REG - Ariana Resources PLC - Final Results for the Year Ended 31 December 2023
24/06/2024 07:00
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RNS Number : 4838T Ariana Resources PLC 24 June 2024
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").
24 June 2024
AIM: AAU
FINAL AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
NOTICE OF ANNUAL GENERAL MEETING
Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed mineral
exploration and development company with gold mining interests in Africa and
Europe, announces its audited results for the year ended 31 December 2023.
The Report and Accounts will be posted to shareholders as applicable and are
available on the Company's website (https://arianaresources.com/) .
In accordance with Rule 20 of the AIM Rules, Ariana Resources confirms that
the annual report and accounts for the year ended 31 December 2023 and notice
of the Annual General Meeting ("AGM") and related proxy form will be available
to view on the Company's website (https://arianaresources.com/) on 24 June
2024 and will be posted to shareholders. The AGM will be held on 19 July
2024, at 10.30 a.m. at East India Club, 16 St James's Square, London, SW1Y
4LH.
Chairman's Statement
As we reflect on the achievements and milestones of Ariana Resources plc in
2023, I am pleased to share that this year has been a period of remarkable
progress and significant transformation for our Company. Despite global
economic challenges, Ariana Resources has demonstrated resilience, innovation
and a commitment to sustainable growth, positioning us strongly for the
future.
Most significantly, after completing an assessment of several early and
advanced-staged exploration and development opportunities, particularly in
Africa, the Company took an initial 2.1% interest in the feasibility-stage
1.8Moz Dokwe Gold Project in Zimbabwe (owned by Rockover Holdings Limited) via
its Asgard Metals subsidiary. This enabled the funding of an extensive
due-diligence technical programme on the project during much of 2023 and into
2024, including the completion of four diamond drill-holes, which has led to
the proposed merger with Rockover Holdings Limited, post-period end. We are
excited about the potential value-accretive opportunity this project presents
for the Company and its shareholders, and we look forward to advancing the
project towards a definitive feasibility study in the coming year.
Operational Highlights
Several substantial advancements across our portfolio of assets, particularly
in Türkiye, were seen in 2023. The Kiziltepe Mine has continued to perform
robustly during a period which witnessed the development of its fourth
open-pit on the Banu Vein. This has been a testament to the operational
efficiencies and strategic investments made toward enhancing the mine's
capacity and productivity. The specific focus on optimising the Mineral
Resource and Reserves, operational workflows and employing state-of-the-art
technologies, has resulted in an overall increase in production since
operations commenced in 2017, exceeding our initial projections by over
50,000oz of gold by the year-end.
In parallel, the development of the Tavşan Project has progressed
significantly after a five-month period in which construction was suspended in
2023 following a local court ruling against its Environmental Impact
Assessment. Our operating company in Türkiye, Zenit Madencilik San. ve Tic.
A.S. (of which we own 23.5%), successfully navigated this situation and was
able to recommence mine construction in July 2023. Furthermore, initial gold
production from Tavşan has been recorded post-period end following the
trucking of high-grade ore to the Kiziltepe CIL processing plant. We currently
anticipate the commencement of gold production from the Tavşan heap-leach
towards the end of 2024. These developments underscore our commitment to
expanding our production base and diversifying our project portfolio.
Exploration and Expansion
Exploration remains at the heart of Ariana Resources. Our strategic
partnership with Özaltin Holding and Proccea Construction continues to yield
benefits, particularly in the context of the Salinbaş Project. These
collaborations have provided the financial strength and technical expertise to
support the exploration and development of this project, ensuring its
efficient advancement through an extensive drilling programme over the past
couple of years. This year, our exploration team contributed to important
discoveries, including the identification of new mineralised zones, such as
Hizarliyayla, which has opened exciting opportunities for future
investigation.
Elsewhere, the exploration being undertaken by the team at Western Tethyan
Resources Limited in partnership with Newmont is proceeding exceptionally
well. This work included extensive new generative exploration programmes
across both Kosovo and North Macedonia. Towards the end of the year this
culminated in the drilling of the first two holes into the Hertica prospect in
eastern Kosovo. We are dedicated to advancing these prospects through rigorous
exploration programmes, which we believe will enhance our resource base and
contribute to long-term value creation.
Financial Performance
Ariana delivered a financial result for 2023 in line with expectations,
underpinned by the production from the Kiziltepe operation and prudent
financial management of the Tavşan mine build, which had been funded entirely
by Zenit Madencilik to the year-end. Revenue recorded within Zenit Madencilik
benefitted from favourable commodity prices, despite the lower throughput and
grade of ore being processed compared to the prior year, and cost control
across the Kiziltepe and Tavşan operations delivered a robust year-end
profit. Meanwhile, our exploration and associated expenditure increased during
the year, largely reflecting the work being undertaken by our subsidiary
Western Tethyan, in addition to some Turkish exploration costs. By year-end,
we had maintained a healthy cash and gold bullion-backed bank position, the
latter held in Türkiye in preference to holding Turkish Lira given the
significant currency fluctuations impacting prior years.
