Interim Results
30 September 2011
AIM / PLUS Markets: AAU
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2011
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 2011.
Highlights
* Solid progress towards becoming Turkey's next gold producer - advancing the
Red Rabbit Gold Project towards production in Q4 2012
* Total resource inventory currently 448,000 ounces of gold equivalent -
objective to increase to one million ounces in the medium term
* Ongoing exploration at Red Rabbit Gold Project generating exciting results -
two new vein discoveries at the Kiziltepe Sector containing up to 10.7 g/t
and 7.74 g/t gold equivalent
* Consolidation of licences in flagship project area - acquisition of
additional highly prospective exploration licence areas in the wider Red
Rabbit area
* Focused on expanding resource inventory through new ground acquisitions and
exploration in Western Turkey - licence auctions expected during Q4 2011 and
several attractive targets identified
* European Goldfields Joint Venture yielding positive results in north-eastern
Turkey - results of recent drilling expected Q4 2011
* £1.2 million cash in bank
Dr. Kerim Sener, Managing Director, commented:
"Our sights remain firmly set on becoming Turkey's next gold producer, and we
are delighted with the continued progress made at our most advanced asset, the
Red Rabbit Gold Project. Â As we near the conclusion of our feasibility studies
on Red Rabbit we are looking forward to focusing our efforts on renewed
exploration across several new project areas.
"Before our JV partner, Proccea Construction Co., takes management control of
the Red Rabbit Joint Venture ahead of the construction phase, we are also
gearing up to a new drilling programme to test new targets across the Kiziltepe
Sector. Â This programme will be focused on indentifying the potential for
resource expansion in the vicinity of the planned operation at Kiziltepe.
"Much of the earlier part of this year was focused on evaluating the results of
our regional exploration programmes in Western Turkey. Â The exploration team has
built several enviable datasets and we are now in an excellent position to
rapidly assess new opportunities across the region. Â We have already set our
sights on a number of targets, which are expected to become available as part of
the Turkish Government's licence auctions process.
"We therefore expect the next few months to be busy and look forward to updating
shareholders on news of the licence process, further results from ongoing
exploration programmes and of course, updates on our programme at Red Rabbit."
Chairman's Statement
This has been another busy period for your Company, characterised by the
continuing rapid advancement of our flagship Red Rabbit Gold Project ("Red
Rabbit") towards production and the exciting results being generated elsewhere
in our portfolio. Â Our total resource inventory now stands at 448,000 ounces of
gold equivalent, and current exploration is generating encouraging results,
supporting the Board's confidence in our ability to increase this to one million
ounces in the medium term.
Red Rabbit, in western Turkey, is made up of two key assets, Kiziltepe and
Tavsan, which are within two prolific mineralised districts in the Western
Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. Â This
province hosts the largest operating gold mines in Turkey and remains highly
prospective for new porphyry and epithermal deposits. Â Located 75km apart,
Kiziltepe, and subsequently Tavsan, are being advanced towards production in
joint venture with a leading Turkish construction and engineering firm, Proccea
Construction Co., which is earning into 50% of the project on expenditure of
US$8 million.
The JV with Proccea is split into two stages: Phase 1 is focusing on a
feasibility study and Environmental Impact Assessment ('EIA'), with a budget of
US$1.4 million and with management control remaining with Ariana; and Phase 2
will focus on the construction of the mine, with a commitment of US$6.6 million
and management control moving to Proccea. Â Red Rabbit is drawing to the end of
Phase 1, with the Definitive Feasibility Study (DFS) and the Environmental
Impact Assessment (EIA) due for completion by the end of 2011. Â The Company has
already brought the project successfully through an internal pre-feasibility and
we are looking towards advancing relationships with lending institutions in
expectation of DFS and EIA completion.
Once we commence production at Red Rabbit, scheduled for Q4 2012, we anticipate
processing 150,000 tonnes ore per annum, corresponding to an average production
of approximately 20,000 ounces per year of gold equivalent over a mine life of
approximately 7 years. Â With this in mind, even if we take a conservative
approach to long-term gold prices, Ariana has the potential to generate
significant revenues and has ample scope to expand the resource base within
current mine life.
Following completion of Phase 1, our team's time will be freed up to focus on
delineating further gold and silver resources proximal to Red Rabbit, to feed
into the current 448,000 ounce gold equivalent resource. This strategy aims to
extend the mine life and further improve the economic fundamentals of the
project. Â In this respect, ongoing exploration is generating exciting results,
underpinning the high prospectivity of the project area. Â Indeed, two new
discoveries at Kiziltepe were recently announced: the Gamze Vein where
continuous high-grades of up to 10.7 g/t gold equivalent were identified; and a
new buried gold-silver vein system, the Hande Vein, where grades of up to 7.74
g/t gold equivalent were reported.
