29 September 2017
AIM: AAU

INTERIM RESULTS

Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company operating in Turkey, is pleased to announce its unaudited interim results for the six months ended 30 June 2017.

Highlights:

  • Kiziltepe Mine (Red Rabbit JV) delivered its first gold-silver pour in March 2017, with commissioning and production ramp-up continuing through the period.

     
  • Pilot gold and silver production during the commissioning phase, to the end of June 2017, totalled 1,929oz and 14,519oz respectively, the sale of which generated maiden revenues for the JV company.
     
  • Commercial production was declared in July 2017, shortly after the period end, and the mine has continued to operate as planned and within its design specifications.
     
  • The mine has been operational for over two full quarters and production remains in line with management forecasts; reporting of the Q3 2017 operational results will occur during October.

Michael de Villiers, Chairman, commented:

"We continue to be very encouraged by the performance of our first gold-silver mine in Turkey, which is being operated by our 50:50 JV partners, Proccea Construction Co.  The Kiziltepe Mine has been operational now for over two quarters, with ramp-up occurring largely between March and the end of June.  This solid progress led to the commencement of commercial production during July of this year. The results to be shown in future periods will be more informative regarding the mine's operational performance*.

The results for the Group for the six-month period to June are in line with expectations.  Operating costs are slightly higher than in previous periods due to increased professional fees and salary costs, in part due to our wider footprint in Turkey as a result of our 100% ownership of Salinbas.  The other significant financial activity in the period related to the issue of equity of £2.9m to finance work at both Red Rabbit and Salinbas and which has helped maintain significant developments on both fronts.

We look forward to keeping the market updated on our progress across our exploration and development portfolio in the coming months.  We will also be updating the market later in October on the results of our Q3 operational performance from the Kiziltepe Mine, when our first commercial JV production will be recognised."

* It is important to note that revenues realised from the operation will be accounted for at the JV company level, such that on consolidation we show our share of the Joint Venture's results for the period using the equity method of accounting rather than a line by line consolidation, in accordance with IAS 28.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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 originally selected on the basis of its in-house geological and remote-sensing database.

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, form part of a 50:50 Joint Venture with Proccea Construction Co.  The Kiziltepe Sector of the Red Rabbit Project is fully-permitted and is currently in production.  The total resource inventory at the Red Rabbit Project and wider project area stands at c. 605,000 ounces of gold equivalent.  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on production is payable to Franco-Nevada Corporation.  At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.

In north-eastern Turkey, Ariana owns 100% of the Salinbas Gold Project, comprising the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects.  The total resource inventory of the Salinbas project area is c. 1 million ounces of gold equivalent.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation.

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 2017

Condensed consolidated statement of comprehensive income

    6 months to 6 months to 12 months to
    30 June 30 June 31 December
    2017 2016 2016
  Note £'000 £'000 £'000
         
Administrative costs   (580) (360) (930)
         
General exploration expenditure   (8) (50) (118)
         
         
Operating loss   (588) (410) (1,048)
 

Other income
 

(4)
 

-

 
 

475

 
 

1,215

 
Gain on acquisition of remaining interest in Joint Venture   - - 12,435

 
Investment income   75 43 103

 
Profit on disposal of available for sale investments   3 626 810

 
Share of profit on dilution of interest in joint Venture (5) - 279 677

 
Share of profit/(loss) of joint venture (5) (153) 130 20
         
         
Profit/(loss) on ordinary activities before tax   (663) 1,143 14,212
         
Taxation (7) - (390) (486)
         
Profit/(loss) for the period   (663) 753 13,726
         
         
Other comprehensive income:

 

Items that may be reclassified subsequently to profit or loss when specific conditions are met.

 
       
Exchange differences on translating foreign operations   (239) 83 (5)
         
Fair value adjustment on available for sale investments (9) (130) 433 23
         
Other comprehensive income for the period
net of tax
   

(369)
 

516
 

18
         
Total comprehensive income for the period   (1,032) 1,269 13,744
         
Profit/(loss) for the period attributable to owners of the parent company    

(663)
 

753
 

13,726
         
Total comprehensive income attributable to owners of the parent company    

(1,032)
 

1,269
 

13,744
         
Profit/(loss) per share (pence)        
Basic and diluted (8)                  (0.07)                   0.09                      1.67