Sustainability and Corporate Responsibility
Sustainability is a core pillar of our business strategy. In 2023, we made
meaningful progress in our environmental, social, and governance (ESG)
initiatives. We have implemented several measures to reduce our environmental
footprint and promote environmental stewardship, including energy-efficient
practices and waste management programmes. In particular, our dedicated office
facilities in Ankara now generate more electricity than they consume, through
use of a solar-power system installed during the year. We have also introduced
the first hybrid-electric vehicles to our fleet, marking a process of change
that will come in the years ahead as technologies continue to improve. Our
commitment to social responsibility is reflected in our community engagement
activities, where we have supported local communities through various
development projects and educational and health
initiatives in Türkiye and elsewhere. We continue to prioritise the health
and safety of our employees and their personal development, adhering to the
highest standards of workplace safety, including access to a helicopter-based
medevac service while our team maintained an on-site presence in Zimbabwe. Our
dedication to maintaining a safe and inclusive work environment is unwavering
and we are proud of our track record in this area.
Looking Ahead
As we look forward to 2024 and beyond, Ariana Resources is well-positioned to
continue its growth trajectory, particularly with respect to the development
of the Dokwe Gold Project, which we intend to advance into a project
feasibility study. Our strategic focus will remain on enhancing operational
efficiencies, advancing our exploration projects, and pursuing value-accretive
opportunities. We are confident that our financially disciplined,
technology-driven approach and our robust project pipeline will drive
sustainable growth and deliver long-term value for our shareholders.
In closing, I would like to extend my heartfelt gratitude to our dedicated
employees, partners, and shareholders for their unwavering support. Your
commitment and confidence in Ariana Resources have been instrumental in our
success. Together, we will continue to build a prosperous future for our
company and all its stakeholders.
Michael de Villiers
Chairman
21 June 2024
Financial Review
The Consolidated Statement of Financial Position reports essentially a
break-even position for the year to December 2023 in terms of profit before
tax, as compared to a profit of £5m in the prior year. There are a variety of
reasons behind this change, the largest one being the decline in the
profitability of Zenit in the period, such that our share of its results for
the year declined by £4m to £2m. The key drivers of this being lower grade
ore being processed as part of the mine plan after seven years of operation,
and also the increased operational costs associated with bringing the Tavşan
mine into being, including the support of that project during a five-month
period of suspension during the year.
Our Administrative Costs were lower by over £0.7m in the year, at £2.5m but
this year, the foreign exchange gains on our US dollar holdings primarily,
were also lower by £2m, which is why these costs which are stated after
exchange movements appear higher this year. Overall, we remain extremely
cost-conscious, choosing to adopt exploration and management practices which
are enhancing cost-efficiency in the longer term. Other Comprehensive Income
shows a significant loss this year, at £5.5m versus £3.5m in the comparative
year. As mentioned in previous years, these are the costs associated with
translating the opening balances of our overseas subsidiaries at the closing
rates of exchange, and the continued decline of the Turkish Lira has caused
this to increase once again.
As far as the Consolidated Statement of Financial Position is concerned, the
interests in our Equity Accounted Investments, where we have a significant
interest but not overall control of these companies, declined by £1.8m
primarily due to the decline in value of our interest in Zenit after increased
translation losses again due to the weakening Turkish Lira. Our Exploration
Expenditure and Earn-in Advances increased by £1.2m this year, being largely
our work in Kosovo undertaken by our subsidiary Western Tethyan Resources
Limited, as well as some Turkish exploration costs. The Group has cash and
gold bullion-backed bank balances in total amounting to £4.1m, the latter
held in Türkiye in preference to holding the local currency.
The Group remains in a strong financial position, with interests in a variety
of exciting projects, and remains extremely well positioned for future growth.
Outlook
The past year witnessed a consolidation of our core strategy to identify an
advanced project capable of being progressed through to the feasibility stage.
This culminated in a Merger Implementation Agreement entered with Rockover
Holdings Limited on the circa 1.8Moz Dokwe Gold Project in Zimbabwe, which was
announced post-period end. Despite its relatively advanced status, the Dokwe
Project shows substantial exploration upside and can become the flagship asset
of the company on the conclusion of the Merger. Our team remain active on-site
in Zimbabwe and are continuing to improve our understanding of the opportunity
and the broader exploration potential across the mineral claims.
In addition, we have implemented a cutting-edge on-site geochemical laboratory
at Dokwe, known as the detectORE(TM) system developed by Portable PPB Pty.
Ltd. in Perth, Australia. The application of this latest analytical technology
represents a game-changer for the industry, capable of delivering very fast,
reliable gold analytical results on-site at a fraction of the cost of
traditional methods. We have also implemented the same system at our Ankara
office, allowing for the processing of our exploration samples across the
southeast European region. As ever, Ariana remains a first-mover in adopting
the very latest technologies in its exploration practices and we are proud to
support the further development of such methods through our ongoing
interaction with technology providers.