Our other exploration interests, which are in north-eastern Turkey, are
primarily focused around the Ardala and Salinbas Projects, which are being
developed in JV with AIM-listed European Goldfields. Â European Goldfields owns
51% of this JV and, as the operator, is fully funding all exploration work on
the properties until delivery of a feasibility study. Â Initial results from both
of these projects have been highly encouraging, with high grade gold
mineralisation of up to 55m @ 7.8g/t of gold demonstrated from trench sampling
at Salinbas. Â Exploration drilling campaigns have been underway, with results
expected towards the end of 2011.
Ariana also holds a 13% investment in Tigris Resources Limited, a private
Jersey-based exploration company, which is focused on the exploration of copper
and gold deposits in south-eastern Turkey. Â This area of Turkey is for the most
part underexplored, and represents a significant opportunity for the discovery
of multi-million ounce gold discoveries.
Financial Overview
Our balance sheet remains healthy with £1.2 million cash in bank, having
completed a £1.16m funding in February with the placing of 24.5 million new
shares at 4.75p per share. These funds, together with a £5 million Standby
Equity Distribution Agreement (SEDA) finalised in January 2011, provides us with
the flexibility to enable us to move quickly on exploration and development
opportunities meeting our stringent investment criteria.
Outlook
Looking ahead, I believe that Ariana's consistent strategy, focused on value
creation, will deliver significant returns for our shareholders. Â As the pace of
Red Rabbit's development gathers, we anticipate the publication of the DFS and
EIA in the coming months, ahead of permitting in H1 2012. Â Once the permitting
process is concluded, construction will commence and this phase is anticipated
to take six to eight months. Â Based on current forecasts we remain on target to
become Turkey's next gold producer in late 2012.
In tandem with this, we are focused on expanding our resource inventory through
further exploration, which is where our team excels. Â Ariana has set its sights
on a number of new gold exploration targets which we have identified as highly
prospective, and which are expected to become available as part of the Turkish
Government's licence auctions process. Â News on the results of these auctions is
expected in the coming months, as are the results of other exploration
programmes from across our wholly owned portfolio and joint venture projects.
Finally, on behalf of the board, I would like to thank all of our people for
their hard work during the past six months. Our thanks also go to our
shareholders, whose continued support of Ariana has helped us reach this
exciting pre-production stage in the Company's life.
Michael Spriggs
Chairman
30 September 2011
 Contacts:
Ariana Resources plc Tel: +44 (0) 20 7407 3616
Michael Spriggs, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited Tel: +44 (0) 20 7628 3396
Roland Cornish / Felicity Geidt
Fairfax I.S. PLC Tel: +44 (0) 20 7598 5368
Ewan Leggat / Laura Littley
St Brides Media & Finance Ltd Tel: +44 (0) 20 7236 1177
Hugo de Salis / Susie Geliher
Ariana Resources Plc
Unaudited Condensed Consolidated Interim Financial Statements
for the six months ended 30 June 2011
Condensed consolidated statement of comprehensive income
 6 months to 6 months to 12 months to
 30 June 30 June 31 December
 2011 2010 2010
  £'000 £'000 £'000
Continuing Operations
Administrative costs  (403)    (195)    (466)
Share options  (478)    - -
Other income  24 7 277
Write down of intangible
assets  - - (326)
-------------------------------------------------
Operating Loss  (857) (188) (515)
Investment income  3 5 9
-------------------------------------------------
Loss on ordinary activities
before tax  (854) (183) (506)
-------------------------------------------------
Taxation  - - (17)
Loss for the period  (854) (183) (523)
-------------------------------------------------
Other comprehensive income:
Exchange differences on
translating foreign
operations  (101) 4 (1)
-------------------------------------------------
Other comprehensive income
for the period, net of tax  (101) 4 (1)
-------------------------------------------------
Total comprehensive income
for the period  (955) (179) (524)
-------------------------------------------------
Loss for the period
attributable
to owners of the parent
company  (854) (183) (523)
-------------------------------------------------
Total comprehensive income
attributable
to owners of the parent
company  (955) (179) (524)
Loss per share (pence):
Basic and diluted   0.35      0.09     0.25
 onsolidated balance sheet
Condensed consolidated interim statement of financial position
  30 June 30 June 31 December
2011 2010 2010
£'000 £'000 £'000
ASSETS
Non-current assets
Trade and other
receivables 90 126 Â Â Â Â Â Â Â 12
Available for sale
investments  72 - 71
Land, property, plant
and equipment 200 184 176
Intangible assets  4,993 4,304 4,343
-------------------------------------------------------
Total non-current
assets  5,355 4,614 4,602
-------------------------------------------------------
Current assets
Trade and other
receivables  304 160 835
Available for sale
investments  - 66 56
Cash and cash
equivalents  1,454 1,240 755
-------------------------------------------------------
Total current assets  1,758 1,466 1,646
-------------------------------------------------------
Total Assets  7,113 6,080 6,248
Equity
Called up share capital  2,518 2,217 2,220
Share premium  6,201 5,175 5,167
Other reserves  720 720 720
Share options  578 100 100
Translation reserve  (38) 67 63
Retained earnings  (3,602) (2,631) (2,748)