Condensed consolidated interim statement of financial position

    30 June 30 June 31 December
    2017 2016 2016
  Note £'000 £'000 £'000
         
ASSETS        
Non-current assets        
Trade and other receivables   113 45 120
Available for sale investments (9) - 51 -
Intangible exploration assets (10) 17,978 1,789 17,965
Land, property, plant and equipment   316 351 319
Investment in Joint Venture (5) 3,374 3,239 3,527
         
Total non-current assets   21,781 5,475 21,931
         
         
Current assets        
Trade and other receivables (11) 3,394 1,110 1,689
Available for sale investments (9) 691 575 866
Cash and cash equivalents   565 822 440
         
Total current assets   4,650 2,507 2,995
         
Total assets   26,431 7,982 24,926
         
         
EQUITY        
Called up share capital (12) 6,056 5,805 5,836
Share premium (12) 11,735 8,845 9,241
Other reserves   720 720 720
Share based payments   571 578 571
Translation reserve   (779) (452) (540)
Retained earnings   3,574 (8,085) 4,367
         
 

Total equity attributable to equity holders of the parent
   

21,877
 

7,411
 

20,195
         
         
LIABILITIES        
Non-Current Liabilities        
Deferred tax Liability   2,273 - 2,273
Other financial liabilities   1,651 - 1,651
         
Total non-current liabilities   3,924 - 3,924
         
Current liabilities        
Trade and other payables   630 571 807
         
Total current liabilities   630 571 807
         
Total equity and liabilities   26,431 7,982 24,926



Condensed consolidated interim statement of changes in equity

   

 

 

Share
capital
 

 

 

Share
premium
 

 

 

Other
reserves
 

 

 

Share
options
 

 

Trans-
lation
reserves
 

 

 

Retained
losses
 

 

Non-
controlling
interests
Total
attributable
to equity
holder of
parent
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
                 
Balance at 1 January 2016 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
                 
Changes in equity
to 31 December 2016
               
                 
Profit for the period - - - - - 12,973 - 12,973
Other comprehensive income - - - - (88) (410) - (498)
                 
Total comprehensive income - - - - (88) 12,563 - 12,475
                 
Cancellation of share options - - - (7) - 7 - -
Issue of share capital 31 443 - - - - - 474
Share issue costs - (47) - - - - - (47)
Non-controlling Interest
-acquisition of shares in subsidiary
 

-
 

-
 

-
 

-
 

-
 

(118)
 

-
 

(118)
                 
Transactions with owners 31 396 - (7) - (111) - 309
                 
Balance at 31 December 2016 5,836 9,241 720 571 (540) 4,367 - 20,195
                 
Changes in equity
to 30 June 2017
               
                 
Loss for the period - - - - - (663) - (663)
Other comprehensive income - -

 
- - (239) (130) - (369)
                 
Total comprehensive income - - - - (239) (793) - (1,032)
                 
Issue of share capital 220 2,680 - - - - - 2,900
Share issue costs - (186) - - - - - (186)
                 
Transactions with owners 220 2,494 - - - - - 2,714
                 
Balance at 30 June 2017 6,056 11,735 720 571 (779) 3,574 - 21,877



Condensed consolidated Interim statement of cash flows

  6  months to 6 months to 12 months to
  30 June 30 June 31 December
  2017 2016 2016
Cash flows from operating activities

 
£`000

 
£`000

 
£`000

 
Profit/(loss) before tax (663) 1,143 14,212
Adjustments for:      
Profit on disposal of available for sale investments (3) (626) (810)
Other income - non cash consideration received in shares - - (1,148)
Depreciation of non-current assets 1 1 1
Disposal of intangible exploration assets - Australian tenements and licences - 50 51
Gain on acquisition of remaining interest in Joint Venture (excluding cash acquired) - - (12,386)
Fair value adjustments 130 (433) (23)
(Increase)/decrease  in investment in Joint Venture asset 153 (409) (697)
Investment income (75) (43) (103)
Movement in working capital (457) (317) (903)
       
Increase/(decrease)  in non-current assets due to exchange movements                    50 (56) 51
(Increase)/decrease  in trade and other receivables (624) 123 (660)
Increase/(decrease) in trade and other payables (86) (102) 237
Foreign exchange differences on retranslation of assets and liabilities (239) 83 (5)
Cash outflow from operating activities (1,356)  (269) (1,280)
       
Taxation paid (91)  (60)  (77)
Net cash used in operating activities (1,447) (329) (1,357)
       
Cash flows from investing activities      
Purchase of land, property, plant and equipment (17) (10) (19)
Payments for intangible assets (175) (136) (149)
Investment income 75 43 103
Net cash used in investing activities (117) (103) (65)
   

