value
At 1 January and 31 December 2015	274

The Company's investments at the balance sheet date comprise ownership of the ordinary share capital of the following companies:

Subsidiaries	Ownership	Country of incorporation	Nature of business
Ariana Exploration & Development Limited	100%	United Kingdom	Exploration
Portswood Resources Limited	100%	British Virgin Islands	Holding company
Galata Madencilik San. ve Tic. Ltd.	100%	Turkey	Exploration
Çamyol Gayrimenkul, Madencilik, Turizm, Tarim ve Hayvancilik Ltd.	99%	Turkey	Land acquisition
Asgard Metals Pty. Ltd.	86.05%	Australia	Exploration

Çamyol Gayrimenkul, Madencilik, Turizm, Tarim ve Hayvancilik Ltd. is involved with the acquisition of land in the mine development area of the Red Rabbit Gold Project. It is a subsidiary of Galata Madencilik San. ve Tic. Ltd.

Interest in associates

Ariana Exploration & Development Limited's investments at the balance sheet date comprise of the following companies:

Associates	Ownership	Country of incorporation	Nature of business
Greater Pontides Exploration B.V.	49%	Netherlands	Holding company
Pontid Madencilik San. ve Tic. Ltd.	49%	Turkey	Exploration

Greater Pontides Exploration B.V. was created in the Netherlands. This company, along with its wholly owned subsidiary - Pontid Madencilik San. ve Tic. Ltd., a private company incorporated in Turkey - was established originally with European Goldfields Limited as part of the agreement on the Artvin Project, and which the Group accounts for as an associate. European Goldfields Limited was acquired by Eldorado Gold Corporation in 2013. Ariana Exploration & Development Limited, a fully owned subsidiary of the Group holds 49% of the ordinary shares and Eldorado Gold Corporation, the other party to the agreement, holds the remaining 51% of the ordinary shares. The Greater Pontides Exploration B.V. Group is treated as an Associate investment for purposes of the Group consolidation as the Group has a significant influence over the financial and operating policy decisions but not control or joint control over these policies.

The carrying value of the Group's investment in Greater Pontides Exploration B.V. and subsidiaries at December 2015 is £nil (2014: £nil)

The reported loss of Greater Pontides Exploration B.V. in its unaudited company financial statements for the year ended 31 December 2015, amounted to US$17,965 (2014: US$274,042). The Group has made no provision in respect to the reported loss as there is no constructive or legal obligation for the Group to settle any future liabilities on their behalf. The functional currency for the Greater Pontides Exploration B.V. Group is US Dollars. The Group's share of the adjusted loss, converted into Pounds Sterling, has been included in the Consolidated Statement of Comprehensive Income, and amounted to £nil (2014 : £nil). All Associates have a reporting date of 31 December 2015.

The following is a summary of the financial information of the above associates:

	Associates
Share of Associate's balance sheet	Associate 100% 2015 US$'000	Ariana Share 2015 US$'000	Associate 100% 2014 US$'000	Ariana Share 2014 US$'000
Non-current assets	8,724	4,274	8,724	4,274
Current assets	3	1	4	2
Total assets	8,727	4,275	8,728	4,276
Current liabilities	(292)	(143)	(318)	(156)
Total liabilities	(292)	(143)	(318)	(156)
Net assets	8,435	4,132	8,410	4,120

In the absence of available audited consolidated group accounts for the Greater Pontides Exploration B.V., the figures stated above are extracted from the holding company's unaudited accounts.

15. Non-current trade and other receivables

	Group		Company
	2015 £'000	2014 £'000	2015 £'000	2014 £'000
Other receivables	42	37	-	-

Other receivables falling due after more than one year represent amounts due from the government of Turkey in respect of VAT relating to the Group's mining projects.

16. Other financial asset

In May 2013 the Company raised £1.25 million following the issue of 125 million new shares at 1p per share to Lanstead Capital L.P. ("Lanstead"). The Company received £250,000 in cash and entered into an equity swap price mechanism with Lanstead for the balance of these shares with consideration payable on a monthly basis over a period of 24 months. The Company also issued 12.5 million shares to Lanstead in consideration for the equity swap agreement. A second equity swap arrangement was entered into on similar terms with Lanstead for £152,000 during the January 2014 share placement, where the Company raised in total £789,000 following the issue of 87 million new shares at 0.9p per share.

