The following amends the Interim Results announcement released today at 10.30 a.m.
The full Unaudited Condensed Consolidated Interim Financial Statements have been included in this announcement.
All other details remain unchanged and the full amended announcement appears below.
30 September 2014
AIM: AAU
INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2014
Ariana Resources plc ("Ariana" or "the Company"), the gold exploration and development company focused on Turkey, announces its interim results for the six months ended 30 June 2014.
Highlights
- Continued advancement of the Red Rabbit Gold Project ("RRGP")
- Secured 100% financing for the RRGP mine at Kiziltepe - US$33 million overall credit agreement completed with international Turkish investment bank
- Mining Licence renewed up to April 2034 (providing mining operations commence within the first five years of the licence)
- Attractive investment incentives approved (including significant reductions in corporation tax and exemptions from customs duties and VAT) by the Turkish Government for Kiziltepe
- Continued progress across exploration and development portfolio - new mineralised zones discovered at Kizilcukur and Karakavak, within the Kiziltepe Sector of the RRGP
To view the Company's financial statements for the period ended 30 June 2014 please visit; http://www.arianaresources.com/investors/financials.
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 |
| Saif Janjua | |
| Loeb Aron & Company Ltd. | Tel: +44 (0) 20 7628 1128 |
| John Beresford-Peirse / Dr. Frank Lucas | |
| St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
| Susie Geliher / Lottie Brocklehurst | |
Ariana Resources Plc
Unaudited Condensed Consolidated Interim Financial Statements
for the six months ended 30 June 2014
Condensed consolidated statement of comprehensive income
| Restated* | Restated* | |||
| Note | 6 months to 30 June 2014 | 6 months to 30 June 2013 | 12 months to 31 December 2013 | |
| £'000 | £'000 | £'000 | ||
| Continuing Operations | ||||
| Administrative costs | (411) | (419) | (942) | |
| General exploration expenditure | (13) | (67) | (121) | |
| Other income | 34 | 76 | 68 | |
| Operating Loss | (390) | (410) | (995) | |
| Finance costs | 4 | (25) | (38) | (124) |
| Investment income | 2 | 1 | 2 | |
| Gain/(deficit) on dilution of interest in joint venture | 5 | 214 | (35) | (35) |
| Share of profit/(loss) of a joint venture | 5 | (26) | (10) | (256) |
| Loss on ordinary activities before tax | 6 | (225) | (492) | (1,408) |
| Taxation | 7 | - | - | - |
| Loss for the period | (225) | (492) | (1,408) | |
| Other comprehensive income: | ||||
| Exchange differences on translating foreign operations | (15) | (4) | (125) | |
| Fair value adjustment on other financial asset classified as held for sale | 10 | (286) | (265) | (69) |
| Other comprehensive income for the period net of tax | (301) | (269) | (194) | |
| Total comprehensive income for the period | (526) | (761) | (1,602) | |
| Loss for the period attributable to owners of the parent | (225) | (492) | (1,408) | |
| Total comprehensive income attributable to owners of the parent | (526) | (761) | (1,602) | |
| Loss per share (pence): | ||||
| Basic and diluted | 8 | (0.04) | (0.17) | (0.29) |
| Restated due to adoption of IFRS 11, see note 5. | ||||
Condensed consolidated balance sheet
Condensed consolidated interim statement of financial position
| Restated* | Restated* | |||
| Note | 30 June 2014 £'000 | 30 June 2013 £'000 | 31 December 2013 £'000 | |
| ASSETS | ||||
| Non-current assets | ||||
| Trade and other receivables | 40 | 42 | 38 | |
| Other financial asset | 10 | 135 | 368 | 301 |
| Available for sale investments | 109 | 226 | 109 | |
| Intangible exploration assets | 9 | 1,978 | 1,908 | 1,866 |
| Land, property, plant and equipment | 382 | 428 | 370 | |
| Investment in Joint Venture | 5 | 3,108 | 3,166 | 2,920 |
| Total non-current assets | 5,752 | 6,138 | 5,604 | |
| Current assets | ||||
| Trade and other receivables | 864 | 812 | 774 | |
| Other financial asset | 10 | 325 | 367 | 338 |
| Cash and cash equivalents | 271 | 626 | 212 | |
| Total current assets | 1,460 | 1,805 | 1,324 | |
| Total Assets | 7,212 | 7,943 | 6,928 | |
| EQUITY | ||||
| Called up share capital | 11 | 5,640 | 5,550 | 5,550 |
| Share premium | 11 | 7,585 | 6,900 | 6,900 |
| Other reserves | 720 | 720 | 720 | |
| Share based payment reserve | 578 | 578 | 578 | |
| Translation reserve | (157) | (20) | (142) | |
| Retained earnings | (7,370) | (6,139) | (6,859) | |
| Total equity attributable to equity holders of the parent | 6,996 | 7,589 | 6,747 | |
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | 216 | 222 | 181 | |
| Interest bearing borrowings | - | 132 | - | |
| Total current liabilities | 216 | 354 | 181 | |
| Total Equity and Liabilities | 7,212 | 7,943 | 6,928 |
Restated due to adoption of IFRS 11, see note 5.
