Interim Results

RNS Number : 1249P

Ovoca Gold PLC

29 September 2011

 

Ovoca Gold PLC

29 September 2011

Ovoca Gold plc ("Ovoca" or the "Company")

2011 Interim Results

Ovoca Gold is pleased to announce its interim financial statements and report covering the six month period from 1 January 2011 to 30 June 2011.

Highlights:

·      Net income for 1H2011 of US$10.06 million

·      Cash and cash equivalents and available for sale financial assets of US$54.09 million as at 30 June 2011

·      Successful mobilization of exploration at two core projects

·      Appointment of Kenneth Kuchling as non-executive director - ex-Senior Mining Engineer for Rio Tinto's Diavik Diamond Mine between 1997 - 2000 and consultant to multiple high profile gold mines globally

·      Commencement of share buy back programme

·      Maiden Stakhanovsky resource, JORC Inferred 350,000 oz gold at 1.2 g/t (cut-off grade 0.5 g/t gold)

·      GLG Asset Management to manage $10mn of Company's funds

Post period:

·      Updated JORC Inferred resource for Olcha of 9.2mn tons to give 650,000 ounces gold at 2.20 g/t and 3.59mn ounces silver at 12.12 g/t (cut-off grade 1.0 g/t gold)

·      Appointment of Fairfax I.S. PLC as joint broker

·      Continuation of share buy back programme, total share count held in treasury at 1,095,000

CEO's letter

Dear shareholders,

It is my pleasure to report to you our financials and the results of our work for the first half of 2011. We started the year with several tasks. On the exploration front we planned to drill on new targets Podgorniy and Zet, conduct geophysical surveys on Olcha's northeast and southeast flanks, and complete a bulk sampling and drilling program on Stakhanovsky. On the corporate level our plan for the year is to successfully receive a full exploitation license for Olcha, effectively manage our cash and equivalents position to ensure the Company's financial strength, strengthen our board and staff of professionals, review acquisitions and corporate development opportunities and continue to reach out to a wider investor audience about Ovoca's undervalued share price.

Exploration:

Podgorniy - At the end of 2010 Ovoca announced grab sample results as part of a preliminary exploration effort that included soil geochemistry and mapping.  Announced grab samples were:

Sample number	Gold grade, g/t	Silver grade, g/t
#49	5	15
#52	21	68
#53	12	64

In 2011 Ovoca plans to complete a drilling programme of 5,000 meters, of which 4,000 meters is already completed. Core samples indicate potentially gold bearing mineralization and we await laboratory analysis. The majority of core samples is now at our base in Magadan or has been prepared and sent to a laboratory.

Zet - At the beginning of 2011 Ovoca announced the results of historical and 2010 trenching work. Zet is 30 kilometers north of Olcha and initial study of the target shows it is a low-sulphidation gold-silver epithermal ore zone similar to Olcha. Ovoca will be drilling on Zet for the first time and the total plan for 2011 was 2,000 meters, of which a total of 2,500 meters has been drilled and the season ended on Zet (additional 500 meters drilled above plan). The focus of the drilling is to establish that surface mineralization (as shown by trench work) extends to depth. There are several examples in and near the Magadan Region of operating gold mines transporting ore up to 100 kilometer distances. One such example is Birkachan-Kubaka-Sopka Kvartsevaya operated by Polymetal, while another example is Dvoynoye-Kupol operated by Kinross. While gold and silver grades are a key issue determining the economic viability of transporting ore, Zet and Olcha could be part of one production complex given their near proximity.

Previously announced trench results

Trench ID number	Target	Length, m	True thickness, m	Gold grade, g/t	Silver grade, g/t
K-8-Z*	Vein #1	3.8	3.71	2.0	12.5
K1-Z*	Vein #1	1.5	1.41	0.7	5.5
K-8	Vein #1	2.5	2.41	3.2	17.2
K-BK-5	Vein #1	0.4	0.38	4.7	0.0
K-BK-2	Vein #1	1.0	1.00	3.4	33.5
K-2	Vein #1	1.9	1.84	2.7	14.2
K-BK-7	Vein #1	0.7	0.70	1.9	0.0
K-BK-5	Vein #2	1.0	0.95	6.2	8.2
TR-1	Vein #2	3.0	2.90	2.6	17.0
K-BK-7	Vein #2	0.5	0.47	20.6	14.0
SP-2	Vein #2	4.0	3.88	10.5	60.5
K-1-Z*	Vein #3	0.6	0.59	6.6	80.6
K-BK-14	Vein #3	0.7	0.69	4.0	12.0
K-BK-5	Vein #3	0.1	0.10	2.0	0.0
K-2-Z*	Vein #3	1.0	0.75	8.0	10.8
K-BK-7	Vein Zone #6	1.2	1.20	3.7	3.4
K-6-Z*	Vein Zone #6	3.7	3.52	4.1	29.9
K-BK-9	Vein Zone #6	3.0	2.99	1.6	15.0
K-BK-11	Vein #8	3.9	3.77	12.5	22.4