We are aiming to advance the Dokwe Project through feasibility in the coming
year, as we progress our strategy to become a mid-tier mine developer in the
longer term. As part of this strategy, we are planning to dual-list the
company on the Australian Securities Exchange, aiming to encourage investment
from a new market, increasing liquidity and creating the circumstances to
enable a better valuation. This will be important as we build on our plan to
advance the Dokwe Project through feasibility and then eventually into
construction and operation. Having built the Company from the ground up,
particularly after having navigated successfully through the challenges of
mine development and financing in Türkiye, we are confident we have the
skills, capacity and will to see the Dokwe Project through to a successful
conclusion.
2024 marks two decades since the commencement of our first exploration
programmes in Türkiye and, coincidentally, two decades since the independent
discovery of the Dokwe Project by the Rockover team. In that time, both
companies charted a remarkably similar course, with a resolute focus on
achieving exploration success and developing innovative approaches to make
discoveries, culminating in the identification of mineral resources of
comparable scale. Most remarkably, both companies were able to achieve this
outcome at a near identical discovery cost per resource ounce, which
demonstrates better than any other metric, the similarity of vision and
strategy of Ariana and Rockover in their exploration across frontier
jurisdictions. These factors contribute substantially to our understanding
that the proposed merger with Rockover represents a synergistic alliance of
fundamental values and core strengths.
We are looking forward to completing the Merger with Rockover this year and
welcome the support of our stakeholders in enabling our ongoing development.
By continuing to build on the impressive and unusually successful exploration
track-records demonstrated by both Ariana and Rockover to date, we will
collectively enhance value and create a sustainable future.
Dr Kerim Sener
Managing Director
21 June 2024
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Continuing operations Note 2023 2022
£'000 £'000
Administrative costs (net of exchange gains) 4a (1,828) (555)
General exploration expenditure (218) (181)
Operating loss 4b (2,046) (736)
Fair value gain on gold bullion backed bank accounts 5 175 -
Profit on disposal of gold bullion backed bank accounts 5 168 -
Fair value loss on listed investments through profit or loss 13 (165) -
Share of profit of associate accounted for using the equity method 6c 2,080 6,010
Share of loss of associate accounted for using the equity method 6b (513) (551)
Other income 128 159
Investment income 232 135
Profit before tax 59 5,017
Taxation 8 (277) (987)
Profit/(loss) for the year from continuing operations (218) 4,030
Earnings per share (pence) attributable to equity holders of the company
Basic and diluted 10 (0.02) 0.36
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations (5,466) (3,504)
Other comprehensive loss for the year net of income tax (5,466) (3,504)
Total comprehensive profit/(loss) for the year (5,684) 526
The accompanying notes form part of these financial statements.
Consolidated Statement of Financial Position
For the year ended 31 December 2023
Note 2023 2022
£'000 £'000
Assets
Non-current assets
Trade and other receivables 16 666 414
Financial assets at fair value through profit or loss 13 883 639
Intangible assets 11 112 130
Land, property, plant and equipment 12 331 461
Investment in associates accounted for using the equity method 6 13,479 15,317
Exploration expenditure 14a 1,085 199
Earn-In advances 14b 416 87
Total non-current assets 16,972 17,247
Current assets
Trade and other receivables 17 854 1,280
Gold bullion backed bank accounts 5 1,590 -
Cash and cash equivalents 2,517 9,375
Liquid funds available to the Group 4,107 9,375
Total current assets 4,961 10,655
Total assets 21,933 27,902
Equity
Called up share capital 19 1,147 1,147
Share premium 19 2,207 2,207
Other reserves 720 720
Translation reserve (17,148) (11,682)
Retained earnings 34,448 34,666
Total equity attributable to equity holders of the parent 21,374 27,058
Non-controlling interest 140 30
Total equity 21,514 27,088
Liabilities
Current liabilities
Trade and other payables 18 419 814
Total current liabilities 419 814
Total equity and liabilities 21,933 27,902
Company Statement of Financial Position
For the year ended 31 December 2023
Note 2023 2022
£'000 £'000
Assets
Non-current assets
Trade and other receivables 16 3,728 3,850
Investments in group undertakings 15 377 377
Investment in associate accounted for using the equity method 6 2,035 2,612
Total non-current assets 6,140 6,839
Current assets
Trade and other receivables 17 370 540
Cash and cash equivalents - -
Total current assets 370 540
Total assets 6,510 7,379
Equity
Called up share capital 19 1,147 1,147
Share premium 19 2,207 2,207
Retained earnings 3,130 3,886
Total equity 6,484 7,240
Liabilities
Current liabilities
Trade and other payables 18 26 139
Total current liabilities 26 139
Total equity and liabilities 6,510 7,379
The accompanying notes form part of these financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Share Share Other Share Capital Translation reserve Retained Total attributable to equity holders of parent Non- Total
capital premium reserves based reduction £'000 earnings £'000 controlling £'000
£'000 £'000 £'000 payments reserve £'000 interest
reserve £'000 £'000
£'000
Changes in equity to
31 December 2022
Balance at 1,097 305 720 173 7,222 (8,178) 27,160 28,499 30 28,529
1 January 2022
Profit for the year - - - - - - 4,030 4,030 - 4,030
Other - - - - - (3,504) - (3,504) - (3,504)
comprehensive income
Total - - - - - (3,504) 4,030 526 - 526
comprehensive income
Issue of ordinary shares 50 1,902 - - - - - 1,952 - 1,952
Dividend paid - - - - - - (3,919) (3,919) - (3,919)
to shareholders
Transfer between reserves - - - (173) (7,222) - 7,395 - - -
Transactions 50 1,902 - (173) (7,222) - 3,476 (1,967) - (1,967)
with owners
Balance at 1,147 2,207 720 - - (11,682) 34,666 27,058 30 27,088
31 December 2022
Changes in equity to
31 December 2023
Loss for the year - - - - - - (218) (218) - (218)
Other - - - - - (5,466) - (5,466) - (5,466)
comprehensive income
Total - - - - - (5,466) (218) (5,684) - (5,684)
comprehensive income
Transactions between shareholders - - - - - - - - 110 110
Transactions - - - - - - - - 110 110
with owners
Balance at 1,147 2,207 720 - - (17,148) 34,448 21,374 140 21,514
31 December 2023
The accompanying notes form part of these financial statements.