Condensed consolidated interim statement of changes in equity
| Condensed consolidated interim statement of changes in | Share capital | Share premium | Other reserves | Share options | Trans -lation Reserve | Retained losses | Total attributable to equity holder of parent | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
| Balance at 1 January 2013 | 3,710 | 7,004 | 720 | 578 | (16) | (5,382) | 6,614 | ||
| Changes in equity to 30 June 2013 | |||||||||
| Loss for the period | - | - | - | - | - | (757) | (757) | ||
| Other comprehensive income | - | - | - | - | (4) | - | (4) | ||
| Total comprehensive income | - | - | - | - | (4) | (757) | (761) | ||
| Issue of share capital | 1,840 | 124 | - | - | - | - | 1,964 | ||
| Share issue costs | - | (228) | - | - | - | - | (228) | ||
| Transactions with owners | 1,840 | (104) | - | - | - | - | 1,736 | ||
| Balance at 30 June 2013 | 5,550 | 6,900 | 720 | 578 | (20) | (6,139) | 7,589 | ||
| Changes in equity to 31 December 2013 | |||||||||
| Loss for the period | - | - | - | - | - | (720) | (720) | ||
| Other comprehensive income | - | - | - | - | (122) | - | (122) | ||
| Total comprehensive income | - | - | - | - | (122) | (720) | (842) | ||
| Issue of share capital | - | - | - | - | - | - | - | ||
| Share issue costs | - | - | - | - | - | - | - | ||
| Transactions with owners | - | - | - | - | - | - | - | ||
| Balance at 31 December 2013 | 5,550 | 6,900 | 720 | 578 | (142) | (6,859) | 6,747 | ||
| Changes in equity to 30 June 2014 | |||||||
| Loss for the period | - | - | - | - | - | (511) | (511) |
| Other comprehensive income | - | - | - | - | (15) | - | (15) |
| Total comprehensive income | - | - | - | - | (15) | (511) | (526) |
| Issue of share capital | 90 | 725 | - | - | - | - | 815 |
| Share issue costs | - | (40) | - | - | - | - | (40) |
| Transactions with owners | 90 | 685 | - | - | - | - | 775 |
| Balance at 30 June 2014 | 5,640 | 7,585 | 720 | 578 | (157) | (7,370) | 6,996 |
Condensed consolidated interim statement of cash flows
| Restated* | Restated* | |||
| 6 months to 30 June 2014 | 6 months to 30 June 2013 | 12 months to 31 December 2013 | ||
| £'000 | £'000 | £'000 | ||
| Cash flows from operating activities | ||||
| Cash generated from operations | (464) | (488) | (1,233) | |
| Net cash outflow from operations | (464) | (488) | (1,233) | |
| Cash flows from investing activities | ||||
| Proceeds from sale of investments | - | - | 104 | |
| Purchase of land, property, plant and equipment | (12) | (14) | (37) | |
| Payments for intangible assets | (119) | (157) | (166) | |
| Investment income | 2 | 1 | 2 | |
| Net cash used in investing activities | (129) | (170) | (97) | |
| Cash flows from financing activities | ||||
| Proceeds from issue of share capital | 677 | 1,175 | 1,580 | |
| Proceeds from borrowings | - | 145 | 145 | |
| Repayment of borrowings | - | (281) | (384) | |
| Interest and financing fees | (25) | (10) | (54) | |
| Net cash proceeds from financing activities | 652 | 1,029 | 1,287 | |
| Net increase/(decrease) in cash and cash equivalents | 59 | 371 | (43) | |
| Cash and cash equivalents at the beginning of period | 212 | 255 | 255 | |
| Cash and cash equivalents at end of period | 271 | 626 | 212 |
Restated due to adoption of IFRS 11, see note 5.
