Ariana Regulatory News (AAU)

21 Jun 2006 09:08

Ariana Resources PLC21 June 2006 ARIANA RESOURCES PLC 21 June 2006AIM: AAU PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2005 Ariana Resources plc ("Ariana" or "the Company"), the gold exploration companyfocused exclusively on Turkey, announces its maiden annual results following itsadmission to AIM in July 2005. During the period since December 2004 Ariana hassignificantly grown its portfolio of gold projects in Turkey through explorationand acquisition. Highlights: * Acquisition of the Sindirgi gold project in western Turkey * Positive exploration results from Kiziltepe and Kepez prospects at the Sindirgi gold project * Geological model of 150,000 oz (non-JORC) from 600m section of Arzu vein at Kiziltepe * Further targets generated by remote sensing and new exploration licences granted * Non executive board appointments * July 2005 IPO financing raising approximately £1.2m * Significant 750m gold in soil anomaly at Kinik prospect Post Period Event: * Additional £2m raised; drilling programmes planned at the Sindirgi gold project Michael Spriggs, Chairman, commented: "2005 was a year of excellent progress. The Company's exploration programmesidentified several prospects that exhibit the potential to host economic goldresources. The additional funds raised post the reporting period will be used toaccelerate this exploration, including a concerted drilling programme at theKiziltepe and Kepez prospects which form part of the Company's flagship Sindirgigold project in western Turkey. The Board is confident that in the current yearAriana will confirm its exciting potential." All technical information contained in this announcement has been announcedpreviously and has been read and approved by a suitably qualified person. Contacts: Ariana Resources plcSteven Poulton, Chief Executive Tel: 01235 511 767s.j.poulton@arianaresources.cominfo@arianaresources.com Mobile: 0797 408 6712 Beaumont Cornish LimitedRoland Cornish/Felicity Geidt Tel: 020 7628 3396 Ambrian Partners LimitedRichard Chase Tel: 020 7776 6461 Bankside ConsultantsMichael Padley / Susan Scott Tel: 020 7367 8888 About Ariana Resources Ariana is a technology-driven exploration company focused on the discovery ofepithermal gold-silver and porphyry copper-gold deposits with multi-millionounce potential within the Tethyan metallogenic belt of Turkey. The Company hasa portfolio of prospective licences covering approximately 1,000km2, selected onthe basis of its advanced in-house remote sensing database. Ariana's broker isAmbrian Partners Limited and Beaumont Cornish Limited is the Company's nominatedadviser. For further information on Ariana you are invited to visit theCompany's website at www.arianaresources.com. The Report and Accounts for the year to 31 December 2005 are being posted toshareholders and are available to the public, for at least one month, free ofcharge at Ridgeway House, 1 Hagbourne Road, Didcot, Oxfordshire OX11 8ER. CHAIRMAN'S STATEMENT This is my first opportunity to write to you formally as Chairman of ArianaResources plc and I am very pleased to provide an overview of the excellentprogress made by your Company in 2005. I would like to highlight the keydevelopments and to emphasise the contributions from the people who have madethem happen. 'Inspired to Discover' is a theme which runs continuously like a rich veinthrough your Company's activities, and 2005 was certainly a year of inspireddiscovery for Ariana. The drive and enthusiasm of Ariana's management team inthe pursuit of excellence was rewarded with the addition of substantial marketvalue in the period. Our successful admission to AIM in July 2005, raisingapproximately £1.2m against a difficult market background, provided a powerfuldemonstration of your Company's energy and commitment and is something of whichI am particularly proud. Paralleling this progress, your Company has driven forward its explorationprogrammes to deliver on a number of the key objectives defined in our AIMAdmission Document. These include notably the confirmation of significant goldshowings together with numerous additional discoveries at our flagship Sindirgigold project in western Turkey. Further exploration highlights included thediscovery of a major gold in soil anomaly at the Kinik prospect and theindication of additional gold mineralised systems from our enlarged generativeexploration programme. During