*Denotes trenches completed by Ovoca Gold in 2010

Olcha - Olcha was a core focus of Ovoca's exploration program in 2010, as we strived to move forward on the basis of existing information to increase the resources at the site. An updated JORC inferred resource statement was released in July 2011. Additionally, Ovoca has put together a Russian-compliant resource statement, as well as preliminary economic, environmental and metallurgical studies. This documentation has been filed with the necessary regulatory bodies so that Ovoca can receive a full exploitation license for Olcha. The Company expects to have an exploitation license by the end of 2011 or in early 2012. For 2011 Ovoca plans to conduct geophysical work to the northeast and the east of known mineralization zones. Ovoca announced its updated JORC compliant Inferred resource on Olcha in July. Chart below:

Cut-off grade, Au	Tons, Mt	Au grade, g/t	Au oz	Ag grade, g/t	Ag oz
0.5 g/t	20.1	1.39	900,000	9.32	6,050,000
1.0 g/t	9.2	2.20	653,000	12.12	3,590,000
1.5 g/t	5.2	2.97	496,000	14.64	2,440,000
2.0 g/t	3.3	3.64	395,000	16.82	1,820,000

Stakhanovsky - At the beginning of 2011 Ovoca announced its maiden JORC compliant Inferred resource on Stakhanovsky. Chart below:

Million tonnes	Grade (g/t)	Gold (t)	Gold oz
9.1	1.2	10.9	350,000

*Cut-off grade 0.5 g/t gold

In 2010 the Company commissioned a wide-diameter drill programme (RC rig drilling 18cm diameter drill wells), but the contractor did not complete the full work programme (completed was slightly over 50% or 7,100 meters). At the end of 2010 the Company decided to change contractors or shift the focus of the exploration effort to bulk sampling. Bulk sampling done in 2009 yielded encouraging results of 1.9 g/t and 2.0 g/t on two targets with total sample size being 260 tons. Ovoca chose for 2011 to conduct a bulk sampling programme with some drilling to confirm ore body structure (DD rig drilling 7cm diameter drill wells). The initial plan was to process 20,000 tons of ore samples over the 2011 summer and autumn. Unfortunately, a delay in the delivery of the metal frame that houses the conveyor belts and ball mill cost three weeks of the operating season. Despite intense efforts to expedite the assembly process to make up the lost time, the bulk sample processing facility was not ready until late into the operating season.  To complicate matters further, this summer has been unusually cold in the Magadan Region, which has frozen up water supplies necessary for the operating of the facility. However, approximately 8,000 tons of ore samples have already been collected, labeled and await processing. The facility has been test-run so that once there is running water again it can be switched on for operation. The Company will be able to immediately start processing ore by the first thaw in the Stakhanovsky area, which normally is at the beginning of May. The result of this delay is a push out of anticipated first gold production to the beginning of 2014 (pending successful exploration and engineering results).

Corporate overview:

Available for sale securities and cash - As at 30 June 2011 Ovoca had circa 0.8 million Polymetal common shares worth US$15.35 million. Additionally, the Company had approximately US$28.74 million in cash and US$10.01 million in a diversified portfolio of gold mining equities. In total, the pro forma total cash and securities position of Ovoca as of 30 June 2011 is US$54.09 million. Ovoca's management and Board have decided to change the format of its equity portfolio investment. Part of the investment will now be made in a GLG fund. GLG is one of the world's largest fund management companies with over $70bn under management and are based in London. The liquidity provisions of the fund are substantially the same as our previous portfolio, while GLG brings to our investment their superior monitoring, brokerage service terms and risk management skills. In July the Company put US$10 million under GLG management. The strategy behind Ovoca's holding of Polymetal shares and the GLG fund investment is to give Ovoca shareholders exposure to the gold price before Ovoca has its own gold production.

