Ariana Regulatory News (AAU)

29 Sep 2006 07:04

Ariana Resources PLC29 September 2006 28 September 2006AIM: AAU INTERIM REPORT FOR SIX MONTHS TO 30 JUNE 2006 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, 2006. Highlights: •Encouraging results from a number of targets, particularly the Sindirgi gold project in western Turkey - 45km of mapped veins •Grassroots exploration success - 750km gold in soil anomaly @ Kinik •Private placement raising £2.0m •No long term debt •Director share purchases Post Period Highlights: •Drilling commenced at Sindirgi gold project •Acquisition of licences from Newmont Mining Corporation Michael Spriggs, Chairman, commented: "I am pleased to report that in the six months to the 30th June 2006 Arianacontinued to advance at an exceptionally strong pace. Our high speed / low costexploration approach is yielding excellent results, particularly at our flagshipSindirgi gold project. Our strong progress has been bolstered by a £2 millionfinancing that introduced several key institutional investors and which broughtforward the start of the ongoing drilling programme at the Sindirgi project. "The work that we have done to date has created an extremely strong platform onwhich to build our resource base. We are continuing to press home our 'firstmover' advantage in Turkey and to grow the Company's considerable pipeline ofgold projects for future drill testing. A number of joint venture opportunitieswith both international and local partners are being assessed as a means ofaccelerating growth still further." Enquiries to: Ariana Resources plcSteven Poulton, Chief Executive Tel: 01235 511 767s.j.poulton@arianaresources.com info@arianaresources.com Mobile: 0797 408 6712 Bankside ConsultantsMichael Padley / Susan Scott Tel: 020 7367 8888 About Ariana Resources Ariana is a well funded technology-driven exploration company focused on thediscovery of epithermal gold-silver and porphyry copper-gold deposits withmulti-million ounce potential within the Tethyan metallogenic belt of Turkey.The Company has a portfolio of prospective licences covering approximately1,000km2, selected on the basis of its advanced in-house remote sensingdatabase. Ariana's broker is Ambrian Partners Limited and Beaumont CornishLimited is the Company's nominated adviser. For further information on Arianayou are invited to visit the Company's website at www.arianaresources.com. Chairman's Statement: In my last Chairman's statement I demonstrated how 2005 had been a year of'inspiration and discovery' for your Company. I am pleased to report that in thesix months to the 30th June 2006 Ariana has continued to advance at anexceptionally strong pace. Our high speed / low cost exploration approach is yielding excellent results,particularly at our flagship Sindirgi gold project in western Turkey. Our strongprogress has been bolstered by a £2 million financing which introduced severalkey institutional investors and which brought forward the start of thecontinuing aggressive drilling programme at the Sindirgi project. The interimresults for the period are set out below. Our activity in the period can be summarised as follows Kiziltepe prospect •Encouraging results from Hale vein (2.9 g/t Au over 10.5m) •Wide gold zone defined at Arzu north vein (1.25 g/t Au over 17m) •Bulk tonnage target defined by rock chip sampling (up to 4.59 g/t Au) Kepez prospect •High grade intersects from channel sampling at Kepez vein (8.68 g/t Au over 16m) €50m wide stockwork zone discovered from rock chip sampling (up to 9.77 g/ t Au) Generative Exploration •Excellent results from the Kosedere and Cinarpinar licences (6.1 g/t Au) •Remote sensing across 72,000km2 completed Corporate •Strong institutional support for placement raising £2 million at 13 pence per share •Director share purchases Sindirgi gold project The field teams of our Turkish operating subsidiary, Galata Madencilik San. veTic. Ltd. Sti. ("Galata") have focused exploration on the Company's 100% ownedSindirgi gold project that covers 224km2 in Balikesir Province, western Turkey.We believe Sindirgi exhibits many of the hallmarks of a potential one millionounce gold system, with over 45km of mapped gold-silver bearing epithermalquartz veins, as well as several gold bearing silicified bodies and stockworksacross numerous prospect areas. The most advanced prospect at Sindirgi is Kiziltepe, which hosts over 19km ofveins. Work by previous operators included diamond drilling with intersectionsup to 10.5 g/t gold over 7.5m and 7.23 g/t over 10m reported. Our explorationteams have completed a programme of systematic trenching and over 1,000m of rocksaw channel sampling at Kiziltepe in the period. This programme yielded positiveresults from testing of several priority veins including 6.29 g/t Au over 13.5mfrom Arzu South vein, 2.90 g/t Au over 10.5m from Hale vein, 2.45 g/t Au