Half-yearly report for six months to 30 June 2009
(Thomson Reuters ONE) - 29 September 2009AIM / PLUS Markets: AAU HALF-YEARLY REPORT FOR SIX MONTHS TO 30 JUNE 2009Ariana Resources plc ("Ariana" or "the Company"), the goldexploration and development company focused on Turkey, announces itsunaudited half-yearly results for the six months ended 30 June 2009.Highlights:* Trial mining on Kiziltepe; first gold production * Acquisition of the Muratdag Gold Project * 401,000 oz Au equivalent in JORC resources * JV discovery of the Salinbas ProspectDr. Kerim Sener, Managing Director, commented:"During the period the Company made important strides towards thedevelopment of its projects in western Turkey. The trial mining ofthe Kiziltepe deposit demonstrated the Company's ability to deliveron its operational targets, both on time and on budget. With acombined JORC resource of over 401,000 oz gold equivalent across theKiziltepe and Tavsan deposits, the Company is now well placed topursue development routes which capitalise on current elevated goldprices.We announced recently the combination of Kiziltepe and Tavsan into asingle conceptual entity known as the Red Rabbit Project. TheCompany is considering a joint venture (JV) on Red Rabbit with aTurkish engineering firm. Such a JV will encompass the necessaryfeasibility work, environmental impact assessment, engineering designand plant construction required for the advancement of Red Rabbit.In north-eastern Turkey, our JV with European Goldfields has madeseveral significant discoveries. The identification of additionalpotential in the Ardala South area, the nearby discovery of thehigh-grade Salinbas Prospect and continued increases in groundholding in this area highlight the value of the JV.At the beginning of a year of unprecedented market uncertainty, theCompany raised £500,000 with the support of its largestshareholders. Underpinned by improving market sentiment post-period,the Company successfully raised a further £800,000, which will bedevoted to funding the Company through the early stages of itsdevelopment work on the Red Rabbit Project and to enable focusedexploration on Kiziltepe and Tavsan."CHAIRMAN'S STATEMENTAlthough we entered this year with markets clouded by globalmacroeconomic uncertainty, the Company actively took the decision tofollow through with its immediate objectives in western Turkey.After establishing over 401,000 oz Au in JORC resources and thecompletion of necessary permitting at Kiziltepe towards the end oflast year, the Company began trial mining at this location andproduced its first gold. The achievement of this significantmilestone resulted in a further reappraisal of our two principalprojects: Kiziltepe and Tavsan. Both projects are now beingevaluated and advanced under the banner of the Red Rabbit Project.Meanwhile our Joint Venture with European Goldfields Limited in thevicinity of the Ardala copper-gold porphyry in north eastern Turkeyis providing encouraging exploration success.Red Rabbit ProjectThe conceptual combination of the Kiziltepe and Tavsan projects intoa single integrated project - named 'Red Rabbit' - creates apotentially economic 230,000 oz Measured and Indicated and 170,000 ozInferred JORC resource. Excluding the existing Inferred resources,the combined project satisfies a production rate of 30,000 oz perannum over a period of 7 years. Further exploration at bothKiziltepe and Tavsan is planned with the object of increasing thecombined resource base to at least 500,000 oz.Based on the conceptual project outline, the Company envisages mininghigh-grade ore from Kiziltepe and trucking this material 125km byroad to Tavsan. The Tavsan deposit would itself be mined andprocessed at a heap-leach facility established on site. Low-gradeore from Tavsan would be blended with the high-grade ore arrivingfrom Kiziltepe before being placed on the heap-leach pads. In thesame context, the Company will consider the development of thecombined project via the staged mining of Kiziltepe and Tavsan, withmining commencing at the high-grade Kiziltepe deposit and concludingwith the mining of the low grade Tavsan deposit.The Company intends to pursue components of a feasibility study forthe Red Rabbit Project during Quarter 4, 2009. The most criticalaspect of this is the metallurgical testwork required to determinethe optimal crush size of Kiziltepe and Tavsan ore with respect tocost and recovery. Following this, the Company intends to progressthe project rapidly through to feasibility in 2010 by undertakingcomprehensive column leach testwork, preliminary mine design andeconomic modelling.In parallel with these efforts to bring the project to feasibility,the Company is considering a joint venture with a Turkish engineeringcompany to fast-track the project through feasibility and ultimatelyonto production. Renewed exploration in the area between Kiziltepeand Tavsan has also begun, with the aim of identifying furtherresource potential in this highly prospective region.Joint VentureOur Joint Venture with European Goldfields Limited in north-easternTurkey is continuing to yield exploration success. At the ArdalaProject, exploration has confirmed that porphyry Cu-Au mineralisationcontinues to the south of previously mapped and drilled