REG - Ariana Resources PLC - INTERIM RESULTS

Ariana ResourcesAnnouncement

30/09/2020 07:01

RNS Number : 4990A
  
Ariana Resources PLC
  
30 September 2020
  
 

 
 
 
 
 
 
30 September 2020
AIM: AAU
 
INTERIM RESULTS
 
Ariana Resources plc ("Ariana" or the "Company"), the AIM-listed exploration and development company operating in Europe, is pleased to announce its unaudited interim results for the six months ended 30 June 2020.
 
Financial Highlights:
 
·    Ariana's share of profits from the Kiziltepe Mine, part of the joint venture ("Zenit" or "JV"), in the six months to June 2020 amount to £3.0m, compared to £7.9m in the year ended December 2019. 
 
·    Profit before tax of £2.2m recorded for the period, with operating costs in line with expectations and the prior year.
 
·    Profit for the period of £1.9m reflects a withholding tax charge on maiden dividend distributions of £1,600,000 which were paid in March 2020 from Ariana's operating subsidiary in Turkey to its intermediate (BVI) holding company.
 
Operational Highlights:
 
·    Gold production guidance for 2020 for the Kiziltepe Mine is c. 18,000 oz Au (gross to the JV) is expected to be met at the end of Q4 2020.
 
·    Gold production for H1 2020 achieved 9,808 oz Au (H1 2019: 13,734 oz Au); reduced output due to the planned progression of mining to lower grade areas.
 
·    During the period, 100% of Zenit's US$33 million construction capital loan for Kiziltepe was repaid to Turkiye Finans Katilim Bankasi A.S.
 
·    Ariana completed its initial earn-in on Cyprus-focused Venus Minerals Ltd to 9.24% and, following further expenditure, has earned an entitlement to 12%, post-period end.  
 
·    New independent JORC resource estimates completed for Kiziltepe, Kizilcukur and Tavsan, increasing the total depleted resource inventory across the wider Red Rabbit Project Area to just over 500,000 ounces of gold.
 
·    An exploration drilling campaign, which commenced during the period at the Arzu South vein, identified a new high-grade vein which will become the focus of further work.
 
Michael de Villiers, Chairman, commented: 
 
"The first half of 2020 was marked by extraordinary global developments, which will undoubtedly leave their mark on society for many years into the future.  Despite this, our business has continued to progress positively under the conditions imposed by the Coronavirus pandemic and we are now drawing on this experience to further strengthen and build the Company's strategy.
 
"During the period, both our operating mine and our ongoing exploration and development activities have continued to yield positive results.  While we remain on track to produce c.18,000 oz (gross to the JV) of gold for the year, at an average operating cost in the region of US$580 per ounce, exploration at Kiziltepe has continued to demonstrate the opportunities to expand the resource and to identify new mining areas.
 
"Significantly, the period saw the end of repayments against Zenit's US$33 million construction capital loan in April 2020.  Full repayment of this loan has in turn underpinned the financial strength of our business, through cash flow arising from the repayment of debtor balances and dividends, enabling us to support various exploration and development programmes across our Turkish portfolio and the diversification of the portfolio outside of Turkey.
 
"In particular we are pursuing an expanded joint venture with our current partners, Proccea Construction Co., along with a potential new partner, Ozaltin Holding A.S.  The Salinbas Gold Project, which we believe has the potential to become a significant new gold mine producing at a rate of 50,000 oz per annum over a 10-year life of mine, is the focus of this enhanced joint venture.  
 
"Meanwhile, commodity market conditions have not been this favourable for many years, with the gold price having risen to a high of US$1,782 per ounce at the end of the period.  Under the current conditions of global uncertainty and with yet more unprecedented central bank financial action, we expect that the gold market will remain strong for some time to come.
 
"As always, I take this opportunity to thank the Ariana and joint venture teams for their unwavering efforts during a period of heightened uncertainty.  These efforts have been reflected in a share price which climbed 56% during the period; a momentum which was maintained into the current period."
 
Management Statement
 
Ariana has continued to make significant progress during the period, having established itself as a profitable, cash generative exploration and development company.  Our strategy of developing a pipeline of projects at the production, development and exploration phases continues to be rewarded.  We remain committed to enhancing our current portfolio and continue to evaluate new projects both in Turkey, and in surrounding countries, which straddle the Tethyan Metallogenic Belt.  Such projects are carefully filtered to fit our development criteria and must show capacity to enhance shareholder value.
 