The consideration from Lanstead has been treated as a non-derivative financial asset and its fair value has been determined by reference to the Company's share price at the balance sheet date as measured against a benchmark price of 1.33 pence for the first equity swap agreement and 1.20 pence per share for the second agreement entered into during this year. If the actual share price exceeds the benchmark price during any of the 24 settlement months, the Company will receive more than 100% of the monthly settlement due. Should the share price fall below the benchmark price, the Company will receive less than 100% of the expected monthly settlement on a pro rata basis.  The final settlement under this agreement was received in March 2016.

	Group and Company
	2015 £'000	2014 £'000
Fair value recognised at start of year	263	639
Swap settlement for shares	-	152
Capital repayments	(261)	(247)
Swap charges	(148)	(185)
Surplus/ (Loss) on revaluation at end of year	160	(96)
Fair value recognised at end of year	14	263

The amounts reported in the balance sheet relating to other financial instruments mature as follows:

	Group and Company
	2015 £'000	2014 £'000
Receivable within one year	14	250
Receivable within two  years	-	13
	14	263

 

17. Trade and other receivables

	Group		Company
	2015 £'000	2014 £'000	2015 £'000	2014 £'000
Amounts owed by Group undertakings	-	-	8,594	7,605
Amounts owed by Joint Venture Company	880	775	-	-
Other receivables	63	70	-	-
Prepayments	46	16	10	-
	989	861	8,604	7,605

The fair value of trade and other receivables is not materially different to the carrying values presented. The amounts owed by Group undertakings are interest free and repayable on demand.

18. Trade and other payables

	Group		Company
	2015 £'000	2014 £'000	2015 £'000	2014 £'000
Trade and other payables	49	131		-
Social security and other taxes	4	7		-
Other creditors	10	26		-
Accruals and deferred income	78	84	7	6
	141	248	7	6

The above listed payables were all unsecured. The fair value of trade and other payables is not materially different to the carrying values presented.

19. Share capital

Allotted, issued and fully paid ordinary 0.1p shares	Number	Ordinary Shares £'000	Deferred shares £'000	Share Premium £'000
In issue at 1 January  2015	645,816,141	645	4,995	7,583
Shares issued in the year	156,244,055	157	-	1,257
Less expenses on issue	-	-	-	(76)
In issue at 31 December 2015	802,060,196	­­802	4,995	8,764

During 2013 the existing ordinary shares were sub-divided into one new ordinary share of 0.1 pence ("New Ordinary Share") and one deferred share of 0.9 pence ("Deferred Share"). The New Ordinary Shares have a nominal value of 0.1 pence. The percentage of New Ordinary Shares held by each shareholder following the subdivision is the same as the percentage of existing ordinary shares held by him before the change.

Fully paid Ordinary Shares carry one vote per share and carry the right to dividends. Deferred Shares have attached to them the following rights and restrictions:

• they do not entitle the holders to receive any dividends and distributions;
• they do not entitle the holders to receive notice or to attend or vote at General Meetings of the Company;
• on return of capital on a winding up the holders of the Deferred Shares are only entitled to receive the amount paid up on such shares after the holders of the Ordinary Shares have received the sum of 0.1p for each ordinary share held by them and do not have any other right to participate in the assets of the Company.

During 2015 the Company issued 156,244,055 ordinary shares for a total net consideration of £1.34m for cash and in settlement of professional fees.

Potential issue of ordinary shares

Share options and warrants

At 31 December 2015 the Company had 12,800,000 options (2014: 15,941,000) and 41,877,777 warrants (2014: 5,000,000) outstanding for the issue of ordinary shares as follows:

Date of grant	Exercisable from	Exercisable to	Exercise price	Number granted	Lapsed options during the year	Number at 31 December 2015
Options
19 July 2005	19 July 2005	19 July 2015	8.8p	2,105,869	(2,105,869)	-
19 July 2005	19 July 2005	19 July 2015	8.8p	65,131	(65,131)	-
22 August 2005	22 August 2005	22 August 2015	13p	870,000	(870,000)	-
22 August 2005	22 August 2005	22 August 2015	13p	100,000	(100,000)	-
1 September 2006	1 September 2006	1 September 2016	13p	300,000	-	300,000
22 March 2011	22 March 2011	21 March 2018	5p	12,500,000	-	12,500,000
Total				15,941,000	(3,141,000)	12,800,000

Date of grant	Exercisable from	Exercisable to	Exercise price	Number granted	Lapsed warrants during the year	Number at 31 December 2015
Warrants
19 April 2013	19 April 2013	19 April 2018	2p	5,000,000	-	5,000,000
4 February 2015	4 February 2015	4 February 2018	1.8p	16,666,666	-	16,666,666
7 April 2015	7 April 2015	7 April 2018	1.8p	11,111,111	-	11,111,111
30 June 2015	30 June 2015	30 June 2018	1.8p	8,333,333	-	8,333,333
29 July 2015	29 July 2015	29 July 2018	0.99	766,667	-	766,667
Total				41,877,777	-	41, 877,777

No options were issued or exercised in the year.