Joint Broker appointment - On 5 July 2011 Ovoca appointed Fairfax I.S. PLC as joint broker to the Company with immediate effect. Davy continues to act as nominated adviser and joint broker for Ovoca. Fairfax is a well-established and very reputable broker and investment bank to the junior mining sector in London.

Director appointment - On 1 March 2011 Ken Kuchling became a non-executive director of the Company.  Mr. Kuchling  provides mining consulting services with multiple clients globally. He has worked on such projects as Northgate Mining's Kemess North copper-gold mine in Canada, NovaGold's Rock Creek project in Canada, Oromin Explorations' Sabodala gold project in Senegal, as well as having  assisted with BHP Billiton's study of potash projects globally.  Additionally, from 1997 to 2000 Mr. Kuchling was the Senior Mining Engineer for Rio Tinto's Diavik Diamond Mine in Canada playing a key role in completing the feasibility study and permitting of the project.

Sincerely,

Tim McCutcheon

CEO

Ovoca Gold plc
period ended 30 June 2011
CONSOLIDATED INCOME STATEMENT		Unaudited		Unaudited		Unaudited		Unaudited
		6 Months ended		6 Months ended		6 Months ended		6 Months ended
		30.06.2011		30.06.2010		30.06.2011		30.06.2010
		€'000		€'000		$'000		$'000
Continuing operations
Exploration costs written off		(166)		(299)		(233)		(398)
Gross loss		(166)		(299)		(233)		(398)
Administration expenses		380		(1 028)		533		(1 368)
Share option expense		(44)		(733)		(62)		(975)
Other gains and losses		7 379		2 355		10 353		3 133
Operating profit		7 549		295		10 591		392
Finance costs		(645)		(16)		(905)		(21)
Finance income		354		647		496		861
Gain for the period before tax		7 258		926		10 182		1 232
Income tax		(88)		6		(123)		8
Gain for the period from continuing operations		7 170		932		10 059		1 240
Discontinued operations
Loss for the period from discontinued operations				(2 103)				(2 798)
Profit/(loss) for the period		7 170		(1 171)		10 059		(1 558)
Attributable to:
Owners of the parent		7 170		(1 171)		10 059		(1 558)
		7 170		(1 171)		10 059		(1 558)
Earnings/(loss) per share
Basic earnings per share from continuing operations		0.08 cents		0.20 cents		0.12 cents		0.26 cents
Basic loss per share from discontinued operations				(0.45) cents				(0.59) cents
Fully diluted earnings per share from continuing operations		0.08 cents		0.21 cents		0.11 cents		0.27 cents
Fully diluted loss per share from discontinued operations				(0.47) cents				(0.62) cents

Ovoca Gold plc
period ended 30 June 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
		Unaudited		Unaudited		Unaudited		Unaudited
		6 Months ended		6 Months ended		6 Months ended		6 Months ended
		30.06.2011		30.06.2010		30.06.2011		30.06.2010
		€'000		€'000		$'000		$'000
Profit/(loss) for the period		7 170		(1 171)		10 059		(1 558)
Other comprehensive (expense)/income:
Movement on available for sale financial assets		(8 600)		4 654		(10 516)		4 538
Exchange movement		(2 784)		6 870		(1 402)		357
Total comprehensive (loss)/income for the period		(4 214)		10 353		(1 859)		3 337
There is no income tax impact in respect of components recognised within the consolidated statement of comprehensive income.

Ovoca Gold plc
period ended 30 June 2011
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
	Share capital	Share premium	Treasury shares	Share based payment reserve	Other reserves	Exchange movement	Retained earnings	Total (attributable to owners of the parent)
	€'000	€'000		€'000	€'000	€'000	€'000	€'000
At 1 January 2011	11 057	48 108	-	1 253	16 729	2 494	(22 893)	56 748
Comprehensive income:
Loss for the period							7 170	7 170
Other comprehensive income								-
Fair value movement on available for sale financial assets					(8 600)			(8 600)
Realised exchange movement on available for sale assets disposed of during the year						(971)		(971)
Exchange movement						(1 813)		(1 813)
Total comprehensive income	-	-	-	-	(8 600)	(2 784)	7 170	(4 214)
Transactions with owners
Reduction of share premium		(48 108)					48 108	-
Share based payments				44				44
Share buy back			(20)			15	(40)	(45)
Total transactions with owners	-	(48 108)	(20)	44	-	15	48 068	(1)
At 30 June 2011	11 057	-	(20)	1 297	8 129	(275)	32 345	52 533
At 1 January 2010	11 057	48 108	-	520	6 553	(364)	(19 453)	46 421
Comprehensive income:
Loss for the period	-	-	-	-	-	-	(1 171)	(1 171)
Other comprehensive income
Fair value gain on available for sale financial assets	-	-	-	-	4 654	-	-	4 654
Realised exchange movement on available for sale assets disposed of during the year                                                                           -                          -                       -                         -                         -                            -							-	-
Exchange movement						6 870		6 870
Total comprehensive income	-	-	-	-	4 654	6 870	(1 171)	10 353
Transactions with owners
Share based payments				733				733
Total transactions with owners				733				733
At 30 June 2010	11 057	48 108	-	1 253	11 207	6 506	(20 624)	57 507