the period, your Company's board was expanded and strengthened with theappointment of non-executives Directors, Mike Etheridge and Michael de Villiers,two highly experienced individuals in their respective fields of exploration andfinance. Sindirgi Gold Project The decision by your Company to acquire the Sindirgi gold project in westernTurkey from Newmont Mining in early 2005 proved to be well judged. The project,which covers an area of 224km2, hosts over 45km of gold-silver bearing quartzveins which vary between 1m and 20m in width. Independent consultants SRK haveproduced an outline geological model indicating a resource (not yet inaccordance with the JORC code) of 150,000oz at an average grade of 4.2 g/t, fromjust a single 600m section of one vein. In 2005, Ariana's attention focused on the two most advanced prospects atSindirgi, namely Kiziltepe and Kepez. The best intersects by Ariana from aprogramme of channel sampling were 6.29 g/t Au over 13.5 m true thickness(Kiziltepe) and 8.68 g/t Au over 16 m (Kepez). After the period under review,two significant bulk tonnage potential stockwork targets were also defined froma programme of rock chip sampling at Kiziltepe and Kepez. At least three additional high interest prospect areas exist at Sindirgi andthese will be the focus of a continuing exploration campaign in 2006. Grassroots Success Ariana places strong emphasis on the use of advanced remote sensing technologyto generate new discoveries. Our in-house database now covers over 500,000km2 ofTurkey and includes geological, mineral occurrence, structural and satellitedata. It is an approach that allows Ariana to reduce risks through undertakingrapid and low cost reconnaissance exploration on specific target areas. Thisstrategy has generated numerous targets and forms the backbone of our licenceportfolio programme, which now covers approximately 1,000km2 and which continuesto grow. The Kinik gold discovery in western Turkey testifies to the power of thisexploration strategy, where following positive sample results in 2004, a soilgeochemical survey has defined a 750m long by 50m wide gold anomaly. Looking ahead Your Company's strategy is to add value by: • Drilling at the Kiziltepe and Kepez prospects • Discovering new vein and bulk tonnage targets • Acquiring further prospective licences • Developing joint ventures with local and international partners Subsequent to the year end, your Company raised £2 million by way of a privateplacement of new shares at 13 pence per share, and it is my pleasure to welcomeour new shareholders. The excellent response to our fundraising both fromexisting and new senior institutional investors underlines the growing marketappreciation of your Company's management team, projects and growth potential. Iwould like to thank all our Shareholders for their continued support. The solid progress to date which I have outlined has only been achieved throughthe strong commitment and determination of the entire Ariana team whom Icongratulate sincerely. Together, we can anticipate further vigorous explorationactivity, in what I expect will prove another pivotal year for your Company, andone in which we will continue to deliver on our stated promises. Michael J SpriggsChairman OPERATING REVIEW Since December 2004 Ariana has successfully grown its portfolio of gold projectsin Turkey through exploration and acquisition. Most notably, in January 2005,the Company acquired the Sindirgi gold project from Newmont Mining Corporation.The information in this report reviews results up to May 2006. 2005 Highlights January Sindirgi gold project acquired from Newmont Mining April Appointment of non executive Directors Michael de Villiers & Mike Etheridge July Shares admitted to trading on AIM, raising £1.165 million September Scoping study at Sindirgi commenced November 750m long gold in soil anomaly discovered at Kinik prospect SINDIRGI GOLD PROJECT The Sindirgi gold project ("Sindirgi") comprises two operating and elevenexploration licences which cover a contiguous area of 252 km2 in BalikesirProvince, western Turkey. The area was originally targeted during the Company'sregional remote-sensing studies and 11 licences were acquired from NewmontMining Corporation in January 2005 for the consideration of US$400,000. Newmontalso retains the right to a royalty of up to 2.5% on future gold production fromthe Sindirgi gold project. Sindirgi hosts over 45km of