over9.5m from Aybor vein and 1.63 g/t Au over 13.4m from Arzu North vein.Separately, rock-chip sampling on the Ceylan vein returned grades up to 14.2 g/t. Elsewhere at the Kiziltepe prospect, a gold in soil anomaly measuringapproximately 900m by 300m was tested by a systematic rock chip grid. This rapidprogramme resulted in the identification of a pervasive stockwork style goldmineralised system and included peak grade of 16.2 g/t Au from samplescoinciding with vein material. The Kepez prospect is located 6.5km northeast of Kiziltepe. Rock-chip channelsampling by our team on a 100m section of the 475m long Karakaya veinsuccessfully intersected significant mineralisation, including 8.68 g/t Au over16m and 6.28 g/t Au over 11m. We consider this zone to be the source of theadjacent mining scree, from which a grab sample returned 19.66 g/t Au. Exploration at Kepez also resulted in the discovery of three silicified bodies upto 50m wide and 150m long, with rock chip samples assaying up to 9.7 g/t Au. Generative Exploration Ariana places very strong emphasis on the application of remote sensingtechnology in order to generate and turn over rapidly and cost-effectively newprospect areas. Our study has now been completed over an area of 72,000km2covering the most prospective areas of Turkey. This programme has resulting inthe generation of over 80 new targets. Simultaneously we have successfullydoubled our field team to eight geologists in order to accelerate our rate ofexploration. Our strategy has already been powerfully rewarded with the discovery of theKinik gold prospect, where a 750m long gold in soil anomaly has been defined.Further success has been achieved at the Kosedere and Cinarpinar licence areas,where reconnaissance samples of quartz in streams yielded up to 6 g/t Au andwhere rock chips returned up to 0.19% copper. Corporate Activity In order to fund the Company's continuing exploration and growth programmes, aprivate placing was undertaken in May 2006 which raised £2,000,000 from theissue of 15,384,617 shares at 13 pence per share. The placement was very wellreceived and brought a number of new institutional investors. On behalf of theBoard, I would like to take the opportunity of formally welcoming our newshareholders to the Company. Subsequent to the private placement, certaindirectors including Chief Executive Steven Poulton purchased an aggregate of90,333 shares in the Company. Activities Post Period On 9th August 2006, we announced the acquisition of exploration licences on the4km long and up to 1km wide Goveli gold prospect (western Turkey) from NewmontAltin Madencilik Limited Sirketi, a subsidiary of Newmont Mining Corporation(NYSE & ASX: NEM; TSX: NMC) ("Newmont") in return for a 2% Net Smelter Returnsroyalty on future gold / minerals production within a 2km area of interest ofthe combined licence package. Later in August we announced the commencement of a 3,700m diamond drillingprogramme with 37 holes planned in total at the Kiziltepe prospect. Theprogramme has been designed to test the depth and grade continuation of the fiveprincipal veins and to define an initial JORC compliant gold resource for theArzu South vein. Most recently, on the 8th September 2006, we announced the retirement from theboard of Matthew Grainger, in order for him to develop a new businessopportunity. On behalf of the Board I would like to take this opportunity tothank him again for his considerable contribution to the Company. Outlook The significant progress we have worked very hard to achieve has created anextremely strong platform on which to build our resource base. In the meantimewe are continuing to press home our 'first mover' advantage in Turkey and togrow the Company's considerable pipeline of gold projects for future drilltesting. A number of joint venture opportunities with both international andlocal partners will continue to be assessed as a means of accelerating growthstill further. Michael Spriggs Chairman 28 September 2006 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 RESOURCES PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 Notes Unaudited Audited 1.1.06 Year Ended to 30.6.06 31.12.05 £'000 £'000Administrative expenses 213 397 -- --OPERATING LOSS (213) (397)Interest receivable and similar income 15 16 -- --LOSS ON ORDINARY ACTIVITIES BEFORE (198) (381)TAXATIONTax on loss on ordinary activities - - -- --LOSS FOR THE FINANCIAL PERIOD AFTER (198) (381)TAXATION -- --DEFICIT FOR THE PERIOD FOR THE GROUP (198) (381) LOSS PER SHARE (pence) 5 0.55 1.35 CONTINUING OPERATIONS None of the group's activities were acquired or discontinued during the currentperiod or previous year. TOTAL RECOGNISED GAINS AND LOSSES The group has no recognised gains or losses other than the losses for thecurrent period ARIANA RESOURCES PLC CONSOLIDATED BALANCE SHEET 30 JUNE 2006 Notes 2006- Unaudited 2005- Audited £'000 £'000FIXED ASSETSIntangible assets 6 689 498Tangible assets 41 33 -- -- 730 531CURRENT ASSETSDebtors 113 131Cash at bank 2,313 771 -- -- 2,426 902CREDITORSAmounts falling due within one year 54 68 -- --NET CURRENT ASSETS 2,372 834 -- --TOTAL ASSETS LESS CURRENT LIABILITIES 3,102 1,365 CAPITAL AND RESERVESCalled up share capital 469 315Share premium 2,747 966Mergers reserve 720 720Profit and loss account (834) (636) -- --SHAREHOLDERS' FUNDS 7 3,102 1,365 ARIANA RESOURCES PLC CASH FLOW STATEMENT FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 Notes Unaudited Audited 1.1.06 Year Ended to 30.6.06 31.12.05 £'000 £'000Net cash outflow from operating activities 1 (204) (528)Returns on investments and servicing of 2 15 16financeCapital expenditure and financial 2 (204) (463)investment -- -- (393) (975)Financing 2 1,935 1,064 -- --Increase in cash in the period 1,542 89 Reconciliation of net cash flow to 3movement in net fundsIncrease in cash in the period 1,542 89 -- --Change in net funds resulting from cash 1,542 89flows -- --Movement in net funds in the period 1,542 89Net funds at 1 January 2006 771 682 -- --Net funds at 30 June 2006 2,313 771 ARIANA RESOURCES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 1. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Period Year Ended 1.1.06 31.12.05 to 30.6.06 £'000 £'000Operating loss (213) (397)Depreciation charges 4 3Foreign Exchange differences 25 (6)Increase in debtors (3) (124)Decrease in creditors (17) (4) -- --Net cash outflow from operating activities (204) (528) 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT Period Year Ended 1.1.06 31.12.05 to 30.6.06 £'000 £'000Returns on investments and servicing offinanceInterest received 15 16 -- --Net cash inflow for returns on investments 15 16and servicing of finance Capital expenditure and financialinvestmentPurchase of intangible fixed assets (186) (424)Purchase of tangible fixed assets (18) (39) -- --Net cash outflow for capital expenditure (204) (463)and financial investment FinancingShare issue 2,000 1,165Expenses offset against share premium (65) (101) -- --Net cash inflow from financing 1,935 1,064 ARIANA RESOURCES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 3. ANALYSIS OF CHANGES IN NET FUNDS At 1.1.06 Cash flow At 30.6.06 £'000 £'000 £'000Net cash:Cash at bank 771 1,542 2,313 -- -- -- 771 1,542 2,313 -- -- --Total 771 1,542 2,313 ARIANA RESOURCES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 4. 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 25th 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. A further placement wasundertaken in May 2006 and raised £2.0m. The directors and management are usingthese funds for exploration and evaluation activities on several projects. The funds are forecast to provide sufficient working capital through 2006 and2007 and to raise additional funds when required. Accordingly, the directorsconsider that it is appropriate to prepare the financial information on a goingconcern 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 and evaluation ofinterests in licences not yet transferred to a cost pool is capitalised underintangible assets. Cost pools are established on the basis of geographic area.When it is determined that such costs will be recouped through successfuldevelopment and exploitation or alternatively by sale of the interest,expenditure will be transferred to tangible assets and depreciated over theexpected productive life of the asset. Whenever a project is considered nolonger viable the associated exploration expenditure is written off to theprofit and loss account. ARIANA RESOURCES PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 5. LOSS PER SHARE The calculation of basic loss per share is based on the loss attributable toordinary shareholders £195,639 divided by the weighted average number of sharesin issue during the period 35,313,020. There is no dilutive effect of shareoptions on the basic loss per share. 6. INTANGIBLE FIXED ASSETS Group Exploration Costs £'000COSTAt 1 January 2006 498Additions 191 --At 30 June 2006 689 --NET BOOK VALUEAt 30 June 2006 689 At 31 December 2005 498 ARIANA RESOURCES PLC NOTES TO THE FINANCIAL STATEMENTS 7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS Group 2006 2005 £'000 £'000Loss for the financial year (198) (381)Shares issued less expenses offset 1,935 1,064Long term exchange differences - (6) -- --Net reduction of shareholders' funds 1,737 677Opening shareholders' funds 1,365 688 -- --Closing shareholders' funds 3,102 1,365 Equity interests 3,102 1,365 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, balance sheet and cash flow statement for the yearended 31st December 2005, have been audited. 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. This information is provided by RNS The company news service from the London Stock Exchange