Ariana Resources PLC

Ariana Resources PLC - INTERIM RESULTS

RNS Number : 2524C
Ariana Resources PLC
28 September 2018
 

 

 

 

 

 

 

 

28 September 2018

AIM: AAU

 

INTERIM RESULTS

 

 

Ariana Resources plc ("Ariana" or "the Company"), the exploration and development company operating in Turkey, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.

 

Financial Highlights:

 

·     Ariana's share of profits from Kiziltepe amount to £1.1m in 6 months to June 2018, compared to £1.8m in year ended December 2017.

 

·     Profit before tax of £0.3m recorded for period, with operating costs in line with expectations and prior year.

 

·     Overall exploration expenditure is consistent with prior period at £0.25m.

 

Operational Highlights:

 

·     Gold production guidance for 2018 from our Joint Venture at Kiziltepe is c. 20,000 oz Au, a c. 47% increase on an annualised basis (2017: 10,191 oz Au).

 

·     Gold production to the end of June 2018 totalled 12,037oz; production for the year is expected to exceed initial expectations in the second half.

 

·     JORC Exploration Target of up to 2.7Moz gold and 16.1Moz silver established for the Salinbas Project, excluding current JORC Indicated and Inferred Resources of c.1Moz gold.

 

·     Tavsan resource was updated to a global 3.98Mt at 1.32 g/t Au and 4.46 g/t Ag for 168,900 oz Au and 571,700 oz Ag (Measured, Indicated, Inferred).

 

·     Kepez resource was updated to a global resource of 0.37Mt at 2 g/t Au and 14 g/t Ag for 23,900 oz gold and 164,300 oz silver (Indicated, Inferred).

 

·     Metallurgical testwork following trial mining at Kizilcukur demonstrates high gold recoveries ranging from c. 83 to 92%.

 

 

Michael de Villiers, Chairman, commented: 

 

"I am very pleased to be able to report further exceptional progress from our operations in Turkey in the first half of the year.  During the period, the performance of our gold-silver mine in Turkey, which is being operated by our 50:50 JV partners, Proccea Construction Co., reached record levels. The Kiziltepe Mine has been commercially operational for 15 months now, and operating cash costs are continuing generally in the sub-US$600 per ounce region, with the last reporting quarter recording a cash cost of US$371 per ounce.  JV revenue* for the six-month period reached just over US$17 million.

 

"As a result of this strong cash-flow profile, since February 2018 our subsidiary in Turkey, Galata Madencilik San. ve Tic. Ltd. has been receiving regular monthly repayments of its loans to Zenit.  To date our subsidiary has received US$1.23 million from our JV, equating to an average repayment of US$175,000 per month.  Between now and the year-end we are expecting that cash flow will continue to be received at similar and perhaps somewhat higher levels, with the current gold price being the most significant moderating factor. 

 

"In the background, we are also making significant progress on other facets of our exploration and development portfolio.  Recent resource updates have established a substantial JORC Exploration Target at the Salinbas Project, a revised and more robust mineral resource estimate for Tavsan and significant developments at our 100%-owned peripheral projects at Ivrindi and Kizilcukur.   We are now in the process of committing to a 4,000m RC and diamond drilling programme across certain projects during the remaining 2018 through to 2019 period.  These programmes are to be funded from current resources and future cash-flow.

 

"We are also carefully evaluating a few opportunities outside of the current portfolio that have the potential to strengthen and diversify the Company in terms of commodity and geography, as part of our core strategy to future-proof the business and unlock value for shareholders.  We look forward to keeping the market updated on our progress across our exploration and development portfolio in the coming months.  In addition, we have also recently adopted the QCA Corporate Governance Code and our Corporate Governance Statement is now available on our website."

 

 

* 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

 

 

 

Panmure Gordon (UK) Limited

Tel: +44 (0) 20 7886 2500

Adam James / James Stearns

 

 

 

Yellow Jersey PR Limited

Tel: +44 (0) 7544 275 882

Tim Thompson / Harriet Jackson

/ Henry Wilkinson

arianaresources@yellowjerseypr.com

 

 

Editors' Note:

 

About Ariana Resources:

 

Ariana is an exploration and development company with mining operations focused on epithermal gold-silver and porphyry copper-gold deposits in Turkey, the largest gold producing country in Europe. The Company is developing a portfolio of prospective licences originally selected on the basis of its in-house geological and remote-sensing database, which now contain a total of 1.6 million ounces of gold and other metals (as at end-2017). Ariana's objective is to cost-effectively add value to its projects through focused exploration and to develop its operations, primarily through well-financed joint ventures. 

 

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 (as at end-2017). 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.

 

Panmure Gordon (UK) Limited are broker 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 2018

 

Condensed consolidated statement of comprehensive income

 

 

 

6 months to

6 months to

12 months to

 

 

30 June

30 June

31 December

 

 

2018

2017

2017

 

Note

£'000

£'000

£'000

 

 

 

 

 

Administrative costs (including share based payment charge)

(11)

 

(801)

(580)

(1,311)

 

 

 

 

 

Exploration expenditure written off

 

(111)

(8)

(392)

 

 

 

 

 

 

 

 

 

 

Operating loss

 

(912)

(588)

(1,703)

 

 

 

 

 

Investment income

 

85

75

176

 

Profit/(loss) on disposal of available for sale investments

 

(3)

3

117

 

Share of profit/(loss) of  joint venture

(4)

1,149

(153)

1,834

 

 

 

 

 

 

 

 

 

 

Profit/(loss) on ordinary activities before tax

 

319

(663)

424

 

 

 

 

 

Taxation

(6)

-

-

-

 

 

 

 

 

Profit/(loss) for the period

 

319

(663)

424

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

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

 

 

 

 

 

Exchange differences on translating foreign operations

 