Ovoca Gold plc
period ended 30 June 2011
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
		Unaudited		Audited		Unaudited		Audited
		30.06.2011		31.12.2010		30.06.2011		31.12.2010
		€'000		€'000		$'000		$'000
Assets
Current assets
Inventories		129		35		186		46
Trade and other receivables		1 384		4 918		1 992		6 517
Cash and cash equivalents		19 973		8 394		28 740		11 123
		21 486		13 347		30 919		17 686
Non current assets
Property, plant and equipment		1 433		750		2 062		1 024
Intangible assets		24 751		23 413		35 616		33 252
Available for sale financial assets		17 616		32 473		25 349		43 029
		43 800		56 636		63 027		77 305
Total assets		65 286		69 983		93 946		94 991
Liabilities
Current liabilities
Trade and other payables		1 032		1 153		1 485		1 528
Provisions for other liabilities and charges		8 697		2 092		12 515		2 771
		9 729		3 245		14 000		4 299
Non current liabilities
Contingent provisions		3 024		9 990		4 351		13 239
Total liabilities		12 753		13 235		18 351		17 538
Net assets		52 533		56 748		75 595		77 453
Equity
Ordinary shares		11 057		11 057		15 586		15 586
Share premium accounts				48 108				67 809
Treasury shares		(20)		-		(29)		-
Other reserves		8 129		16 729		11 698		22 214
Foreign currency translation reserve		(275)		2 494		(70)		3 402
Share based payment reserve		1 297		1 253		1 866		1 706
Profit and loss account		32 345		(22 893)		46 543		(33 264)
		52 533		56 748		75 594		77 453