Production from our flagship mining operation at Kiziltepe in Turkey, which is part of the 50/50 Red Rabbit Joint Venture with Proccea Construction Co., remains fully on target.  Q1 2020 gold production was 5,129 ounces, with 4,679 ounces delivered in Q2 2020, bringing H1 2020 gold production to 9,808 ounces of gold.  This represents an expected decrease in mine output compared to the same period last year as a result of mining transitioning from the high-grade Arzu South pit to the lower grade Arzu North pit.  Importantly, however, despite the reduction in grade, average operating cash costs for the first half of the year remain in the region of US$500 to US$530 per ounce, in line with the same period in 2019.  Our strong performance in the first half of the year reflects positively on our 2020 production guidance of 18,000 ounces of gold (gross to the JV).
 
Due to high commodity prices during the period, Kiziltepe achieved an average revenue per gold ounce of US$1,920 (inclusive of silver credit).  This, coupled with low operating costs which have carried over into the period, have resulted in strong revenue from the operation in the range of c. US$9 to 10 million per quarter.  In addition, 100% of the US$33 million JV construction capital loan was repaid to the project finance bank, Turkiye Finans Katilim Bankasi A.S. during the period.  
 
In terms of exploration within the Red Rabbit JV area, we continue to make significant progress across all of our projects in western Turkey, with the aim of increasing the JV life of mine and achieving a production profile of up to 50,000 ounces of gold per annum.  In addition to this we have been making significant progress at the wholly-owned Salinbas Gold Project, which is located in northeastern Turkey.  A revised resource estimate was completed shortly after the period end, demonstrating c.1.5 million ounces of gold.  The project comprises three licences two of which were renewed as 10-year operational licences and one renewed as a 5-year operational licence.  These licences areas include the Salinbas gold-silver deposit and the Ardala copper-gold-molybdenum porphyry among other prospects.  
 
Outlook
 
While the first half of the year was impacted by the onset of the Coronavirus pandemic, mining operations at Kiziltepe continued without interruption and an exploration drilling programme proceeded at the Arzu South vein.  This was achieved through the introduction of various company-wide risk mitigation measures, which have come at the cost of limiting travel and physical interaction, requiring the development of an even more atomised and autonomous approach to business.  Both our team and that at the mine site have demonstrated their ability to operate under this new reality.  Accordingly, our business has emphasised a remarkable resilience, a characteristic that will be further built upon and further incorporated into our strategy for the years ahead.
 
Our existing joint venture with Proccea Construction Co. has proven the importance of creating strong, successful in-country partnerships.  In this context, we are now looking forward to enhancing our partnership further with the addition of Ozaltin Holding A.S. as a second partner in to our current joint venture.  This expanded partnership will drive the further development of the Red Rabbit assets of Kiziltepe and Tavsan, in addition to progressing the Salinbas asset through feasibility with the addition of new capital and engineering expertise.
 
We strive to continue to deliver on this year's exceptional progress, through continued production and exploration success, as well as seeking new development opportunities within and outside of Turkey.  Notably, our investment in Cyprus has continued to progress and we have been encouraged by the success of initial exploration on the island.
 
Based on the progress of mine development we expect our production guidance for the year of 18,000 oz (gross to the JV) will be met, and operations during the third quarter continue to perform in line with expectations.  We look forward to providing further updates on our progress across our projects and particularly in relation to the development of an enhanced joint venture encompassing both the Red Rabbit and Salinbas Projects.
 
 
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
 
 
Contacts:
 




Ariana Resources plc


Tel: +44 (0) 20 7407 3616




Michael de Villiers, Chairman


 




Kerim Sener, Managing Director


 




 


 




Beaumont Cornish Limited


Tel: +44 (0) 20 7628 3396




Roland Cornish / Felicity Geidt


 




 


 




Panmure Gordon (UK) Limited


Tel: +44 (0) 20 7886 2500




John Prior / Hugh Rich / Atholl Tweedie


 




 


 




Yellow Jersey PR Limited


Tel: +44 (0) 7951 402 336




Dom Barretto / Joe Burgess / Henry Wilkinson


arianaresources@yellowjerseypr.com




 
 
Editors' Note:
 
About Ariana Resources:
 
Ariana is an AIM-listed mineral exploration and development company operating in Europe.  It has interests in gold production in Turkey and copper-gold assets in Cyprus.  The Company is developing a portfolio of prospective licences in Turkey, which contain a depleted total of c. 2.1 million ounces of gold and other metals (as at July 2020).  
 