-------------------------------------------------------
Total equity
attributable to equity
holders of the parent   6,377      5,648  5,522
Non-controlling
interest  415 - 415
-------------------------------------------------------
Total Equity
            5,937
     6,792 5,648
-------------------------------------------------------
Liabilities
Current liabilities
Trade and other 311
payables  321 432
-------------------------------------------------------
Total current
liabilities  321 432 311
-------------------------------------------------------
Total Equity and 6,248
Liabilities  7,113 6,080
Condensed consolidated interim statement of changes in equity
Condensed
consolidated
interim
statement of  Total
changes in  attributable
    Trans- to equity Non-
Share Share  Other Share lation Retained holder of controlling
 capital premium reserves options reserve  losses parent interest Total
 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1
January 2010 1,709 4,738 720 100 64 (2,448) 4,883 - 4,883
----------------------------------------------------------------------------------
Changes in
equity
to 30 June
2010
Other
comprehensive
income-
exchange 3 -
differences
on
retranslation
of foreign
operations - - - - - 3 3
Loss for the
period - - - - - (183) (183) Â - (183)
----------------------------------------------------------------------------------
Total
comprehensive 3
income - - - - (183) (180) - (180)
Issue of
share capital 508 507 - - - - 1,015 Â Â Â Â Â - 1,015
Expenses
offset - -
against
share premium  (70) - - - (70) (70)
----------------------------------------------------------------------------------
Balance at
30 June 2010 2,217 5,175 720 100 67 (2,631) 5,648 - 5,648
----------------------------------------------------------------------------------
Changes in
equity
to 31
December 2010
Other
comprehensive
income-
exchange (4) -
differences
on
retranslation
of foreign
operations - - - - - (4) (4)
Loss for the
period - - - - - (340) (340) Â Â Â Â Â - (340)
----------------------------------------------------------------------------------
Total
comprehensive (4)
income - - - - (340) (344) Â Â Â Â Â - (344)
Issue of
share capital 3 11 - - - - 14 Â Â Â Â Â - 14
Expenses
offset
against share
premium - (19) - - - - (19) Â Â Â Â Â - (19)
Non-
controlling 415
interest - - - - - - - 415
Increase in
share of 223
assets
of subsidiary - - - - - 223 Â Â Â Â Â - 223
----------------------------------------------------------------------------------
Balance at
31 December (2,748) 415
2010 2,220 5,167 720 100 63 5,522 5,937
----------------------------------------------------------------------------------
Changes in equity to
 30 June 2011
Other comprehensive
income-exchange
differences on
retranslation of
foreign
operations - - - - (101) - (101) Â Â Â Â Â - (101)
Loss for the period - - - - - (854) (854) Â Â Â Â Â - (854)
----------------------------------------------------------
Total comprehensive
income - - - - (101) (854) (955) Â Â Â Â Â - (955)
Issue of share capital 298 1,092 - - - - 1,390 Â Â Â Â Â - 1,390
Expenses offset
against
share premium - (58) - - - - (58) Â Â Â Â Â - (58)
Share options - - - 478 - - 478 Â Â Â Â Â - 478
----------------------------------------------------------
Balance at 30 June
2011 2,518 6,201 720 578 (38) (3,602) 6,377 415 6,792
----------------------------------------------------------
Condensed consolidated interim statement of cash flows
Condensed consolidated interim cash flow statement
  6 months to 6 months to
30 June 30 June 12 months to
2011 2010 31 December 2010
  £'000 £'000 £'000
Cash flows from operating
activities
Cash generated from operations  (79) (154) (1,200)
--------------------------------------------------------------------------------
Net cash outflow from operations  (79) (154) (1,200)
--------------------------------------------------------------------------------
Cash flows from investing
activities
Purchase of land, property,
plant and equipment  (41) (4) (15)
Purchase of investments  - (66) (137)
Purchase of intangible assets  (650) (394) (400)
Interest received  3 5 9
--------------------------------------------------------------------------------
Net cash used in investing
activities  (688) (459) (543)
--------------------------------------------------------------------------------
Cash flows from financing
activities
Proceeds from issue of share
capital  1,332 945 940
Proceeds from sale of
investments  134 - 12
Proceeds from shares issued to
non-controlling interest  - - 638
--------------------------------------------------------------------------------
Net cash proceeds from financing
activities  1,466 945 1,590
--------------------------------------------------------------------------------
Net increase/(decrease) in cash
and cash equivalents  699 332 (153)
Cash and cash equivalents at the
beginning of period  755 908 908
--------------------------------------------------------------------------------
Cash and cash equivalents at end
of period
  1,454 1,240 755
--------------------------------------------------------------------------------
Notes to the interim financial statements for the six months ended 30 June 2011
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 traded on AIM, a
market operated by 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. Â The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended 31 December
2010, 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. Â 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. Â Statutory financial statements for the year
ended 31 December 2010 were approved by the Board of Directors on 17 May 2011
and delivered to the Registrar of Companies. Â The financial information for the
periods ended 30 June 2011 and 30 June 2010 are unaudited.