gold-silver bearingepithermal quartz veins defined across at least four target areas, being theprospects of Kiziltepe, Kepez, Karakavak and Kizilcukur South. The focus of work to date has been on the Kiziltepe prospect where a geologicalmodel of 150,000 ounces (non JORC) at an average grade of 4.2 g/t has beencalculated on a 600m long section of the Arzu South vein, based on drillingundertaken by previous owners. Less than 5% of the vein system at Kiziltepe hasbeen drill tested to date. Work completed by Ariana at Kiziltepe has establisheda series of targets comprising narrow (1-14m wide) high grade veins and wider (>50m) low grade stockwork areas which will be followed up by drilling in 2006to define resources. Since May 2005, 600m of trenching, approximately 800m of rock-saw channelsampling in addition to the collection of 880 rock chip samples and 315 soilsamples and 122 stream samples has been completed on Sindirgi leading to thediscovery of a number of high priority targets. Elsewhere on Sindirgi, at the Kepez prospect Ariana has discovered a significanthigh-grade zone of mineralisation on the Karakaya Vein (including 8.68 g/t Auover 16m and 6.28 g/t Au over 11m). Ongoing exploration on the Karakavak andKizilcukur South prospects has defined further areas of interest which arecurrently being assessed by the Company. Kiziltepe Prospect The majority of work completed to date on Sindirgi has focused on the Kiziltepeprospect where at least 19 km of low-sulphidation epithermal quartz veinsoutcrop at surface. There are seven main veins, which generally trend northwestand dip to the northeast within a dacitic volcanic unit. The vein system occursover an area covering approximately 3 x 1 km. Individual veins are exposed atsurface for up to 700m in strike length and are between 1 and 14 m wide. Kiziltepe Prospect - Arzu Vein Ariana commissioned SRK UK Ltd ("SRK") to undertake a 3D resource model, basedon existing drilling data (Table 1) from the southern (600m) portion of the ArzuVein representing approximately 5% of the outcropping vein system at Kiziltepe.SRK outlined a geological model of 1.1Mt at an average grade of 4.2 g/t gold for150,000 ounces (not yet in accordance with the JORC Code) and concluded thatwider potential exists for economic resources from a number of open pits atSindirgi hosting between 25,000 and 100,000 ounces each. Table 1: Higher grade intercepts from previous drilling. Hole Vein From(m) To (m) Length Grade (m) Au (g/t) KT01 Arzu South 51.95 63.00 11.06 3.72 KT02 Arzu South 63.40 67.20 3.70 9.38 KT03 Arzu South 76.30 86.40 9.95 7.23 KT06 Arzu South 35.40 49.50 13.97 3.85 KT16 Arzu North 79.10 83.40 4.35 4.08 RSC6 Arzu South 28.00 34.00 5.69 10.23 RSC8 Arzu South 45.00 52.50 7.50 10.55 Ariana has undertaken surface mapping, trenching, rock-chip sampling androck-saw channel sampling on the Kiziltepe vein system. Channel sampling on theArzu South Vein was designed to verify the gold grades and widths at surface, asindicated by historical drill data. Elsewhere, the programme was applied to testthe grade and geometry of other, less well exposed veins and determine thesource of a significant (>100ppb Au) soil anomaly covering an area of 0.25 x0.6km. On the Arzu South Vein, 38 rock-saw channels were completed. The channels werebetween 1m and 35m in length and spaced at 12.5m intervals along 400m of veinstrike. The vein was located and significant mineralisation encountered in allbut eight channels. Eight further channels terminated in vein or stockworkmaterial grading above 0.5 g/t Au. A best channel intersect of 6.29 g/t Au over13.5m true thickness was returned close to historical vein workings. Ariana completed eight trenches (up to 55m in length) across the Arzu North Veinwhich were channel sampled at regular 1m intervals. The channels were spaced atapproximately 40m intervals along a strike length of 250m. All eight channelswere mineralised, with a series of parallel quartz veins, stockwork material anddacitic host rock intersected. Significant intercepts included 1.25 g/t over17.5m, 1.54 g/t over 16.5m, 1.44 g/t over 15.6m, 1.23 g/t over 14.6m, and 2.12 g/t over 12.0m (true thicknesses using a 0.5 g/t Au cut off). The Arzu Northsystem remains open in all directions, with several trenches terminating inmineralization. Vein textures and trace element data are indicative of the upperpart of an epithermal system and, supported by historic drill