Company Statement of Changes in Equity
For the year ended 31 December 2023
Share Share Capital Share Retained Total
capital premium reduction based earnings £'000
£'000 £'000 Reserve payments £'000
£'000 reserve
£'000
Changes in equity to
31 December 2022
Balance at 1 January 2022 1,097 305 7,222 173 34 8,831
Profit for the year - - - - 376 376
Other comprehensive income - - - - - -
Total comprehensive income - - - - 376 376
Issue of ordinary shares 50 1,902 - - - 1,952
Dividend paid to shareholders - - - - (3,919) (3,919)
Transfer between reserves - - (7,222) (173) 7,395 -
Transactions with owners 50 1,902 (7,222) (173) 3,476 (1,967)
Balance at 31 December 2022 1,147 2,207 - - 3,886 7,240
Changes in equity to
31 December 2023
Loss for the year - - - - (756) (756)
Other comprehensive income - - - - - -
Total comprehensive income - - - - (756) (756)
Transactions with owners - - - - - -
Balance at 31 December 2023 1,147 2,207 - - 3,130 6,484
The accompanying notes form part of these financial statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Profit/(loss) for the year (218) 4,030
Adjustments for:
Depreciation of non-current assets 74 93
Share of profit in equity accounted associate (2,080) (6,010)
Share of loss in equity accounted associate 513 551
Fair value loss on listed investments 165 -
Profit on disposal of gold bullion backed bank accounts (168) -
Fair value gain on investment in gold bullion backed bank accounts (175) -
Expenditure settled in shares for non-controlling shareholders 60 -
Investment income (232) (135)
Income tax expense 277 987
Movement in working capital (1,784) (484)
(Increase)/decrease in trade and other receivables (842) (361)
(Decrease)/increase in trade and other payables (263) 46
Cash (outflow)/inflow from operating activities (2,889) (799)
Taxation paid (256) (1,882)
Net cash (used in)/generated from operating activities (3,145) (2,681)
Cash flows from investing activities
Earn-In Advances (330) (87)
Purchase of land, property, plant and equipment (94) (333)
Payments for intangible and exploration assets (896) (199)
Purchase of gold bullion backed bank accounts (1,916) -
Proceeds from disposal of gold bullion backed bank accounts 671 -
Purchase of associate investment (200) -
Purchase of financial assets at fair value through profit or loss (443) (155)
Loan granted to associate (350) (500)
Investment income 232 135
Net cash generated from/ (used in) investing activities (3,326) (1,139)
Cash flows from financing activities
Issue of share capital - 1,952
Proceeds from non-controlling interest 50 -
Payment of shareholder dividend (excluding uncashed) (8) (4,022)
Net cash (used in)/generated from financing activities 42 (2,070)
Net (decrease)/increase in cash and cash equivalents (6,429) (5,890)
Cash and cash equivalents at beginning of year 9,375 16,389
Exchange adjustment on cash and cash equivalents (429) (1,124)
Cash and cash equivalents at end of year 2,517 9,375
Liquid funds available to the Group.
Cash and cash equivalents 2,517 9,375
Gold bullion backed bank accounts held at year end at market value. 1,590 -
4,107 9,375
The accompanying notes form part of these financial statements.
Selected Notes to the Consolidated Financial Statements
for the year ended 31 December 2023
1. General Information
Ariana Resources PLC (the "Company") is a public limited company incorporated,
domiciled and registered in the UK. The registered 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 Alternative Investment 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 and technology-metals, principally in south-eastern
Europe.
The consolidated financial statements are presented in Pounds Sterling (£),
which is the parent company's functional and presentation currency, and all
values are rounded to the nearest thousand except where otherwise indicated.
The financial information has been prepared on the historical cost basis
modified to include revaluation to fair value of certain financial instruments
and the recognition of net assets acquired including contingent liabilities
assumed through business combinations at their fair value on the acquisition
date modified by the revaluation of certain items, as stated in the accounting
policies.
Basis of Preparation
The Group financial statements have been prepared and approved by the
Directors in accordance with UK-adopted International Accounting Standards and
effective for the Group's reporting for the year ended 31 December 2023.