outcrops. Modelling of the newly discovered zone is now complete anddrill-testing is planned.Approximately 1.5km to the southwest of the main Ardala porphyry, ahigher-grade gold zone named the Salinbas prospect has beenidentified by rock-chip and soil sampling. Detailed mapping andlithological sampling has identified a 230 metre long zone of brecciashowing widths of 5 to 15 metres. Rock-chip samples returned gradesof between 1.42 and 20.5 g/t Au with an average of 10.8 g/t Au.Other high-grade but more sporadic occurrences are located alongstrike and parallel to this principal zone of interest. A programmeof trenching with follow-up drilling is due to commence on thisprospect in the near future.The JV is consolidating its ground holding in this part of thePontide metallogenic belt and in several newly defined areas, withthe aim of undertaking modern, systematic exploration for porphyryCu-Au and related Au mineralisation. Ariana currently retains 49% ofthe JV and European Goldfields is continuing to fund exploration anddevelopment of the JV licences.OutlookAs a focused gold exploration and development Company, our objectiveshave not changed: we remain committed to establishing economic goldresources in Turkey and then to develop these resources in theshortest timeframe possible. Over the past five years we haveestablished the Company as one of the leading gold explorersoperating in Turkey. In this period, we have built up considerablegeological and operational expertise within what is currently themost productive gold province in Europe. We are committed tomaintaining this strategic position, and are on the threshold ofimportant development and production decisions.Michael SpriggsChairman29 September 2009Contacts:Ariana Resources plc Tel: 020 7407 3616Michael Spriggs, ChairmanKerim Sener, Managing DirectorBeaumont Cornish Limited Tel: 020 7628 3396Roland CornishAlexander David Securities Limited Tel: 020 7448 9820Nick Bealer / David ScottLoeb Aron & Company Ltd Tel: 020 7628 1128Peter Freeman / Frank LucasEditors' note:About Ariana ResourcesAriana is an exploration and development company focused onepithermal gold-silver and porphyry copper-gold deposits in Turkey.The Company is exploring a portfolio of prospective licences selectedon the basis of its in-house geological and remote-sensing database,on its own in western Turkey and in Joint Venture with EuropeanGoldfields Limited in north-eastern Turkey.The Company's flagship assets are its Sindirgi and Tavsan goldprojects. Both projects contain a series of prospects, within twoprolific mineralised districts in the Western Anatolian Volcanic andExtensional (WAVE) Province in western Turkey. This Province hoststhe largest operating gold mines in Turkey and remains highlyprospective for new porphyry and epithermal deposits. These coreprojects, which are separated by a distance of 75km, are presentlybeing assessed as to their economic merits. The total resourceinventory of the Company stands at 401,000 ounces of goldequivalent.Loeb Aron & Company Ltd. and Alexander David Securities Limited arejoint brokers to the Company and Beaumont Cornish Limited is theCompany's Nominated Adviser.For further information on Ariana you are invited to visit theCompany's website at www.arianaresources.com.Ends Ariana Resources Plc Unaudited condensed consolidated interim statement of comprehensive income For the six months ended 30 June 2009 12 months to Note 6 months to 6 months to 31 December 30 June 30 June 2008 2009 2008ContinuingOperations £'000 £'000 £'000Administrativecosts (206) (343) (608)Other income 12 - -Operating Loss (194) (343) (608)Share of loss (2)of associates - (25)Investmentincome 3 18 29Loss onordinary (327)activitiesbefore tax forthe period (191) (604)Tax (3) - - -Loss for theperiod (191) (327) (604)Othercomprehensiveincome:Exchangedifferences ontranslating (23)foreignoperations (40) 25Othercomprehensiveincome for the (23)period, net oftax (40) 25Totalcomprehensive (350)income for theperiod (231) (579)Loss for theperiod (327)attributableto Owners of theparent (191) (604)Totalcomprehensiveincomeattributable (350)to: Owners of theparent (231) (579) Loss per share (pence):Basic(4) 0.14 0.41 0.71 _____ _____ _____Diluted 0.13 0.41 0.71 _____ _____ _____Condensed consolidated balance sheet 30 June 30 June 2008 31 December 2009 2008 £'000 £'000 £'000ASSETSNon-current assetsTrade and other 179receivables 126 126Land, property, plant 267and equipment 213 230Intangible assets 3,711 3,064 3,401Interest in associates - 24 -Total non-current assets 4,050 3,534 3,757Current assetsTrade and otherreceivables 174 214 302Cash and cashequivalents 198 671 143Total current assets 372 885 445Total assets 4,422 4,419 4,202EquityCalled up share capital 1,427 927 927Share premium 4,244 4,282 4,282Other reserves 720 720 720Share options 100 85 100Translation reserve 23 15 63Retained earnings (2,237) (1,769) (2,046)Total equity 4,277 4,260 4,046LiabilitiesCurrent liabilitiesTrade and other payables 145 159 156Total currentliabilities 145 159 156Total equity and 4,419liability 4,422 4,202Condensed consolidated interim cash flow statement 6 months to 6 months to 12 months to 30 June 30 June 31 December 2009 2008 2008 £'000 £'000 £'000Cash flows from operatingactivitiesCash