data, gold gradesare expected to increase with depth. Kiziltepe Prospect - Other veins The rock saw channel sampling and trenching programme has defined a number ofother targets which will be drill tested by the Company in 2006. On the recentlydiscovered Aybor Vein, a best intersect of 2.45 g/t Au over 9.5m was returnedfrom 3 initial trenches. Channel sampling on the Hale Vein defined 10.5m @ 2.9 g/t Au coincident with a higher grade soil anomaly that extends some 300m to thewest. Rock-chip sampling across the Ceylan Vein and adjacent stockwork,identified consistent gold mineralisation along 300m of strike length, includinga higher grade section averaging 12.6 g/t Au over 32m of strike length, (peakgrade of 14.2 g/t Au). The Company plans to drill test these targets in 2006. Kiziltepe Prospect - Stockwork A large gold in soil anomaly at least 650m long and typically up to 250m wide,as defined by a >100 ppb gold contour has been defined immediately west of theArzu North Vein. In March 2006 the Company completed a programme of systematicrock chip sampling across the soil anomaly. In total, 84 samples were collectedon a regular 50m x 50m grid and assay results confirm the presence of a widezone of stockwork style mineralization. Peak grades from this survey include7.05 g/t Au and 16.2 g/t Au from samples coinciding with vein material. Kepez Prospect The Kepez prospect is located within the same 36km2 ten-year renewable operatinglicence which hosts the Kiziltepe prospect. Ariana has mapped over 2.5km instrike length of gold-silver bearing low-sulphidation epithermal quartz veins atKepez, across an area of at least 2km by 1km. Individual veins are exposed forup to 850m and widths vary between 1m and 25m. The main vein trends northward,dips to the west at 50 degrees and is hosted along the contact between Mioceneage andesitic volcanic rocks and Cretaceous ophiolitic units. In March 2005, initial reconnaissance sampling at Kepez established the presenceof significant gold grades at Kepez after a grab sample from historical workingsreturned 19.66 g/t Au. In December 2005, Ariana completed five rock-chip channelsamples along a 100m section of the Karakaya Vein at the Kepez gold prospect toverify grades and widths at surface as indicated by historical drill data.Results from the channels, which measured up to 20m wide and were spacedapproximately 25m apart along the vein are presented in Table 2 below. All fivechannels intersected gold mineralisation with higher grade intercepts of 6.28 g/t over 11m (channel #2) and 8.68 g/t Au over 16m (channel #4). Significantly,channel #4 ended in vein grading above 8 g/t Au at each end. Table 2: Karakaya vein rock-chip channel sample results Line Intersection Gold Grade Silver Number Width (m) (g/t Au) Grade (g/t Ag) 1 1 3.42 7.00 2 11 6.28 34.39 Includes 5 12.25 51.46 3 14 2.43 23.18 Includes 5 4.25 38.40 4 16 8.68 58.92 Includes 6 11.75 72.93 5 4 1.62 57.53 Notes:No top cut has been applied to assay results.Intersection based on a 0.5 g/t cut off grade. Umurlar Target In April 2006 the Company completed a programme of reconnaissance rock-chipsampling and mapping over the Umurlar target within the Kepez prospect.Rock-chip samples were collected from three silicified bodies (quartzstockworks, breccias and veins) outcropping at surface for up to 150 metres inlength, discontinuously along a total strike length of 1km within a zone up to50m wide. Sampling defined the presence of gold and silver mineralization atUmurlar, with peak grades of 9.77 g/t Au and 9.73 g/t Au (including 68.1 g/tAg). The quartz textures observed in these areas indicate formation at a highlevel in the hydrothermal system and the results highlight further potential atdepth, where grades are expected to increase. GENERATIVE EXPLORATION Overview As part of its strategy of rapidly and cost efficiently generating a pipeline ofprojects, the Company has developed a comprehensive understanding of the keygeological parameters controlling the location of known gold deposits in Turkey.This systematic methodology has yielded exploration success, with the discoveryof the Kinik gold prospect. Elsewhere, reconnaissance sampling at the Company's licences at Kosedere andCinarpinar in Canakkale province of western Turkey has determined several targetareas for gold and base metal mineralization with grades up to 6 g/t Au. InSeptember, exploration commenced on the Company's newly acquired licences in Vanprovince, eastern Turkey. With an enlarged field team comprising eight Turkish geologists, the Company hasaccelerated its generative exploration programmes. Progress in the period issummarised as follows: - Land holdings increased from 210 km2 to approximately 1,000km2 - 23 licences explored (approx. 