The separate financial statements of the Company are presented as required by
the Companies Act 2006. As permitted by that Act, the separate financial
statements have been prepared in accordance with UK-adopted International
Accounting Standards. These financial statements have been prepared under the
historical cost convention (except for financial assets at FVOCI) and the
accounting policies have been applied consistently throughout the period.
Going Concern
These financial statements have been prepared on the 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. The Group has no bank
facilities and has been meeting its working capital requirements from cash
resources and its gold bullion-backed bank accounts which are convertible into
cash on demand. At the year end the Group had liquid funds amounting to
£2.517 million (2022: £9.375 million), as well as gold bullion-backed
accounts amounting to £1.59 million (2022: £nil).
The Directors have prepared cash flow forecasts for the Group for the period
to 30 September 2025 based on their assessment of the prospects of the Group's
operations. The cash flow forecasts include expected future cash flows from
our equity-accounted associates along with the normal operating costs for the
Group over the period together with the discretionary and non-discretionary
exploration and development expenditure. The Group can of course reduce its
discretionary operational expenditure as well as liquidate available-for-sale
investments.
The forecasts indicate that on the basis of existing cash and other resources,
and expected future dividend payments from Zenit, the Group may require
additional funds if it is to meet all its expected obligations in delivering
all of its work programmes for the forthcoming year, particularly on
completion of the acquisition of Rockover Holdings Limited (see note 24). This
project is being acquired with the intention of advancing immediately to its
feasibility-stage development and the forecasts specifically include this
outcome.
The Directors are obliged to consider a variety of options as regards to the
financing of the Group going forward, and this may include an equity raise via
an open offer or placing, or alternative sources of finance if thought
appropriate. Planning is also underway with regard to a dual-listing on the
Australian Securities Exchange ("ASX") which will provide further
opportunities to raise capital. Despite the continuing challenging market
conditions for exploration and development companies, the Company and the
Group have been successful historically in raising finance (having last done
so in 2017) and in the light of this, the Directors have a reasonable
expectation of securing sufficient funding to continue in operational
existence for the foreseeable future.
In preparing these financial statements the Directors have given consideration
to the above matters and on this basis they believe that it remains
appropriate to prepare the financial statements on a going concern basis.
4. Administrative costs & Operating loss
4a. Administrative costs amounting to £1,828,000 (2022: £555,000) are stated
after significant exchange gains amounting to £712,000 (2022: £2.8m), these
primarily arising in the group's wholly owned subsidiary Galata Mineral
Madencilik San. ve Tic. A.S. ("Galata"), mainly due to the strengthening of
the US dollar and Sterling against the Turkish Lira. On retranslation into
Galata's functional currency, US dollar and Sterling-denominated assets held
by Galata, including bank, gold bullion-backed bank accounts and trade
receivables, resulted in an uplift to those Lira asset valuations and a
corresponding exchange gain for the year to 31 December 2023.
4b. The operating loss is stated after charging/(crediting):
2023 2022
£'000 £'000
Depreciation and amortisation - owned assets 73 93
Office lease rentals 6 8
Exceptional exchange (gain) in Türkiye (712) (2,821)
Net foreign exchange losses/(gains) 60 156
Fees payable to the Company's auditor for the audit of the Group's and 50 50
Company's annual accounts
Fees payable to the Company's auditor for other services: 25 25
- The audit of the Company's subsidiaries
5. Gold Bullion Backed Bank Accounts
During March 2023 the Group, through its wholly owned subsidiary company
Galata Madencilik San. Ve Tic Ltd, reinvested some of its currency reserves
into gold bullion-backed bank accounts. As at the end of the year and due to
the significant increase in the market price for this commodity, the resulting
uplift in the market valuation compared to its original cost, resulted in an
unrealised gain amounting to £175,000. This gain has been reflected in the
statement of comprehensive income. Additionally, profit amounting to £168,000
was generated from the part-disposal of the gold bullion-backed bank account
during the year. The year-end valuation for the gold bullion-backed bank
accounts amounted to £1,590,000 (2022: Nil) and this investment is separately
shown under current assets in the financial statements. Whilst the gold
bullion-backed bank accounts are convertible into cash on demand, they do not
meet the definition of cash and cash equivalents under IAS 7 as they are not
subject to an insignificant risk of changes in value.
6. Equity accounted Investments
The Group and Company's investments comprise the following: -
Associates and joint ventures companies Note Group Company Group Company
2023 2023 2022 2022
£'000 £'000 £'000 £'000
Associate Interest in Pontid Madencilik San. ve Tic. A.S. ("Pontid") 6a 4,139 - 4,139 -
Associate Interest in Venus Minerals Ltd ("Venus") 6b 2,035 2,035 1,848 2,612
Associate Interest in Zenit Madencilik San. ve Tic. A.S. ("Zenit") 6c 7,305 - 9,330 -
Carrying amount of investment at 31 December 13,479 2,035 15,317 2,612
6a Associate Interest in Pontid
Following the disposal in the prior year by Greater Pontides Exploration B.V.
(holding company) of its entire interest in Pontid Madencilik San. ve Tic.