Ovoca Gold plc
period ended 30 June 2011
CONSOLIDATED STATEMENT OF CASH FLOWS
						Unaudited				Audited			Unaudited			Audited
						30.06.2011				31.12.2010			30.06.2011			31.12.2010
						€'000				€'000			$'000			$'000
Cash flows from operating activities
Net profit for the period/year before tax						7 258				936			10 182			1 254
Foreign currency reserve movement						(2 767)				2 858			(3 263)			1 909
Depreciation						43				116			60			154
Share option expense						44				733			62			973
Net finance costs						304				(170)			427			(232)
Exploration costs written off						166				297			233			394
Increase in inventories						(94)				(28)			(135)			(36)
Decrease/(increase) in trade and other receivables						3 534				(921)			5 085			(789)
Decrease in trade and other payables						(121)				(686)			(175)			(1 108)
Decrease in provisions						(361)				-			(519)			-
Net cash flow from continuing operations						8 005				3 135			11 956			2 519
Discontinued Operations
Net loss for the year before tax						-				(4 376)			-			(5 811)
Exploration costs written off						-				3 779			-			5 377
Net finance costs						-				(89)			-			(112)
Net cash flow from discontinued operations						-				(686)			-			(546)
Net cash flow from operating activities						8 005				2 449			11 956			1 973
Cash flow from financing activities
Net interest received						304				259			437			344
Net cash flow from financing activities						304				259			437			344
Cash flows from investing activities
Net purchases of property, plant & equipment						(683)				(67)			(982)			(57)
Acquisitions of subsidiary/intangibles						-				(7 264)			-			(11 882)
Purchase of available for sale assets						(14 857)				-			(20 860)			-
Proceeds from disposal of AFS assets						20 314				(1 616)			29 232			(768)
Expenditure on exploration activities						(1 504)				(5 121)			(2 165)			(6 800)
Net cash flow from investing activities						3 270				(14 068)			5 225			(19 507)
Net increase/(decrease) in cash and cash equivalents						11 579				(11 360)			17 618			(17 190)
Cash and cash equivalents at the beginning of period/year						8 394				19 754			11 123			28 313
Cash and cash equivalents at the end of period/year						19 973				8 394			28 741			11 123
	Ovoca Gold plc
	period ended 30 June 2011
1	Basis of Preparation
	The interim consolidated financial statements for the six months ended 30 June 2011 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board.
	The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 December 2010
	The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2010
2	Accounting Policies
	The accounting policies are consistent with those in the annual report for the financial year ended 31 December 2010.
	The following new standards, amendments and interpretations became effective in 2011, however, they either do not have an effect on the Group financial statements or they are not currently relevant for the Group:
	Classification of Rights Issues (Amendment to IAS 32)
	IAS 24, Related Party Disclosure (Revised)
	Amendments to IFRIC 14, Prepayments of a Minimum Funding Requirement
	IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
	In addition, a number of annual improvements to the IFRSs are effective for 2011, however, none of these had or is expected to have a material effect on the Group financial statements.
3	Segmental reporting
	Segment information is presented in accordance with IFRS 8 - Operating Segments with effect from 1 January 2010. Comparative information is presented on a consistent basis.
	At 30 June 2011, the Group had two business segments, exploration activities and investment. Exploration activities are primarily carried out by number of subsidiary companies based in Russia. Investing activities are carried out by another subsidiary company located in Bermuda. Unallocated costs represent group administration costs, primarily incurred in Ireland.
	Period ended 30 June 2011	Exploration activities	Investment	Unallocated			Total	Exploration activities			Investment			Unallocated			Total
		€'000	€'000	€'000			€'000	US$'000			US$'000			US$'000			US$'000
	Exploration costs written off	(98)	-	(68)			(166)	(137)			-			(95)			(232)
	Administration expenses	267	2 146	(2 077)			336	375			3 010			(2 914)			471
	Other gains and losses	121	7 259	(1)			7 379	170			10 185			(1)			10 354
	Operating profit	290	9 405	(2 146)			7 549	407			13 195			(3 011)			10 591
	Finance costs	(94)	(598)	47			(645)	(132)			(839)			66			(905)
	Finance income	161	192	1			354	226			269			1			496
	Loss/Profit before tax	357	8 999	(2 098)			7 258	501			12 625			(2 943)			10 183
	Segment assets	16 148	49 004	136			65 288	23 236			70 514			196			93 946
	Segment liabilities	(763)	(11 721)	(269)			(12 753)	(1 098)			(16 866)			(387)			(18 351)
	Net assets	15 385	37 283	(134)			52 535	22 138			53 648			(192)			75 595

	Period ended 30 June 2010	Exploration activities	Investment	Unallocated	Total	Exploration activities	Investment	Unallocated	Total
		€'000	€'000	€'000	€'000	US$'000	US$'000	US$'000	US$'000
	Revenue	-	-	-	-	-	-	-	-
	Other gains and losses	(277)	2 021	611	2 355	(369)	2 689	813	3 133
	Operating profit	(3 960)	1 850	2 405	295	(531)	2 461	(540)	1 390
	Finance costs	(16)	-	-	(16)	(21)	-	-	(21)
	Finance income	454	-	193	647	604	-	257	861
	Loss/Profit before tax	(3 522)	1 850	2 598	926	52	2 461	(283)	2 230
	Segment assets	11 882	46 167	5 677	63 726	14 502	56 346	6 929	77 777
	Segment liabilities	(1 224)	(4 560)	(435)	(6 219)	(1 494)	(5 565)	(531)	(7 590)
	Net assets	10 658	41 607	5 242	57 507	13 008	50 781	6 398	70 187
				CONTINUING OPERATONS
	Year ended 31 December 2010	Exploration activities	Investment	Unallocated	Total	Exploration activities	Investment	Unallocated	Total
		€'000	€'000	€'000	€'000	US$'000	US$'000	US$'000	US$'000
	Exploration costs written off	(297)	-	-	(297)	(394)	-	-	(394)
	Administration expenses	(11)	(1 870)	(1 480)	(3 361)	(14)	(2 483)	(1 966)	(4 463)
	Other gains and losses	(60)	4 682	231	4 853	(80)	6 228	307	6 455
	Operating profit	(368)	2 812	(1 249)	1 195	(488)	3 745	(1 659)	1 598
	Finance costs	(118)	(974)	(11)	(1 103)	(157)	(1 293)	(15)	(1 465)
	Finance income	22	700	122	844	29	929	163	1 121
	Loss/Profit before tax	(464)	2 538	(1 138)	936	(616)	3 381	(1 511)	1 254
	Income tax	-	-	-	-	-	-	-	-
	Loss/Profit after tax	(464)	2 538	(1 138)	936	(616)	3 381	(1 511)	1 254
	Segment assets	11 212	58 361	410	69 983	15 219	79 216	556	94 991
	Segment liabilities	(795)	(12 094)	(346)	(13 235)	(1 053)	(16 026)	(459)	(17 538)
	Net assets	10 417	46 267	64	56 748	14 166	63 190	97	77 453