20. Notes to the cash flow statement

Cash generated from Group operations

The following non-cash flow adjustments have been made to the pre-tax results for the year:

	2015 £'000	2014 £'000
Loss before tax	(1,460)	(885)
Other financial asset charges	148	185
Change in Joint Venture asset	65	(106)
Investment income	(66)	(74)
Adjusted for:
Write down of intangible exploration assets	521	65
Fair value adjustment	87	-
Depreciation	1	1
Operating income before working capital changes
Change in non-current assets to exchange movements	(132)	40
Change in trade and other receivables	(3)	(88)
Change in trade and other payables	108	69
Foreign exchange differences	(374)	(19)
Cash used in Group operations	(1,105)	(812)

21. Contingent liabilities

The Group had no contingent liabilities at the year end (2014: £nil).

22. Operating lease arrangements

At the year end, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	2015 £'000	2014 £'000
Within one year	15	12

23. Capital commitments

The Group had no authorised or unauthorised capital commitments at the year end (2014: £nil).

24. Related party transactions

Group companies

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

Ariana Resources PLC is the beneficial owner and controls, or is in joint venture with, the following companies and as such are considered related parties: Ariana Exploration & Development Limited
Portswood Resources Limited Galata Madencilik San. ve Tic. Ltd. Zenit Madencilik San. ve Tic. A.S. (joint venture) Çamyol Gayrimenkul, Madencilik, Turizm, Tarim ve Hayvancilik Ltd. Asgard Metals Pty. Ltd.

The only transactions during the year between the Company and its subsidiaries were intercompany loans, which were interest free and payable on demand and included the following:
Loans payable by Ariana Exploration & Development Limited and Galata Madencilik San. ve Tic. Ltd. to Ariana Resources PLC amounted to £8,586,506 (2014: £7,062,237) and £7,614 (2014: £542,565) respectively.

William Payne is a partner in Wilkins Kennedy LLP, Chartered Accountants, the firm which provides his services. During the year end December 2015, Wilkins Kennedy LLP were paid £36,000 (2014: £36,000) in respect of his services as a Director, and £48,550 (2014: £62,750) in respect of accounting and management services. Fees paid for WJB Payne's services are included as part of directors emoluments declared in Note 3. At the year end the Group owed Wilkins Kennedy LLP £28,232 (2014: £62,814).

As detailed in Note 14a, the Group has an investment in Royal Road Minerals Limited, a company involved in gold exploration in southern Turkey.

Matrix Exploration Pty. Ltd., a company majority owned by Dr. Kerim Sener, charged the Company £31,266 (2014: £31,466) for office rent and other services. At the year end the Company owed Matrix Exploration Pty. Ltd. £nil (2014: £6,987).

Dr. Francis Wedin, former director of Asgard Metals Pty. Ltd. holds 13.94% of the share capital of that company.

Joint Venture companies

Loans payable on demand by Zenit Madencilik San. ve Tic. to A.S. to Galata Madencilik San. ve Tic. Ltd. amounted to £744,119 (2014: £774,988) and £135,754 to Ariana Exploration and Development Ltd. Interest receivable has been included under Investment Income in the statement of comprehensive income and amounted to £63,929 (2014: £70,017).

Associated companies

Transactions between the Group and its associated companies, which are related parties, have been included on consolidation.

25. Post year end events

During February 2016 the Group, through its 86%-owned 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 ("Dakota"), as announced on 18 December 2015. The initial consideration included cash payments totalling AU$147,000 and 22,500,000 fully paid ordinary shares in Dakota. Asgard is also to benefit from a fixed consulting fee of AU$98,000 over the course of 12 months and up to 29,400,000 performance shares which are to be issued on the achievement of certain project milestones.

As at the end of May Proccea owns approximately 42% of Zenit Madencilik and is continuing equity-funding through the construction stage, formally committing the final US$2.1 million to earn-in to 50% of the JV.

26. Capital management policies and procedures

The Group's capital management objectives are:

• To ensure the Group's ability to continue as a going concern;
• To increase the value of the assets of the business;
• To provide an adequate return to shareholders in the future when exploration assets are taken into production; and
• To secure sufficient funding to bring the Red Rabbit Project into production.

