Ariana Regulatory News (AAU)

7 Oct 2005 15:37

Ariana Resources PLC07 October 2005 07 October 2005AIM: AAU INTERIM REPORT FOR SIX MONTHS TO 30 JUNE 2005 Ariana Resources plc ("Ariana" or "the Company"), the gold exploration companyfocused exclusively on Turkey, today released its interim report for the 6months ended June 30, 2005. Highlights: * Acquisition of Sindirgi gold project in western Turkey * Appointment of experienced Non Executive Directors * Further exploration licences granted * No long term debt Post Period Highlights: * Admission to AIM on 28 July 2005 * IPO Financing raising £1.16m * Commencement of scoping study on the Kiziltepe gold prospect * Reconnaissance exploration in eastern Turkey Michael Spriggs, Chairman, commented: "Our vision for Ariana is to discover world class gold and copper-gold depositsin Turkey using an advanced technology-driven exploration strategy and toinvestigate opportunities for early stage cash generation. In this regard, 2005is proving to be a pivotal year for Ariana, with good progress and significantdevelopments on several fronts. Our initial targets offer excellent potentialand we look forward to delivering positive result. "The Company has acquired the advanced Sindirgi gold project, trebled itsgrassroots exploration base, and appointed two highly experienced Non ExecutiveDirectors. Despite relatively weak market conditions in July, Arianasuccessfully raised £1.16m and its shares were admitted to AIM." Enquiries to:Ariana Resources plcSteven Poulton, Chief Executive Tel: 01235 511 767s.j.poulton@arianaresources.com Mobile: 0797 408 6712 Bankside ConsultantsMichael Padley / Susan Scott Tel: 020 7367 8888 Chairman's statement: It is a pleasure to present my first Chairman's statement to you on yourCompany's activities for the six months to 30th June 2005, to accompany theinterim results for the same period which are set out below. Overview Ariana is focused exclusively on exploration in Turkey, a geologically complexcountry which the Directors consider to be highly prospective for the discoveryof world class epithermal gold and porphyry copper-gold deposits. DespiteTurkey's long history of metal mining, its geology is relatively under-explored.The existence of such gold deposits as Kiladag (5m oz), Copler (4m oz), Ovacik(1m oz) and Efemcukuru (1m oz) provide ample demonstration of Turkey'sprospectivity. Turkey is an attractive country in which to invest and explore. It is also theworld's third largest consumer of gold. Turkey is a stable country with arapidly developing economy built around a supportive legislative and investmentframework. The positive developments in the recent negotiations over Turkey'spotential membership of the enlarged EU provide further encouragement. Ariana's exploration strategy using sophisticated remote sensing techniques andbased on rapid ground turnover is proving highly efficient and cost-effective.An advanced in-house remote sensing database is being successfully applied togenerate a pipeline of projects. The database contains multiple geoscientificdatasets, including satellite-borne remote sensing data across an area ofapproximately 420,000km(2). To date, over 100 targets have been systematically prioritised, initial licencesacquired and grassroots exploration results used to determine with confidencewhether licence areas are developed or relinquished. Ariana's initialexploration results have been very encouraging. Ariana's focus on gold, copper and other key associated metals reflects thewidely held view that the recent market strength in these products issustainable, fuelled by the continuing vigorous growth in the world's majoremerging economies. The Company is therefore well positioned to derive fullbenefit from the discoveries it is seeking to make. Activities in the period In January 2005, the Company acquired the Sindirgi Gold Project from NewmontAltin Madencilik Limited irketi, a subsidiary of Newmont Mining Corporation(NYSE & ASX: NEM; TSX: NMC) for a consideration of US$400,000 and a royalty ofup to 2.5% on future production. The Sindirgi Gold Project comprises threeoperating licences and eight exploration licences, covering an area ofapproximately 235km2 in Balikesir Province, western Turkey. Sindirgi hosts a number of prospect areas, the most advanced of which isKiziltepe, which hosts over 19km in strike length of gold-silver bearing veins.Work by previous operators at Kiziltepe included mapping, soil sampling,rock-chipping and 3,425m of diamond drilling from 26 holes. Intersections of upto 10.5 g/t gold over 7.5m were reported from this previous