Replacement: Interim Results for the period ended 30 June 2014


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.