generated from operations (100) (363) (613)Net cash outflow fromoperations (100) (363) (613)Cash flows from investingactivitiesPurchase of land, property,plant and equipment - (231) (231)Purchase of an interest in (26)associate - (25)Purchase of intangible assets (310) (832) (1,125)Interest received 3 14 28Net cash used in investingactivities (307) (1,075) (1,353)Cash flows from financingactivitiesProceeds from issue of sharecapital 462 927 927Net cash proceeds fromfinancing activities 462 927 927Net increase/(decrease) incash and cash equivalents 55 (511) (1,039)Cash and cash equivalents atbeginning of period 143 1,182 1,182Cash and cash equivalents at 671end of period 198 143 Notes Ariana Resources Plc Notes to the unaudited consolidated interim financial statements For the six months ended 30 June 20091. General informationAriana Resources Plc (the "Company") is a public limited companyincorporated and domiciled in Great Britain. The addresses of itsregistered office and principal place of business are disclosed atthe end of this report. The Company's shares are listed on theAlternative Investment Market of the London stock Exchange. Theprincipal activities of the Company and its subsidiaries (the"Group") are related to the exploration for and development of goldand other minerals in Turkey.The unaudited consolidated interim financial statements are presentedin Pounds Sterling (£), which is the parent company's functional andpresentation currency, and all values are rounded to the nearestthousand except where otherwise indicated.The financial information set out in this interim report does notconstitute statutory accounts as defined in Section 435 of theCompanies Act 2006. The Group's statutory financial statements forthe year ended 31 December 2008, prepared under IFRS, have been filedwith the Registrar of Companies. The auditor's report on thosefinancial statements was unqualified and did not contain a statementunder Section 237(2) of the Companies Act 1985.1(a). Basis of preparationThese financial statements have been prepared under the historicalcost convention, and the accounting policies have been appliedconsistently throughout the Group for the purposes of preparation ofthese condensed consolidated interim financial statements.The financial information for the twelve months ended 31 December2008 has been derived from the Group's audited financial statementsfor the period as filed with the Registrar of Companies. It does notconstitute the financial statements for that period. The auditor'sreport on the statutory financial statements for the year ended 31December 2008 was unqualified and did not contain any statement underSection 237(2) or (3) of the Companies Act 1985.The amendment to IAS1 (Revised) Presentation of Financial Statementsreleased in September 2007 redefines the primary statements andexpands on certain disclosures within these. The group's primarystatements have been amended to reflect the presentation required andthe adoption of this amendment has had no impact on Group earnings orequity in the current or prior periodsNew IFRS accounting standards and interpretations not yet adoptedThe directors together with their advisers are in the process ofevaluating the impact of standards and interpretations that have notyet become effective. Listed below are those standards andinterpretations most likely to impact the Group:- IAS 23 Borrowing Costs (revised 2007) (effective 1 January 2009)- IAS 27 Consolidated and Separate Financial Statements (Revised2008) (effective 1 July 2009)- Amendment to IFRS 2 Share-based Payment - Vesting Conditions andCancellations (effective 1 January 2009)- IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009)- IFRS 8 Operating Segments (effective 1 January 2009)- IFRIC 11 IFRS 2 - Group and Treasury Share Transactions (effective1 March 2007)IFRS 8 Operating Segments replaces the segmental reportingrequirements of IAS 14 Segment Reporting. The key change is to alignthe determination of segments in the financial statements with thatused by management in their resource allocation decisions. Thisstandard is not expected to have significant impact on existingdisclosureBased on the Group's current business model and accounting policiesit is felt that the other standards and/or interpretations areunlikely to have a material impact on the Group's earnings orshareholders' funds.IFRS 1 First time adoption of IFRS: the Group has elected thebusiness combinations exemption, which allows the Company not torestate business combinations prior to 1 January 2006.The Group has elected to apply the transitional provisions under IFRS6 which permits the existing accounting policy under UK GAAP foraccounting for and capitalisation of mineral exploration costs, to beused for IFRS purposes.The Group has chosen not to restate items of property, plant andequipment to fair value at the transition date.1(b). Significant accounting policies Basis of consolidationThe consolidated financial statements incorporate the financialstatements of the Company and entities controlled by the Company.Control is achieved where the Company has the power to govern thefinancial and operating policies of an entity so as to obtainbenefits from its activities.The results of subsidiaries and associates acquired or disposed ofare included in the consolidated income statement from the effectivedate of acquisition or up to the effective date of disposal, asappropriate.Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring their accounting policies into line with thoseused by other members of the Group. All intra-group transactions,balances, income and expenses are eliminated in full onconsolidation.Income and expense recognitionThe Group's only income is interest receivable from bank deposits.Interest income is accrued on a time basis, by reference to theprincipal outstanding and the effective rate of interest applicable.The effective interest rate is the rate that exactly discountsestimated future cash receipts through the expected life of thefinancial asset to the net carrying amount of the financial asset.Operating expenses are recognised in the income statement uponutilisation of the service or at the date of their origin and arereported on an accruals basis.Group companiesThe results and financial position of all the Group entities (none ofwhich has the currency of a hyperinflationary economy) that have afunctional currency different from the presentation currency aretranslated into the presentation currency as follows:- monetary assets and liabilities for each balance sheetpresented are translated at the closing rate at the date of thatbalance sheet. Non-monetary items are measured at the exchange ratein effect at the historical transaction date and are not translatedat each balance sheet date. - income and expenses for each income statementare translated at average exchange rates (unless this average is nota reasonable approximation of the cumulative effect of the ratesprevailing on the transaction dates, in which case income andexpenses are translated at the dates of the transaction); and- all resulting exchange differences are recognised asa separate component of equity. On consolidation, exchangedifferences arising from the translation of monetary items receivablefrom foreign subsidiaries for which settlement is neither planned norlikely to occur in the foreseeable future are taken to shareholders'equity. When a foreign operation is sold, such exchange differencesare recognised in the income statement as part of the gain or loss on sale.Investments in associatesAn associate is an entity over which the Group is in a position toexercise significant influence, but not control or joint control,through participation in the financial and operating policy decisionsof the investee. Significant influence is the power to participate inthe financial and operating policy decisions of the investee but isnot control or joint control over those policies.The results and assets and liabilities of associates are incorporatedin these financial statements using the equity method of accountingexcept when classified as held for sale. Investments in associatesare carried in the balance sheet at cost as adjusted bypost-acquisition changes in the Group`s share of the net assets ofthe associate, less any impairment in the value of individualinvestments. Losses of the associates in excess of the Group`sinterest in those associates are not recognised.Intangible assetsIntangible assets represent the cost of acquisition by the Group ofrights, licences and know how. Such expenditure requires theimmediate write-off of exploration and development expenditure thatthe Directors do not consider to be supported by the existence ofcommercial reserves.All costs associated with mineral exploration and investments arecapitalised on a project-by-project basis, pending determination ofthe feasibility of the project. Costs incurred include appropriatetechnical and administrative expenses but not general overheads. Ifan exploration project is successful, the related expenditures willbe transferred to mining assets and amortised over the estimated lifeof the commercial ore reserves on a unit of production basis. Where alicence is relinquished or a project abandoned, the related costs arewritten off. Where the Group maintains an interest in a project, butthe value of the project is considered to be impaired, a provisionagainst the relevant capitalised costs will be raised.The recoverability of all exploration and development costs isdependent upon the discovery of economically recoverable reserves,the ability of the Group to obtain necessary financing to completethe development of reserves and future profitable production orproceeds from the disposition thereof.Impairment of tangible and intangible assetsAt each balance sheet date, the Group reviews the carrying amounts ofits tangible and intangible assets to determine whether there is anyindication that those assets have suffered an impairment loss. If anysuch indication exists, the recoverable amount of the asset isestimated in order to determine the extent of the impairment loss (ifany). Where it is not possible to estimate the recoverable amount ofan individual asset, the Group estimates the recoverable amount ofthe cash-generating unit to which the asset belongs. Where areasonable and consistent basis of allocation can be identified,corporate assets are also allocated to individual cash-generatingunits, or otherwise they are allocated to the smallest group ofcash-generating