				DISCONTINUED OPERATIONS
	Year ended 31 December 2010	Exploration activities	Investment	Unallocated	Total	Exploration activities	Investment	Unallocated	Total
		€'000	€'000	€'000	€'000	US$'000	US$'000	US$'000	US$'000
	Administration expenses	(40)	-	-	(40)	(53)	-	-	(53)
	Other gains and losses	(434)	-	-	(434)	(576)	-	-	(576)
	Operating Loss	(474)	-	-	(474)	(629)	-	-	(629)
	Loss on disposal of operations	(3 813)	-	-	(3 813)	(5 064)	-	-	(5 064)
	Finance costs	(89)	-	-	(89)	(118)	-	-	(118)
	Loss before tax	(4 376)	-	-	(4 376)	(5 811)	-	-	(5 811)
	Income tax	-	-	-	-	-	-	-	-
	Loss/Profit after tax	(4 376)	-	-	(4 376)	(5 811)	-	-	(5 811)
	Segment assets	-	-	-	-	-	-	-	-
	Segment liabilities	-	-	-	-	-	-	-	-
	Net assets	-	-	-	-	-	-	-	-
	Secondary reporting format - geographical segments
	The Group's business segments and its assets are located in the Russia, Bermuda, and Ireland. The table above shows income and expenditure and assets and liabilities by primary geographical segments on the basis that exploration activities are carried out in Russia, investment activity is carried out in Bermuda and unallocated amounts relate to costs incurred in Ireland.

4	Financial assets available for sale
	Financial assets available for sale are held at their fair value and consist of both quoted securities and shares in Polymetal listed on the Russian Stock Exchange. They have provided a steady income stream throughout the period. There was a fall in the price of Polymetal shares during the period but their overall performance remains strong, the decrease of the total value of the financial assets being caused by both the disposal of shares for cash and re-investment of a significant portion from quoted securities into a high yield deposit facility. The latter is reflected in the increased cash and cash equivalents balance.
5	Provisions
	The change in the provisions is due to the timing of the deferred consideration payable on the previous year's acquisition of the 3 Russian subsidiaries, with the bulk of the conditional payment now falling due within the next 12 months.
6	Transactions in own shares
	By the end of the period the group had acquired 160,000 of its own shares through purchases on the London Stock Exchange. The total amount paid to acquire the shares net of commissions was €59,674 ($85,619). At the start of the period Ovoca Gold Plc obtained High Court permission to reduce its share premium account to facilitate the share buy back process. The shares are held as treasury shares and the company has the right to re-issue these shares at a later date.
7	Events after the reporting period
	There have been no significant events affecting the Group since the interim period.
8	Approval of the financial statements
	The interim report was approved by the Board of Directors on September 27, 2011 and is included on the Company's website, www.ovocagold.com.

Notes to Editors

Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the ESM market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region. Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.

Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region. It is accessible by year-round road and there is power infrastructure on site. Stakhanovsky's initial independently established resource was announced in an RNS on 2 February 2011 and is available on the Company's website. The Company intends to put Stakhanovsky into production by 2013.

Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Seimchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource. Olcha's latest independently established resource was announced in an RNS on 07 July 2010 and is available on the Company's website. Rassoshinskaya also hosts several gold targets, including Podgorniy and Zet.

Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko- Pestrinskoye.

Ovoca Gold Plc

Timothy McCutcheon [phone] [e-mail]

Davy - NOMAD and joint broker

John Frain [phone]

Fairfax I.S. PLC - joint broker

Ewan Leggat/Laura Littley [phone]

 

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