The Red Rabbit Project is comprised of the Company's flagship assets, the Kiziltepe and Tavsan gold projects, and is part of a 50:50 Joint Venture with Proccea Construction Co.  Both assets are located in western Turkey, which hosts some of the largest operating gold mines in the country and remains highly prospective for new porphyry and epithermal deposits.  The Kiziltepe Sector of the Red Rabbit Project is fully permitted and is currently in production.  The total depleted resource inventory at the Project and its wider area is c. 500,000 ounces of gold equivalent (as at April 2020).  At Kiziltepe a Net Smelter Return ("NSR") royalty of up to 2.5% on production is payable to Franco-Nevada Corporation. At Tavsan an NSR royalty of up to 2% on future production is payable to Sandstorm Gold.
 
The 100% owned Salinbas Gold Project is located in north-eastern Turkey and has a total resource inventory of c. 1.5 million ounces of gold.  The project comprises three notable licence areas: Salinbas, Ardala and Hizarliyayla, all of which are located within a multi-million ounce Artvin Goldfield.  The "Hot Gold Corridor" contains several significant gold-copper projects including the 4 million ounce Hot Maden project, which lies 16km to the south of Salinbas and 7km south of Hizarliyayla.  A NSR royalty of up to 2% on future production is payable to Eldorado Gold Corporation on the Salinbas Gold Project.
 
Ariana is also earning-in to 50% of UK-registered Venus Minerals Ltd ("Venus") and has to date earned into an entitlement to 12%.  Venus is focused on the exploration and development of copper-gold assets in Cyprus.
 
Panmure Gordon (UK) Limited is broker 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--


Ariana Resources Plc
Unaudited Condensed Consolidated Interim Financial Statements
For the six months ended 30 June 2020
 
Condensed consolidated statement of comprehensive income
 




 


 


Unaudited
6 months to


Unaudited
6 months to


Audited
12 months to




 


 


30 June 


30 June 


31 December




 


 


2020


2019


2019




 


Note


£'000


£'000


£'000




 


 


 


 


 




Administrative costs


 
 


(782)


(588)


(1,242)




General exploration expenditure


 


-


(139)


(18)




Intangible exploration assets - written off


 


-


-


(364)




Other gains


 


-


-


627




Other income


 


-


-


61




 


 


 


 


 




 
Operating Loss


 


 
(782)


 
(727)


 
(936)




 


 


 


 


 




Profit on disposal of equity securities at FVOCI


 


-


-


20




Share of profit of  joint venture accounted for using the equity method


(4)


3,010


3,029


7,891




Investment Income


 


2


3


5




 


 


 


 


 




Profit before tax


 


2,230


2,305


6,980




 


 


 


 


 




Taxation


(6)


(282)


-


(46)




 


 


 


 


 




Profit for the period from continuing operations


 


1,948


2,305


6,934




 


 


 


 


 




 


 


 


 


 




Other comprehensive income
Items that may be reclassified subsequently to profit or loss:


 


 


 


 




 


 


 


 


 




Exchange differences on translating foreign operations


 


(1,307)


(1,121)


(1,774)




 


 


 


 


 




Items that will not be reclassified to profit or loss:


 


 


 


 




 


 


 


 


 




Net change in fair value of equity securities at FVOCI


(8)


-


49


49




 


 


 


 


 




Other comprehensive (loss) for the period 
net of income tax


 


 
(1,307)


 
(1,072)


 
(1,725)




 


 


 


 


 




 
Total comprehensive profit for the period


 


 
641


 
1,233


                
                 5,209




  


 


 


 


 




Earnings per share (pence)


 


 


 


 




Basic 


(7)


0.18


                  0.22


                     0.65




Fully diluted


 


                  0.17


                 0.21


                   0.65




 


 


 


 


 




 


Condensed consolidated interim statement of financial position
 




 


 


Unaudited
30 June 


Unaudited
30 June 


Audited
31 December




 


 


2020


2019


2019




 


Note


£'000


£'000


£'000




 


 


 


 


 




ASSETS


 


 


 


 




Non-current assets


 


 


 


 




Trade and other receivables


 