Notes to the interim financial statements for the six months ended 30 June 2014
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 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 2013, 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 2013 were approved by the Board of Directors on 5th June 2014 and delivered to the Registrar of Companies. The financial information for the periods ended 30 June 2014 and 30 June 2013 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 2013, apart from the change in policy for joint ventures as set out below.
Following IFRS 11 becoming effective and the subsequent adoption by the Group, the Group now accounts for its investment in its joint venture using the equity method of accounting. This replaced the proportional consolidation method of accounting applied previously and has also required the restatement of comparative numbers. See note 5 for further information on this.
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 expects to incur further losses in the development of its business. 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 £0.8m, subject to collection of the related derivative financial asset, in the six month period under review and the Directors remain confident that if future funding is required they will be able to raise this finance to meet the Group exploration and development programme and associated overhead cost.
4. Finance cost
| 6 months to 30 June 2014 | 6 months to 30 June 2013 | 12 months to 31 December 2013 | |
| £'000 | £'000 | £'000 | |
| Interest on loan facility | - | 28 | 14 |
| Loan facility fees | - | 10 | 40 |
| Swap charges on other financial assets | 25 | - | 70 |
| 25 | 38 | 124 |
5. Interest in joint venture
In previous periods the Group's joint venture with Proccea Construction Co in Zenit Madencilik San ve Tic AS ("Zenit") was accounted for using the proportional consolidation method of accounting. Following IFRS 11 Joint Arrangements becoming effective, the Group considered its categorisation and determined it a joint venture to be accounted for using the equity method in accordance with IAS 28 (revised). At 30 June 2014 the Group has a 73.47% (2013: 81.68%) interest in Zenit.
Prior to this change in accounting the Group's share of Zenit's income, expenditure, assets and liabilities were consolidated into the Group accounts on a line by line basis in proportion to its underlying ownership of the company. Zenit's results have now been removed from the comparative financial periods and the Group`s interest in Zenit is now accounted for using the equity method in the consolidated financial statements.
Summarised financial information of the joint venture, based on its translated financial statements, and reconciliations with the carrying amount of the investment in the consolidated financial statements are set out below:-
| Summarised statement of financial position | 30 June 2014 | 30 June 2013 | 31 December 2013 |
| £'000 | £'000 | £'000 | |
| Non-current assets | 5,096 | 4,878 | 4,902 |
| Current assets | 376 | 323 | 231 |
| Current liabilities | (1,103) | (1,325) | (1,558) |
| Non-current liabilities | (138) | - | - |
| Equity | 4,231 | 3,876 | 3,575 |
| Proportion of the Group's ownership | 73.47% | 81.68% | 81.68% |
| Carrying amount of Investment in Joint Venture | 3,108 | 3,166 | 2,920 |
| Summarised statement of Profit and Loss | 30 June 2014 | 30 June 2013 | 31 December 2013 |
| Other income | - | 1 | 2 |
| Administrative expenses - including exchange losses | (35) | (13) | (315) |
| Loss for the period | (35) | (12) | (313) |
| Proportion of the Groups ownership | 73.47% | 81.68% | 81.68% |
| Group`s share of loss for the period | (26) | (10) | (256) |
| Increase/(decrease) in share of net assets following issue of shares in Zenit | 214 | (35) | (35) |
| Movement in interest in Joint Venture for the period | 188 | (45) | (291) |
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.