drilling.Independent technical consultants SRK have prepared a geological model of150,000 ounces gold (not a resource as defined by the JORC code) at Kiziltepe onapproximately 5% of the known vein system, based on an average grade of 4.2 g/tto an approximate depth of 150m. Ariana's exploration portfolio includes a further 50 licences across western,north eastern and eastern Turkey. Within these, the company's explorationstrategy has yielded early success with the identification of the Kinik GoldProspect in Balikesir Province, western Turkey. A channel sample along a roadcut returned 48m of mineralisation, including higher grade zones of 3.21 g/tgold over 10m, 3.09 g/t over 5m and 1.4 g/t over 13m (using a 0.5g/t goldcut-off) and a peak grade of 10.42 g/t. Board appointments During the period Ariana welcomed two board members, with Mike Etheridge andMichael de Villiers joining the board as Non Executive Directors in April 2005.Their appointment brings to Ariana extensive experience in the resources sectorwhich will greatly assist the Company in realising its strategy. Mike Etheridgehas over 30 years' industry experience, having served as Executive Chairman ofSRK (Australasia) from 1997 until 2004, and as a Director of SRK Global from1998-2001. His current directorships include AIM and ASX-listed BallaratGoldfields NL and TSX-V listed Geoinformatics Exploration Inc. Michael deVilliers is a Commercial and Financial Accountant with over 15 years' experiencein mining and chemicals operations in Namibia, Botswana, Ghana, Bulgaria and theUK. His current directorships include AIM-listed Mercator Gold plc and EurasiaMining plc. Activities post period Ariana's shares were admitted to trading on AIM on 28 July 2005 with AmbrianPartners and Beaumont Cornish appointed as the Company's Nominated Broker andNominated Adviser respectively. Prior to admission the Company raised £1,165,400before costs through an Initial Public offering (IPO) of 9,711,665 ordinaryshares at a price of 12p per share. Over 70% of the investors at the IPO wereInstitutional or board members. The new shares issued represent 30.9% of theenlarged capital of 31,431,065 ordinary shares. On 22 August 2005 we announced the commencement of a scoping study on theKiziltepe prospect at the Sindirgi gold project. Two teams are undertaking rocksaw channel sampling to enable a mineral resource estimate to be completedaccording to the JORC Code. On 21 September 2005 we announced the commencement of reconnaissance explorationin eastern Turkey. This region is a new exploration frontier regarded by thedirectors as prospective for the discovery of world-class deposits. Withfirst-mover advantage, Ariana has established a significant land holding over anumber of prospective remote-sensing anomalies. Outlook Ariana has shown both corporate agility and exploration expertise in the periodunder review, and its profile as a dynamic junior company has continued to grow.Based on its progress to date, Ariana remains firmly on course towards achievingits strategic goals and is confident that it can maintain the tempo of recentactivity. Your company has brought together experienced management and energetic operatingteams, an advanced exploration strategy, and a first-class portfolio ofprospective properties in Turkey. This is an enviable combination which isalready starting to deliver results. To have come so far so rapidly is a tributeto all the members of the Ariana team in the UK and Turkey. On behalf of theCompany, I would like also to express our appreciation to all of ourshareholders for their continuing support. We shall strive to keep allshareholders fully and continuously informed on our activities through regularprogress reports. We can anticipate considerable activity in the coming year as we advanceexisting properties towards the drilling stage, aim for new discoveries andpursue other corporate developments with both local and international partnerswhich we consider to be of long term value for shareholders. Michael SpriggsChairman 07 October 2005 About Ariana Resources Ariana is a technology-driven exploration company focused on the potentialdiscovery of multi-million ounce epithermal gold-silver and porphyry copper-golddeposits within the Tethyan metallogenic belt of Turkey. The Company has aportfolio of prospective licences covering over 1,000km2, selected on the basisof its advanced in-house remote sensing database. Ariana's nominated broker isAmbrian Partners Limited and Beaumont Cornish Limited is nominated adviser. Mike Etheridge, BSc (Hons), PhD, is a non-executive director of the Company andis a Fellow of the Australian Institute of Geoscientists. He has over 30 years'experience in geological research and mineral consultancy and served as aDirector of SRK Global from 1978-2001 and as Chairman (SRK Australasia) from1998-2004. He is a Competent Person with respect to the technical disclosure inthis regulatory announcement, which he has read and approved. For further information on Ariana you are invited to visit the Company's websiteat www.arianaresources.com. Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 Consolidated Profit and Loss Account Notes Unaudited Audited Six months ended Year ended 30 June 2005 31 December 2004 £'000 £'000 Administrative expenses (117) (152) Operating loss (117) (152) Net interest receivable 6 1 Loss on ordinary activitiesbefore taxation (111) (151)Tax on loss on ordinary activities - - Loss on ordinary activitiesafter taxation and retained forthe period (111) (151) Basic and diluted loss pershare (pence) 2 (51.1)p (125.9)p All transactions arise from continuing operations.All recognised gains and losses are included in the profit and loss account. Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 Consolidated Balance Sheet Notes Unaudited Audited At At 30 June 2005 31 December 2004 £'000 £'000 Fixed assetsIntangible fixed assets 396 67Tangible fixed assets 19 4 415 71 Current assetsDebtors 51 7Cash at bank and in hand 190 682 241 689 Creditors: amounts falling due withinone year (79) (72) Net current assets 162 617 Total assets less current liabilities 577 688 Capital and reservesCalled up share capital 217 217Share premium account 719 719Adjustment for shares in subsidiary not yet issued - -Merger reserve - -Profit and loss account (359) (248) Shareholders' funds 5 577 688 Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 Unaudited, Consolidated Cash Flow Statement Notes Six months Year ended ended 31 December 30 June 2005 2004 £'000 £'000 Net cash outflow fromoperating activities 3 (150) (41) Returns on investment and servicing offinanceInterest received 6 1Interest paid - - Net cash inflow fromreturns on investment andservicing of finance 6 1 Taxation - - Capital expenditure and financialinvestmentPurchase of tangible fixedassets (19) (5)Purchase of intangiblefixed assets (329) (66) Net cash outflow fromcapital expenditure andfinancial investment (348) (71) Management of liquid resourcesTransfer to short term bank deposits - - Net cash outflow beforefinancing (492) (111) FinancingIssue of shares by ArianaExploration & DevelopmentLimited - 793 Net cash inflow fromfinancing - 793 (Decrease)/increase incash 4 (492) 682 Cash brought forward 682 - Cash carried forward 190 682 Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 Notes to the interim financial information: 1. Basis of preparation The interim financial information set on pages 1 to 6 has been prepared underthe historical cost convention. The principal accounting policies applied on aconsistent basis in the preparation of the interim financial information are setout below. Going concern The group is at an early stage of development and in common with manyexploration companies it raises funds in discrete tranches and the proceeds ofthe share placings in the year to 31 December 2004 have raised approximately£800,000 in cash. The parent company, Ariana Resources plc, completed a listingon AIM in July 2005 and the fund raising by placing of shares provided funds ofapproximately £900,000 net of expenses. The funds are forecast to providesufficient working capital until the end of 2006. Accordingly the Directorsconsider that it is appropriate to prepare this interim report on the goingconcern basis. However, these proceeds will not be sufficient to bring the projects into fullproduction and, in due course, further funding will be required for theseprojects. In the event that the group is unable to secure further finance thegroup will not be able to fully develop these projects. Basis of consolidation The interim financial information includes the financial information of ArianaExploration and Development Limited ("AEDL") and all its subsidiaries (together,the "Group") for the period from 1 January 2004 to 30 June 2005. The consolidated financial information includes the financial information ofAEDL's subsidiary undertakings using the acquisition method of accounting. Underthis method the results of the acquired entity are included in the consolidatedprofit and loss account from the date of acquisition. AEDL has a wholly ownedsubsidiary, Portswood Resources Ltd, incorporated in the British Virgin Isleswhich in turn owns 98% of