106


120


93




Intangible exploration assets


(9)


16,347


16,987


16,404




Intangible assets


 


177


-


187




Land, property, plant and equipment


 


59


185


50




Other Investments (Earn-In advances)


 


808


-


-




Investment in Joint Venture accounted for using the equity method


(4)


9,969


3,521


7,768




 
Total non-current assets


 


 
27,466


 
20,813


 
24,502




 


 


 


 


 




 


 


 


 


 




Current assets


 


 


 


 




Trade and other receivables


(10)


340


4,196


4,574




Equity securities at FVOCI


(8)


-


84


-




Cash and cash equivalents


 


2,342


569


453




 
Total current assets


 


 
2,682


 
4,849


 
5,027




 


 


 


 


 




Total assets


 


30,148


25,662


29,529




 


 


 


 


 




 


 


 


 


 




EQUITY


 


 


 


 




Called up share capital


(11)


6,054


6,054


6,054




Share premium


(11)


11,821


11,821


11,821




Other reserves


 


720


720


720




Share based payments


 


409


364


364




Translation reserve


 


(7,277)


(5,317)


(5,970)




Retained earnings


 


14,246


7,670


12,298




 
Total equity attributable to equity holders of the parent


 


 
25,973


 
21,312


 
25,287




 
Total equity


 


 
25,973


 
21,312


 
25,287




 


 


 


 


 




 


 


 


 


 




LIABILITIES


 


 


 


 




Non-Current Liabilities


 


 


 


 




Deferred tax liability


 


2,273


2,273


2,273




Other financial liabilities


 


1,651


1,651


1,651




 
Total non-current liabilities


 


 
3,924


 
3,924


 
3,924




 


 


 


 


 




Current liabilities


 


 


 


 




Trade and other payables


 


251


426


318




 
Total current liabilities


 


 
251


 
426


 
318




 


 


 


 


 




Total equity and liabilities


 


30,148


25,662


29,529






Condensed consolidated interim statement of changes in equity




 


 
 
 
Share
capital 


 
 
 
Share
premium


 
 
 
Other
reserves


 
Share
based payment reserve


 
 
Trans-
lation
reserve


 
 
 
Retained
earnings


Total
attributable
to equity
holder of
parent




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 




Balance at 31 December 2018


6,054


11,821


720


250


(4,196)


5,315


19,964




 


 


 


 


 


 


 


 




Changes in equity to 30 June 2019


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Profit for the period 


-


-


-


-


-


2,306


2,306




Other comprehensive income


-


 


-


-


(1,121)


49


(1,072)




 


 


 


 


 


 


 


 




Total comprehensive income


-


-


-


- 


(1,121)


2,355


1,234




 


 


 


 


 


 


 


 




Share options


-


-


-


114


-


-


114




 


 


 


 


 


 


 


 




Transactions with owners


-


-


-


114


-


-


114




 


 


 


 


 


 


 


 




Balance at 30 June 2019


6,054


11,821


720


364


(5,317)


7,670


21,312




 
 


 


 


 


 


 


 


 




Changes in equity 
to 31 December 2019


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Profit for the period


-


-


-


-


-


4,628


4,628




Other comprehensive income 


-


-


-


-


(653)


-


(653)




 


 


 


 


 


 


 


 




Total comprehensive income


-


-


-


-


(653)


4,628


3,975




 


 


 


 


 


 


 


 




Share options


-


-


-


-


-


-


-




 


 


 


 


 


 


 


 




Transactions with owners


-


-


-


-


-


-


-




 


 


 


 


 


 


 


 




Balance at 31 December 2019


6,054


11,821


720


364


(5,970)


12,298


25,287




 


 


 


 


 


 


 


 




Changes in equity 
to 30 June 2020


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Profit for the period 


-


-


-


-


-


1,948


1,948




Other comprehensive income


-


-


-


-


(1,307)


-


(1,307)




 


 


 


 


 


 


 


 




Total comprehensive income


-


-


-


-


(1,307)


1,948


641




 


 


 


 


 


 


 


 




Share options


-


-


-


45


-


-


45




 


 


 


 


 


 


 


 




Transactions with owners


-


-


-


45


-


-


45




 


 


 


 


 


 


 


 




Balance at 30 June 2020


6,054


11,821


720


409


(7,277)


14,246


25,973






Condensed consolidated interim statement of cash flows




 