A.S. ("Pontid") to Ozaltin Holding A.S and Proccea Construction Co., the Group
reinvested US$5.75m for a 23.5% shareholding in Pontid. This investment is
currently valued at £4.139m and represents the Group's share of Pontid's net
assets and goodwill paid on acquisition. Since the date of acquisition, Pontid
continues to benefit from new capital funding into its Salinbaş project.
Financial information based on Pontid's translated financial statements, and
reconciliations with the carrying amount of the investment in the consolidated
financial statements are set out below.
Statement of financial position 2023 2022
As at 31 December 2023 £'000 £'000
Assets
Non-current assets
Other receivables - 14
Intangible exploration assets 2,567 2,006
Land, property, plant and machinery 47 69
Total non-current assets 2,614 2,089
Current assets
Trade and other receivables 470 337
Cash and cash equivalents 2,626 4,377
Total current assets 3,096 4,714
Total assets 5,710 6,803
Current liabilities
Other payables 38 131
Total current liabilities 38 131
Equity 5,672 6,672
Proportion of the Group's ownership 23.5% 23.5%
Share of net assets per above analysis 1,333 1,568
Goodwill on acquisition and share of interest post-acquisition 2,806 2,571
Carrying amount of investment in Pontid 4,139 4,139
6b Share of loss of associate interest in Venus Minerals Ltd
The Company and group acquired 50% of Venus Minerals Ltd ("Venus") through an
earn-in agreement on 5 November 2021. During the period the Company provided
additional support to Venus, initially in the form of convertible loan finance
and subsequently on the conversion of this loan into equity. Following the
loan conversion during May 2023, the Company's shareholding in Venus increased
from 50% to 58% (post-period end 61%). The Ariana Board recognises that this
additional equity stake is solely to assist with the short-term funding of
Venus and has no direct impact on its operational control. On this basis, the
Ariana Board believes it appropriate to continue to use the equity method of
accounting for its investment in Venus.
On the 1 November 2023, Venus changed its legal status from Limited to PLC
ahead of its planned IPO.
The Group and Company accounts for its associate interest in Venus using the
equity method in accordance with IAS 28 (revised). The results set out below
includes the Group`s and Company's share of loss for the year to 31 December
2023.
Group Company Group Company
2023 2023 2022 2022
£'000 £'000 £`000 £`000
Equity accounted Equity accounted Associate interest Equity accounted Associate interest Equity accounted Associate interest
Associate interest
At 1 January 2023 1,848 2,612 2,399 2,612
Equity acquired 700 700 - -
Share of loss since significant influence recognised by Group and Company (513) (1,277) (551) -
At 31 December 2023 2,035 2,035 1,848 2,612
6c Share of profit of associate interest in Zenit
The Group accounts for its associate interest in Zenit using the equity method
in accordance with IAS 28 (revised). In prior years Zenit was also accounted
for using the equity method of accounting, albeit the company was then
classified as a joint venture, until part disposal by the Group in February
2021. At 31 December 2023 the Group has a 23.5% interest in Zenit, and profits
from Zenit are shared in the ratio of 23.5% the Group, 23.5% Proccea and the
remaining 53% interest to Ozaltin Holding A.S.
Zenit was incorporated in, and has its principal place of business in Ankara,
Türkiye.
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:
Statement of Comprehensive Income 2023 2022
For the year ended 31 December 2023 £'000 £'000
Revenue 31,247 47,489
Cost of sales (21,355) (26,244)
Gross Profit 9,892 21,245
Administrative and other expenditure (including government levy) (2,265) (555)
Operating profit 7,627 20,690
Finance expenses including foreign exchange losses (944) (1,102)
Finance income including foreign exchange gains 6,629 4,728
Profit before tax 13.312 24,316
Taxation charge (including deferred taxation) (4.459) 1,259
Profit for the year 8,853 25,575
Proportion of the Group's profit share 23.5% 23.5%
Group's share of profit for the year 2,080 6,010
6c Share of profit of interest in associate in Zenit
Statement of financial position 2023 2022
As at 31 December 2023 £'000 £'000
Assets
Non-current assets
Other receivables and deferred tax asset 4,242 6,287
Intangible exploration assets 14 50
Kiziltepe Gold Mine (including capitalised mining, land, property and 8,006 12,889
equipment
Tavşan Mine in construction 10,883 4,709
Total non-current assets 23,145 23,935
Current assets
Trade and other receivables 314 281
Inventories 2,287 3,424
Other receivables, VAT and prepayments 3,458 5,345
Cash and cash equivalents 10,904 15,420
Total current assets 16,963 24,470
Total assets 40,108 48,405
Liabilities
Non-current liabilities
Asset retirement obligation 417 582
Total non-current liabilities 417 582
Current liabilities
Borrowings - 361
Trade payables 2,403 3,345
Other payables 6,203 4,415
Total current liabilities 8,606 8,121
Total liabilities 9,023 8,703
Equity 31,085 39,702
Proportion of the Group's ownership 23.5% 23.5%
Carrying amount of investment in associate 7,305 9,330
Movement in Equity - our share
Opening balance 9,330 4,864
Profit for the year 2,080 6,010
Translation and other reserves (4,105) (1,544)
Closing balance 7,305 9,330
9. Profit and distributable reserves of parent Company
(a) Profit of parent company
As permitted by Section 408 of the Companies Act 2006, the statement of
comprehensive income of the parent Company is not presented as part of these
financial statements. The parent Company's loss for the financial year was
£756,000 (2022: profit of £376,000).