units for which a reasonable and consistentallocation basis can be identified.Intangible assets with indefinite useful lives and intangible assetsnot yet available for use are tested for impairment annually, andwhenever there is an indication that the asset may be impaired.Recoverable amount is the higher of fair value less costs to sell andvalue in use. In assessing value in use, the estimated future cashflows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value ofmoney and the risks specific to the asset for which the estimates offuture cash flows have not been adjusted.If the recoverable amount of an asset (or cash-generating unit) isestimated to be less than its carrying amount, the carrying amount ofthe asset (cash-generating unit) is reduced to its recoverableamount. An impairment loss is recognised immediately in the incomestatement, unless the relevant asset is carried at a revalued amount,in which case the impairment loss is treated as a revaluationdecrease.Where an impairment loss subsequently reverses, the carrying amountof the asset (cash-generating unit) is increased to the revisedestimate of its recoverable amount, but so that the increasedcarrying amount does not exceed the carrying amount that would havebeen determined had no impairment loss been recognised for the asset(cash-generating unit) in prior years. A reversal of an impairmentloss is recognised immediately in the income statement, unless therelevant asset is carried at a revalued amount, in which case thereversal of the impairment loss is treated as a revaluation increase.2. Accounting estimates and judgementsThe Group makes estimates and assumptions regarding the future.Estimates and judgements are continually evaluated based onexperience and other factors, including expectations of future eventsthat are believed to be reasonable under the circumstances. In thefuture, actual experience may deviate from these estimates andassumptions. The estimates and assumptions that have a significantrisk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next financial year are discussedbelow: * Capitalised mining costs The recovery of the value of the Group's explorationmining projects is reviewed in the light of future productionestimates based upon ongoing geological studies. Over the longer termthe actual mineable resources achieved may vary significantly fromthe current estimates. The Group periodically updates estimates ofresources in respect of its exploration mining projects and assessesthose for indicators of impairment relating to its capitalised costs. * Carrying value of property, plant and equipmentThe Group monitors internal and external indicators of impairmentrelating to its property, plant and equipment. Management hasconsidered whether any indicators of impairment have arisen overcertain assets. After assessing these, management has concluded thatno impairment has arisen in respect of these assets during the periodand subsequently. * Useful lives of tangible assetsPlant and equipment are depreciated over their useful lives. Usefullives are based on management's estimates and are periodicallyreviewed for continued appropriateness. * Fair value of financial instrumentsThe Group determines the fair value of financial instruments that arenot quoted, based on estimates using present values or othervaluation techniques. Those techniques are significantly affected bythe assumptions used, including discount rates and estimates offuture cash flows. * Share-based payments In order to calculate the charge for share-based paymentsas required by IFRS 2, the Group makes estimates principally relatingto assumptions used in its option-pricing model as set out in note11. * Shareholder warrants The shareholder warrants entitle shareholders to a numberof common shares based upon the number of shares they subscribed forat the date of issue of the warrant instrument. The warrants relateto a transaction with the equity holders as opposed to a transactionin exchange for any goods or service. The equity component of theinstrument is not considered material and there is no liabilitycomponent arising as a result of these warrants. Upon exercise of thewarrant the proceeds received, net of attributable transaction costs,are credited to share capital and where appropriate share premium. * Trade and other receivables Trade and other receivables are recognised initially atfair value and subsequently restated for any impairment. A provisionfor impairment of trade receivables is established when there isobjective evidence that the Group will not be able to collect allamounts due according to the original terms of the receivables.3. TaxThe Group has incurred tax losses for the period and a corporationtax charge is not anticipated.4. Loss per shareThe calculation of basic loss per share is based on the lossattributable to ordinary shareholders of £191,000 divided by theweighted average number of shares in issue during the period, being139,263,918 (fully diluted weighted average number of share amountsto 145,760,462).The full Half-Yearly-Report is published on the Company's website:www.arianaresources.com.---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 29.09.2009 - 08:04 Uhr
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