(934)

(239)

(1,363)

 

 

 

 

 

Fair value adjustment on available for sale investments

(8)

(16)

(130)

(53)

 

 

 

 

 

Other comprehensive (loss) for the period

net of tax

 

 

(950)

 

(369)

 

(1,416)

 

 

 

 

 

Total comprehensive (loss) for the period

 

(631)

(1,032)

(992)

 

 

 

 

 

Profit/(loss) for the period attributable to: Owners of the parent company

 

 

319

 

(663)

 

424

 

 

 

 

 

Total comprehensive (loss) attributable to: Owners of the parent company

 

 

(631)

 

(1,032)

 

(992)

 

 

 

 

 

Profit/(loss) per share (pence)

 

 

 

 

Basic and diluted

(7)

                   0.03

                (0.07)

                     0.04

 

 

 

 

 

 

 

 

 

Condensed consolidated interim statement of financial position

 

 

 

30 June

30 June

31 December

 

 

2018

2017

2017

 

Note

£'000

£'000

£'000

 

 

 

 

 

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Trade and other receivables

 

84

113

93

Intangible exploration assets

(9)

17,182

17,978

17,527

Land, property, plant and equipment

 

272

316

289

Investment in Joint Venture

(4)

3,230

*1,098

2,467

 

 

 

 

 

Total non-current assets

 

20,768

19,505

20,376

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

(10)

2,289

3,394

2,547

Available for sale investments

(8)

45

691

218

Cash and cash equivalents

 

475

565

773

 

 

 

 

 

Total current assets

 

2,809

4,650

3,538

 

 

 

 

 

Total assets

 

23,577

24,155

23,914

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

Called up share capital

(11)

6,054

6,056

6,054

Share premium

(11)

11,821

11,735

11,821

Other reserves

 

720

720

720

Share based payments

 

327

571

93

Translation reserve

 

(2,968)

*(910)

(2,034)

Retained earnings

 

3,374

*1,429

3,071

 

 

 

 

 

 

Total equity attributable to equity holders of the parent

 

 

19,328

 

19,601

 

19,725

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

Non-Current Liabilities

 

 

 

 

Deferred tax Liability

 

2,273

2,273

2,273

Other financial liabilities

 

1,651

1,651

1,651

 

 

 

 

 

Total non-current liabilities

 

3,924

3,924

3,924

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

325

630

265

 

 

 

 

 

Total current liabilities

 

325

630

265

 

 

 

 

 

Total equity and liabilities

 

23,577

24,155

23,914

 

 

 

 

*Restated balances as set out in note 12

 

 

 

 

 

 

 

 

Condensed consolidated interim statement of changes in equity

 

 

 

 

Share

capital

 

 

 

Share

premium

 

 

 

Other

reserves

 

 

 

Share

options

 

 

Trans-

lation

reserves

 

 

 

Retained

earnings

Total

attributable

to equity

holder of

parent

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance at 31 December 2016 - Restated

5,836

9,241

720

571

(671)

2,222

 

 

17,919

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

(910)

1,429

19,601

 

 

 

 

 

 

 

 

 

Changes in equity

to 31 December 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

1,087

1,087

Other comprehensive income

-

-

-

-

(1,124)

77

(1,047)

 

 

 

 

 

 

 

 

Total comprehensive income

-

-

-

-

(1,124)

1,164

40

 

 

 

 

 

 

 

 

Cancellation of share options

-

-

-

(478)

-

478

-

Issue of share capital

(2)

102

-

-

-

-

100

Share issue costs

-

(16)

-

-

-

-

(16)

 

 

 

 

 

 

 

 

Transactions with owners

(2)

86

-

(478)

-

478

84

 

 

 

 

 

 

 

 

Balance at 31 December 2017

6,054

11,821

720

93

(2,034)

3,071

19,725

 

 

 

 

 

 

 

 

Changes in equity

to 30 June 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

319

319

Other comprehensive income

-

-

 

-

-

(934)

(16)

(950)

 

 

 

 

 

 

 

 

Total comprehensive income

-

-

-

-

(934)

303

(631)

 

Issue of share options

 

-

 

-

 

-

 

234

 

-

 

-

 

234

Issue of share capital

-

-

-

-

-

-

-

Share issue costs

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

Transactions with owners

-

-

-

234

-

-

234

 

 

 

 

 

 

 

 

Balance at 30 June 2018

6,054

11,821

720

327

(2,968)

3,374

19,328

 

 

 

 

Condensed consolidated Interim statement of cash flows

 

6  months to

6 months to

12 months to

 

30 June

30 June

31 December

 

2018

2017

2017

Cash flows from operating activities

 

£`000

 

£`000

 

£`000

 

Profit/(loss) before tax

319

(663)

424

Adjustments for:

 

 

 

(Profit)/loss on disposal of available for sale investments

3

(3)

(117)

Depreciation of non-current assets

1

1

1

Directors and staff remuneration paid in shares

-

-

191

Write down of intangible exploration assets

-

-

352

Fair value adjustments

16

130

53

(Increase)/decrease  in investment in Joint Venture asset

(1,149)

153

(1,834)

Investment income

(85)

(75)

(176)

Share based payment charge

234

-

-

Movement in working capital

(661)

(457)

(1,106)

 

 

 

 

(Increase)/decrease  in trade and other receivables

267

(624)

(950)

Increase/(decrease) in trade and other payables

60

(86)

(112)

Foreign exchange differences on retranslation of assets and liabilities

(50)

(189)

(170)

Cash outflow from operating activities

277

(1,356)

(2,338)

 

 

 

 

Taxation paid

-

 (91)

 (403)

Net cash used in operating activities

(384)

(1,447)

(2,741)

 

 

 

 

Cash flows from investing activities

 

 

 

Pu