Ariana Regulatory News (AAU)

30 September 2022

AIM: AAU

INTERIM RESULTS

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral exploration and development company with gold mining interests in Europe, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.

Financial Highlights:

· Ariana's share of profits from the Kiziltepe Mine, of which Ariana owns 23.5% through its investment in Zenit Madencilik San. ve Tic. A.S. ("Zenit"), in the six months to June 2022 amount to £2.5m (H1 2021: £1.3m), reflecting improved metals prices and a doubling of capacity of the Kiziltepe processing plant.

· Profit before tax of £2.9m recorded for the period, with operating costs in line with expectations and the prior year.

· Payment of the second tranche of the Company's Special Dividend, of 0.175 pence per ordinary share, following the completion of the partial divestment of its interests in Turkey.

· Approval at the Company's Annual General Meeting of the payment of the final tranche of Special Dividend, of 0.175 pence per ordinary share, to be made to shareholders on 3 October 2022.

Operational Highlights:

· Strategic investment of US$2.5m made into Ariana by Newmont Corporation to support the exploration programmes of Ariana's 75%-owned Western Tethyan Resources ("WTR") in south-eastern Europe. 

· WTR has since been granted 297km2 of highly prospective ground in Kosovo across four licences, with a further 161km2 of tenure currently under application.

· Ariana's 50%-owned Venus Minerals Ltd ("Venus") has substantially improved the project metrics for the advanced and full-permitted Apliki copper mine in Cyprus as it continues to pursue an IPO on AIM.

· Kiziltepe Mine production for H1 2022 achieved 13,378 ounces of gold (H1 2021: 7,941 oz Au) with annual guidance of 25,000 ounces of gold expected to be met by year-end.

· Further extended exploration and resource drilling campaigns are underway at Kiziltepe and Salinbas.

Post-Period End Highlights:

· Construction of the Tavsan gold mine, intended to be Zenit's second producing mine, has been underway since late July 2022 and scheduled for completion in H2 2023.

Dr. Kerim Sener, Managing Director, commented:

"The last half year has reflected a period of consolidation on the strategy of the Company following the transformative developments of 2021, which included the payment of the second tranche of our £7.74m Special Dividend in March 2022. The third and final tranche of this Special Dividend, amounting to £2.0m, is due to be paid to shareholders on 3 October 2022. This marks the end of one era for Ariana and the beginning of an exciting second era. This new era involves a much broader spread of project interests, from the developing Project Leopard strategy in Turkey to our significant regional investments in Western Tethyan and Venus, and to our minority interests in several discovery-stage opportunities, held through the Asgard Metals Fund. 

"Such a broadening of interests is underpinned by our 23.5% holding in Zenit, which has been successfully producing gold and silver for the past five years from the Kiziltepe Mine in Turkey. An extensive drilling programme, completed in late 2021, resulted in the definition of a revised Resource and Reserve estimate, announced in early 2022, which provided a further 2.5 years of production from the mine. With a new two-rig drilling programme currently underway, we are expecting to enhance the life of mine further still.

"Zenit now has production from its second gold and silver mine at Tavsan in its sights, targeting a production rate of circa 30,000 ounces of gold per annum over eight years. Post-period end, Zenit commenced the construction phase of the mine, with completion currently targeted during H2 2023. Meanwhile, drilling remains underway at the Salinbas Project in north-eastern Turkey, drawing on the enhanced financial resources of US$8m injected into the project company by Ozaltin Holding A.S.

"Our 75% investment in Western Tethyan Resources, completed in late 2021, was clearly well-timed, with Newmont Corporation taking a strategic position in Ariana to support our exploration activities across south-eastern Europe. Since then, WTR has secured 297km2 of highly prospective ground in Kosovo across four licences, with a further 161km2 under application. Among the exploration licences granted during the period, the Hertica Project contains a large 6km2 zone of advanced argillic alteration containing several quartz-diorite porphyry intrusions displaying copper, gold and antimony mineralisation up to 0.4 g/t Au and 0.5% Cu from rock-chip samples. Post-period end, WTR entered into an option to acquire the high-grade Slivova gold project in Kosovo from Avrupa Minerals, representing an advanced project development opportunity.

"We are also very pleased with the progress being made by the team at Venus; notably the completion of a 50:50 joint venture agreement with Cyprus' leading construction firm, the Iacovou Group, on the advanced and fully-permitted Apliki copper project in Cyprus. This has significantly enhanced Venus' project portfolio and, recent developments, including the completion of a revised Mineral Resource Estimate for Apliki of 17Mt at 0.26% to 0.69% Cu (0.34% Cu average), have made material improvements to the metrics of its proposed IPO. These improvements are in the process of being integrated into the IPO documentation ahead of further market soundings which will be completed in Q4 2022.