These objectives will be achieved by identifying the right exploration projects, adding value to these projects (principally Red Rabbit) and ultimately taking them through to production and cash flow, either with partners or by our own means.

The Group monitors capital on the basis of the carrying amount of equity, cash and cash equivalents as presented on the face of the consolidated statement of financial position. Movements in capital for the year under review are summarised in Note 19 and in the consolidated statement
of changes in equity.

The Group manages its capital structure in response to changes in economic conditions and in accordance with the Group's objective to bring the Red Rabbit Project into production.

27. Financial instruments

In the normal course of its operations, the Group and Company are exposed to gold prices, currency, interest rate, and liquidity risk.

The Group and Company use financial instruments, other than derivatives, comprising, short term deposits, cash, liquid resources and various
items such as sundry debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations.

The main risks arising from the Group's and Company's financial instruments are liquidity and currency differences on foreign currency net investments. The Directors review and agree policies for managing these risks and these are summarised below.

Market operational risk

The nature of the Group's and Company's investments requires the commitment of significant funding to finance its mining projects. It is the nature of mining operations that each project is long term before exploration proves to be viable and progresses to reach commercial production. To control these risks the Board arranges for the provision of technical support, commissions technical research and feasibility studies both prior to entering into these commitments and subsequently over the life of these projects.

Liquidity risk

The Group and Company seek to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Board will seek additional funds from the issue of share capital and warrants where appropriate, by reviewing financial and operational budgets and forecasts. The Group and Company's financial liabilities, including interest bearing liabilities, trade and other payables all of which will be settled within six months.

Credit risk and Treasury management

The Company has borrowings outstanding from its subsidiaries, the ultimate realisation of which depends on the successful exploration and realisation of the Group's intangible exploration assets. This in turn is subject to the availability of financing to maintain the ongoing operations of the business. The Group manages its financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

Foreign currency risk

Foreign exchange risk arises due to the Group's and Company's primary operations being in Turkey. The Group and Company have a general policy of not hedging against its exposure of foreign investments in foreign currencies. The Group and Company are exposed to translation and transaction foreign exchange risks and take profits or losses on these as they arise.

Borrowing facilities and interest rate risk

The Group and Company finances its operations primarily through the issue of equity share capital and debt in order to ensure sufficient cash resources are maintained to meet short-term liabilities and future project development requirements. Additional cash was received during the year as a result of further capital raising activities. Cash assets returned on average an interest rate of 0.5% during the year. Cash deposits are kept under regular review, with reference to future expenditure requirements, and to maximise interest receivable.

Interest rate sensitivity

(a)  The Group and Company have limited exposure to changes to Interest rates both locally and in Turkey since the interest accruing on bank deposits was relatively immaterial.

(b) The Group and Company have no interest rate exposure on the loan finance provided during the year as the amounts owed by Group undertakings are interest free.

Fair values of financial instruments

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Set out below is a comparison by category of carrying amounts and fair values of all the Group's financial instruments:

	Carrying amount		Fair values
	2015 £'000	2014 £'000	2015 £'000	2014 £'000
Financial assets
Cash and cash equivalents	319	44	319	44
Available for sale financial assets
Other financial asset (current) - Level 2	14	250	14	250
Other financial asset (non-current) - Level 2	-	13	-	13
Loans and receivables
Trade and other receivables (current)	989	861	989	861
Trade and other receivables (non-current)	42	37	42	37
Financial liabilities
Financial liabilities measured at amortised cost
Trade and other payables	(141)	(248)	(141)	(248)

The fair value of trade and other receivables is estimated as the present value of future cash flows discounted at the market rate of interest at the reporting date. For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect fair value. All other receivable and payables are discounted to determine the fair value.

Level 2 fair value measurements have been determined by reference to observable data in quoted markets at the balance sheet dates.
All payables for the Company and the Group are considered repayable on demand.

Differences arising between the carrying and fair value are considered not significant to adjust for in these accounts.

The carrying and fair value of intercompany balances are the same as if they are repayable on demand.

Editor's Notes

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 being assessed as to their economic merits and now form part of a Joint Venture with Proccea Construction Co.  The Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is currently in construction.  The total resource inventory at the Red Rabbit Project and wider project area 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.  Loeb Aron & Company Ltd. will continue to act as a market advisor to the Company until June 2016.

For further information on Ariana you are invited to visit the Company's website at www.arianaresources.com.

Ends