 
   
Cash flows from financing activities      
Proceeds from disposal of available for sale investments 48 832

 
1,103

 
Proceeds from issue of share capital 1,641 103 440
Net cash proceeds from financing activities 1,689 935 1,543
       
Net increase in cash and cash equivalents 125 503 121
Cash and cash equivalents at beginning of period/year 440 319 319
Cash and cash equivalents at end of period/year 565 822 440



Notes to the interim financial statements for the six months ended 30 June 2017

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 2016, 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 2016 were approved by the Board of Directors on 2 June 2017 and delivered to the Registrar of Companies.  The financial information for the periods ended 30 June 2017 and 30 June 2016 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 2016.

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 £2.9m (gross) in the six month period from two issues of new equity and the Directors remain confident that if future funding is required they will be able to raise this finance to meet the Group's exploration and development programme and associated overhead cost.  The second issue of equity took place near the period end and £1.07m was still to be received as at 30 June 2017, as set out in note 11.  This sum was received after that date.

4. Other income 30 June 30 June 31 December
  2017 2016 2016
  £'000 £'000 £'000
       
Consideration in cash and shares for disposal of Australian tenements and licences  

-
 

468
 

1,148
Consultancy fees - 7 67
       
  - 475 1,215
       

5. Interest in joint venture

The Group accounts for its joint venture with Proccea Construction Co in Zenit Madencilik San. ve Tic. A.S. ("Zenit") using the equity method in accordance with IAS 28 (revised). At 30 June 2017 the Group has a 50% 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:

  30 June 30 June 31 December
  2017 2016 2016
Summaries statement of financial position £'000 £'000 £'000
       
Non-current assets 35,337 24,253 23,505
Current assets 4,314 821 15,081
Current and non-current liabilities (32,903) (18,596) (31,532)
       
Equity 6,748 6,478 7,054
       
Proportion of Group's ownership 50% 50% 50%
       
Carrying amount of Investment in Joint Venture 3,374 3,239 3,527
       

  30 June 30 June 31 December
  2017 2016 2016
Summaries statement of profit and loss £'000 £'000 £'000
       
Other income 188 202 483
Administrative expenses - including exchange gains/(losses) (494) 58 (443)
       
Profit/(loss) for the period (306) 260 40
       
Proportion of Group's ownership 50% 50% 50%
       
Group's share of profit/(loss) for the period

 
(153) 130 20
Increase in share of net assets following
issue of shares in Zenit
 

-
 

279
 

677

 
       
Movement in interest in Joint Venture for the period (153) 409 697
       

During the commissioning phase of the Kiziltepe Gold and Silver Mine, all revenues and costs associated with production during the ramp-up period ending 30 June 2017 have been capitalised and included under development expenditure in accordance with pre-commercial production protocol. Gold and silver production during this commissioning phase totalled 1,929 oz and 14,519 oz respectively.  The Company considers that Zenit commenced commercial production during July 2017.

In future accounting periods, more detailed production accounting information will be included in the notes to the Group accounts, as it not permitted to consolidate using acquisition accounting the results of 50% held joint venture enterprises such as Zenit. It will therefore continue to be reported as an investment in the Consolidated Balance sheet and the Consolidated Income Statement will include our share of Zenit's profit or loss for each particular period.
 
 
6. 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 2017 30 June 2016 31 December 2016
    Other     Other     Other  
    reconciling     reconciling     reconciling  
  Mining items Group Mining items Group Mining items Group
                   
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
                   
Administrative costs - (580)

 
(580) - (360) (360) - (930) (930)

 
General and specific exploration expenditure  

(8)
 

-
 

(8)
 

(50)
 

-
 

(50)
 

(118)
 

-
 

(118)

 
Other income

 
- - - 475 - 475 1,215 - 1,215

 
Profit on disposal of AFS investments 3 - 3 626 - 626 810 - 810
                   
Gain on acquisition in interest in Joint venture - - - - - - 12,435 - 12,435

 

 
Movement in interest in a joint venture

 
 

(153)
 

-

 
 

(153)
 

409
 

-
 

409
 

697
 

-

 
 

697
Investment income

 
- 75 75 - 43 43 - 103 103
Tax - - - (390) - (390) (486) - (486)
                   
Profit/(loss) after tax (158) (505) (663) 1,070 (317) 753 14,553 (827) 13,726
                   
                   
Assets                  
Segment assets 24,116 2,314 26,431 7,395 587 7,982 24,072 854 24,926
                   
                   
Liabilities                  
Segment liabilities (4,282) (272) (4,554) (398) (173) (571) (4,539) (192) (4,731)
                   

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

Geographical segments

All of the Group's mining assets and liabilities are located primarily in Turkey.