460 km2) - 7 licences relinquished (approx. 140 km2) - 3 licences advanced to phase 2, including the Kinik gold prospect (approx. 60km2) - Over 72,000km2 analysed by ASTER remote-sensing - Over 80 new targets designated for future licence application Kinik gold prospect The Kinik gold prospect forms part of the Ivrindi project, which also includesthe Bengiler, Camavsar, Osmanlar and Okcular licences, totalling 61km2 inBalikesir Province, western Turkey. The Kinik snd Camavsar licences wereacquired following delineation of Landsat remote-sensing alteration anomaliesspanning 1.5km x 0.5km and 4km x 0.5km, respectively. The prospect is situatedin a regional-scale structural corridor that contains known occurrences ofepithermal gold-silver and antimony mineralisation. Following positive rock chip and channel sampling results Ariana has defined asignificant (750m by 50m) gold in soil anomaly (>100 ppb Au) at the Kinikprospect. The Company intends to undertake drilling on this target in order todefine the vertical extent of gold mineralization. Kosedere and Cinarpinar licences The Kosedere and Cinarpinar licences cover 57km2 in Canakkale Province, westernTurkey and were selected on the basis of the Company's remote sensing database.Reconnaissance work (January 2006) has returned grades up to 6 g/t Au fromsamples of rock 'float' collected from streams. Samples also returned anomalouscopper (0.19%) and zinc (0.25%). A second phase of follow up exploration onthese licences is planned. CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31st DECEMBER 2005 Notes 2005 2004 £'000 £'000 Administrative expenses 397 154Other operating income - 2 Operating loss 2 (397) (152) Interest receivable and similar income 16 1 ------- ------Loss on ordinary activities before (381) (151)taxationTax on loss on ordinary activities - - ------ ------Loss for the financial year after (381) (151)taxation Loss per share (pence) 4 1.35 0.69 CONTINUING OPERATIONS None of the group's activities were acquired or discontinued during the currentyear or previous year. CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE YEAR ENDED 31st DECEMBER 2005 2005 2004 £'000 £'000 Loss for the financial year (381) (151)Currency differences on foreign currency net (6) -investments ------ ------ Total Recognised gains and losses for the (387) (151)period CONSOLIDATED BALANCE SHEET 31st DECEMBER 2005 2005 2004 £'000 £'000 Fixed assetsIntangible assets 498 67Tangible assets 33 4 531 71 Current assetsDebtors 131 7Cash at bank and in hand 771 682 902 689 CreditorsAmounts falling due within one year 68 72 Net current assets 834 617 Total assets less current liabilities 1,365 688 Capital and reservesCalled up share capital 315 217Share premium account 966 -Merger reserve 720 720Profit and loss account (636) (249) Shareholders' funds 1,365 688 CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31st DECEMBER 2005 Notes 2005 2004 £'000 £'000 Net cash outflow from operating 3 (528) (189)activities Returns on investments and servicing of 16 1finance Capital expenditure and financial (463) (67)investment (975) (255) Financing 1064 937 Increase in cash in the period 89 682 Reconciliation of net cash flow tomovement in net funds Increase in cash in the period 89 682 Net funds at 1 January 682 - Net funds at 31 December 771 682 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards and the Statement ofRecommended Practice Accounting for Oil and Gas Exploration, Development andProduction and Decommissioning Activities revised in June 2001 (the SORP). Basis of consolidation On 19th July 2005 Ariana Resources Plc acquired the entire issued share capitalof Ariana Exploration and Development Limited by way of a share for shareexchange. The transaction qualifies as a Group reconstruction within the meaningof FRS 6, and has been accounted for using the merger accounting method.Accordingly, the financial information for the current period and comparativeshave been presented as if Ariana Exploration and Development Limited had beenowned by Ariana Resources Plc throughout the current and prior periods. Going concern