(b) Distributable reserves of parent company
The Company paid its first shareholder inaugural special dividend on 24
September 2021 amounting to £3,820,873. To facilitate this distribution the
Company gained shareholder approval during February 2021 and applied to the
High Court of Justice of England and Wales to reduce its share capital. This
application was granted by the High Court during July 2021 and the share
capital reduction scheme resulted in generating distributable reserves of
£7.22m, as set out in the Company's Statement of Changes in Equity.
(c) Dividends
During the prior year, a second interim and third final part of the inaugural
special dividend distribution was paid out of distributable reserves. The
second interim payment on 11 March 2022 of 0.175 pence per ordinary share
amounted to £1,919,186; the third and final payment on 21 September 2022 of
0.175 pence per ordinary share amounted to £2,000,010.
10. Earnings per share on continuing operations
The calculation of basic profit/(loss) per share is based on the loss
attributable to ordinary shareholders of £218,000 (2022: Profit -
£4,030,000) divided by the weighted average number of shares in issue during
the year, being 1,146,363,330 shares (2022: 1,133,043,081). There is no
material effect on the basic earnings per share for any dilution provided
by share options.
13. Financial assets at fair value through profit or loss
Group and Company Group
£'000
At 1 January 2023 639
Additions 443
Fair value adjustment (165)
Exchange movement (34)
At 31 December 2023 883
Carrying value
At 31 December 2022 639
At 31 December 2023 883
During the year, the Group's wholly owned subsidiary, Asgard Metals Pty. Ltd.,
continued with its investment strategy, with the acquisition of both listed
and unlisted investments amounting to £443,000.
As at 31 December 2023, due to a change in the market valuation of its listed
securities, a fair value loss amounting to £165,000 has been reflected in
these accounts. The market valuation of listed securities at the balance sheet
date amounted to £87,000 (level 1 hierarchy). Unlisted securities, where fair
value cannot be reliably measured, continue to be valued at cost and amounted
to £796,000 (level 3 hierarchy) at the balance sheet date.
16. Non-current trade and other receivables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Amounts owed by Group undertakings - - 3,728 3,850
Amounts owed by associate interest 666 414 - -
666 414 3,728 3,850
The amount owed to the Group relates to an instalment-based interest free loan
agreed upon following the disposal by Galata of its three remaining satellite
projects to Zenit at a rate of US$50,000 per calendar month. During May 2023,
it was agreed that the monthly instalment plan would be paused until the
second mine at Tavşan, currently under construction and financed entirely
from funds retained by Zenit, is operational.
The directors have assessed that the future fair value return on settlement of
this debt is not materially different from the carrying value shown above.
17. Trade and other receivables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Other receivables 370 155 20 29
Amounts owed by associate interest - 497 - -
Loan to associate interest 350 500 350 511
Prepayments 134 128 - -
854 1,280 370 540
The carrying values of other receivables and amounts owed by associate
interest approximate their fair values as these balances are expected to be
cash settled in the near future.
A convertible loan agreement with Venus Minerals Limited amounting to
£700,000, including the advance granted in the prior year, was settled in
full during May 2023 in exchange for additional equity in Venus.
A second convertible loan agreement was completed with Venus Minerals PLC
(previously Ltd) and at the end of the year amounted to £350,000.
18. Trade and other payables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade and other payables 118 189 20 102
Social security and other taxes 172 355 - -
Other creditors and advances 21 137 - 29
Accruals and deferred income 108 133 6 8
419 814 26 139
The above listed payables are all unsecured. Due to the short-term nature of
current payables, their carrying values approximate their fair value.
19. Called up share capital, share premium and capital reduction reserve
Allotted, issued and fully paid ordinary 0.1p shares Number Ordinary Shares Share
Premium
£'000
£'000
In Issue 1 January & 31 December 2023 1,146,363,330 1,147 2,207
22. Contingent liabilities
Following the restructuring of the Group and the part disposal by Galata
Mineral Madencilik San. ve Tic. A.S. of 26.5% of its interest in Zenit
Madencilik San. ve Tic. A.S., 75% of the resulting gain on disposal is exempt
from Turkish corporation tax provided the gain is retained under equity by
Galata for a period of 5 years. This potentially exempt taxable gain,
including the previously reported gain during 2019 on Çamyol Gayrimenkul,
Madencilik, Turizm, Tarim ve Hayvancilik Ltd ("Camyol") is as follows:
Contracting parties Shareholding Taxable gain in Lira Contingent liability in Lira Contingent Liability in GBP
Galata 26.5% 127,766,456 31,941,614 £850,483
Çamyol 99% 4,529,343 1,132,335 £30,150
24. Post year end events
On 25 April 2024, the Company announced that it had entered into a conditional
Merger Implementation Agreement, which if concluded would affect an all-share
acquisition of Rockover Holdings Limited ("Rockover"), a company that owns the
c. 1.3Moz Dokwe Gold Project in Zimbabwe. If approved, this would give rise to
the issue of approximately 688 million new Ariana shares, based on an agreed
merger ratio of 62.5% Ariana and 37.5% Rockover of the newly enlarged group.