  30 June 2017 30 June 2016 31 December 2016
    United     United     United  
  Turkey Kingdom Group Turkey Kingdom Group Turkey Kingdom Group
                   
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
                   
Carrying amount of segment non- current assets  

 

20,844
 

 

937
 

 

21,781
 

 

5,423
 

 

52
 

 

5,475
 

 

20,994
 

 

937
 

 

21,931

7. Taxation

The Group has incurred tax losses for the period and a corporation tax charge is not anticipated.

8. Profit per share

The calculation of basic loss per share is based on the loss after taxation attributable to ordinary shareholders of £663,000 divided by the weighted average number of shares in issue during the period, being 903,412,283.

9. Available for sale Investments

Company Non- Current Current Total
  £'000 £'000 £'000

 
Valuation at 1 January 2016
Additions
Disposals
22
-
-
-
380
(209)
22
380
(209)
Fair value adjustment 29 404 433
       
 

Valuation at 30 June 2016
 

51
 

575
 

626
       
Additions
Disposals
-
-
734
(84)
734
(84)
Fair value adjustment
Transfer to current assets
(5)
(46)
(403)
46
(408)
-
       
 

Valuation at 31 December 2016
 

-
 

866
 

866
       
Disposals - (45) (45)
Fair value adjustment - (130) (130)
 

Valuation at 30 June 2017
 

-
 

691
 

691
       
       
Net book value      
At 30 June 2017 - 691 691
       
At 31 December 2016 - 866 866
       
At 30 June 2016 51 575 626
       

Available for sale investments represent the Group's investment in Novo Litio Limited (previously Dakota Minerals Limited) and Kingston Resources Limited, both listed on the Australian Securities Exchange and the Company`s  investment in Royal Road Minerals Limited, a company listed on the Toronto Venture Exchange and all are stated at their market value at the period end.

As at 30 June 2017 due to changes in the market value of these investments, a fair value loss totaling £130,000 has been reflected in these accounts.

10. Intangible exploration assets £'000  
     
Six months ended 30 June 2016    
     
Opening net book value at 1 January 2016 1,654

 
 
Additions 136

 
 
Disposals (50)

 
 
Exchange movements 49  
     
     
Closing net book value at 30 June 2016 1,789  
     
Six months ended 31 December 2016    
     
Opening net book value at 1 July 2016 1,789

 
 
Additions 13

 
 
Disposals (1)

 
 
Additions through acquisition of remaining interest in Joint Venture 16,210

 
 
Exchange movements (46)  
     
     
Closing net book value at 31 December 2016 17,965  
     
Six months ended 30 June 2017    
     
Opening net book value at 1 January 2017

 
17,965  
Additions

 
175

 
 
Exchange movements (162)

 
 
     
Closing net book value at 30 June 2017 17,978  

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

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.

11. Trade and other receivables 30 June 30 June 31 December
  2017 2016 2016
  £'000 £'000 £'000
       
Amounts owed by Joint Venture Company 2,120 941 1,597
       
Other receivables 85 70 48
       
Prepayments and accrued income 116 99 44
       
Share capital receivable 1,073 - -
       
  3,394 1,110 1,689
       

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

12. Called up share capital and share premium        
         
Allotted, issued and fully paid 0.1p shares        
  Number Share Deferred Share
  of shares Capital Shares Premium
  £'000 £'000 £'000 £'000
         
At 1 January 2016 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
         
Shares issued in period (net of expenses) 31,666,666 31 - 396
         
         
At 31 December 2016 841,541,790 841 4,995 9,241
         
Shares issued in period (net of expenses) 210,096,154 220 - 2,494
         
         
At 30 June 2017 1,051,637,944 1,061 4,995 11,735

During 2017 the Company issued 210,096,154 ordinary shares for a total gross consideration of £2,900,000 for cash and in settlement of professional fees.

At 30 June 2017 the Company had 12,500,000 options and 32,777,777 warrants outstanding for the issue of ordinary shares. No options or warrants were issued or exercised during the six month period.

13. Approval of interim financial statements

The interim financial statements were approved by the Board of Directors on 29 September 2017.


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Ariana Resources plc via Globenewswire