3. Significant accounting policies
The condensed interim financial statements have been prepared under the
historical cost convention.
Except as described below, 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 2010.
Changes in accounting policy and disclosures
(a) New and amended standards, and interpretations mandatory for the first time
for the financial year beginning 1 January 2011 but not currently relevant to
the Group.
The following standards and amendments to existing standards have been published
and are mandatory for the Group's accounting periods beginning on or after 1
January 2011 or later periods, but not currently relevant to the Group.
A revised version of IAS 24 "Related Party Disclosures" simplified the
disclosure requirement for government-related entities and clarified the
definition of a related party. Â This revision was effective for periods
beginning on or after 1 January 2011.
An amendment to IFRS 1 "First-time Adoption of International Financial Reporting
Standards" relieved first-time adopters of IFRSs from providing the additional
disclosures introduced in March 2009 by "Improving Disclosures about Financial
Instruments" (Amendments to IFRS 7). Â This amendment was effective for periods
beginning on or after 1 July 2010.
Amendments to IFRS 7 "Financial Instruments: Disclosures" were designed to help
users of financial statements evaluate the risk exposures relating to transfers
of financial assets and the effect of those risks on an entity's financial
position. Â These amendments were effective for periods beginning on or after 1
January 2011 but are still subject to EU endorsement.
Amendments to IAS 32 "Financial Instruments: Presentation" addressed the
accounting for rights issues that are denominated in a currency other than the
functional currency of the issuer. Â These amendments were effective for periods
beginning on or after 1 February 2010.
IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments" clarified
the treatment required when an entity renegotiates the terms of a financial
liability with its creditor, and the creditor agrees to accept the entity's
shares or other equity instruments to settle the financial liability fully or
partially. Â This interpretation was effective for periods beginning on or after
1 July 2010.
An amendment to IFRIC 14 "IAS 19 - The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction", on prepayments of a minimum funding
requirement, applies in the limited circumstances when an entity is subject to
minimum funding requirements and makes an early payment of contributions to
cover those requirements. Â The amendment permitted such an entity to treat the
benefit of such an early payment as an asset. Â This amendment was effective for
periods beginning on or after 1 January 2011.
(b) New standards, amendments and interpretations issued but not effective for
the financial year beginning 1 January 2011 and not early adopted.
The Group's assessment of the impact of these new standards and interpretations
is set out below.
IFRS 10 "Consolidated Financial Statements" builds on existing principles by
identifying the concept of control as the determining factor whether an entity
should be included within the consolidated financial statements of the parent
company. Â The standard provides additional guidance to assist in the
determination of control where this is difficult to assess. Â This standard is
effective for periods beginning on or after 1 January 2013, subject to EU
endorsement.
IFRS11 "Joint Arrangements" provides for a more realistic reflection of joint
arrangements by focusing on the rights and obligations of the arrangement,
rather than its legal form (as is currently the case). Â The standard addresses
inconsistencies in the reporting of joint arrangements by requiring a single
method to account for interests in jointly controlled entities. Â This standard
is effective for periods beginning on or after 1 January 2013, subject to EU
endorsement.
IFRS 12 "Disclosure of Interest in Other Entities" is a new and comprehensive
standard on disclosure requirements for all forms of interests in other
entities, including joint arrangements, associates, special purpose vehicles and
other off balance sheet vehicles. Â This standard is effective for periods
beginning on or after 1 January 2013, subject to EU endorsement.