"Meanwhile, in Australia, the Asgard Metals Fund is continuing to evaluate several investment opportunities beyond those completed to date. Significant investments completed during the past year have included Panther Metals Ltd, Pallas Resources Ltd and Annamite Resources Holdings Pte. Ltd. Panther is exploring a largely Western Australian portfolio of gold and nickel-cobalt assets, upon which a maiden JORC Resource of 70.6Mt at 0.7% Ni and 460ppm Co (Inferred) was established in June 2022. Pallas Resources commenced an extensive exploration programme across its highly prospective portfolio of copper-gold assets in Kazakhstan, involving soil geochemistry and airborne geophysics, among other work. Annamite Resources commenced a drilling programme on its Namthom copper-gold porphyry project in Laos. 

"We look forward to providing further updates from our exciting pipeline of projects and investments, representing a full spectrum of opportunities across commodities and jurisdictions, yet maintaining a continued focus on advanced projects in gold and copper, particularly in south-eastern Europe."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Condensed consolidated statement of comprehensive income

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Condensed consolidated interim statement of financial position

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Condensed consolidated interim statement of changes in equity

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Condensed consolidated interim statement of changes in equity (continued)

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Condensed consolidated Interim statement of cash flows

Ariana Resources Plc

Unaudited Condensed Consolidated Interim Financial Statements

For the six months ended 30 June 2022

Notes to the interim financial statements for the six months ended 30 June 2022

1. General information

Ariana Resources Plc (the "Company") is a public limited company incorporated, domiciled and registered in the U.K. The registration number is 05403426 and the registered address is 2nd Floor, Regis House, 45 King William Street London EC4R 9AN.

The Company`s shares are listed on the AIM Market of the London Stock Exchange. The principal activities of the Company and its subsidiaries (together the "Group") are related to the exploration for and development of gold, copper and technology-metals, primarily in south-eastern Europe, with an interest in mining operations in Turkey.

2 (a). 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 2021, which have been prepared in accordance with UK-adopted international accounting standards.

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 UK. Statutory financial statements for the year ended 31 December 2021 were approved by the Board of Directors on 28 June 2022.The financial information for the periods ended 30 June 2022 and 30 June 2021 are unaudited.

2 (b). Significant accounting policies

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 2021.

These financial statements have been prepared on a going concern basis. The Directors are mindful that there is an ongoing need to monitor overheads and costs associated with delivering on its strategy and certain exploration programmes being undertaken across its portfolio.

3. Administrative costs

During the period, exchange gains on holding US bank deposits resulted in a net credit arising on the charge for administrative costs.

4. Profit on restructuring of group`s activities

During the prior period, the Group concluded its restructuring programme. This comprised the part-disposal of its interest in Zenit Madencilik San.ve Tic. A.S ("Zenit") and Pontid Madencilik San.ve Tic. A.S. ("Pontid") to Ozaltin Insaat, Ticaret and Sanayi A.S. ("Ozaltin") and Proccea Construction Co ("Proccea") for a total consideration of US$ 35.75m.

5. Equity accounted Investments 

The Group investments comprise the following:

5 ( a). Investment in Zenit

The Group accounts for its associated interest in Zenit using the equity method. During February 2021, the Group sold 26.5% of its existing 50% shareholding in Zenit to Ozaltin for a total consideration of US$25m. As at 30 June 2022 the Group retained a 23.5% interest in Zenit. Prior to the part-disposal, the Group`s interest in Zenit was accounted for as an equally controlled joint venture.

Summarised financial information, based on Zenit`s translated financial statements, and reconciliations with the carrying amount of the investment in the consolidated financial statements are set out below:

5 (b). Investment in Pontid

Following the disposal in the prior period by Greater Pontides Exploration B.V. (holding company) of its entire interest in Pontid Madencilik San.ve Tic. A.S. ("Pontid") to Ozaltin and Proccea, the Group reinvested US$ 5.75m for a 23.5% shareholding in Pontid. This investment continues to be valued at £4.139m as at 30 June 2022.

5 (c). Investment in Venus

The Group acquired 50% of Venus Minerals Ltd through an earn-in agreement on 5 November 2021. The Group`s share of loss for the period to 30 June 2022 amounted to £143,000 (2021:loss: £213,000 - since significant influence on 5 November 2021).

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.

Other reconciling items include non-mineral exploration costs and transactions between Group and associate companies. 

Geographical segments

The Group's mining assets and liabilities are located primarily in Turkey.

7. Taxation

The Group had taxable profits for the period and a corporation tax charge is anticipated during the year to 31 December 2022.

The charge reflected in these interim accounts is based on the following transactions:

8. Earnings per share on continuing operations

The calculation of basic profit per share is based on the profit attributable to ordinary shareholders of £2,439,000 divided by the weighted average number of shares in issue during the period, being 1,121,823,310.

All the above investments are owned by the Group`s wholly-owned subsidiary Asgard Metals Pty. Ltd.

The fair value of trade and other receivables is not materially different to the carrying values presented.