Contacts:
Ariana Resources plc Tel: +44 (0) 20 7407 3616
Michael de Villiers, Chairman
Kerim Sener, Managing Director
Beaumont Cornish Limited (Nominated Adviser) Tel: +44 (0) 20 7628 3396
Roland Cornish / Felicity Geidt
Panmure Gordon (UK) Limited (Joint Broker) Tel: +44 (0) 20 7886 2500
Hugh Rich / Atholl Tweedie / Rauf Munir
WHIreland Limited (Joint Broker) Tel: +44 (0) 207 2201666
Harry Ansell / Katy Mitchell / George Krokos
Yellow Jersey PR Limited (Financial PR) Tel: +44 (0) 7983 521 488
Dom Barretto / Shivantha Thambirajah / arianaresources@yellowjerseypr.com (mailto:arianaresources@yellowjerseypr.com)
Bessie Elliot
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.
Editors' Note:
The information in this announcement that relates to exploration results is
based on information compiled by Dr. Kerim Sener BSc (Hons), MSc, PhD,
Managing Director of Ariana Resources plc. Dr. Sener is a Fellow of The
Geological Society of London and a Member of The Institute of Materials,
Minerals and Mining and has sufficient experience relevant to the styles of
mineralisation and type of deposit under consideration and to the activity
that has been undertaken to qualify as a Competent Person as defined by the
2012 edition of the Australasian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code) and under the AIM
Rules - Note for Mining and Oil & Gas Companies. Dr. Sener consents to the
inclusion in the report of the matters based on his information in the form
and context in which it appears.
About Ariana Resources:
Ariana is an AIM-listed mineral exploration and development company with an
exceptional track-record of creating value for its shareholders through its
interests in active mining projects and investments in exploration companies.
Its current interests include gold production in Türkiye and copper-gold
exploration and development projects in Cyprus and Kosovo.
The Company holds 23.5% interest in Zenit Madencilik San. ve Tic. A.S. a joint
venture with Ozaltin Holding A.S. and Proccea Construction Co. in Türkiye
which contains a depleted total of c. 2.2 million ounces gold equivalent (as
at March 2024, using a price ratio of 90 Ag to 1 Au). The joint venture
comprises the Kiziltepe Mine and the Tavsan and Salinbas projects.
The Kiziltepe Gold-Silver Mine is located in western Türkiye and contains a
depleted JORC Measured, Indicated and Inferred Resource of 171,700 ounces gold
and 3.3 million ounces silver (as at March 2024). The mine has been in
profitable production since 2017 and has been producing at an average rate of
c.22,000 ounces of gold per annum. A Net Smelter Return ("NSR") royalty of
2.5% on production is being paid to Franco-Nevada Corporation.
The Tavsan Gold Mine is located in western Türkiye and contains a JORC
Measured, Indicated and Inferred Resource of 311,000 ounces gold and 1.1
million ounces silver (as at March 2024). Following the approval of its
Environmental Impact Assessment and associated permitting, Tavsan is being
developed as the second gold mining operation in Türkiye and is currently in
construction. A NSR royalty of up to 2% on future production is payable to
Sandstorm Gold.
The Salinbas Gold Project is located in north-eastern Türkiye and contains a
JORC Measured, Indicated and Inferred Resource of 1.5 million ounces of gold
(as at July 2020). It is located within the multi-million-ounce Artvin
Goldfield, which contains the "Hot Gold Corridor" comprising several
significant gold- copper projects including the 4 million ounce Hot Maden
project, which lies 16km to the south of Salinbas. A NSR royalty of up to 2%
on future production is payable to Eldorado Gold Corporation.
Ariana owns 100% of Australia-registered Asgard Metals Fund ("Asgard"), as
part of the Company's proprietary Project Catalyst Strategy. The Fund is
focused on investments in high-value potential, discovery-stage mineral
exploration companies located across the Eastern Hemisphere and within easy
reach of Ariana's operational hubs in Australia, Türkiye, UK and Zimbabwe.
Ariana owns 75% of UK-registered Western Tethyan Resources Ltd ("WTR"), which
operates across south-eastern Europe and is based in Pristina, Republic of
Kosovo. The company is targeting its exploration on major copper-gold deposits
across the porphyry-epithermal transition. WTR is being funded through a
five-year Alliance Agreement with Newmont Mining Corporation
(www.newmont.com) and is separately earning-in to up to 85% of the Slivova
Gold Project.
Ariana owns 61% of UK-registered Venus Minerals PLC ("Venus") which is focused
on the exploration and development of copper-gold assets in Cyprus which
contain a combined JORC Indicated and Inferred Resource of 16.6Mt @ 0.45% to
0.80% copper (excluding additional gold, silver and zinc.
Panmure Gordon (UK) Limited and WH Ireland Limited 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 at www.arianaresources.com.
Ends.
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