IFRS13 "Fair Value Measurement" improves consistency and reduces complexity by
providing, for the first time, a precise definition of fair value and a single
source of fair value measurement and disclosure requirements for use across
IFRSs. Â It does not extend the use of fair value accounting, but provides
guidance on how it should be applied where its use is already required or
permitted by other standards. Â This standard is effective for periods beginning
on or after 1 January 2013, subject to EU endorsement.
IAS 27 " Separate Financial Statements" replaces the current version of IAS 27 "
Consolidated and Separate Financial Statements" as a result of the issue of IFRS
10 (see above). Â This revised standard is effective for periods beginning on or
after 1 January 2013, subject to EU endorsement.
IAS 28 "Investments in Associates and Joint Ventures" replaces the current
version of IAS 28 "Investments in Associates" as a result of the issue of IFRS
11 (see above). This revised standard is effective for periods beginning on or
after 1 January 2013, subject to EU endorsement.
Amendment to IAS 1 "Presentation of Financial Statements" require items that may
be reclassified to the profit or loss section of the income statement to be
grouped together within other comprehensive income (OCI). Â The amendments also
reaffirm existing requirements in OCI and profit or loss should be presented as
either a single statement or two consecutive statements. Â These amendments are
effective for periods beginning on or after 1 July 2012, subject to EU
endorsement.
4. Tax
The Group has incurred tax losses for the period and a corporation tax charge is
not anticipated.
5. Loss per share
The calculation of basic loss per share is based on the loss attributable to
ordinary shareholders of £854,000 divided by the weighted average number of
shares in issue during the period, being 243,293,387.
6. Additions and disposals of intangible assets
Exploration, evaluation and development of mineral resources
Six months ended 30 June 2010 £'000
Opening net book amount 1 January 2010 3,910
Additions 394
--------
Closing net book amount 30 June 2010 4,304
--------
Six months ended 31 December 2010
Opening net book amount 1 July 2010 4,304
Additions net of write down 39
--------
Closing net book amount 31 December 2010 4,343
--------
Six months ended 30 June 2011
Opening net book amount 1 January 2011 4,343
Additions 650
--------
Closing net book amount 30 June 2011 4,993
7. Called up share capital and share premium
Authorised share capital of the company is 500,000,000 ordinary shares at 1
pence each
Details of issued capital are as follows:
 Number of Nominal Share
shares Value Premium
  £'000 £'000
----------------------------
At 1 January 2010 171,049,239 1,709 4,738
Shares issued in period (net of expenses) for cash 50,684,862 508 437
----------------------------
Balance at 30 June 2010 221,734,101 2,217 5,175
Shares issued in period (net of expenses) for cash 245,432 3 (8)
----------------------------
At 31 December 2010 221,979,533 2,220 5,167
Shares issued in period (net of expenses) for cash 29,851,223 298 1,034
----------------------------
Balance at 30 June 2011 251,830,756 2,518 6,201
8. Approval of interim financial statements
The interim financial statements were approved by the Board of Directors on 29
September 2011.
**ENDS**
About Ariana Resources
Ariana is an exploration and development company focused on epithermal gold-
silver and porphyry copper-gold deposits in Turkey. Â The Company is developing a
portfolio of prospective licences selected on the basis of its in-house
geological and remote-sensing database, on its own in western Turkey and in
Joint Venture with European Goldfields Limited in north-eastern Turkey.
 European Goldfields owns 51% of this joint venture and, as the operator, is
fully funding all exploration work on the JV properties until delivery of a
feasibility study.
The Company's flagship assets are its Sindirgi and Tavsan gold projects which
form the Red Rabbit Gold Project. Â Both contain a series of prospects, within
two prolific mineralised districts in the Western Anatolian Volcanic and
Extensional (WAVE) Province in western Turkey. Â This Province hosts the largest
operating gold mines in Turkey and remains highly prospective for new porphyry
and epithermal deposits. Â These core projects, which are separated by a distance
of 75km, are presently being assessed as to their economic merits and now form
part of a Joint Venture with Proccea Construction Co. Â The total resource
inventory of the Company stands at 448,000 ounces of gold equivalent.
Ariana also has a strategic investment in Tigris Resources Limited
(www.tigrisresources.com), a private Jersey-based exploration company, which is
focused on the exploration of copper and gold deposits in southeastern Turkey.
 Ariana retains approximately 13% of Tigris Resources Limited.
Fairfax I.S. PLC are brokers to the Company and Beaumont Cornish Limited is the
Company's Nominated Adviser.
For further information on Ariana you are invited to visit the Company's website
atwww.arianaresources.com.
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Source: Ariana Resources plc via Thomson Reuters ONE
[HUG#1551003]