the issued share capital of a company, GalataMadencilik Ltd, incorporated in Turkey. The remaining 2% of the issued sharecapital is being held in a trust on behalf of Portswood Resources Ltd. Intangible fixed assets Intangible fixed assets are stated at cost. These comprise costs directly incurred in exploration and evaluation. They arecapitalised as intangible assets pending determination of the feasibility of theproject. When the existence of economically recoverable reserves is establishedthe related intangible assets are amortised on a depletion percentage basis.Where a project is abandoned or is determined to not be economically viable, therelated costs are written off. The recoverability of these deferred exploration and evaluation costs isdependent upon a number of factors common to the natural resource sector. Theseinclude the extent to which the company can establish recoverable reserves onits properties, the ability of the company to obtain necessary financing tocomplete the development of such reserves and future profitable production orproceeds from the disposition thereof. 2. Loss per share The calculation of loss per share is based on a loss of £111,000 for the periodended 30 June 2005 (31 December 2004: loss of £151,000) and the weighted averagenumber of shares in issue in the period to 30 June 2005 of 217,194 (31 December2004: 119,843). There is no difference between the diluted loss per share andthe loss per share presented. Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 3. Net cash outflow from operating activities Six months ended Year ended 30 June 2005 31 December 2004 £'000 £'000 Operating loss (117) (152)Depreciation and amortisationcharge 4 1Increase in debtors (44) (6)Increase/(decrease) in creditors 7 (22)Non-cash expenditure - 138 Net cash outflow from operatingactivities (150) (41) 4. Reconciliation of net cash flow to movements in net funds Six months ended Year ended 30 June 2005 31 December 2004 £'000 £'000 (Decrease)/increase in cash in theperiod (492) 682Increase in short term bank deposits - - (Decrease)/increase in funds inthe period (492) 682 Net funds at start of period 682 - Net funds at end of period 190 682 Represented by:Cash at bank and in hand 190 682Short term bank deposits - - Net funds at end of period 190 682 5. Reconciliation of movements in shareholders' funds Six months ended Year ended 30 June 2005 31 December 2004 £'000 £'000 Loss for the period (111) (151)New share capital subscribed -Ariana Exploration & DevelopmentLimited - 931 Movement in shareholders' funds (111) 780 Shareholders' funds at start ofperiod 688 (92) Shareholders' funds at end ofperiod 577 688 Ariana Exploration and Development LimitedInterim report for the six months ended 30 June 2005 6. Intangible assets Included in intangible assets at 30 June 2005 is an amount of £217,000 being thepurchase of the Sindirgi Gold Project and accompanying data from the NewmontMining Corporation ("Newmont") for a total consideration of US$400,000 plus aNet Smelter Return ("NSR") Royalty on 31 January 2005. The royalty calls AEDL topay Newmont 1.5%, 2% and 2.5% of NSR depending on the London gold price tradingbelow US$400, above US$400 and above US$450 per ounce respectively. 7. Post balance sheet events On 19 July 2005 the entire issued share capital of AEDL was acquired by ArianaResources Plc in a share for share exchange. On 19 July 2005 21,719,400 ordinary shares were issued by Ariana Resources Plcto the existing shareholders of AEDL in accordance with a share for shareexchange agreement, whereby each share held in AEDL was exchanged for 100ordinary shares in Ariana Resources Plc. Pursuant to this exchange, loss pershare of 51.1 pence equates to 0.51 pence in Ariana Resources Plc based on theloss of £111,000. On 28 July 2005 Ariana Resources Plc was admitted to trading on AIM. At thistime the group raised approximately £900,000 in cash, net of expenses, from aplacing of 9,711,665 ordinary shares 12p per share. 8. Publication of non-statutory accounts The financial information set out in this interim report does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. The profit and loss account and balance sheet for the year ended 31 December2004 have been audited and this financial information was included in thePlacing and AIM Admission document. Copies of this report are available from the Companies registered office atRidgeway House, 1 Hagbourne Road, Didcot, Oxfordshire, OX11 8ER or the Company'swebsite www.arianaresources.com. Ends This information is provided by RNS The company news service from the London Stock Exchange