Unaudited
6 months to


Unaudited
6 months to


 
Audited
12 months to




 


30 June


30 June


31 December




 


2020


2019


2019




Cash flows from operating activities
 


£`000
 


£`000
 


                  £`000
 




Profit for the year


1,948


2,305


6,934




Adjustments for:


 


 


 




Profit on disposal of land owning operations


-


-


(627)




Profit on disposal of equity securities at FVOCI


-


-


(20)




Profit on disposal of equipment 


-


 


(53)




Depreciation of non-current assets


11


1


20




Write down of intangible exploration assets


-


-


364




Fair value adjustments


-


(49)


(49)




Share of profit in Joint Venture


(3,010)


(3,029)


(7,891)




Share based payments charge


45


114


114




Investment income


(2)


(3)


(5)




Income tax expense


282


-


46




Movement in working capital


(726)


(661)


(1,167)




 


 


 


 




Decrease  in trade and other receivables


3,419


580


918




Increase/(decrease) in trade and other payables


(62)


178


253




Cash inflow from operating activities


2,631


97


4




 


 


 


 




Taxation paid


(282)


-


(8)




Net cash from operating activities


2,349


97


(4)




 


 


 


 




Cash flows from investing activities


 


 


 




Purchase of land, property, plant and equipment


(13)


(28)


(12)




Payments for intangible assets


(166)


(367)


(516)




Payments for other investments


(274)


-


-




Proceeds from disposal of equity securities at FVOCI


-


                    -


104




Proceeds from disposal of equipment


-


                    -


55




Investment income


2


                    3


5




Net cash used in investing activities


(451)


(392)


(364)




 


 


 
 


 




Net increase/(decrease) in cash and cash equivalents


1,898


(295)


(368)




Cash and cash equivalents at beginning of period


453


938


938




Exchange adjustment


(9)


(74)


(117)




Cash and cash equivalents at end of period


2,342


569


453






Notes to the interim financial statements for the six months ended 30 June 2020
1. General information
 
Ariana Resources Plc (the "Company") is a public limited company incorporated, domiciled and registered in the U.K. The registration number is 05403426 and the registered address is 2nd Floor, Regis House, 45 King William Street, London, EC4R 9AN, United Kingdom. 
 
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 other technology-metals, principally in Turkey and surrounding countries.  
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.  The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019, 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.  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.  Statutory financial statements for the year ended 31 December 2019 were approved by the Board of Directors on 27 July 2020 and delivered to the Registrar of Companies.  The financial information for the periods ended 30 June 2020 and 30 June 2019 are unaudited.
3. Significant accounting policies
The same accounting policies have been followed in these condensed interim financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2019.
The Group and Company financial statements have been prepared on a going concern basis. As an exploration and development company the Directors are mindful that there is an ongoing need to monitor overheads and cash associated with the exploration and development programme; and, where necessary, to raise additional working capital on an ad hoc basis to support the Group's activities.
 
The Group's ability to continue its operations and to realise its assets at their carrying values is dependent upon the Group generating revenues sufficient to cover its operating costs, and /or obtaining additional financing. These financial statements do not give effect to any adjustments which would be necessary should the Group be unable to continue as a going concern and therefore be required to realise its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.
 
The Directors remain confident that if future funding is required they will be able to raise finance to meet the Group's exploration and development programme and associated overhead cost.
 
4. Share of profit of interest in Joint Venture
 
The Group accounts for its joint venture with Proccea Construction Co. in Zenit Madencilik San. ve Tic. A.S. ("Zenit")  using the equity method in accordance with IAS 28 (revised). At 30 June 2020 the Group has a 50% interest in Zenit. 
 
Zenit entered production during March 2017, with commercial production declared from 1 July 2017.  Operational revenues and costs arising from pre-commercial production were capitalised in 2017, along with any new capital expenditure incurred subsequently, including the construction of the district road diversion necessary for the full development of the Arzu South open pit.
 
