REG - Ariana Resources PLC - PUBLICATION OF CIRCULAR

Ariana ResourcesAnnouncement

08/02/2021 07:00

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RNS Number : 2341O  Ariana Resources PLC  08 February 2021

 

 

 

 

 

 

8 February 2021

AIM: AAU

 

PUBLICATION OF CIRCULAR IN RESPECT OF CAPITAL REDUCTION AND UPDATE ON
COMPLETION OF THE JOINT VENTURE

 

Ariana Resources plc ("Ariana" or "the Company"), the AIM-listed exploration
and development company operating in Europe, is pleased to announce the
publication of its circular to shareholders (the "Circular"), concerning the
proposed reduction of share capital via a cancellation of the Company's share
premium account, the cancellation of the deferred shares and the authority for
the Company to buy back shares.

 

Highlights:

 

·  Circular published on the Ariana Resources website, under Circulars
(accessible via: https://arianaresources.com/investors/circulars
(https://arianaresources.com/investors/circulars) ) and which has been posted
to shareholders today.

 

·  General Meeting to consider and, if thought fit, approve certain
resolutions, which are proposed as special resolutions, to be convened on 26
February 2021.

 

·   Completion of the Joint Venture with Ozaltin Holding A.S. and Proccea
Construction Co. is progressing as planned, following the receipt of approval
from the Competition Authority, as announced on 19 January 2021.

 

Dr. Kerim Sener, Managing Director, commented:

 

"This timely circular is being distributed in advance of the completion of our
new Joint Venture with Ozaltin and Proccea. The proposed General Meeting
concerns a capital reorganisation which will enable the Company to pay a
special dividend. Since receiving shareholder ratification of the joint
venture agreements signed at the end of last year and the approval received
from the Competition Authority in Turkey last month, we are expecting to
conclude all remaining formal corporate procedures in the near future. We are
continuing to advance rapidly on all fronts and we look forward to keeping the
market updated on our progress."

 

Michael de Villiers, Chairman, commented:

 

"We have come a long way since the inception of the Company as a junior
explorer some 15 years ago. Our strategy has enabled us to create a mechanism
by which our shareholders will be rewarded through the distribution of
dividends; a status which is quite unlike the majority of exploration and
development companies globally. We are now focused on positioning the Company
so that we can reward shareholders with a special dividend following
completion of the JV and possibly additional dividends in the future. We trust
that our shareholders will support this initiative and vote alongside the
Board in supporting all of the proposed General Meeting resolutions."

Terms of the Proposed Capital Reduction

 

Under the current share structure, Ariana would need to generate profits in
excess of £9.6 million before it was able either to pay a dividend or return
cash to Shareholders in other ways. The Directors are consequently proposing
to modify the Company's share structure to enable investors to obtain returns
on their shareholdings without having to wait until retained earnings of in
excess of £9.6 million have been generated.

 

At the date of the Circular, the Company has in issue 1,075,677,943 Ordinary
Shares of £0.001 each, together with 554,949,474 Deferred Shares of £0.009
each. Over the years, the Ordinary Shares have been issued at varying prices,
which gave rise to a Share Premium of £11,864,727 as at 30 September 2020.
Since the Company's formation, it has accumulated retained losses of
£9,568,727 as at 30 September 2020 and is likely to continue to have made
losses after that date.

 

The Directors believe the large level of these accumulated losses is
detrimental to the interests of Shareholders and hence are looking at means of
improving the Shareholders' position. For example, the suggested special
dividend relating to the new joint venture arrangements with Ozaltin Holding
A.S. (which were approved by the Company at a General Meeting held on 30
December 2020) would not be possible to the degree envisaged with the present
level of deficit in retained earnings.

 

A Company is permitted to reduce its share capital by the Companies Act 2006
(Chapter 10). The reduction in its share capital can then be offset against
the losses in retained earnings. The Directors accordingly propose to cancel
the entire Share Premium Account as at the date of a Court Hearing and to
cancel all of the Deferred Shares of £0.009 each (which were a necessary
by-product of a reduction in the nominal value of its ordinary shares from
£0.01 to £0.001, carried out on 28 June 2013). The effect of this, and the
offset of the remaining deficit on distributable reserves mentioned above
against the Share Premium Account which is reduced to nil, is to generate
distributable reserves of £7.48 million. As at the date of posting of this
Circular the share premium account is £12,053,227.

 

 

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 (mailto:arianaresources@yellowjerseypr.com)

 

Editors' Note:

 

About Ariana Resources (details as current and before completion of the JV):

 

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 16%.  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 and Broker.

For further information on Ariana you are invited to visit the Company's
website at www.arianaresources.com (http://www.arianaresources.com) .

Ends.

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