| 30 June 2014 | 30 June 2013 restated | 31 December 2013 restated | |||||||
| Mining | Other reconciling items | Group | Mining | Other reconciling items | Group | Mining | Other reconciling items | Group | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Administrative costs | - | (411) | (411) | - | (414) | (414) | - | (942) | (942) |
| General exploration Expenditure | (13) | - | (13) | (67) | - | (67) | (121) | - | (121) |
| Other income | 34 | - | 34 | 76 | - | 76 | 68 | - | 68 |
| Finance costs | - | (25) | (25) | - | (43) | (43) | - | (124) | (124) |
| Fair value loss on derivative financial assets | - | (286) | (286) | - | (265) | (265) | (69) | - | (69) |
| Share of profit/(loss) of its interest in a joint venture | 188 | - | 188 | (45) | - | (45) | (291) | - | (291) |
| Investment income | - | 2 | 2 | - | 1 | 1 | - | 2 | 2 |
| Tax | - | - | - | - | - | - | - | - | - |
| Loss after tax | 209 | (720) | (511) | (36) | (721) | (757) | (413) | (1,064) | (1,477) |
| Assets | |||||||||
| Segment assets | 6,157 | 1,055 | 7,212 | 6,297 | 1,646 | 7,943 | 5,947 | 981 | 6,928 |
| Liabilities | |||||||||
| Segment liabilities | (28) | (188) | (216) | (28) | (326) | (354) | (25) | (156) | (181) |
Other income includes consultancy, loan interest and license fees.
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 in Turkey.
| 30 June 2014 | 30 June 2013 restated | 31 December 2013 restated | |||||||
| Turkey | United Kingdom | Group | Turkey | United Kingdom | Group | Turkey | United Kingdom | Group | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Carrying amount of segment non-current assets | 5,339 | 413 | 5,752 | 5,544 | 594 | 6,138 | 5,194 | 410 | 5,604 |
7. Taxation
The Group has incurred tax losses for the period and a corporation tax charge is not anticipated.
8. Loss per share
The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of £225,000 divided by the weighted average number of shares in issue during the period, being 630,104,546.
9. Intangible exploration assets
Restated
| Six months ended 30 June 2013 | £'000 |
| Opening net book value 1 January 2013 | 1,752 |
| Additions and capitalised depreciation | 157 |
| Exchange movements | (1) |
| Closing net book value 30 June 2013 | 1,908 |
| Six months ended 31 December 2013 | |
| Opening net book value 1 July 2013 | 1,908 |
| Additions and capitalised depreciation | 9 |
| Exchange movements | (51) |
| Closing net book value 31 December 2013 | 1,866 |
| Six months ended 30 June 2014 | |
| Opening net book value 1 January 2014 | 1,866 |
| Additions and capitalised depreciation | 119 |
| Exchange movements | (7) |
| Closing net book value 30 June 2014 | 1,978 |
10. Derivative financial asset
In June 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 £770,000 following the issue of 85 million new shares at 0.9p per share.
The consideration from Lanstead has been treated as a derivative financial asset and its fair value has been determined by reference to the Company`s share price at the balance sheet date and has been calculated as follows:
| Total £`000 | Non-current assets £`000 | Current assets £,000 | |
| Value recognised on inception | 1,000 | 334 | 666 |
| Capital repayments | (222) | - | (222) |
| Swap charges | (70) | - | (70) |
| Loss on revaluation | (69) | (33) | (36) |
| Fair value recognised at 31 December 2013 | 639 | 301 | 338 |
| Swap charges | (25) | - | (25) |
| Capital repayments | (20) | - | (20) |
| Swap settlement for shares | 152 | - | 152 |
| Loss on revaluation | (286) | (166) | (120) |
| Fair value recognised at 30 June 2014 | 460 | 135 | 325 |
11. Called up share capital and share premium
Details of issued capital are as follows:
| Number of | Share Capital | Deferred shares | Share Premium | |
| shares | £'000 | £'000 | £'000 | |
| At 1 January 2013 | 371,019,494 | 3,710 | - | 7,004 |
| Shares issued in period (net of expenses) | 183,929,980 | 1,840 | - | (104) |
| At 30 June 2013 | 554,949,474 | 5,550 | - | 6,900 |
| Conversion of ordinary shares into new ordinary and deferred | - | (4,995) | 4,995 | - |
| At 31 December 2013 | 554,949,474 | 555 | 4,995 | 6,900 |
| Shares issued in period (net of expenses) | 90,866,667 | 90 | - | 685 |
| At 30 June 2014 | 645,816,141 | 645 | 4,995 | 7,585 |
During 2013 the existing ordinary shares were sub-divided into one new ordinary share of 0.1pence ("The New Ordinary Share") and one deferred share of 0.9pence ("Deferred Shares"). The New Ordinary Shares have a nominal value of 0.1 pence. The percentage of New Ordinary Shares held by each shareholder following the sub division is the same as the percentage of existing ordinary shares held by them before the change.
12. Approval of interim financial statements
The interim financial statements were approved by the Board of Directors on 29 September 2014.