Summarised financial information of the joint venture, based on its translated financial statements, and reconciliations with the carrying amount of the investment in the consolidated financial statements are set out below:-






 


6 months to
30 June 


6 months to
30 June 


Year ended
31 December




 


2020


2019


2019




Summary statement of comprehensive income 
 


£'000


£'000


£'000




Revenue


   14,301    


     16,132


35,337




 


 


 


 




Cost of sales


      (7,051)


(7,357)


(15,444)




 


 


 


 




Gross Profit


7,250  


8,775


19,893




 


 


 


 




Other income


359


-


-




 


 


 


 




Administrative expenses


(812)


(985)


(1,636)




 


 


 


 




Operating profit


  6,797


7,790


18,257




 


 


 


 




Finance expenses including foreign exchange losses


(1,584)


              (2,810)


(4,762)




 


 


 


 




Finance income including foreign exchange gains


756


1,117


2,667




 
Profit for the period before tax


 
5,969


      6,097


16,162




 


 


 


 




Taxation credit/(charge)


    51


(39)


(380)




 


 


 


 




Profit for the period 


       6,020     


6,058


    15,782




 


 


 


 




Proportion of Group's profit share


50%


50%


50%




 


 


 


 




 
Group's share of profit for the period


3,010


 
3,029


7,891




 


 


 


 




 


 


 


 




 


6 months to


6 months to


12 months to




 


30 June 


30 June


31 December




 


2020


2019


2019




Summary statement of financial position


£'000


£'000


£'000




 


 


 


 




Non-current assets


22,886


22,904


24,552




 


 


 


 




Current assets


13,950


8,506


11,868




 


 


 


 




Current liabilities


(11,522)


(16,518)


(16,643)




 


 


 


 




Non-current liabilities


(5,376)


(7,851)


(4,241)




 


 


 


 




Equity


19,938


7,041


15,536




 


 


 


 




Proportion of Group's ownership


50%


50%


50%




 


 


 


 




 


 


 


 




Carrying amount of Investment in Joint Venture


9,969


 3,521


7,768




 


 


 


 






5. Segmental analysis
 
Management currently identifies one division as an operating segment - mineral exploration. This operating segment is monitored and strategic decisions are made based upon this and other non-financial data collated from exploration activities.
Principal activities for this operating segment are as follows:
Mining - incorporates the acquisition, exploration and development of gold resources.
 
Other reconciling items - include non-mineral exploration costs and transactions between Group and associate companies.
 
 




 


30 June 2020


30 June 2019


31 December 2019




 


 


Other


 


 


Other


 


 


Other


 




 


 


reconciling


 


 


Reconciling


 


 


reconciling


 




 


Mining


items


Group


Mining


Items


Group


Mining


items


Group




 


 


 


 


 


 


 


 


 


 




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 


 


 




Administrative costs


-


(782)


(782)


-


(588)
 


(588)


-


(1,242)


(1,242)




General and specific exploration expenditure
 


 
-


 
-


 
-


 
(139)


 
-


 
(139)


 
(382)


 
-


 
(382)




 
Profit on disposal of investments
 


 
 
-
 


 
 
-


 
 
-


 
 
-


 
 
-


 
 
-


 
 
-


 
 
20


 
 
20




Share of profit in  joint venture
 


 
3,010


 
-


 
3,010


 
3,029


 
-
 


 
3,029


 
7,891


 
-


 
7,891




Other gains


-


-


-


-


-


-


627


-


627




 


 


 


 


 


 


 


 


 


 




Investment income


-


2


2


-


3


3


-


66


66




 


 


 


 


 


 


 


 


 


 




Profit before taxation


3,010


(780)


2,230


2,890


(585)


2,305


8,136


(1,156)


6,980




 


 


 


 


 


 


 


 


 


 




Taxation


(282)


-


(282)


-


-


-


(43)


(3)


(46)




 


 


 


 


 


 


 


 


 


 




Profit/(loss) after tax


2,728


(780)


1,948


2,890


(585)


2,305


8,093


(1,159)


6,934




 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 




Assets


 


 


 


 


 


 


 


 


 




Segment assets


28,886


1,262


30,148


25,061


601


25,662


28,706


823


29,529




 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 




Liabilities


 


 


 


 


 


 


 


 


 




Segment liabilities


(3,940)


(235)


(4,175)


(3,970)


(380)


(4,350)


(4,003)


(239)


(4,242)




 


 


 


 


 


 


 


 


 


 



 
 
 
 
 
 
 
 
 
 
 
 
 
 



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




 


30 June 2020


30 June 2019


31 December 2019




 


 


United


 


 


United


 


 


United


 




 


Turkey


Kingdom 


Group


Turkey


Kingdom


Group


Turkey


Kingdom


Group




 


 


 


 


 


 


 


 


 


 




 


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 


 


 




Carrying amount of segment non- current assets


 
 
26,479


 
 
987


 
 
27,466


 
 
20,243


 
 
570


 
 
20,813


 
 
24,314


 
 
188


 
 
24,502






6. Taxation
 
The Group has not incurred taxable profits for the period and a corporation tax charge is not anticipated.
 