The Group is at an early stage of development. In common with many explorationcompanies the Group raises funds in discrete tranches and the proceeds of theCompany's listing on AIM in 2005 raised £1.16m. The Directors and management areusing these funds for exploration and evaluation activities on several projects. The funds are forecast to provide sufficient working capital through 2006 and toraise additional funds when required. Accordingly, the Directors consider thatit is appropriate to prepare the financial information on a going concern basis. Exploration and development costs In accordance with the full cost method as set out in the SORP, expenditureincluding directly attributable overheads on the acquisition, exploration andevaluation of interests in licences not yet transferred to a cost pool scapitalised under intangible assets. Cost pools are established on the basis ofgeographic area. When it is determined that such costs will be recouped throughsuccessful development and exploitation or alternatively by sale of theinterest, expenditure will be transferred to tangible assets and depreciatedover the expected productive life of the asset. Whenever a project is consideredno longer viable the associated exploration expenditure is written off to theprofit and loss account. Tangible fixed assets Depreciation is provided at the following annual rates in order to write offeach asset over its estimated useful life. Fixtures and fittings - 33% on cost Motor vehicles - 25% on cost Deferred tax Deferred tax is recognised on all timing differences where the transactions orevents that give the Group an obligation to pay ture, or a right to pay less taxin the future, have occurred by the balance sheet date. Deferred tax assets arerecognised when it is more likely than not that they will be recovered. Deferredtax is measured using rates of tax that have been enacted or substantivelyenacted by the balance sheet date. Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Monetary assets and liabilities in foreigncurrencies are translated at the rates of exchange ruling at the balance sheetdate. The financial statements of foreign subsidiaries are translated at therate of exchange ruling at the balance sheet date. The exchange differencesarising from the retranslation of the opening net investment in subsidiaries aretaken directly to reserves. All other exchange differences are dealt withthrough the profit and loss account. Financial instruments The Group uses financial instruments to manage exposures to fluctuations ininterest rates. Financial assets are recognised in the balance sheet at the lower of cost andnet realisable value. Provision is made for diminution in value whereappropriate. Interest receivable and payable is accrued and credited/charged to the profitand loss account in the period to which it relates. Liquid resources Liquid resources comprise cash on short term deposit at not less than 24 hoursnotice. 2. OPERATING LOSS The operating loss is stated after charging: 2005 2004 £'000 £'000 Depreciation - owned assets 3 1Auditors' remuneration 10 8 Directors' emoluments 150 104 3. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2005 2004 £'000 £'000 Operating loss (397) (152)Depreciation charges 3 1Foreign Exchange Differences (6) -Increase in debtors (124) -Decrease in creditors (4) (38) Net cash outflow from operating (528) (189)activities 4. LOSS PER SHARE The calculation of basic loss per share is based on the loss attributable toordinary shareholders £381,000 (2004- £151,000) divided by the weighted averagenumber of shares in issue during the year 29,007,625 (2004-21,719,400). There isno dilutive effect of share options or warrants on the basic loss per share. On 16th May 2006 a further 15,384,617 shares were issued as detailed. Thisdecreases the loss per share to 0.86 pence. 5. POST BALANCE SHEET EVENTS On 11th May 2006 the Company announced a conditional placing of 15,384,617 newOrdinary Shares of 1 pence each at a price of 13 pence per share, raising£2,000,000 before expenses. The net proceeds of the placing will be used toaccelerate exploration with a programme at the Sindirgi gold project in WesternTurkey. The shares were admitted to AIM and dealings commenced on 19th May 2006.The new shares rank pari passu in all respects to the existing share capital. Ends This information is provided by RNS The company news service from the London Stock Exchange