During the period, withholding tax amounting to £282,000 was paid by the Group's operating subsidiary in Turkey, Galata Madencilik San. ve Tic Ltd. on two dividend distributions totalling £1,600,000 to the Group's intermediate (BVI) holding company, Portswood Resources Limited. 
7. Earnings per share on continuing operations
 
The calculation of basic profit per share is based on the profit attributable to ordinary shareholders of £1,948,000 divided by the weighted average number of shares in issue during the period, being 1,059,677,953.
8. Equity securities designated as FVOCI
 




 


Group & Company




 


£'000




 
Valuation at 1 January 2019
 
 


 
35




Fair value adjustment


49




 


 




 
Valuation at 30 June 2019


 
84




 


 




Disposals


(84)




 


 




 
Valuation at 31 December 2019 and 30 June 2020


 
-




 


 




The Company sold its remaining shares in Royal Road Minerals Ltd. during 2019 and hence holds no further listed investments at the period end.  






9. Intangible exploration assets


£'000




 


 




Six months ended 30 June 2019


 




 


 




Opening net book value at 1 January 2019
 


16,975




Additions


378
 




Exchange movements


(366)
 




Closing net book value at 30 June 2019


16,987




 


 




 


 




Six months ended 31 December 2019


 




 


 




Opening net book value at 1 July 2019
 


16,987




Additions
 


138




Expenditure written off
 


(364)




Reclassification of expenditure


(207)
 




Exchange movements


(150)
 




Closing net book value at 31 December 2019


16,404




 


 




 


 




Six months ended 30 June 2020


 




 


 




Opening net book value at 1 January 2020
 


16,404




Additions
 


166




Exchange movements


(223)
 




 
Closing net book value at 30 June 2020


 
16,347




                            
 
  The technical feasibility and commercial viability of extracting a mineral resource are not yet demonstrable in the above        intangible exploration assets. These assets are not amortised, until technical feasibility and commercial viability is established. Intangible exploration costs written off represent costs relating to certain projects that are no longer considered economically viable or where exploration licences have been relinquished.
 
 




10. Trade and other receivables


30 June 


30 June 


31 December




 


2020


2019


2019




 


£'000


£'000


£'000




 


 


 


 




Amounts owed by Joint Venture Company


-


3,613


3,383




 


 


 


 




Other receivables


214


478


598




 


 


 


 




Earn-In advances


-


-


534




 


 


 


 




Prepayments 


126


105


59




 


 


 


 




 


 


 


 




 


340


4,196


4,574




 


 


 


 




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






11. Called up share capital and share premium


 


 


 


 




 


 


 


 


 




Allotted, issued and fully paid 0.1p shares


 


 


 


 




 


Number


Share


Deferred


Share




 


of shares


Capital


Shares


Premium




 


 


£'000


£'000


£'000




 


 


 


 


 




In issue at 1 January 2019 to 30 June 2020


1,059,677,953


1,059


4,995


11,821




 


 


 


 


 




 
 
Potential issue of ordinary shares - share options and warrants
 
The Company on the 1 January 2018 issued 64,000,000 new share options to directors and staff at an exercise price of 1.55 pence, vesting over 3 years. A share based payment charge of £45,000 (2019: £114,000) has been recognised in these interim results.
 
At 30 June 2020 the Company had 64,000,000 options and nil warrants outstanding for the issue of ordinary shares.
 
12. Contingent liabilities
 
Following the disposal of the Group's 99%-owned subsidiary, Çamyol Gayrimenkul, Madencilik, Turizm, Tarim ve Hayvancilik Ltd. ("Camyol") 75% of the resulting gain on disposal is exempt from Turkish corporation tax provided the gain is retained under equity by Galata Madencilik San. ve Tic. Ltd. for a period of 5 years. This potentially exempt taxable gain amounts to Turkish Lira 4,529,343 with an associated corporation tax liability of Turkish Lira 996,455, or approximately £137,000.
 
13. Approval of interim financial statements
 
The interim financial statements were approved by the Board of Directors on 29 September 2020.
 

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